End of the whale economy? The post-VIP future of iGaming
After more than 15 years working across operators, B2B services, and strategic consulting, Den Kalatsov has seen how the iGaming industry evolves from the inside. In his iGaming Strategic Horizon 2035 Report, he explores how shifting player behaviour, Gen Z engagement, and emerging technologies could reshape the sector.
In this exclusive interview with SiGMA News, Kalatsov discusses what those changes may mean for operators over the next decade.
Gen Z and the re-evaluation of player value
Q. Your report shows that Gen Z players start with lower average revenue per user but show high engagement in esports and social gaming. How should operators rethink player value for this generation?
Kalatsov: In the report I show that the annual lifetime value of Gen Z today is around $200–2,000, compared to $5,000–50,000+ for classic VIPs, which means that on paper, this is the cheapest segment. At the same time, it is Gen Z who are dominating fast-growing niches, primarily in esports and social/crypto gaming.
In eSports betting, the average ticket is significantly higher than on mainstream football, and Gen Z already accounts for about 44% of the audience, together with millennials accounting for almost 90% of the market. Therefore, player value for Gen Z should be calculated not only through GGR, but as the sum of several layers: lifespan, involvement in several verticals, network effect (who they bring in), and technological adaptability (crypto, Web3). It is profitable for the operator to “grow” this player for 5-10 years, rather than trying to squeeze the maximum out of them in the first year.
In terms of strategy, this is a transition from a whale economy to a network economy: it is not the depth of a single moment’s loss that is important, but the depth of a person’s connection to the product ecosystem.
Gen Z vs traditional bettors
Q. Gen Z is often called mobile‑first and crypto‑native. In day‑to‑day behaviour, how different are they from the traditional sportsbook or casino customer?
Kalatsov: Gen Z essentially live on their phones: more than half of the industry’s revenue is already generated from mobile devices, and for players aged 18–27, the mobile interface is the only point of entry. They expect vertical UX, instant payments (Apple Pay, local wallets), and native integration of streaming and betting: “I watch and click on the odds on the same screen”.
The second facet is crypto and fintech behaviour. Research in the US and Europe shows a strong overlap between Gen Z bettors, users of crypto apps, and speculative trading apps. This is an audience that is not afraid to keep part of their bankroll in USDT (a cryptocurrency stablecoin) or within Web3 games, and at the same time, they are more likely to use responsible gambling tools (limits, self-exclusion) from the outset.
Unlike traditional casino customers aged 40+, who mainly come for slots and roulette, Gen Z builds its stack around eSports, Social Casinos, Crash Games, and is gradually shifting towards blockchain economies.
Model: 10% of players = 80% of revenue
Q. The industry still relies on a small group of high‑value players, with around 10% generating the majority of revenue. How sustainable is this model?
Kalatsov: NatCen data and a recent article by Forrest & McHale based on real account-level data from seven operators confirm this extreme concentration: the top 10% of players generate around 79% of revenue, the top 1% around 37%, and the bottom 50% less than 1%. This is economically efficient in the short term, but creates a triple risk: regulatory, reputational, and strategic.
Any tightening of affordability checks or limits inevitably hits this 10% and can “break” up to 80% of GGR in mature markets. At the same time, Gen Z is less inclined to become classic high rollers: they set limits, split deposits, and more often mix gambling with other forms of digital risk (crypto, trading) rather than concentrating their flows in one casino.
Therefore, by 2035, a system based on an ultra-small group of whales appears structurally unstable. Operators will have to rethink their model, shifting to a broader core base, cross-vertical LTV, and new Web3 revenue sources (rake, commissions, marketplaces), rather than just pure GGR.
Cross-vertical vs new acquisition
Q. Players active across multiple products generate much higher value than single‑vertical users. Should operators prioritise cross‑vertical engagement over pure new acquisition?
Kalatsov: NatCen research has shown that customers who only bet bring in an average of ~$170 per year, those who only play games bring in ~$375, and players who combine both verticals bring in ~$765.
