Gambling Tech Trends – How emerging technologies are transforming games of chance

Entering the Las Vegas Caesars Palace Casino from your own living room? Trying your luck with an animated 3D scratch card? Browsing odds and statistics of your hometown’s football team around you on virtual screens to make the most lucrative betting decisions? One might think we are depicting a scene of a sci-fi movie; however, these advanced technologies are already here with us.

Not even two decades ago we could not imagine we would be carrying around a computing device 24 hours a day to use it for entertainment, work, social interactions or even betting on sports games. Today, we can envision a future in which we wear an even more powerful tool that will bring a new world, where the virtual and the real are meshing together seamlessly.

 

XR – the new technology is now reality

Extended reality (XR) refers to the creation of virtual human-machine interaction environments by combining the real and the virtual through smart devices. XR is the umbrella term for the emerging immersive technologies such as VR (Virtual Reality), AR (Augmented Reality), MR (Mixed Reality) and the new technologies still to be created. 

VR and AR are the main components of the XR concept, and both bring virtual world experiences, but they achieve different virtual experiences: VR simulates a virtual environment through a VR headset or a head-mounted display in which users get fully immersed, experience real-time interactions with other users and with the graphics chip painted world.

Whereas AR applies computer graphics technology and visualization technology to produce virtual objects laid over the real world, enhancing it with digital details such as images, texts, or animations. AR uses smartphone cameras, or imaging devices (e.g. AR glasses) for the interaction. We all remember that just a couple of years ago people were running around in major cities eagerly scanning the environment with their phones to catch Pokémons. 

In mixed reality (MR) – often referred to as hybrid reality – end users can place digital objects into their environment and interact with those, using specific hardware. Currently this technology is mainly used in healthcare and engineering where professionals can conduct different tests in a combination of the real and virtual world. 

With the development of 5G technology and the rise of AI technology – empowering network and boosting application scenarios, providing computational vision and the innovative functions of hardware – VR, AR and MR technologies are becoming more integrated and intertwined, resulting in the emergence of XR concepts. 

 

Global market outlooks

In 2020, out of the three technologies VR represented the highest market share with 48%, followed by AR (34%) and MR with 18% according to an analysis conducted by Deloitte China. This distribution is mainly caused by the early adaptation of VR in certain industries, such as gaming and entertainment which two represent 51% of the expenses shared globally in VR downstream applications. Gaming and media focus on B2C implementations investing more into content creation and application development, while other industries, applying XR for technological advancement and B2B purposes, are much more dependent on the maturity of the capabilities of the necessary hardware and software. 

Tech giant Apple is expected to launch its AR glasses in 2023 further boosting – and potentially disrupting the XR industry. The company obtained 59 patents for AR and 3D technologies in 2020 which is a guarantee to enter this market with their 1 billion active users and the leading hardware and software ecosystem. In addition, Facebook (Meta) has been rigorously expanding its XR systems since purchasing Oculus in 2014. The Oculus VR headset, currently the best-selling on the market provides a solid foundation for Meta’s future deployments.  

Chinese tech companies are also leveraging their advantages. Huawei unveiled its latest VR glasses in 2020, while HiSilicon released an XR chip which is capable of 8K decoding. These technology advancements will likely cause a burst in the quality and capabilities of XR devices, causing the shipped units to double globally in 2022. 

 

XR – the future space of gambling

The boom in the use of XR devices is expected to become reality during the next 5 years as the technological ecosystem is getting richer, the downstream application scenarios are increasing, and tech giants are investing more and more capital in XR and building their strategies around it.
 

As these tools are becoming more frequent in our homes, the adaptation of XR technologies is a necessity for gambling service providers if they are willing to retain or even increase their market share.

 - says Dániel Bognár, Director, Gambling Advisory at Deloitte Hungary.

Industry players have long been experimenting with XR concepts. As one of the pioneers in 2017, the gambling technology giant IGT paved the way by bringing augmented reality to the lottery. With the use of a smartphone or tablet, players could lay virtual games over their surroundings, and they could experience 3D reveal of their physical instant tickets.

Still in the infancy stage, VR was used by Loto-Quebec Canada to prepare winners for what their new life would be like by providing the experience of what type of questions friends, family or co-workers might ask. Moreover, the Swedish national lottery assessed the idea of giving the bucket list experience in a studio environment, where volunteers were able to virtually achieve, or at the very least feel closer to their dreams and goals which would ordinarily require winning the lottery.

Casinos have been the early adopters of the technology. SlotsMillion – again, in 2017 – appeared on the market with the first VR casino, offering 140 VR games. The main driver of their success was that they were able to closely work together with the government of Malta to obtain the necessary licences. Unfortunately, the application cannot accept registrations from the US, UK or even Hungary, highly limiting the possible number of users worldwide. 

Though the options of real money VR casinos are currently limited due to the serious regulatory constraints – SlotsMillion being first of its kind – there are several social VR casinos where players can experience virtual reality gambling without staking any money, while they can walk through the environment fully immersed, interact with other users, choose a game, have a seat, play, or just sit in the lobby.

Sports betting is also a rapidly growing segment, where XR betting is already within reach. Owing to the latest camera systems and the connectivity provided by 5G, betting service providers are now able to start exploiting the XR technology. 

Imagine a VR betting experience, where we can watch the World Cup final in 360-degrees real-time, being able to ‘click’ on players to browse statistics or betting options. This would lift the live betting experience to a stellar level, and the good news is that this can be achieved soon thanks to the 2030 World Cup. 

