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Since AmericanGDP Your browser does not support the element. states started to legalise sports betting in 2018, the industry’s explosive growth and omnipresent advertisements have drawn widespread attention. But although America was one of the last big economies to allow legal wagering, similar trends are evident elsewhere. In most markets around the world, online betting, mostly on sports, is replacing traditional “land-based” forms of gambling, of which sports are a small component. As a consequence, what was once a niche pastime is entering the global mainstream.H2 Gambling Capital, a consultancy, has estimated annual spending (ie, punters’ losses) for each type and method of betting for some 100 countries since 2003, “repatriating” stakes placed via offshore websites to customers’ suspected home countries. Worldwide, traditional casinos and their online equivalents remain the largest sector, accounting for $209bn. Lotteries come next at $154bn, followed by sports at $130bn and gaming or slot machines outside casinos at $87bn.Measured in constant 2024 dollars, the industry has grown modestly from $545bn in 2017—just before mass American sports betting began—to $593bn this year. Yet these placid top-line numbers hide vast upheaval. In net terms, all of the gains have come from sports, excluding horse racing, which rose from $45bn to $99bn.The covid-19 pandemic shut physical casinos, as well as shops selling lottery tickets and clubs, restaurants and gaming parlours home to slot machines. Tourist destinations, such as Macau and Las Vegas, have mostly recovered, but the same is not true of casinos elsewhere. And China has not re-authorised video gaming terminals, which were widespread before the pandemic struck. In current dollars, land-based revenues have dropped from $479bn in 2019 to $431bn this year.Meanwhile, people locked up at home flocked to online gambling, then a relative novelty in most of Europe. Italy and France first allowed such betting in 2010, and Spain in 2011. Germany did not establish clear rules until 2021. Unlike in America, where legal providers of “daily fantasy sports” could easily shift their customers to betting, European markets had to build customer bases from scratch. Global digital revenues then surged during covid, from $82bn (in current dollars) in 2019 to $162bn today. Even markets where online betting had long been legal, such as Hong Kong, have seen the practice explode.Many casinos offer sports gambling and sports-betting shops are common in some big markets, but such wagers account for just 8% of land-based revenues. In contrast, sports already made up 34% of online betting before the pandemic. As a result, the growth of digital betting at physical venues’ expense has caused the share of total revenues coming from non-equestrian sports to rise from 10% to 17%.America represents just a quarter of the worldwide increase in sports betting since 2017. Europe, led by countries where such betting was legalised only recently, has swollen by even more, accounting for almost a third of the growth. The mainland Chinese “sports lottery”, which requires participants to get a series of bets right, accounts for a sixth. And Japanese wagers on various types of racing, including horses and motorboats, have risen to just under a tenth, helping offset a decline in pachinko, the country’s version of slot machines. Whereas the American market stands out for “same-game parlays”, in which punters can win extravagant payouts by predicting before a match that numerous events will all occur, Asian and European gamblers tend to opt for live “micro-betting”—sequential wagers on individual games in tennis, or corner kicks in football.H2’s forecasts suggest the transition from in-person to virtual gambling will continue for the rest of this decade, though the firm expects that online revenues will climb faster for casino games than for sports. The biggest obstacle to further growth is probably regulatory. Sports betting is still expanding in the Americas—Argentine provinces have been legalising it since 2019, and Brazil will follow suit next month—but politicians elsewhere are moving in the opposite direction.States in Australia, which spends an impressive 1.2% of its on gambling, the most of any big economy, are looking at reforms. Victoria is targeting “pokies” (slot or video-poker machines). It will require players to use cards pre-loaded with cash and limits on how much they are willing to lose. Spain has banned some forms of gambling advertising, and Britain has limited the maximum bet on an online slot-machine spin to £5 ($6). Just as America got around to legalising sports betting eventually, it would be no surprise if the country soon seeks to restrict the burgeoning industry’s excesses as well. Gambling should be enjoyed responsibly, after all.
