*By Tony Jones
The digital economy of Asia is continuing to grow at an incredible rate as we enter a new decade, and one of the biggest beneficiaries of this is the e-Gaming industry.
Gambling is a traditional and important part of Asian culture, and with a growing middle-class market and an increasingly tech-savvy and outward-looking youth, the prospects for businesses catering to Asia look increasingly bright, with those who offer the highest quality products likely to benefit most.
According to Transparency Market Research, the online gambling & betting market in Asia will grow at a significant compound annual growth rate (CAGR) of 14 percent between 2018 and 2026.
Investment opportunities have become more evident in Asia as a result of e-Gaming sector growth, whether this be technological innovation in infrastructure right through to supporting running gambling operations.
The recent developments in Cambodia and the PAGCOR imposed moratorium on new licensees may have cast doubt on the attraction of further investment in these regions, however companies and investors affected by these developments do have options further afield.
There are opportunities for Asian operators looking to expand into the West, and with the M&A activity associated with maturing markets, there are opportunities for Western operators to increase their market reach into Asia. The robust yet flexible regulation available by licensing in a top-tier international business centre, such as the Isle of Man, ensures quality corporate governance which in turn increases the attractiveness of companies to investors as well as opening new doors in other geographical areas.
Newer business models, such as those enabled through crypto-currency and blockchain technology, are interesting areas for investors, with potentially very lucrative results. Blockchain technology is becoming ever more popular in the gaming sector, as evidenced by the increase in applications the Isle of Man has received for gaming operations utilising this tech and savvy investors will be keeping up to date with related developments and opportunities.
Challenges for operators
Despite the phenomenal growth over the last decade or two, there are several challenges facing operators targeting the Asian market. The region is very fragmented with some countries encouraging the online gaming sector, some discouraging it, some enforcing outright bans and some with un-enforced legislation. Most countries are in a state of flux, often leaving operators in a state of confusion, with regulations and requirements changing regularly. Therefore ensuring the compliance function within a company is operating to high standards is essential. The compliance teams will have different levels of compliance requirements to adhere to for each jurisdiction, so often operating to the highest standards is the best way to ensure all markets are covered, especially as AML/CFT/Source of Wealth requirements are becoming ever more important in the modern world of international trade and no company wants to be associated with tainted funds.
Other challenges for e-Gaming operators in Asia include satisfying local languages and customs protocols, understanding regional game type preferences and securing an easy and secure mechanism for transferring money. The regulatory landscape is also adapting quickly, meaning operators must deal with inconsistency regarding regulation and rules, however as the e-Gaming sector evolves and develops in the region, these challenges can be overcome.
The e-Gaming market in Asia is maturing, with competition intensifying amongst companies for dominance in the region. For companies to thrive, it is crucial that they satisfy the demands of modern consumers by embracing industry and technological trends, and providing innovative solutions, in order to stand out in the market.
Reputable operators targeting this market are looking for jurisdictions in which to base their operations, that have a strong reputation for compliance and strike a balance between keeping crime out and supporting high quality businesses.
* Tony Jones is e-Gaming Development Manager at Digital Isle of Man. Digital Isle of Man is responsible for the digital sector in the Isle of Man, spanning 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.
Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.
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