In order to provide a much needed boost to tax revenues, governments around the world may consider relaxing current online gaming restrictions, according to a new KPMG report: 'Online Gaming: A Gamble or a Sure Bet?'
The global report reveals that the likely move by some countries to bring internet gaming revenues on-shore, could soon see the egaming market go mainstream.
Mark Summerfield of KPMG in the UK and global head of gaming said: "Governments in many parts of the world are quietly rethinking their opposition to online gambling. We believe that, following the inevitable initial teething difficulties, a sustained period of re-regulation is likely that will see the market mushroom.
"What will be unusual for this internet driven sector is that, at least in the short term, a physical and therefore taxable presence may be required in order to secure gambling licences within different countries. This will bring a new set of challenges for online businesses that do not have large international structures or brand recognition."
The global online gaming market is expected to grow by 42 per cent to US$30bn by 2012 from US$21bn in 2008 (H2 Gambling Capital), and there is big potential for further growth in the sector, as some of the biggest markets - such as the US, China, Japan and South Korea - currently prohibit online gambling.
Technological developments are also driving change and growth, and online gambling is beginning to adopt the mobile and social platforms for casual online games.
Gary Matuszak, global chair of KPMG’s information, communications and entertainment practice, commented: "Innovation and technological developments are constantly driving new market opportunities. As the popularity of both gambling and online entertainment continues to grow, the online gaming market is without a doubt an attractive area of expansion for gaming software developers, casinos, industry newcomers, media and investors.
"As the market becomes more complex the business-to-business segment of the industry will also expand. We expect to see new rounds of M&A and joint venture activity, with traditional companies - from gaming and other sectors such as media - reaching into virtual markets and existing virtual leaders taking over smaller niche competitors," continued Summerfield.
