Online sports betting, once a rapidly growing global powerhouse, is now facing significant challenges that threaten to slow its momentum.
The industry, which has flourished thanks to innovative technologies, mobile betting apps, and widespread legalization, has seen remarkable achievements in recent years. However, the double-digit growth that once defined this sector is beginning to fade.
The online sports betting market, which currently accounts for 86% of all wagers placed globally, has experienced unprecedented expansion over the last decade. Mobile betting, in-play wagering, AI-driven predictions, and digital sportsbooks transformed the market, attracting millions of new users. Since 2017, the industry has added nearly 100 million users and quadrupled its revenue. Despite these accomplishments, experts warn that the era of exponential growth is over.
Market Saturation and Regulatory Hurdles
Several factors are contributing to the industry’s slowing growth. Market saturation is a significant challenge, with many mature markets reaching their peak user bases. Stricter advertising regulations, rising compliance costs, and intense competition have further squeezed profit margins for operators, particularly smaller and newer entrants.
While revenues in the sector are still expected to grow this year—reaching $45.1 billion—analysts predict a steady decline in growth rates. Projections show annual growth dropping to just 4.4% by the end of the decade, marking a threefold decrease compared to current figures.
The slowdown is particularly evident in major markets like the United States and the United Kingdom. In the US, where online betting has expanded rapidly, growth rates are expected to fall from over 20% to just above 4% by the decade’s end. Similarly, the UK will see growth drop from 8.3% to 3.5% over the same period.
Betting and Tourism: A Symbiotic Relationship
Despite the challenges in growth, online sports betting continues to profoundly impact tourism, especially in regions where it complements major sporting events or casino tourism. Large-scale events like the Super Bowl, UEFA Champions League, or Formula 1 races attract millions of visitors, many of whom engage in betting activities before, during, or after the games.
For destinations like Las Vegas, Macau, or Monaco, gambling and sports betting are intertwined with their tourism appeal. Online betting platforms have extended this influence, allowing tourists to wager on local games even from their smartphones. In emerging markets like Australia and parts of Asia, sports betting is increasingly integrated into the tourism ecosystem, driving traffic to cities hosting marquee events.
User Growth Persists Despite Revenue Challenges
While revenue growth slows, the number of online sports bettors is still on the rise, albeit at a slower pace. Over 123 million people used online sports betting platforms this year, an increase of 18 million compared to the previous year. This number is projected to surpass 150 million by 2025 and exceed 181 million by 2029, adding nearly 45 million new users within five years.
This expanding user base provides a glimmer of hope for the industry. However, operators must contend with maturing markets, increasing competition, and the complexities of adhering to stricter regulations. The challenge lies in sustaining profitability while navigating these obstacles.
Australia Emerges as a Unique Case
While most markets are experiencing decelerating growth, Australia offers a different narrative. The country, the third-largest online sports betting market globally, is expected to see a modest recovery by 2029.
Australia is also a popular tourism destination for sports enthusiasts, with events like the Melbourne Cup or Australian Open contributing to both travel and betting revenues. This combination positions Australia as a unique case where betting and tourism support each other.
While online sports betting faces slowing growth due to market saturation and regulatory challenges, its connection to tourism remains a bright spot. Betting continues to enhance the travel experience, drawing visitors to major sporting events and gambling hubs worldwide. This symbiotic relationship offers destinations an opportunity to leverage sports betting as a tool to boost local economies and attract global audiences. As the industry evolves, its integration with tourism may serve as a key strategy to sustain engagement and profitability.
