GPWA Times Magazine - Issue 16 - May 2011

Gross Gaming Yield Per Capita (US$ 2009) Source: GBGC Global Gambling Report Payment Cards Per Capita – European Union Source: GBGC Analysis around the world, even if gambling is heavily restricted, there is usually some form of lottery that can act as a guide. Equally, you can look for evidence of citizens of one country traveling to neighboring countries to satisfy their gambling demands. For example, the border regions of Cambodia are home to large numbers of casinos that cater to gamblers in neighboring Vietnam and Thailand who are denied access to casi- nos in their own country. The Global Betting and Gambling Consul- tants (GBGC) mantra regarding gambling is that people can only spend what they have in their pocket. To this end getting a measure on a population’s level of av- erage disposable income is a useful rela- tive guide to the kind of yield per active account you might expect to see. At an operational level, the ability for customers to make payments online is clearly essential for a successful mar- ket. Online gaming is predominantly about the movement of funds between operator and player, which is why gov- ernments seeking to prohibit online gambling usually target the financial system rather than the online gambling operators directly. One measure is to assess the number of payment cards in circulation and to cre- ate a relative comparison of cards per capita. In addition to this there is the consumers’ willingness to use online payment methods. This is a more diffi- cult factor to get a handle on; obtaining the relevant information is not always easy in certain parts of the world. Last but not least, the level of Internet penetration is an important factor to con- sider when assessing emerging markets. More specifically, broadband Internet penetration is important to take into ac- count because customers have to be able to access the website if they are to gamble online. In emerging markets this does not necessarily have to be domestic Internet access as the Internet café model is often the more usual means of going online. In GBGC’s view, broadband Internet pene- tration is a key factor in the growth of Inter- net gambling in emerging markets. Global penetration of broadband in households was 7.6 percent at the end of 2010, showing there is still substantial growth in the global broadband market. This figure is forecast to reach 8.0 percent midway through 2011 and 8.3 percent by the end of 2011. India If the potential for an emerging market were measured in the number of enqui- ries that GBGC had received about it, then India would be at the top of the list. The enquiries are both from existing Eu- ropean firms looking to find a way into India as well as from Indian business- men seeking partners to provide the necessary operational expertise. In October 2009, interest in the Indian online gambling market was raised by reports that the small state of Sikkim was in the process of issuing licenses for online gambling. While there seem to have been delays in granting those licenses, interest in the market has persisted over the last 18 months. The products being considered by poten- tial operators are sports betting on events such as cricket and hockey, and politics and skill-based games. India has a large number of Internet us- ers, although they are still a small per- centage of the vast population. There is a high propensity to gamble, which is 33 Searching for the Next Mother Lode — Emerging Online Gambling Markets