Gambling service providers should also focus on e-sports betting. The e-sports audience is rapidly growing, it has doubled during the past four years, counting 532 million enthusiasts and occasional global viewers in 2021. To put this in context, the 2022 Champions League final was watched globally by around 400 million people. 
 

The gaming industry is already the greatest adopter of XR technologies, these sports already provide virtual environments, the audience is tech savvy, the industry just needs to develop ways for users to be able to observe matches as closely and as immersive as possible.

- says Mátyás Leitner, Senior Consultant, Gambling Advisory at Deloitte Hungary.

 

Why bet on XR today

How could gambling service providers benefit from XR technologies while those are still at such an early stage? When is it the optimal time to invest in these technologies? Is there a need for diversification as this innovative technology requires a completely different infrastructure? What is the XR strategy of potential competitors, especially after more and more gambling markets are becoming liberalised? – These are some critical questions which these companies must ask themselves. 
 

People will use XR technologies in many fields of their lives: education, retail, sports, and several specific areas. It is only rational to assume these people will expect lotteries and betting services to grant them the opportunity to use their services with the tech they already carry or wear.

- says András Sallai, Consultant, Gambling Advisory at Deloitte Hungary.

XR can clearly change the gambling experience entirely. The players’ level of engagement in the virtual or augmented environment, the swiftness and responsiveness of these interactions can provide a brand-new user experience. In addition, virtual environments will open many doors for reaching existing and potential new customers. Gambling service providers are not only able to utilize a 360-degree space to place ads, but with the growth of XR technologies used in stadiums viewers could reach betting ads with simple interactions, gambling ads will be more interactive and adaptive to the given game and situations. 

 

Challenges

Though the implementation of these technologies for gambling operators seems to be a necessity given the countless opportunities and the huge demand foreseen, there are still several challenges associated with XR. The lack of standards might be the main concern presently. Technology is rather new, and its universal language is still under construction. Due to lack of standards, every AR project is a thing of its own barely compatible with the others, making implementation considerably expensive. 

The cost of usage may be another issue: presently, XR gadgets are still quite expensive to use in everyday life and it might be less accessible for small businesses. Headset pricing ranges from $15 (Google Cardboard using a smart phone) to $1500 (HTC Vive Pro). AR-based apps may need training as well.

There are certain challenges concerning the end users’ health. Research papers show that people can quickly lose awareness while using AR headsets. Some of the common symptoms are twitches, blackouts, eye fatigue, and repetitive stress injuries.

Another risk to factor in is the uncertain regulatory environment. Given the lack of regulations of XR, combined with the strict regulations governing gambling services, investing in these technologies impose significant risks.

We have all seen dystopian movies where people’s virtual experience is better in many ways than their ‘normal’ existence, and there is a significant chance of them becoming addicted – and we can expect that this will too be given consideration by regulators. 

Today, extended reality technologies are undeniably making massive leaps and their near future holds exciting opportunities. It is true, for a long time, consumers have been hesitant about embracing XR technologies, but that seems to be changing. Are gambling service providers willing to endeavour breaking the barriers of XR adoption to match the paths of customer interests? Until building specific business line XR strategies, leveraging the potential of these technologies will remain elusive.

Used Sources:

GOV.UK. (2020). Safety of domestic virtual reality systems. Available at: https://www.gov.uk/government/publications/safety-of-domestic-virtual-reality-systems. (Accessed: 12 September 2022)

Grand View Research. (2020). Virtual Reality Headset Market Size, Share & Trends Analysis Report By End-device (Low-end, High-end), By Product Type (Standalone, Smartphone-enabled), By Application (Gaming, Education), And Segments Forecasts, 2021 – 2028. Available at: https://www.grandviewresearch.com/industry-analysis/virtual-reality-vr-headset-market (Accessed: 12 September 2022)

Grand View Research. (2021). Online Gambling Market Size, Share & Trends Analysis Report By Type (Sports Betting, Casinos, Poker, Bingo), By Device (Desktop, Mobile), By Region (North America, Europe, APAC, Latin America, MEA), And Segment Forecasts, 2022 – 2030. Available at: https://www.grandviewresearch.com/industry-analysis/online-gambling-market (Accessed: 12 September 2022)

Metromsk. (2022). How AR Will Change Football Betting? Available at: https://metromsk.com/how-augmented-reality-arwill-change-football-betting/ (Accessed: 12 September 2022)

Statista. (2021). Market size of the online gambling and betting industry worldwide in 2021, with a forecast for 2028. Available at: https://www.statista.com/statistics/270728/market-volume-of-online-gaming-worldwide/ (Accessed: 12 September 2022)

Technavio. (2021). VR Gambling Market to grow by USD 1.74 billion. Available at: https://www.prnewswire.com/news-releases/vr-gambling-market-to-grow-by-usd-1-74-billion--technavio-301447477.html (Accessed: 12 September 2022)

UK Tech News. (2020). Will Virtual Reality transform online casinos? Available at: https://www.uktech.news/how-vr-is-transforming-casinos (Accessed: 12 September 2022)

World Lottery Association. (2021). New opportunities for lotteries in the metaverse. Available at: https://www.world-lotteries.org/insights/editorial/blog/new-opportunities-for-lotteries-in-the-metaverse (Accessed: 12 September 2022)