Could the Online Gambling Industry Be in For a Rude Awakening?
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For many avid gamers, working in the technological sector -whether for a major social media platform, as an app developer or designing casino games at one of the world’s top gaming studios - is a dream come true. However, with all the furor over the mass redundancies being made by tech giants such as Twitter and Meta, you can’t help but wonder how stable the online gaming sector could be next.
Lucrative as this industry may be, what with its hundreds - if not thousands of promotional offers to players worldwide, such as cashable daily no deposit bonuses - the online casino sector isn’t untouchable.
A Backdrop of Instability
Nowadays you can’t browse the internet without hearing about yet another disruption occurring in the Twitterverse since billionaire Elon Musk executed a USD 44 billion takeover of the company. Whether he is banning parody accounts or requiring users to pay for blue tick verification, it is certain that Musk is causing havoc.
Beyond his haphazard approach to protocol, though, what is really concerning for people concerns the severe cuts to Twitter’s workforce. Currently, over 3,000 employees at Twitter have lost their jobs, almost half of the company’s workforce.
This is not an isolated case, though. It was also announced recently that Meta, the company that owns Facebook, Instagram and WhatsApp, would also be laying off 11,000 workers globally. And things don’t stop there. Although the stories don’t always make the headlines, you just need to do a little digging, and you’ll learn that Lyft laid off about 700 workers recently, and Microsoft also announced job losses.
Perhaps a little less alarming but also providing an indication that the sector could be in trouble. Both Apple and Amazon have been reported to be implementing hiring freezes to reduce their labor costs.
Of particular concern for the iGaming sector is that Stripe, the payments giant, announced that it would be cutting over 1,000 jobs soon. Although Stripe doesn’t currently operate in gambling payments, the fact that it’ll be reducing its workforce by about 14% raises concerns that other similar businesses working alongside casino operators could follow suit soon.
Implications For The Online Gambling Industry
The fact that so many notable technology companies are making sure of severe job cuts is particularly concerning for the online gambling sector, which is already grappling with rising costs. Moreover, it is not just the job cuts that are of concern but the fact that many companies are imposing hiring freezes which indicates that growth in the broader sector is likely to slow in the coming months.
Now, as results from the third quarter of 2022 are released, casino operators and suppliers seem to point to inflation as the main cause of their financial decline. Inflation affects not only the business's operational costs but also customer behavior. So, as it stands, things are looking overly bright for the sector, and we have to wonder whether a wave of redundancies may also be on the horizon.
How The Tables Have Turned
When we look back to 2021, it looked like the workers held all the power within the job market, especially in areas where skills were lacking. If a company wasn’t treating you well or providing the right perks, it was easy enough to quit knowing that there was likely to be another job opportunity around the corner.
However, it now looks like things have flipped in favor of the employer almost overnight. Job openings are becoming more scarce, with more and more prospective employees vying to fill these positions.
Naturally, the prospect of recession and the national cost of living crises have also played a role in changing the economic outlook for businesses that are all thinking about cutting costs in order to survive. Moreover, the last few years, marked by low interest and strong investor sentiment, were great for growth and investment. However, it seems like many got too caught up in the hype and failed to invest in more stable ideas that would have better prepared them for the difficult times that lay ahead.
A Peek into The Future
In short, although the online gambling sector is currently fairly stable and still looking to experience growth in the coming years, it is crucial that online casino operators remain proactive without becoming complacent.
We operate in a highly interconnected world, and the situations we’ve seen in the tech sector are no doubt worrisome for online gambling operators. Moreover, we know that the decline experienced in the crypto sector- which was once driven by hype is also closely connected to the online casino market.
Just like the tech sector, online gambling may have been an industry that thrived during the pandemic, at a time when other sectors struggled to stay afloat, but as we move towards the prospect of a world economy marred by recession and cost of living crisis, concerns about layoffs in the iGaming sector aren’t unfounded. It is, therefore, up to key players within the sector to focus on building a sustainable business model if they truly want to avoid mass redundancies on the same scale as has been experienced in the technological space.
