Will Virtual Sports Ever Take Over from Real Life Sports Betting?

Posted on August 29, 2018 - Last Updated on August 28, 2018

As with any industry operating in the world today, the sports betting industry is prone to the whims of growing and declining trends. In the early days, the trends were for sports betting on horse racing, but then people began to punt on football and other sports.

In the modern era, those trends have become more diversified. Recent trends that have been readily gobbled up by eager punters include In Play betting (and its accompanying Live Streaming services), betting on esports and of course our particular area of interest Virtual Sports betting.

However, Virtual Sports has grown markedly since it was first introduced as a somewhat niche market with some experts maintaining that Virtual Sports betting accounts for around 30% to 35% of bets made on some sites. That is a massive amount of cash generated from Virtual Sports and even if these figures are a tad optimistic, that still represents a huge growth for what is essentially a fledgling industry.

The question we are going to ask is, where does the growth of Virtual Sports end? Will there ever be a time when betting on Virtual Sports outstrips betting on all other forms of real life sporting events? That may sound far-fetched but we are just between 16% and 20% of revenue away from that being the case (if you believed the 30%-35% of bets made figures).

Could we even see a time when sports betting revenue drops markedly and essentially Virtual Sports takes over the sports betting market in full?

To examine this question in full we need to examine the reasons why Virtual Sports has grown so markedly, how important it is to sports betting sites in general and to ask the question of whether Virtual Sports bets are being made instead of real sports bets, or whether they are being made in addition to them.

We also need to take into account the habits of punters that tend to visit sports betting sites and explore the potential longevity of both Virtual Sports and real sports betting.

So let’s begin with the first key question.

How important is Virtual Sports betting to sports betting sites in general?

Even if you do not want to accept that Virtual Sports is responsible for between 30% to 35% of revenue generated on some sports betting sites (and I’ll be honest, I find those figures difficult to reconcile as a long-time sports bettor), there is absolutely no doubt, as research has shown, that after football betting and horse racing, Virtual Sports betting is the third most important stream of revenue for sports betting sites today.

Not only that, but Virtual Sports is by far and away the third most important stream of revenue, offering bookmakers considerably greater turnover than the likes of golf betting, tennis betting, rugby betting or similar.

Furthermore, the importance of Virtual Sports to sports betting sites is only going to increase over time as it seems greater and greater numbers of people are indulging in Virtual Sports betting. There’s certainly no sign of the fashion for Virtual Sports betting slowing down just yet, in fact the market seems to be growing.

Based on that, we can categorically state that Virtual Sports is key to the operations of most sports betting sites and that in the future, its value to them is only likely to grow.

Is Virtual Sports betting reducing or replacing betting on real life sports?

This is a key question for the future of Virtual Sports and also for real life sports betting, but in truth it is extremely difficult to ascertain just how many Virtual Sports bets are being placed instead of real sports bets, or whether people are simply placing these bets in addition to their usual bets at the online bookmaker.

What is interesting is that the Gambling Commission in the UK published findings in May 2018 on the gross gambling yield for Great Britain’s gambling industry as a whole and it found that in the period from April 2016 to March 2017, there was an increase of 0.7% in the amount of money generated from all forms of gambling in the UK.

However, over that same time period, the number of betting shops in the UK in March 2018 was 8,532, which represents a rather stark 3.2% decrease in the number of shops, which means there are around 250 fewer betting shops in the UK in March 2018, than March 2017.

That does sound ominous for sports betting fans, but in truth this could be caused by other factors and the most obvious one being the growth of online betting, especially from mobile devices. Why would people make a trip to a betting shop, when they can wager online instead from the comfort of their own home, or when they are out and about?

The data is not yet sufficient enough to determine whether Virtual Sports betting is detracting from sports betting, but with the overall market still growing, especially online, it seems unlikely. Therefore we can tentatively suggest that for most people, Virtual Sports betting is something they enjoy alongside their sports betting, or another form of gambling.

Will Virtual Sports replace sports betting over time?

In short, I don’t believe Virtual Sports will ever replace real life sports betting although having said that I think the future for both is extremely secure.

Sports betting, in the UK at least, has been around for many years and it is an industry that has learned to adapt to different times and challenges. There are still millions of punters who enjoy sports betting and the particular set of skills it requires to be successful.

Those skills do not transfer to Virtual Sports betting easily and as a result I think there is still a massive (and likely growing) market for real sports betting in the UK and in particular in emerging markets, such as America, where real life sports betting is still illegal in many states, but could be set to become legal over the next decade or so.

While Virtual Sports has many similarities to real life sports betting, the fact that it is a random event means it is more a ‘lottery’ or ‘slot’ type of game, which is based on a random number generator, rather than the ability of the teams, drivers, riders or players in question. It occupies a somewhat niche position, perched neatly between slot games, lottery games and sports betting and it is somewhat unique in that it has instant appeal to fans of all those types of games.

It may well be this factor which is driving Virtual Sports popularity, more so than the fact people are turning to the speed and convenience of Virtual Sports compared to real life sporting events.

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Ian John

Ian John is an expert across many realms of online gambling, both in US and international markets. Based in the UK, Ian covers sports betting, poker, and the regulated online casino and esports betting markets for a wide number of industry-focused publications.

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