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In 2022, the Australian online gambling market was worth $4.5 billion, and by 2028, it is expected to reach $7.2 billion. What’s more, the figures show us that online gambling is very popular among Aussies, who managed to spend $174 billion on gambling between 2019 and 2020.
Several factors have contributed to the growth of the iGaming industry in the Land Down Under, such as regulatory changes and technological advancements, like blockchain, AI, VR, and mobile gaming, which were implemented by the best casinos online Australia has on offer.
In other words, the AU gambling market has become very lucrative for investors who can profit in many ways, from buying stocks to investing in online gambling companies and mobile apps.
That said, in this guide, we’ll talk about the best investment opportunities in the online casino sector in Australia. We’ll also talk about the main benefits and challenges that come with these types of investments.
Investment Opportunities Within the Online Casino Sector in Australia
If you follow the latest gambling trends, you’ll notice that investing in the AU gaming industry is a smart move for several reasons:
- The online gambling sector in Australia is sustainable and fast-growing
- Each province has its own gambling regulatory body
- There is a high demand for new online casinos and betting sites
- Gambling companies in AU are highly valued
- Mobile gaming is in high demand
- AU gaming stocks are up
According to the aforementioned gambling trends, it seems that the most profitable option for entrepreneurs is investing in new or established casino companies, gaming stocks, and mobile game development.
Online Casino Platforms
You can choose to invest in prominent online casino operators that dominate the iGaming industry or in smaller operators that provide unique gaming experiences, such as poker rooms and bingo halls.
If you don’t have a large budget, we suggest that you invest in new gambling platforms or software companies. However, these investments will come with a greater risk since these operators are yet to establish a reputation.
Gaming Stocks
More experienced entrepreneurs can invest in game stocks, i.e., ASX shares. ASX gaming stocks include all companies that create online games and their software. Investing in game stocks is trending right now due to advancements in technology and the implementation of VR and AR in games.
The most popular ASX gaming stocks to invest in are
- Aristocrat Leisure Limited (ASX: ALL) – a gambling machine manufacturer and a mobile game publisher from Australia.
- Jumbo Interactive Limited (ASX: JIN) – Australian reseller of lottery games.
- Ainsworth Game Technology (ASX: AGI) – an Australian company that manufactures, develops, and designs game machines and software.
Mobile Game Development
Mobile gaming experienced a real boom in Australia, which opened the door for many investors. Namely, the AU mobile game market should generate $2.80 billion by 2027, while the number of mobile users is expected to grow to 9.2 million.
The main reasons why you should invest in mobile game development are:
- This industry has yet to reach its peak
- Mobile apps generate revenue in two ways – through in-game purchases and paid versions or paid subscriptions
- Developing mobile games is cheaper than creating desktop games
- Mobile games have a massive user base
If you do the math, you can see how investing in mobile game development in Australia can bring you big profits. On that note, you can invest in companies that need a budget to create and launch their games. Who knows, maybe their games will become the most popular pokies in AU online casinos.
Benefits and Risks of Investing in Online Casinos
Investing in online gambling platforms in Australia comes with great benefits, such as building long-term wealth. However, every investment also comes with certain challenges and risks that you must be prepared for.
Benefits of Investing In Online Casinos
The AU iGaming industry is very profitable, which means that investing in reputable casino operators will bring you great returns on investment, as well as investing in game stocks and mobile developers.
Moreover, launching an online gaming platform is much cheaper than opening a brick-and-mortar casino. The only costs investors will have to cover are marketing, web development, maintenance, and license fees.
Another benefit of investing in online casinos is their availability since you’ll be able to target players from all over the world, not only Australia. Plus, you’ll be able to offer your players to use multiple payment methods, from debit cards and bank transfers to e-wallets and cryptocurrencies.
Risks of Investing In Online Casinos
As with any other business, investing in the iGaming industry comes with certain risks. Since the online gambling market is very competitive, you’ll have to follow the latest trends to stand out from the competition. This includes things like integrating prominent software developers, bitcoin games, responsible gambling tools, and AI.
Other things that can be a big problem for investors are hackers and country restrictions. Namely, since you’ll be running an online casino, you’ll have to invest money in modern security systems, like SSL and TLS encryption and 2-factor identification, to protect the personal data of your players from potential hacks.
When it comes to country restrictions, you must keep in mind that your target market will be limited to countries that allow online gambling.
To reduce the risk of a bad investment and to be able to create a profitable business strategy, you’ll need to thoroughly analyse the iGaming market in Australia.
Investment Strategies That Can Help
Creating a good business strategy is half the way to success. On that note, if you want to invest in the Australian iGaming industry, you must first do market research. This means that you need to analyse trends and see how your competitors operate to have an advantage over them.
After that, you need to create a business plan that must include your long-term goals. In this way, you’ll know how to allocate your budget.
You shouldn’t forget about your target audience, either. Namely, players use various strategies to make money with online casinos, which is why it is essential to understand their gaming habits. Knowing what your players like will help you choose a suitable marketing strategy.
All online gaming platforms must be licensed and regulated by an authoritative gambling body. In other words, if you want to run an online casino, you’ll have to obtain a license. In Australia, each province has its own regulatory body:
- Australian Capital Territory – ACT Gambling and Racing Commission
- New South Wales – Liquor and Gaming NSW
- Northern Territory – Licensing Commission
- Queensland – Office of Liquor and Gaming Regulation
- South Australia – Independent Gambling Authority
- Tasmania – Tasmanian Gaming Commission
- Victoria – Victorian Gambling and Casino Control Commission
- Western Australia – Department of Racing, Gaming and Liquor
How to Find Profitable Gaming Stocks
If you want to find profitable gaming stocks, start by examining the following factors:
- Revenue – this is the money that the company managed to generate within a certain period. For example, Aristocrat Leisure Limited had revenue of $5.57 billion in FY 2022.
- Net income – the total earnings that the company made during the year after paying operating expenses and taxes. For example, in FY 2022, Aristocrat Leisure reported a net income of $653 million.
- Earnings and earnings per share – This number refers to the income that the company gives to its shareholders. By analysing EPS, investors can compare the company’s prior and current performance.
- Price-earnings ratio – This figure tells us how much investors are prepared to pay to get $1 of the company’s current earnings.
- Return on equity and return on assets: Return on equity refers to the profits that the company makes through shareholders’ investments, while return on assets refers to the profits that the company managed to generate through its assets.
Why Should You Invest in Australia’s Online Casino Sector?
The main reason you should invest in the Australian iGaming market is its growth potential. Namely, in 2022, this market was valued at $4.5 billion, which puts it right behind the US and UK markets. What’s more, the Australian online gambling market is expected to generate $7.2 billion by 2028.
Investors may also profit by putting their money into online casino platforms and gaming stocks since the former is in high demand, while the latter is in uptrend.
Likewise, you can profit by investing in mobile game development since this industry has yet to reach its peak. In other words, it has the potential to reach $2.80 billion by 2027.
That said, if you want to be successful, before investing in the iGaming industry, you should do detailed market research and create a business plan based on your long-term goals and budget.
