When you make reference to the fact that iGaming and commercial real estate are intertwining industries, it usually comes across as a reference that does not make logical sense. This is because iGaming is the term used for online gaming which takes place over the internet and relies on digital real estate. Commercial real estate on the other hand revolves around brick and mortar.
Our guest writer Dominic Andreasson discusses how these two industries have intertwined and give iGaming players behind the scenes look into how the property and iGaming industries function in the 21st century. Read more about Dominic Andreasson here.
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What Is iGaming Going To Do With Commercial Real Estate?
It is fair to say that iGaming plays a bigger role in impacting the commercial real estate market than the commercial real estate market plays on impacting the iGaming market. The reason for this is because the global iGaming industry has grown at a massive rate in the last five years.
Sweden is a great example when it comes to how quickly the iGaming industry has blossomed. Sweden came out with its Swedish Gambling Act in 2018 and implemented it from Jan 2019. You will find licensed onlinecasino sites in countries like Sweden and around the world where iGaming is legalized and regulated.
This massive iGaming expansion has caused online gaming operators to expand into new countries and look for commercial real estate space to set up their offices. The impact on commercial real estate demand has more to do with the number of operators wanting rental spaces than to do with the size of the rental properties.
Most iGaming operators tend to run small to medium-sized operations depending on the scale of their business operations. They do not need massive real estate space like major corporations like Google, Samsung or IBM. However, iGaming operators are very keen on finding real estates space in the heart of the business district more often than not.
Why do iGaming Operators Need Real Estate Space?
While iGaming operators run a digital business, they still need to have physical offices that are staffed by their employees. Most of these employees either work in IT support and customer support. IT support is important to address technical and software issues that can arise while you run an online casino software platform.
Customer support is one of the key factors that determine the quality of an online casino. Most players not only look for telephone and e-mail support in the iGaming industry but also look for live chat support on a 24/7 basis. This requires iGaming operators to employ chat support staff on a 24/7 basis and have a state of the art office that will allow them to cater to the needs of their players from around the world.
A lot of small iGaming operators tend to have between 20 to 50 employees, medium sized iGaming operators tend to have 50 to 100 employees and the big players usually end up having over 100 employees at their physical offices. iGaming operators who take up a lot of real estate space are usually operators who hire staff who can communicate in multiple languages and work out of one office to support their players in different parts of the world.
Which Real Estate Markets Are Experiencing A Boom?
All you have to do is look at countries that have licensed online gambling operations and you will find iGaming operators taking up real estate. However, the two biggest markets that are witnessing a major iGaming impact on their commercial real estate space in Malta and the Philippines.
Malta’s landscape has changed tremendously over the last decade as iGaming operators from around the world not only go after a license from the Malta Gaming Authority (MGA) but then look to set up offices in Malta and establish a long term presence. The Philippines has witnessed a massive demand for real estate space thanks to the rapid rise of Philippine Offshore Gaming Operators (POGOs).
POGO operators were responsible for employing more than 138,000 foreign workers and taking up more than 1 million square meters of real estate in Manila during 2019. The demand for prime real estate in Manila resulted in a spike in real estate prices across the capital.
Expect the demand for commercial real estate in places like Malta and the Philippines to continue to increase in the coming years as iGaming continues to grow.