Users being able to download casino apps directly from Google's Play Store could have a noticeable impact on revenue

Will Google’s Change In Stance On Gambling Apps Boost Growth For US Online Casinos?

Today marks an important change for the US online gambling industry. You may not notice it yourself if you’re already happily playing at your preferred online casino, but it could make a big difference for some new users.

As of March 1, Google has updated its policies to allow gambling apps onto the Google Play Store. This includes not only real money casino apps, but also sportsbooks, iLottery and daily fantasy sports.

Naturally, some restrictions still apply. Such apps must be free to download and flagged as Adults Only. They also won’t appear in the store in any state where they wouldn’t be legal to use. Thus, you won’t be able to download Virginia sports betting apps from a neighboring state, even if you’re planning on entering Virginia to bet. You’ll only be able to install it and sign up once you’re safely within the state’s borders.

Google announced the policy change on rather short notice, just over a month ago.

Google pulls ahead of Apple as a gambling platform

Online casinos for Android have been available all along. However, the process to download and install them has been more involved than it had to be.

The operators have been making the apps available through their own websites. To download them, though, users have had to go into their settings and enable downloads from “unknown sources.” Installing the app then displays a warning about the dangers of trusting such apps and asks for confirmation.

For knowledgeable users, this is only takes a few seconds and is no great barrier at all. However, any additional steps can seem daunting for anyone who isn’t comfortable with the technology to begin with.

Meanwhile, Apple has no such ban, yet has thrown another sort of barrier in the path of online gambling companies. Most casinos and sportbooks develop their products in HTML 5 because it makes cross-platform deployment easy. Apple has forbidden its use for any purpose involving financial transactions, including gambling.

Such apps must be developed natively for iOS in order to for Apple to allow them in the App Store. That hurdle has meant that many new casinos launch for desktop and Android only, with the iOS app arriving weeks or months later.

Thus, there have in the past been pros and cons to both platforms when it comes to gambling. With this change to Google’s policies, Android is clearly the more gambling-friendly platform, though it’s still a must for any operator to support both.

Change could be huge for customer acquisition

For most Android users themselves, this is a relatively small quality-of-life upgrade. It’s potentially a much bigger deal for operators, however, as customer acquisition is key to the industry.

The lifetime value of an online casino customer is, for many companies, upwards of $1000. However, the cost per acquisition – consisting of ads and marketing, affiliate fees and bonuses to the user – is often 30% to 50% of that, i.e. many hundreds of dollars. To lose even a small percentage of potential signups due to difficulties installing the app is therefore immensely costly.

Only the companies themselves have access to the relative customer conversion rates for iOS and Android. However, it’s probably safe to assume that this has been a significant thorn in the industry’s side.

In Europe, at least, about one third of all online casino play happens on mobile devices, and there’s no reason to assume the US is very different. In the US, Android devices have about a 43.5% market share. We can therefore guess that roughly 15% of US online casino gambling comes from Android devices, give or take a few percent.

Meanwhile, a study by electronic identity-verification company Truiloo showed that 82% of online casino users have concerns about fraud and identity theft when signing up. That’s a problem when it comes to the warnings shown when downloading third-party apps on an Android device. The apps themselves are safe and the warning is generic, but it may be scaring off some percentage of those users.

Some other potential users might have been getting lost even earlier in the process. There’s no telling how many interested gamblers have searched for an app in the Play Store and given up after failing to find it.

March and April revenue numbers will be interesting

Taking these effects together, it’s possible that the impact of the policy change will be large enough to show up in monthly revenue numbers. If it does, however, the hard part will be separating it from other effects.

Even a large increase in the number of new Android users would only boost total revenue by a few percent. That’s certainly enough to make a difference to companies’ bottom lines, compounded over time. However, the US online gambling industry is growing rapidly to begin with. This past year has been particularly volatile as well, due to COVID, to new markets opening, and new companies entering the fray.

Michigan just launched and West Virginia’s market is less than a year old, making it futile to look for a change in those states. Pennsylvania is still growing by double-digit percentages each month to begin with, and the market is several times the size it was last year.

That leaves New Jersey. It’s also experiencing continued organic growth, but at a slower rate. It hasn’t seen a month with more than a 5% increase in daily average revenue since its casinos reopened. There are other factors at work, of course, such as March Madness. This primarily affects sportsbooks, but could potentially boost cross-vertical traffic to their associated online casinos. Any change in capacity limits or other anti-COVID measures at the Atlantic City casinos could also have an impact.

However, the odds are still pretty good we could see an effect. A rise in growth to high single-digit or even low double-digit percentages would be fairly strong, if circumstantial, evidence that acquisition of new users has increased.

- Alex is a journalist from Dartmouth, Nova Scotia, Canada. Now site runner for Online Poker Report, he has been writing about poker and the online gambling industry in various capacities since 2014.
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