Future of Virtual Sports Betting

Nowadays that virtual sports corner is taking much more of a front seat. Open the average betting app today, and there is almost always something happening, whether that is actual live sport or increasingly polished virtual sports products.

Virtual sports are filling a gap in the always-on gambling ecosystem. What’s more, they’re doing it in a way that feels more realistic: better simulations, better graphics, better commentary.  

While virtual sports may look like football, horse racing, or greyhound racing, they are not real sports. Outcomes are generated through approved random number generation systems rather than live competition. That key difference could alter the future of virtual sports betting quite dramatically, not least because transparency will matter so much, but also trust and taxation. 

Betting Without Downtime

Traditionally, sportsbooks have long revolved around fixture schedules. Saturday football, some midweek racing, and maybe a late-night NBA game. Modern betting apps are totally different. The focus on big fixtures is still present; they tend to have more bonuses devoted to them, like odds boosts and free bets, and they usually have more accurate lines. But there’s almost never a moment when you could load up a betting site and find nothing to bet on.

And if there is one of those moments, the gap can be filled by virtual sports. There are no off-season gaps, international breaks, or rain delays, just reliable opportunities for betting that look just like the real thing.

When your betting app is competing for attention against social media apps and games, it’s got to be just as engaging. Virtual sports are quick, repetitive, and designed for short bursts of engagement - just like pretty much every other entertainment app on your phone.

The problem with all of this is that virtual sports are becoming more and more realistic. You get crowd noise, proper commentary, and far superior graphics. Yet, these sports are run on random number generators rather than the complex web of variables in real sports betting.

For many bettors, that increased realism blurs the psychological line between analysing real sport and interacting with a fast-paced RNG-driven betting product. In the future, we can safely assume that gambling regulations will take a harder line on product intensity and repeat betting cycles.

 Virtual Sports and Taxes

If you’re at all interested in UK gambling regulations, then you’ll have heard about the increase in gambling duty. For remote gaming, it’s moving from 21% to 40%, and for remote betting, it’s moving from 15% to 25%^[1]. That’s a big tax hike for everyone, but it’s particularly large for products like casino games. Where does virtual sports betting sit?

Currently, virtual sports are regulated as a betting product category rather than a remote gaming category^[2]. This means that any operators offering virtual events require a Remote General Betting Standard (Virtual Events) licence from the UK Gambling Commission.

Commercially, this is important because betting and gaming products are taxed differently.
Even after those duty changes, remote betting continues to attract a lower tax rate than remote gaming.

That could be quite attractive for operators, after all, virtual sports share several characteristics associated with online gaming products. They are:

• Always available
• Highly repeatable
• Fast settling
• Run by RNG

Crucially, they also don’t:

•  Require the manpower needed to provide accurate odds for real sporting events. 
• Need live broadcasting rights.
•  Stop during off-season or nighttime.

That means that running a virtual sports betting ‘wing’ of your bookmaker's site could cost less money than real sports betting, but also attract less tax than casino games.