Innovation key in booming Asia online industry

Asia’s online gaming industry, which is forecast for double-digit growth over the next seven years, is likely to be one of the main topics to be talked about at ICE Totally Gaming, with executives keen to explore both the opportunities and learn how to face the challenges.

Asia accounts for about 60 percent of the worldwide population and combines several expanding world economies, so it is no surprise that it is one of the largest gambling markets in the world. The e-Gaming industry in the region has continued its growth trajectory and this can be aptly illustrated by the year-on-year growth in revenues.

In fact, according to a recent market research report published by Transparency Market Research, the online gambling and betting market in Asia Pacific is anticipated to expand at a significant compound annual growth rate (CAGR) of around 14 percent between 2018 and 2026.

This unprecedented growth is driven by a new generation of middle classes, the transition of several countries into modern digital economies, easy access to mobile and tablet applications, improving broadband internet connectivity, and a cultural history of gambling dating back centuries. Continued advancements in technology have propelled the industry’s growth and will continue to do so. In fact, the internet economy of South-East Asia is expected to grow to $200 billion by 2025, as highlighted by the ‘e-Conomy SEA Spotlight 2017’ report by Google and Temasek. This remarkable development will continue to draw in operators that offer high-quality and innovative products.

For investors, the continued rise in the popularity of e-Gaming in Asia has created new avenues on various fronts, from investing in technological infrastructure to supporting local expertise to running gambling operations. Asia has several investment attractive regions such as the Philippines and Japan, which have relatively business friendly environments. Promising countries like Cambodia, Vietnam, and Myanmar are also prospective markets for operators planning to get a firm foothold in the Asian gambling industry. To make the most of the opportunities from Asia, operators are likely to look towards jurisdictions like the Isle of Man, which can offer a license suitable to target pre-regulated Asian markets as part of their multi-jurisdictional strategy.

Despite the phenomenal growth, there are several challenges facing operators targeting the Asian market. The region is very fragmented and some countries are still developing which means that the infrastructural and operational systems can be further improved in certain areas. The other challenge for e-Gaming sites is to provide a local language interface and measures for protecting players’ funds.

Furthermore, as the region’s regulatory environment is still developing, there is no unified approach and operators need to deal with inconsistencies in terms of rules and regulations. However, these challenges can be overcome as the e-Gaming industry continues to mature in the region, with a solid premise for further development.

The Asian e-Gaming market has been a very interesting place to watch over the last few years and we expect that to continue. It is no secret that operators focusing on the region face a lot of competition and it won’t be long until several companies are battling for dominance over this key region. Operators will need to provide innovative solutions and be ahead of the curve in embracing new trends if they want to stand out in the market, otherwise they risk being left behind.

Operators targeting this market are looking for jurisdictions in which to license and headquarter that have a strong reputation and strike a balance between keeping crime out and supporting high quality businesses. They also need a jurisdiction base with robust telecommunications and power infrastructure along with strong data security capabilities. As such, the Isle of Man, with its strong e-Gaming proposition, continues to be well placed to help companies to grow their operations in this interesting region.

It is unfortunate that ICE this year clashes with the Lunar New Year, but we hope some of our Asian friends will still be able to attend.

*Tony Ure, Head of e-Gaming, Digital Isle of Man, Isle of Man Department for Enterprise. Digital Isle of Man is responsible for the the island’s international e-Gaming industry, digital economy, and digital media sector. Digital Isle of Man works with Government, private industry and key associations to create the right environment for the sector to flourish.