Fast Offshore brings you the top news from Gambling, Fintech, and Crypto in February 2021.
Report shows iGaming industry confidence in steady growth
A recent report has found that 77% of top online gambling executives are optimistic about the future. Furthermore, they are expecting online gambling to continue growing at an accelerated pace. Land-based gaming, however, will decrease in the next 12 months. Almost three-quarters of respondents said they expected the sector to be buoyant during 2021 with only 2% predicting a decrease.
In terms of the biggest areas of growth, respondents predicted online and mobile gaming, eSports and developing markets such as Latin America and Africa. Technology that interests executives most include artificial intelligence, virtual currencies, and innovative mobile platforms.
UK regulator unveils new online gambling restrictions
The British Gambling Commission has dismayed operators by implementing new regulations and restrictions for online gambling activity. These include limits on spin speeds and a permanent ban on speeding up play or celebrating losses as wins. Furthermore, operators must ensure that a tally of losses and wins are clearly displayed to payers at all times. The new rules must be implemented by any company offering gambling to UK clients before 31 October 2021.
The clampdown comes following concerns over online slot games as they account for more than 70% of traffic to online casino games. The Commission said they have by far the highest average losses of any online gambling product. This means they should be adapted to reflect this risk to users. British gamblers spent more than GBP 2.2 billion on online slots in 2019. This number is believed to have increased during 2020.
Good news for eSports companies
February was a bumper month for eSports company, particularly Esports Entertainment Group Inc who saw its share price soar to a three-year-high. This came after Citron Research said GameStop Corp should buy the company to provide users with a combination of video gaming and online gambling.
They also raised their fiscal 2021 revenue guidance to $18 million, rising to an impressive $70 million in 2022. The online gambling and eSports company announced some deals in recent months that have contributed to this growth, including an agreement to acquire Helix eSports and the Esports Gaming League, and a license application with the New Jersey Division of Gaming Enforcement which is expected to be approved in Q2 2021.
Crypto and Blockchain
Coinbase prepares to go public
Cryptocurrency trading giant Coinbase has announced it’s filed with the Securities and Exchange Commission in the US, to go public via means of a direct listing. This comes at a time of increased interest in cryptocurrency and trading. Bitcoin, the world’s most famous and widely used cryptocurrency has grown in value by some 73% this year and reached a market capitalisation of $1 trillion. Furthermore, confidence has grown in crypto as big and trusted names such as Tesla, Square, large banks, and institutional investors are starting to appreciate its uses.
Coinbase is the USA’s biggest exchange for cryptocurrency and had revenue in 2020 of $1.4 billion. They profited $322 million in the same year, a significant increase in the losses of $20 million in 2019. This news paves the way for other exchanges to go public and also increases overall confidence in the crypto exchange sector.
JP Morgan takes further steps towards blockchain adoption
JP Morgan was once dubious of crypto and blockchain, but in recent years the organization has become more cryptocurrency-friendly. February saw strategists suggest that investors include 1% cryptocurrency into their portfolio as investment vehicles. In a multi-asset portfolio, they said that around 1% of Bitcoin or another digital currency would help achieve efficiency gain in the portfolio’s risk-adjusted returns. This will give digital currencies a much-appreciated vote of confidence amongst serious and big-time investors.
But JP Morgan took it a step further in terms of its blockchain adoption. In a truly unique use case, they announced they had recently tested blockchain payments via satellites orbiting the planet. They worked with existing satellites which allow the running of third-party software on their systems. It was designed to see how effective Internet of Things transitions would be, using a blockchain system.
Payments market set to reach $729.9 billion by end of 2021
The Cards and Payments Global Market Report 2021 predicts that the market will grow from $671.73 billion in 2020 to $729.9 billion by the end of 2021 with a CAGR of 8.7%. This will be fuelled by the restructuring of operations and recovery from the fall out of the pandemic. COVID-19 had previously led to restrictive measures such as remote working, lockdowns, and decreased spending due to commercial activities closing. Things are looking up however and by 2025, the total market value should exceed $961.34 billion. The biggest payers in the market include AMEX, Visa, Bank of America, MasterCard, and PayPal.
Geographically, Asia was the biggest market with 33% of the market share. This was followed by Western Europe with 23%. South America is the smallest market but it is set to grow. The report also found that merchants are taking technology and security safety seriously. This means implementing the PCI DSS, investing in tokenization, biometrics, and end-to-end encryption.
MasterCard and Tesla set to accept crypto payments in 2021
One of the world’s leading card payment providers, MasterCard is planning to give merchants the option to receive payments in cryptocurrency within 2021. While the company are yet to make a formal announcement, details of their plans have been leaked to the media.
Sources say that the new functionality will allow users to make and settle in cryptocurrencies as well as fiat currency. This comes following CEO Michale Miebach’s promise at the end of 2020 that they would integrate digital currencies directly within their network.
Tesla also announced that it plans to start accepting Bitcoin payments for its products “in the near future”. The news came as a part of their annual report filed with the US SEC, in which they declared $1.5 billion in bitcoin in a new investment policy and said the company may both acquire and hold digital assets from time to time.
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