Inflation is when the value of a certain currency decreases. It’s when the same amount of money would buy you more yesterday than today. While it’s a normal occurrence in worldwide economies, it affects all industries.
Online casinos aren’t an exemption, and this guide discusses how internet gambling was influenced by inflation!
How Inflation Affects Consumer Purchasing Power
Before discussing its effects on online casinos, let’s discuss how inflation affects consumer purchasing power. Imagine you are at a job where your salary didn’t change the entire year. However, the product prices on the market adjusted to follow the inflation trends. That’s why a pound of frozen turkey costs $1.59 in October, even though it was $1.39 in January.
This price increase means the consumers have to pay more for turkey and other basic needs. It’s why their purchasing power for entertaining activities decreases. An average citizen who uses scratch cards South Africa sites can continue buying those cards in the same amounts only if they save money on something else.
Inflation has the power of decreasing the number of scratch cards that a casino sells. It can potentially reduce users’ stakes in casino games and even drive some visitors away from online gambling platforms.
The Higher the Inflation, the Bigger Its Effects
World governments do their best to handle inflation and keep rates low. Higher inflation can lead to price increases that are dangerous if they aren’t met with salary boosts. The reports indicate some countries do a great job in maintaining low inflation. Costa Rica managed to keep it at only 0.55% in 2021 (data until July). On the other hand, El Salvador has to deal with an accumulated inflation rate of 3.71% in the same timeframe.
How Inflation Can Affect Online Casino Businesses
It’s not only the consumers that suffer the effects of inflation. It also influences online casino businesses. As in any other industry, gambling platforms need to adjust to the new market situation. The two main changes casinos should deal with include increased expenses and, subsequently, the need to increase their service costs.
Inflation affects the entire market, which increases its prices accordingly. As a result, online casinos could have bigger expenses.
The areas where they pay more include:
- Acquiring and renewing gaming licenses could cost more
- The taxes and other government-imposed expenses could increase
- Game developers could request bigger fees for their titles on the platform
Online casinos must be profitable to stay in business. But if their expenses increase, that begs the question of how to remain in the black. That’s why many gambling platforms decide to adjust their service costs.
Minimum Stake Increase
If you played in land-based casinos decades ago, you know that the minimum bet in some facilities was $1. But if you visit a reputable gambling property today, the minimum bet would be $5.
The situation is similar in online casinos. Some gambling platforms maintained the lowest stake per round at budget-friendly tables at $0.01. The majority increased the minimum wagers to $0.01 or more. This change is even more noticeable at VIP tables. Many developers and casinos increased the minimum stake by five times or more. The larger sums invested mean that the lowest bet is now $25 instead of $5.
Users might think that online casinos are greedy and looking to maximize their revenue. But most gaming platforms aren’t ripping off their customers. Instead, they simply adjust to the current value of money. If you had $1 in the 1960s, you could buy things that would require $9 today. It’s the inflation that made casinos adjust their prices.
Players Don’t Mind Betting More
The inflation forced casinos to adjust their minimum bets and control expenses. However, the industry didn’t suffer because of this trend. The reports indicate that online gambling is among the markets that show constant growth. The inflation, lower purchasing power, and even the pandemic didn’t affect this industry. It was worth $64.13 billion in 2020, and the growth trend will continue in the coming years. If everything goes right, the industry value will almost double. The predictions are it will be worth $112 billion in 2025.
Most online casinos note an increase in the number of players on their platforms. That indicates users don’t mind the minimum stake bump. After all, that does mean the prizes are potentially greater, too. Online casinos also come up with bonuses for new and promotions for loyal users. Those benefits sound tempting and are another reason why players love internet gambling platforms.
While online casinos feel the effects of inflation, it seems it doesn’t compromise their progress. Land-based gambling properties had huge problems with the pandemic and the decrease in purchasing power. Online casinos seized that opportunity to attract the players and increase their revenue.
Many players still consider internet gambling as their favorite leisure activity. It’s imperative to stick to responsible gaming and rules for managing your bankroll. That guarantees you can continue enjoying online casinos without worrying it will have a negative effect on your finances.