The online gaming market has shown growth in recent years. The global game win for online gaming, including all game segments, has been estimated at EUR 40.5 billion for 2017, an increase of 9 percent compared to the previous year. The corresponding size for the global online casino market has been estimated at EUR 10.6 billion in 2017, an increase of 9 percent for the year (source: H2 Gambling Capital, February 2018).
Europe is by far the largest gaming market and is expected to represent close to half of the gross gaming yield in the coming years. Deregulation and reregulation of national gaming laws is taking place in many European countries. NetEnt closely monitors the development on all markets that are undergoing regulation. NetEnt has a local license in the Great Britain since 2015. It is the largest gaming market in Europe and new regulation was introduced in 2014. As a result, all operators offering gaming services to British players need to have a British gaming license and pay gaming taxes in Britain, regardless of where the operator is based. In Italy, all NetEnt’s game traffic now takes place through licensed operators. The market in Denmark was regulated in 2012 and NetEnt’s games are offered through several operators, including Danske Spil. Online gaming is regulated in Spain, where NetEnt holds a gaming license and its games have been available with several customers since 2015. The online gaming markets have recently been regulated in Portugal, Romania, Bulgaria and Czechia. In Romania, NetEnt obtained a gaming license and launched its games with several operators during 2016. In Bulgaria and Portugal, NetEnt’s games were certified and launched with customers in 2016. New gaming legislation is expected in the Netherlands towards the end of 2018. In Sweden, the gaming commission presented its proposal for new gaming legislation in March 2017 and according to the government, the new legislation shall be introduced in the beginning of 2019.
Today, the majority of NetEnt’s customers are in Europe and the Company will continue to focus on the European market, but expansion into North America is also expected to contribute to long-term growth. In the US, a few states have opened for online gaming: Nevada (poker), Delaware (all games) and New Jersey (all games). Political steps towards reregulation have also been taken in other states, for example in Pennsylvania. NetEnt has applied for a license in New Jersey and has been granted transactional waivers to launch games with several operators in the state, while its full license application is being reviewed. NetEnt is continuously monitoring developments in other US states that are close to regulating and the Company intends to launch its products on these markets if the conditions are right. In Canada, the market is regulated and open for online casino in several provinces such as Ontario, British Columbia and Quebec. As a first step to enter Canada, NetEnt has applied for and obtained a license in British Columbia.
Among suppliers, the online gaming market is dominated by a handful of companies. Most of these offer a broader product portfolio than NetEnt.
In 2017 NetEnt had an estimated global market share of 17 percent, and 28 percent in Europe, based on market statistics from H2GC. The future outlook for online gaming remains very bright and NetEnt has excellent prospects to continue gaining market share.