Is online gambling really helping the economy?
The US economy has seen some ups and downs recently. From the presidential election to the recent imposition of American tariffs on many nations, the data shows that plenty of events have had an impact on economic performance in the last year or two.
However, there are some sectors that are surging ahead, and the online gaming industry is one of them.
This dynamic industry was recently given an expected global value of $2.2tn by 2021 - and with North America being one of the largest online gaming market sectors, the US is a major contributor to (and beneficiary of) this rise. In the US, the online gaming sector is a magnet for all kinds of international investment, and the high profits made by many gaming firms are now proving to be increasingly important sources of employment - and tax revenue.
Make-up of the sector
In short, the online gaming sector comprises of online casinos/betting operators. All of which provide online casino games, live casino games and table games. Now, with the legalization of sports-betting, sports will become another key product.
Measuring which sector is the most beneficial economically is difficult to do. The rate of games purchased differs from genre to genre, but games in some genres are played over and over, while others are quickly replaced - which makes consistent measurement difficult.
One area that is providing clear benefits in terms of buoyant consumer spending, though, is the mobile game app sector. Often, these apps are sold at high volume but with low per-unit prices - or even at no cost at all. In-app purchases are bought as add-ons once the main app has been acquired, which is often a big profit driver for game firms.
What are the knock-on effects?
The impact of the online gaming sector on the US economy can't just be measured in terms of overall value or its relationship to consumer spending, though, as there are lots of other more indirect economic effects of a thriving gaming sector.
Some of these are not so good. There have been suggestions that the rise in gaming addiction has led to a significant amount of lost productivity, for example, while the violence believed to be subtly encouraged by some online games has led to work-preventing injury and violence.
However, on the whole, the impact is positive. The high demand for mobile game design, for example, fuels the need for a knowledge-based economy and skills base, and this in turn helps to bolster America's reputation as a destination for cutting-edge investment. Another area in which an impact can be seen is in cyber security and payments. Online casinos boast some of the most advance security software in the world. This is due to their need to protect themselves and clients. Thanks to continuous development for the sector cyber security has advanced. Many new payment methods have also been developed for the casino industry. Successful methods then go on to find use in more mainstream sectors.
What will the economic impact be in 2019?
One area that the online gaming sector has its eye on is virtual reality technology. This industry is expected to be worth $11.6bn by 2025, and it's expected that it will be worth more once it beds into the online gaming industry. When it does, gamers are likely to experience profound user experience benefits, including better graphics and higher attention to detail - which will fuel demand for both the skills required to design these items as well as their actual manufacturing.
Another focus area for the future will be sports betting. Recently legalized in the US, it is likely to be very lucrative. Reports suggest that the industry will support over $4.0 billion dollars of labor income. In terms of employment early figures suggest 86,819 direct jobs. Indirect jobs created and supported will be around 129,852.
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Aug 01, 2018 04:55 PM EDT