The connection between gambling and gaming is tighter than ever with the meteoric rise of competitive video gaming, live streaming, and new wagering mechanics that leverage skill-based gameplay. While this intersection poses risks like encouraging compulsive behaviors or exposure to gambling for young audiences, it also presents opportunities to engage massive global gaming audiences and breathe new life into the gambling industry. Casual and social wagering around gaming content, for instance Big Bass Splash slot, generates billions in revenue annually, but responsible oversight and consumer protections have not kept pace with innovation. Nuanced governance balancing public good with business interests will shape whether this high-risk, high-reward new era lifts up participants or takes advantage of them.
Key Statistics on Gambling and Gaming Convergence
- 2.8 billion gamers globally in 2022, projected to top 3 billion by 2024 (Newzoo)
- $200B+ estimated 2022 revenue from gambling activities around video gaming (Juniper)
- 80% of esports fans aged 21-35 gambled on esports in the past year (Periscope Esports)
- 70% of adult Americans believe loot boxes are a form of gambling (Morning Consult)
Live Streaming and Esports Wagering
The advent of platforms like Twitch, YouTube Gaming, and Facebook Gaming has turned gaming into both entertainment and a participatory spectator sport. Live streaming now draws audiences that eclipse major traditional sports, with viewership for top streamers exceeding most cable news networks. This has fueled betting around live streamed gaming content. Wagering on the outcomes of esports matches has exploded from $649 million in 2020 to a projected $1.9 billion in 2022 as fantasy esports and proposition bets attract fans (Juniper).
Operators like Unikrn take wagers using cryptocurrencies and obscured nation locations to circumvent gambling regulations. While most bettors are young adults, exposure to gambling mechanics in slot machine streams attracts underage viewers. Just 9% of children can reliably identify gambling sponsors in esports streams (GambleAware). Stricter age gates, responsible gambling messages, and prohibiting wagering sponsors could balance business models with ethical imperatives.
Loot Boxes, NFTs and Play-to-Earn
Loot box monetization in games like FIFA Ultimate Team, where players purchase randomized award packs, generates billions for major publishers. With third-party markets emerging to trade high-value digital assets from games of chance, 70% of American adults view such virtual item gambling as equivalent to traditional gambling (Morning Consult). Pending legislation like the PETE VIP Act proposes applying gambling regulations around disclosure and age gating.
Play-to-earn crypto games like Axie Infinity also reward players for investment of effort, time, or money with tradable NFT assets. In countries like the Philippines and Venezuela facing high inflation or unemployment, play-to-earn offered life-changing income for some during the pandemic. But speculative losses now significantly outweigh reliable earnings for most participants (Yahoo Finance), while fears remain about gambling-like addiction and appealing mechanisms. Designing sustainable, responsible models that protect consumers presents a complex challenge requiring coordinated policies and corporate accountability.
The Inevitable Merging of Games and Gambling
Major gambling brands see gaming IP and casual wagering mechanics key to acquiring younger patrons as older generations fade. BetMGM offers real money bets around simulations like hockey and basketball video games. Entain, owner of Ladbrokes, makes acquisitions across esports while expanding virtual sports betting. Flutter Entertainment brands draft fantasy esports teams through FanDuel.
Australian slot machine maker Aristocrat leverages skill-based gambling built using mobile gaming IP through acquisitions like Product Madness and Plarium. As gaming and gambling collide, no single solution fits all the ethical risks and oversight gaps. But sustainable, common-sense policies embracing input from a spectrum of experts could balance innovation that moves industries forward responsibly, instead of leaving new generations exploited.