Author Archives: andrew

India is set to become one of the biggest global markets for mobile games and apps over the next four years, with predictions for the market to reach a total value of Rs27bn, a new report by  Avendus Capital suggests.

The Indian mobile games market is driven mostly by the rapid adoption of smartphones and the growing 3G user-base. Until recently, the market had been lagging in comparison to other developing economies, as piracy has been a major obstacle for the apps and games market. But as the country offers improved mobile Internet capabilities, demand for paid apps is expected to increase significantly.

Figures published in the report show that the expected number of people in India possessing a smartphone in 2013 will reach 67 million but this is forecast to soar to 382 million by 2016. At the same time, subscribers to the country’s 3G network are set to grow from 11 million in 2011 to 56 million in 2013. By 2016, the number of 3G subscriptions in India is expected to hit 266 million.

The state of New Jersey is to launch its online gambling market on 23 November. A fixed date has finally been announced after months of uncertainty, but the state’s Division of Gaming Enforcement stated that the launch could still be delayed if licensed operators are not ready to go live.

Meanwhile, Delaware has been moving faster than New Jersey, with an announced launch date of 30 October, according to reports. This will make it the second state with an active online gambling market after Nevada, which only provides online poker at present. The Delaware State Lottery has so far selected two companies to operate online casinos – Scientific Games International and 888 Holdings.

Under the state’s regulation, a series of online gambling options will be available, including poker, blackjack and slots. These can be accessed with players’ Facebook accounts regardless of location and can be played with free chips.

When eventually real-money gambling starts, players will only be allowed to access online casinos if they are physically present withing the boundaries of the state and if they provide ID to verify their age, the website noted.

Offshore companies operating on the British online gambling market are to face a new tax, which the Treasury estimates will generate about £300 million per year.

The 15% tax will come into effect in December 2014, when another rule stating that operators should be taxed depending not on where they are based but where they operate comes into force. Thus, offshore companies will be taxed in the same way as British online gambling companies.

According to Sajid Javid, economic secretary to the Treasury, by moving offshore UK gambling companies can avoid paying taxes and the government is taking steps to prevent this from happening in the future. He added that the new rule will mean a fairer contribution from gambling companies to the country’s finances.

The new tax rate is set to be confirmed in next year’s Budget in March 2014 and will affect some of the biggest players on the market, including William Hill, Betfair, Ladbrokes and Bwin.party, which are all based in Gibraltar, where taxes are capped at £425,000.

The reform was first suggested in last year’s Budget and William Hill stated back then that, if the rule came into effect, it would challenge it for violating European Union competition laws.

Estimates from the Gambling Commission reveal that last year the global remote gross gambling yield (GGY) was £21.08 billion, a 5% increase on the previous year, with GGY operators in the UK accounting for approximately 4% of the total. GGY generated for offshore businesses by UK consumers grew by about 1% between 2011 and 2012.

Hungary has introduced changes to its rules concerning gambling in the country, opening up fresh growth opportunities.

The changes were unexpected in view of the country’s reluctance to address the issue in the past couple of years. The most significant amendment to the existing rules is broadening the list of games legally available on the web. The Hungarian Parliament also pledged to issue 10 new casino concessions.

The new laws, which became effective in July, still treat remote gambling as a “non-liberalised” gaming activity but it will be expanded to include sports betting and online casino games, in addition to the previously available online horserace betting and online card games. Remote gambling activities may be carried out only by the state gambling organisation or by a concession operator that has a contract with the state. This means that foreign companies wishing to operate in Hungary will need to establish a domestic concession company in order to start providing such services in the country.

Companies that want to enter the Hungarian gambling market will be assigned five-year concessions and will be required to pay a fee of some $450,000 per game type. Operators will also be liable to a 20% tax on their gross gaming revenues, to be paid every two weeks, as well as a quarterly supervisory fee equal to 2.25% of the sum.

Soon after the government banned the use of slot machines outside Hungary’s three casinos, local lawmakers now seem to have changed their minds and will be promoting the launch of new casinos in 10 cities outside the capital by launching closed bids for operators.

A recent report by Poker Stars shows that Asian countries like South Korea and China, as well as Russia, are the fastest growing markets for online poker. While its popularity is growing across other markets too, such as Peru, Brazil, New Zealand, Central Europe and Western Europe, these still lag behind these three countries. The research also found that the popularity of the online game in the United States, Canada and Mexico has been dropping post UIEGA as regulations there that make it harder to access online poker sites.

In the US, online poker is not legalised at the federal level and the different laws in force in various states can cause confusion among players. Besides the three states that have already allowed online gambling – New Jersey, Nevada and Delaware – a number of other states, such as California, Michigan, Mississippi, Illinois, Florida and Connecticut, are getting closer to legalising it too.

The PokerStars report noted that while the expansion of online poker in North America has not stopped over the past few years, the rate at which it is growing has slowed down.

China is the most populous online gaming market globally, with 120 million avid gamers. Playing games online has become so popular that even the almighty Communist Party of China has given up fighting it and has started creating its own games that show the population how to be better citizens under a socialist regime.

