iGaming revenue continues to overtake more traditional markets.
In 2017, consumers in the UK spent more on gaming than they did on movies and music combined, with approximately £66bn ($89bn) versus £57bn ($77bn) being spent on each of them, respectively. This rapid growth in growth has been attributed to a variety of factors but the migration of iGaming from consoles to mobile devices is seen as one of the core reasons. With the growth of the market comes the expansion of companies within the space. iGaming companies across the world are hiring increasing more staff and are seeing their revenue and profits rising rapidly year-on-year.
Growing employee numbers
iGaming companies are recruiting more staff members because of the sector’s growth. A case study of EGT Interactive shows a 75% increase in employee numbers since 2006. The expansion of iGaming’s popularity across new markets has allowed the company to expand globally and they have needed to hire extra staff in most areas of their business. EGT Interactive’s managing director, Todor Zahariev, seems to be approaching the growth in his team and company methodically, stressing that successful growth is based on choosing the right employees. The company appears to be aiming for further international growth; Zahariev states that they now have further resources to target international territories. They are working on growing their portfolio with new slot games in development that are due to be released in the near future.
Zahariev commented on the company’s rapid growth, saying: “The key to successful growth is to choose people carefully. Our new appointments reflect this by introducing new practices and by furthering a co-operative and kind attitude towards the growing collective, which makes up EGT Interactive.” He added: “Growing to 115 staff members takes a lot of preparation, especially with so many new key appointments. Our largest expansion in 2018 can be seen across our training programs. We’re preparing for this by carefully planning the needed resource, both human and technological, while also implementing pre-assessed timeframes, in which things should happen.
“Our team has grown significantly in recent months, meaning we have further resource to target international territories, to demonstrate new products and increase our presence at international gaming events.”
Earnings on the rise
Companies are not only growing in size, they are also seeing hikes in year-on-year profit. Cherry has seen its group revenue rise to SEK681m (£56.9m/$77m) in the final quarter of the financial year, a 26% rise on the same period in the past year. The company attributes its rising profit to its successful business model. Gross income rose by 131% and net profit increased from SEK36m (£30m/$4.1m) to SEK89m (£7.4m/$10.1m). During this period, Cherry acquired two iGaming businesses, one via ComeOn and the other via Game Lounge. The company’s chief executive, Anders Holmgren, said they are expecting 2018 to be successful too, with new launches on the horizon, bringing the possibility of breaking into new market segments. Of course, they are also aware that the ongoing regulatory changes may lead to the business needing to adapt to the global market.
Holmgren said: “We are seeing ongoing discussions regarding regulation of the gaming market in different countries, legislation that in various ways affects the gaming companies operating in the industry, as well as customer demand and expectations that are changing faster than ever before.
“The first quarter of 2018 was a good start to the year, and I see good prospects of this year becoming an eventful one.”
Taxation and regulation changing
Along with the huge growth in iGaming comes the interest of nations’ regulatory bodies in assessing the taxation and regulation of iGaming companies. The UK is one of the best-established countries in terms of licensing businesses to offer their products online, but the Republic of Ireland, Malta, and Gibraltar also offer interesting regulatory frameworks that allow companies to grow their businesses. However, the UK is thought to be introducing a higher tax rate for iGaming companies, raising their basic rate rise from 1% to 15%, which could affect the very companies that are seeing this rapid growth. The rapid growth in the market may lead to other countries following suit, which could impact on firms’ growing income.