Online gambling has grown into a popular activity blending risk, luck, and strategy. The worldwide online gambling market was valued at $63.53 billion in 2022 and is projected to grow at a CAGR of 11.7% from 2023 to 2030.
But if you’re thinking of starting an iGaming business, opportunity comes at a cost. Developing an iGaming solution is no easy feat: a platform has to be able to handle high user loads, ensure top-notch transaction and data security, and offer all the latest features — and that’s just the start.
This article explores the challenges iGaming companies face in their quest to provide a great gaming experience. To put them in context, we’ll begin with a quick look at the current state of iGaming.
iGaming market trends
With all the hype and excitement surrounding iGaming, it’s no surprise the industry is undergoing a radical transformation.
Experts say that as some countries take charge of local regulations, payments and licensing are becoming the backbone of iGaming. As a result, we’ll likely see more financial modules added to meet local needs in the near future.
The influence of cryptocurrency in online gambling shouldn’t be overlooked either. While Apple Pay and Google Pay are still going strong, a decentralized ledger gives players fast deposits and withdrawals and keeps funds safe from hackers.
Regardless of payment preferences, iGaming operators also need tools for segmenting players according to particular needs. Data analysis helps gambling businesses win user loyalty while safeguarding company profits.
Operators are gradually switching from financial metrics like gross gaming revenue to loyalty-focused metrics like game session length and churn rate. Armed with precise, up-to-date data, gaming businesses can develop better retention tactics and form stronger relationships with players, all the while ensuring personal data protection and fraud-proof cooperation.
Indeed, forming strong bonds with players is key. Implementing responsible gambling practices such as age verification and deposit limits can help, but the rising trend is toward safe gambling software. For instance, Better Collective, a Danish betting company, implemented Gamalyze — a tool to detect problem gambling and ensure responsible betting — across its gambling network.
If you’re on a search for a reliable and feature-rich iGaming platform, these are all trends you need to consider when choosing a software provider. But it doesn’t stop there. Let’s look at the challenges presented by this particular sector — your iGaming software provider should help you tick as many boxes out of this list as possible.
Top 3 challenges of the iGaming industry
Running an iGaming business isn’t always easy — there are regulatory hoops to jump through, security risks to avoid, and high operating costs to contend with. However, with the right approach and information, you can overcome the main challenges.
Navigating the maze of global iGaming regulations can be quite an adventure.
Europe, in particular, is a tough nut to crack, with both EU laws and each country regulating its own gambling sector. Despite the efforts of groups like the European Gaming and Betting Association and the International Association of Gaming Regulators to bring clarity and consistency to the industry, it ultimately falls on each member state to enforce and uphold regulations.
US gambling regulations are also state-led, resulting in changing requirements across the country.
All this means that if you’re an online gaming business owner venturing into the international market, you’ll need to do your homework and ensure compliance at many levels.
When it comes to online casino platform regulations, one size doesn’t fit all, either. While many countries have similar requirements for user identity and anti-money laundering checks, how these are implemented can vary wildly. Some countries might be happy with a basic ID check, while others will demand a full-on selfie or live video to prove you’re not a robot. Other data protection and cybersecurity regulations are also applied to iGaming solutions in different countries.
As a result, it’s wise to avoid budget online casino software solutions that could lead to trouble if they turn out to be non-compliant down the line. Skimping on compliance issues won’t just bring you penalties from regulatory authorities — it can also heighten your security risks.
The iGaming industry has become a tempting target for malicious actors, thanks to high revenue and its storage of personal data.
Last year, the iGaming sector experienced a surge in DDoS attacks, making it one of the most targeted sectors in Q2 2022. To create a safe and inviting environment, casinos need a cybersecurity system that balances protection with maintaining a welcoming atmosphere.
The right gambling software provider will offer a robust iGaming platform that can identify potential security threats in real time and keep everything from player data to business profits secure. Whether you opt for a traditional or blockchain-based online casino, you will need advanced encryption, multi-factor authentication, and regular security audits. This is what you should look for when choosing an iGaming solution provider.
High operating costs
Scaling an online gambling business isn’t cheap.
To survive in a competitive industry, any iGaming company needs significant investment in tech and marketing. Additionally, customer support must be highly personalized and multilingual to accommodate players from different countries.
Fortunately, proper data analysis can help you reduce operating costs and drive revenue.
The advantages of data analysis for iGaming operators
Appropriate algorithms can help ensure the security of your online casino solution and save you money on payment handling. Real-time monitoring and transaction analysis can detect suspicious activity and reduce the risk of chargebacks. Data analysis can also flag possible fraudulent schemes, suspected bot use, and multi-accounting, allowing you to better manage risks.
If you take the time to study your customers’ behavior and preferences, you can also customize your offers and promotions to make them feel special. You’ll be more likely to keep them around for the long haul this way.
Finally, it’s also a good idea to analyze customer support interactions to see if any patterns or trends emerge. If you notice many users asking the same questions, this could signal a problem with your service. Fixing these issues before they escalate can save you money (and headaches).
Given all these benefits, how can you integrate data analysis into your online gaming software to easily make data-driven decisions? The answer is to choose a flexible, API-driven casino platform that centralizes your database, detects and flags data inconsistencies, and gives you real-time data access. An all-in-one iGaming software platform can simplify your technical setup process, allowing for fast gambling software integration and faster time to market.
Success in iGaming means clearing three major hurdles: keeping up with fast-changing regulations, ensuring player data and transactions security, and balancing the high costs of running a gambling business.
But there’s good news too. A data-driven iGaming software platform can help you overcome these challenges. You can sit back and let the platform provider do the hard work by ensuring compliance, protecting your user base, and highlighting where you should save and spend for maximum ROI.
Horizon, VeliTech’s microservices-based platform for online casinos and sports betting is the best turnkey gambling solution offering seamless integration with leading gambling providers. With it, you can build a secure, compliant, and profitable gaming environment for your players. Contact us to find out more!