Business opportunities in such a lucrative market are huge. Technology research firm Strategy Analytics recently calculated that the global online gaming market yielded $12 billion (£8 billion) in revenue in 2012, up from $5.2 billion (£3.5 billion) five years ago. It also estimated that the total annual revenue will reach about $15 billion (£10 billion) by the end of this year, with China accounting for the more than half of this, at about $8 billion (£5.4 billion).

The biggest player in the market is Shenzhen-based Tencent Holdings Ltd, which holds a market share of about 40%. The company also made a move on the international market by acquiring about 48% of US-based Epic Games in 2012. Epic produces several popular series, including Gears of War and Infinity Blade.

Digital Pay2Play entertainment is proving that heritage brands can move seamlessly into online. Adopting board games for mobile and tablets is a mainstream trend now because the games themselves are classic and they never grow old. These board games are becoming increasingly popular in their mobile and tablet variants, as more and more users pay to play Scrabble, Monopoly or other classic board games.

Recent data reveals that Scrabble, owned by Hasbro Inc., is the 14th best-selling app ever for Apple. However, even this achievement is dwarfed by another classic, Zynga’s “Words With Friends,” which currently ranks at number eight. Other board games that have enjoyed a surge in digital popularity include TheCodingMonkeys’ Carcassonne, Hasbro’s Monopoly and Settlers of Catan by United Soft Media Verlag.

Alongside the growing sales of online board games, many experts agree that there is a trend for crossover of sales. For example, between 30% and 40% of the people who buy the Ticket To Ride app will end up purchasing the physical board game, Eric Hautemont, chief executive at Days of Wonder Inc., told the Wall Street Journal. The company owns and manufactures the multiple-award-winning game.

Meanwhile, Thorsten Suckow, who leads the project overseeing the Settlers of Catan board game on mobile devices, commented the game has sold more than 750,000 units for iPhones and iPads since the versions were rolled out in 2009 and 2010 respectively. However, buying the app is just the beginning, as many people also purchase expansion maps.

All operating casinos in Atlantic City have applied for an online gambling permit, it was announced after the deadline for applications on 30 June expired. In the last few days Betfair and Poker Stars have announced tie-ups with Trump Plaza and Resorts Casino respectively. Non-US egaming companies wanteing to tie-up with land-based resorts have until the 29^th of July to file their applications. The Borgata, which is co-owned by Boyd Gaming and MGM Resorts, and Caesars Entertainment were among the first casinos to declare their intention to team up with an online gaming provider.

Atlantic City has a total of 12 casinos and they all filed documentation to New Jersey’s Division of Gaming Enforcement (DGE), hoping to secure a permit prior to the official launch of online casinos in November. The earliest date set for the launch of Internet gambling is 23 November but regulators are indicating that this could be delayed until 2014.

In February, New Jersey joined Nevada and Delaware to become the third state to legalise online gambling. However, New Jersey will allow many more forms of gambling compared to Nevada, for instance, where only poker is allowed.

Analysts estimate that while Nevada’s Internet gambling market could generate annual revenue of between $50 million and $250 million, projections for New Jersey far exceed these estimates, with expectations varying from $500 million to $1 billion per year.

Asia Pacific continues to lead the way in social and online games playing according to recent data from comScore. Almost 48 million Internet users in the Asia Pacific access an online gaming site on a daily basis. Worldwide, 145 million users played online games every day in April, the data reveals.

Europe is another key market, with 45.6 million daily players, followed by North America, where 30.3 million people access online games daily. Latin America comes fourth with 14.9 million daily players but experts predict that the Latin American market is set to develop further over the next few years.

Asia remains a key market for investors, with various companies planning to expand in the region. Philippines-based listed gaming PhilWeb, for example, has recently announced plans to expand its operations to Thailand, Sri Lanka, Myanmar, Palau, Nepal and Mongolia this year.

This dynamic growth is all the more interesting when you consider that over 1 billion smartphones will be shipped annually by 2016 but that less that 15% of phones in the world in use today (over 6 billion phones) are smartphones. With mobile gaming growth outstripping landline broadband gaming growth the potential for digital Pay2Play entertainment remains vibrant.

The Swiss government is taking steps to introduce new gambling regulations and lift the ban on online casinos operating within the country. Switzerland banned online gambling in 1998 but since then it has been struggling to enforce the ban, due to administrative problems. Moreover, Swiss citizens were not prohibited from accessing foreign websites and playing there, which practically meant that the ban was ineffective.

There are 20 casinos currently operating in Switzerland, including the latest brick-and-mortar casino that opened in November last year. One of the main arguments presented by lawmakers against lifting the ban on online gambling was that allowing people to play online would harm the existing casinos in the country. However, a recent report commissioned by the government revealed that the impact on land-based casinos would be virtually non-existent. This led the government to change its view and state that it was willing to allow online gambling within the country’s borders.

It is still not clear what approach the government will be adopting towards the new legislation but experts believe that it is possible to introduce regulation of online gambling establishments through a system of licences and fees. This could be done by the Online Gambling Association Switzerland, a new body that would regulate and advise on Internet gambling to meet the needs of the local online gambling providers, Online Casinos website reported.