Verified data shows that players who use both verticals generate about 55% of net revenue with a share of ~25% of accounts. In other words, transferring a person from “one” vertical to “two” practically doubles LTV without additional CAC. With the cost of traffic rising (CPA $300–500+ in mature markets), ignoring this multiplier is a strategic mistake.
I am convinced that the focus is shifting from “another deposit” to orchestrating the user journey: Sports > Live Casino > Social/Web3 experience in a single ecosystem and a single wallet. At the same time, this must fit into a responsible model: cross-selling should not turn into aggressive up-selling to vulnerable segments, otherwise regulatory risk will negate the entire effect. Those who can build a transparent cross-product UX with clear risk control will gain a structural advantage.
What it takes for Web3 games to explode
Q. Your forecast suggests blockchain gaming could become a massive market by 2035. What has to happen for this growth to materialise?
Kalatsov: Forecasts for the blockchain gaming market vary widely: conservative models predict $300–320 billion by 2035 with a CAGR of around 30–33%, while aggressive models predict up to $1.2–1.6 trillion with growth rates of 60–70% per year.
In my opinion, the actual range lies between these scenarios and depends on three factors. The first is infrastructure: cheap and fast L2 networks, seamless on-ramp/off-ramp, and a “no private keys” UX for mass players.
The second is economic design: the industry has already seen the collapse of pure play-to-earn; sustainable growth will require models where the gaming experience is primary and tokenisation provides “transparent ownership” rather than pyramid farming.
The third is regulation and IP: major publishers, sports leagues, and clubs must see Web3 not only as a risk but also as a protected source of income. So far, we are seeing pilots (NFT fantasy, tokenised tickets), but not a mass shift in major cash flows.
Monetisation of Web3 platforms
Q. If players can own and trade digital in-game items, how could that change the way gambling platforms make money?”
Kalatsov: The traditional iGaming model is simple: players deposit money, lose part of it over time, and that loss becomes the operator’s revenue. But if players can truly own and trade digital in-game items, platforms may start earning money in other ways too; for example, by taking a commission every time those items are bought, sold, or exchanged.
That means the business becomes less dependent on players simply losing more money. In the future, a valuable customer may not just be someone who spends heavily in the casino, but someone who trades actively, brings in other users, or helps create activity inside the platform’s ecosystem.
In short, Web3 could push gambling platforms away from a model based only on player losses and toward a model that also earns from transactions, digital ownership, and platform activity.
Portrait of a player in 2035
Q. Looking ahead to 2035, what will the “typical” iGaming player look like compared to the customer that operators are optimising for today?
Kalatsov: Looking at demographics and technological trends, the “average” iGaming player in 2035 will be 30-35 years old, mobile-first, accustomed to microtransactions, subscriptions, and owning digital assets. They will not distinguish between “Casino,” “Sports,” and “Gaming”: it will be a single continuum of time in an app where you can watch streams, place bets, play interactive game shows, and trade in-game items without leaving the ecosystem.
Financially, such players will likely be less extreme than today’s high rollers: research shows a trend toward a more even distribution of revenue and growth in the role of the core segment, accompanied by stricter RG. They will use stablecoins and local instant methods equally, expect transparency of algorithms and self-control tools enabled by default.
By 2035, operators who continue to design their business around the 1% of 45+ whales and desktop UX today will look like high street betting shops in the era of digital marketplaces.
Taken together, Baker’s analysis suggests the industry may be moving away from a model built around a small number of high-spending players and toward a broader ecosystem shaped by mobile-first users, cross-product engagement, and new digital economies.
Whether that transition is gradual or disruptive will depend on how operators respond to emerging trends; from Gen Z’s different spending patterns to the evolving role of crypto and blockchain-based platforms. What seems increasingly clear, however, is that the assumptions that defined the industry’s growth over the past two decades may not hold in the next one.
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