SGC Blog – Morgan Stanley – Size & Potential of Social Gambling

VaughanDay 2 of the SGC kicks off with sessions on market potential and growth forecasts. Morgan Stanley Analyst – Vaughan Lewis, the author of the most important financial study and research undertaken on social gambling – ‘Social Gambling Click Here To Play’, sheds insight on projected growth for the social gambling market.

Vaughan gives the SGC audience up to date market data and analysis detailing where and how Morgan Stanley fee the market will grow and produce opportunity for operators.

 

SBC Session Notes  

  • Market is projected to grow from $1.7bn today to $2.5bn by 2015, and see it as a rich source of customers that could boost growth rates for real money gambling. The optimistic scenario models market growth to $7bn by 2015; Morgan Stanley also set a bearish scenario is a market of $1.8bn, with our central case at $2.5bn
  • Around 12% of the world’s population (800m people1) plays one or more form of online social gaming every month. Of these players, just over 20% play some form of casino-style game. This suggests that 173m people (2.6% of the population) are involved in ‘soft’ social gambling of some sort.
    This dwarfs the c. 50m people taking part in real money online gambling.
  • Although there are over three times more social gamblers than real money online gamblers, social gambling revenue of $1.7bn is a fraction of real money online gambling of $35bn.
  • Vaughan gives a lifetime player value of social gambling players set around the $535 mark. Nevertheless he states that the metrics are skewed since the player pool of paying social gambling customers is very low – calculated at just over 3 million customers. Vaughan states that Social Gambling needs to revalue its metrics for measurement of actual paying customer values.
  •  Regulation could become a key issue – The social gambling industry is currently unregulated. This means that operators can target any customer in any jurisdiction. Morgan Stanley thinks this helps it in jurisdictions where online gambling is currently illegal or a grey area, as social gambling operators do not face the same level of competition, and customers who enjoy the entertainment of gambling can play legally for virtual currency. We think this helps explain why social gambling is much stronger relative to online gambling in unregulated markets such as the USA and Asia

 

Session Graphs

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