Build a Market-Ready iGaming Strategy

Don’t leave your online casino strategy up to chance.

EXECUTIVE BRIEF

Analyst perspective

Unlock organizational value through iGaming.

Online gaming regulations are dynamic and inconsistent, posing significant challenges for brick-and-mortar casinos trying to enter the iGaming market. As the market shift toward digital platforms accelerates, it is crucial for operations to capitalize on this trend and differentiate their offerings from the crowd. Operators need a comprehensive strategy, including a robust technical architecture, the appropriate business model, and a unified roadmap to prepare for a successful iGaming launch while effectively managing risks to meet the high expectations of players and regulators. A successful iGaming strategy relies heavily on balancing risk and return. It is feasible within an omnichannel loyalty experience where operators can increase engagement for new and existing players. But know that the practicality of increasing returns is based on your organization’s success in identifying and combating business and technical risks. Elizabeth Silva Senior Research Analyst, Sports, Gaming & Hospitality Info-Tech Research Group

Executive summary

Info-Tech Overarching Insight
Formulating a successful iGaming roadmap depends highly on the organization’s ability to derisk iGaming value chains, technical architecture, and business models while balancing the integration of an omnichannel loyalty experience.

Defining iGaming

Derived from the words “internet” and “gaming,” iGaming comprises different variations of gambling games transferred to online platforms. These types of games can include:

• Casino games
• Lotteries
• Poker rooms
• Sports betting platforms

iGaming can also be referred as:

• Internet gambling
• Pay-to-play (P2P)
• Real-money wagering
• Online casino
• iCasino

FintechFuel, 2024

The iGaming regulatory landscape

NORTH AMERICA

UNITED STATES

A slowly growing footprint. The sports betting footprint has grown, but the iGaming regulatory scene has unfortunately been stagnant in the US.

iGaming is currently approved in seven states: Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Nevada, and West Virginia.

CANADA

Gaining iGaming speed. Online gaming is regulated at the provincial level, where each province has the authority to legalize and regulate iGaming.

British Columbia, Quebec, and Ontario have online gaming platforms operated by their respective provincial lottery corporations.

EUROPE

North America’s role model. The majority of Western Europe has regulated iGaming within their respective countries, where operators and technology providers are considered more experienced. The EU has some of the strictest regulations and sets the framework for other countries.

Twenty-two countries in Western Europe require operators to have online gambling licenses, 267 of which have been issued.

APAC

A limited market. APAC is limited to some online gaming (under certain conditions per country), play-for-fun, offshore casinos, or grey markets due to heavy government sanctions on online gambling.

High-value countries for land-based gambling like Singapore, Malaysia, Philippines, and Thailand are stalled in digital iGaming growth.

SOUTH AFRICA

A complex and unclear regulatory environment. South Africa’s National Gambling Act of 2004 legalized online gambling, but operators must obtain a license from the country’s provincial gambling board. No licenses have been issued within the region.

SendX, 2024; EGBA, 2022; PR Newswire, 2022

Analysis of iGaming models – North America

iGaming Ontario, 2024; The Intelligencer, 2023; Public Gaming, 2023; CDC Gaming, 2024; AGA, 2024

Analysis of iGaming Models – Europe

*Not an exhaustive list. Several countries across the EU have legalized iGaming.

Statista, Online Gambling Forecast Report, 2024; iGaming Business, 2024; Gambling Commission UK, 2023; Games Industry, 2024; EGR Global, 2024

The sports betting explosion heralds the opportunity for iGaming approval

Of the 23 US states that have legalized mobile sports betting, 87% were legislatively approved after 2019 (Info-Tech, 2022).

Sports betting has expanded drastically in North America. In Canada, the federal ban on sports betting was lifted in 2021, with the launch of sports betting in Ontario in 2022. Sports betting’s traction in North America fuels the assumption that iGaming is next.

Sports betting expansion will fuel iGaming recognition. The profitability (and responsibility) of the online and mobile sports betting space will encourage the legalization of iGaming. Operators must be at the table with regulators to educate and encourage them.

iGaming is a more profitable addition to a casino operator’s portfolio. While iGaming and sports betting are both online forms of gambling that similarly incentivize new player segments and digitize the casino’s operations, regulators and operators must understand that iGaming is the more profitable product.

iGaming is a more lucrative product…
$24.98 billion
Projected revenue in 2024.

…than sports betting.
$14.3 billion
Projected revenue in 2024.

Statista, 2024

Signals of change

Although iGaming has largely been an underappreciated product offering, signals of change (consumer, competitive, technological, or otherwise) have indicated a divergence from the status quo and a significant focus toward this online revenue stream.

iGaming: Unleash your operation’s potential

1. Have a strategy in any economic downturn
COVID-19 was a prime example of the casino industry's inefficient reactive-over-proactive tendencies. A proactive strategy will prepare operators for any potentially disastrous economic scenario, such as a recession or pandemic.

2. Build a top-class omnichannel operation
Operators can converge their markets – brick-and-mortar and online – so players can witness a truly frictionless experience through all channels. The seamlessness that consumers experience in other industries should be considered and propelled into the casino industry.

3. Meet digital consumer expectations
It’s not “business as usual” anymore. We are in the "new normal," and this era involves far more digital technology. Although casinos are seeing prepandemic revenue numbers, that doesn't mean they shouldn’t change their current operations. Start to consider the digital consumer lifestyle, where the ability to access a product online is no longer a preference but an expectation.

4. Heighten the experience economy
Operators that have implemented iGaming have provided an additional experiential product for consumers to become accustomed to without the need for a physical location or material goods.

Transform your operations by becoming a platform provider

Penn National Gaming example – Pivot from an asset-heavy to a platform-scale model

Asset heavy to asset light
Real estate investment trusts (REITs) have become a mechanism for casinos to unload assets and focus solely on operations.

