CASINO GAMING TECHNOLOGY MARKET US$96 BILLION BY 2021
A research firm estimates that the global market for casino gaming equipment will grow "more than 15%" annually from 2017 to 2021.
Technavio, a market research brand from Infinity Research Ltd, which has offices in Canada, the United States, the United Kingdom, India and China, believes the move to legalize and regulate casino businesses or ease regulations in existing markets will be an improvement.
The casino gaming equipment market is expected to grow to $54.16 billion in 2017 and $96.38 billion in 2021.
"The easing of government regulations related to the casino market is one of the main factors contributing to the growing demand for casino gaming equipment," said Ujwal Dorsey, who was the company's chief analyst on media and entertainment services research, in a Technavio press release.
"Many countries, such as Japan, aim to legalize casino games because of the growing popularity of gambling and the high profit contribution of casinos," the analyst added in a statement.
The study includes the current market and growth outlook for casino gaming equipment worldwide from 2017 to 2021.
The report lists casino tables, slot machines, gaming chips, and video poker machines in four main product categories. Technavio said casino tables and slot machines accounted for more than 50% of the market in 2016.
TechNavio noted that while demand for equipment increased, barriers to entry into the casino supply market were significant.
"Installing manufacturing devices in various countries is quite costly for manufacturers because only a few casinos choose high-quality casino game equipment," the institute said in a press release.
The company added that online orders for casino equipment are a growing area of the market. "Online sales of machines such as slot machines and video poker machines increased by almost 14% in 2015 compared to 2014," it said.
Investment analysts dealing with the casino industry also noted that the importance of online digital casino products is increasing in sales and marketing efforts by traditional casino equipment companies and startups.
interactive growth
For the three-month quarter ended Sept. 30, submitted in early November, gaming and lottery equipment and services company Scientific Games reported a 66.4% year-over-year increase in revenue from its interactive segment to $85.2 million. The interactive segment still accounted for only 11.8% of the group's revenue during the period.
But even in the brick and mortar casino industry, which remains a major source of traditional supplier business, Technavio suggests that equipment sales will be increasingly influenced by the tastes of recent adults. They are often called the "millennial generation.
"In most entertainment sectors, such as games and movies, increasing digitization has become a major factor in attracting young people (18-35 years old)," the research firm said in a statement.
It added: "They are more attracted to innovative games, which has led casino players to gradually integrate games like Call of Duty and Angry Birds, which are replacing slot machines into casinos."
Investment analysts say many traditional equipment manufacturers, which have focused on businesses in North America and Europe in the past, will have to expand their presence in markets where consumer demand for casino games such as Asia-Pacific is growing to repay debts acquired from recent rival brand acquisitions.
Between 2013 and 2014, Scientific Games was involved in leveraged acquisitions by competing game equipment suppliers, achieving a total value of billions of dollars. In 2013, it acquired Chicago-based slot machine maker WMS Industries for US$1.5 billion. In November 2014, Scientific Games completed a US$5.1 billion deal to acquire Bali Technologies. A year ago, Bali Technologies acquired Nevada-based SHFL Entertainment in a $1.3 billion deal.