Digital acquisition & spin outs
With iGaming and sports betting viewed as major expansion opportunities, operators want to acquire digital assets and/or build digital units as tools to focus on and succeed in the online market.

Omnichannel convergence
The combination of being asset light and digitally present has allowed operators to become platform providers by blending operations between digital platforms and land-based casinos while leveraging a flexible, structured, scalable, and brand-focused foundation.

iGaming enables a casino-as-a-platform strategy

Enable a platform model by bringing together two overarching platform strategies: player journey ecosystem and digital experience platform(s).

The player journey ecosystem is supported by digital experience platforms, various lines of business and revenue streams used to build an experience economy. Each digital experience platform is used to curate content, deliver seamless interactions, and orchestrate value across the ecosystems. A combination of these digital experience platforms is the glue that ties the player journey ecosystem together from online to on-property.

The future of iGaming

Once your strategy has been implemented, consider iGaming’s trends and its place on the experience roadmap in the coming years

ONLINE CRYPTO CASINO
Rolling the dice on digital assets

Online crypto and NFT casinos have been disrupting this space through decentralized markets for some time. Cryptocurrency and NFTs provide the opportunity to enable the play-to-earn model, a modern approach that can incentivize play. However, its volatility and place in a regulated market has operators questioning when adoption can occur.

Metaverse iGaming Experience
Appealing to younger demographics

The pandemic heightened the millennial-to-Gen-Z cultural transition, and the industry is exploring what investments will need to be made in virtual reality. While a more realistic initiative than crypto adoption, operators will still have their work cut out for them with the need to create a metaverse from scratch. The challenge will be establishing KYC, AML, and RG regulations in a virtual world.

Info-Tech Insight
Walk before you run. The future of iGaming is promising, but don’t get ahead of yourself by focusing on the implementation speed of new and emerging technologies. As a greenfield project, your organization should focus on needs before wants.

Visit Info-Tech’s Future of Casino-as-a-Platform Trends Report

Follow Info-Tech’s recommended iGaming evolution ladder

Omnichannel loyalty is iGaming’s key differentiator

Inducements and content bring attention to an online casino, but omnichannel loyalty retains players and builds a branded experience.

Converging online and on-property
Build a frictionless experience. To fully capitalize on land-based and online wagering value, casino operators need to bridge the two and create an all-encompassing player experience.
Choose omnichannel over multichannel. In an omnichannel strategy, players can play games, receive promotions, accrue and redeem credits, and transact on the casino floor and online seamlessly with a connected experience (i.e. VIP online experiences become in-person experiences).

Five major omnichannel challenges

1. Ineffective content strategy
2. Improper use of user data
3. Isolated analytics measurement
4. No action on new findings
5. Ineffective marketing strategy

Five major loyalty challenges

1. Focus on transactional marketing
2. Lack of cross-channel redemption
3. Ignoring technological loyalty progress
4. Limited analysis of guest behaviors
5. Absent centralized loyalty program across lines of businesses

Market-ready does not mean rush-to-launch

Regardless of whether your organization decided to adopt early or late, any casino that takes the time to plan an iGaming strategy will increase benefits and decrease risks.

“If we’re launching off-cycle, we don’t have to compete in terms of the cacophony of voices and media spend out there.”

– Jon Kaplowitz, Head of Penn Interactive

SBC Leaders, March 2022

An ad hoc iGaming strategy will miss key risks and considerations

iGaming is not a turnkey operation. The addition of an iGaming product requires time and effort for project development, vendor selection, and implementation. Your iGaming strategy will impact the way you operate and whether further (major and unnecessary) adjustments are needed to resolve initial strategic mistakes.

Revenue is a given; trust is earned. Although iGaming is typically viewed as a cash cow within the greater gaming industry, your strategy will impact how your stakeholders view the organization for years to come. An operator must consider regulatory requirements or risk fines and distrust from legislators and players.

When risks are glossed over, the brand image is impacted. Consider the following real-life cases:

• BetMGM Canada has been served Notice of Monetary Penalties totaling $48,000 for their alleged failure to comply with advertising and inducement standards.
• PointsBet Canada has been served Notice of Monetary Penalties totaling $30,000 for their alleged failure to comply with advertising and inducement standards.
• Casumo, a Maltese operator, has been fined $8.2 million for AML and social responsibility failings that include allowing a player to lose $1.1 million without a responsible gambling interaction.
• Intouch Games, a UK iGaming tech provider, has been fined $3.4 million for social responsibility failings.

The financial dimension of iGaming

While the benefits of iGaming outweigh the costs, developing an effective strategy can reduce risks on both the revenue and cost side, resulting in increased profitability.

The revenue of iGaming

• New source of revenue
• Increased land-based casino revenue
• New player acquisition and engagement opportunity
• Improved brand engagement
• Increased player base loyalty

The cost of iGaming

• Infrastructure
• iGaming licensing
• Maintenance and support
• Regulatory compliance difficulty with heightened KYC and AML obligations
• Customer acquisition through marketing and advertisement
• Promotions and incentives
• Taxation
• Liability

Overarching tribal gaming considerations

Don’t forget about the reality of your environment.

1. Varying data governance perspectives
Control and sovereignty over player data will dictate the approach tribes take to iGaming. Some tribes will want to maintain sovereign interest in the player databases and are less likely to partner with a vendor that requires them to relinquish control.

2. Increased target for cyberattacks
Tribal casinos have increasingly become targets for cyberattacks, with hackers eyeing their players’ data. According to the National Indian Gaming Commission, the prevalence of cyberattacks in 2021 jumped by 1,000% from 2019 (World Casino Directory, 2022), which has increased the price of cyber insurance for tribal casinos.