Esports vs iGaming vs eGaming: Complete Guide to Their Differences and Overlaps

Esports, iGaming, and eGaming are similar but distinct terms used to refer to different sectors of the online gaming industry. While these terms are related and sometimes used interchangeably, they refer to different sectors of the gaming industry.

Anyone looking to venture into these industries by building iGaming platforms or developing Esports software solutions has to understand how each one works. This article explains the distinctions between these three industries and identifies the areas where they overlap. We’ll also explore the role of Esports in education and career development.

• Despite their similarities, Esports, iGaming, and eGaming are distinct niches of the broader gaming and entertainment industry.
• With eGaming, the focus is on fun and entertainment. Esports is all about competitive gaming to earn a prize, while iGaming is focused on real money gambling.
• These three industries overlap in terms of their reliance on certain shared digital technologies, including the internet, streaming services, and mobile and digital payments (such as blockchain).

Introduction to Esports and iGaming: Why These Terms Are Often Confused

Esports, iGaming, and eGaming all sound like they’re referring to the same thing. They can all be traced back to the same origin, dating back to the days of arcade machines and home game consoles.

Today, these terms refer to different sectors of the digital gaming and gambling industry. Clearing up the differences between them will help you understand the peculiarities of each sector, so you can know which one you’re engaging in when you play games online.

What Is Esports?

Esports is short for electronic sports. It is a niche of the video game entertainment industry with greater emphasis on cooperative and competitive gaming. In Esports, individual players or teams compete against each other in video game matches and tournaments.

Many popular video games, such as Fortnite, Dota 2, Call of Duty, and StarCraft, are typically organized into professional leagues where individuals or teams compete against each other. These professional leagues have governing bodies and a unique set of rules for each tournament. Many Esports also have online fans and spectators that typically consist of a younger tech-savvy demographic.

This form of gaming isn’t just about playing for fun or entertainment. The goal is to emerge as the best in competition-like events. The reward for emerging as the best in these competitions may just be bragging rights or a slice of a massive prize pool. For instance, The International 2021, a Dota 2 tournament, featured a record-breaking prize pool of over $40 million.

Although the primary goal of Esports is competition, fans may also bet on the outcome of matches and earn rewards of their own for doing so. You can read our Esports betting guide to discover how betting on Esports matches and tournaments works.

What Is iGaming?

Now that you understand what Esports is, what is iGaming? And how does it differ from Esports? iGaming refers broadly to the online gambling industry. This term can be used to describe all forms of online gaming that involve placing bets or wagering money on a game of chance or skill, with the potential for real money rewards if your bet is successful.

In iGaming, players wager on the future outcome of a game of chance, a competitive sporting event, or a skill-based game. It encompasses gambling in an online casino (playing slots or card games like blackjack), sports betting, live dealer games, and more.

iGaming is a multi-billion-dollar industry that caters to players and enthusiasts with a wide range of interests. It is governed by stringent regulatory and licensing requirements, since gambling is considered potentially dangerous and addictive. The iGaming industry has several sectors and key players, including iGaming software development companies, platform operators, payment processing providers, licensing bodies, and marketing affiliates.

What Is eGaming?

eGaming is short for electronic gaming. This is the broadest of the three terms, referring generally to the act of playing any video game electronically for recreation and entertainment. eGaming is the foundational activity from which the more specific niches of Esports and iGaming have evolved.

The origin of the eGaming industry can be traced back to traditional video games like Super Mario, Sonic the Hedgehog, or Street Fighter that were played on a computer or video game consoles in the latter part of the 20th century.

The arrival of gaming consoles and computers with internet connectivity transformed this industry, as it now made it possible for players to play multiplayer games against others. By the early 2000s, video games that allowed players to connect and play with anyone from anywhere in the world became quite popular, kickstarting the digital games revolution.

Regardless of how the industry has advanced, the main goal of eGaming is fun and entertainment. This is where it differs significantly from a casino or sports betting software, where the goal is to make a profit by wagering on games.

Esports vs iGaming vs eGaming: Key Differences

Although recent technological advancements have blurred the lines between these three sectors of the gaming industry, they still differ significantly in their operations, purposes, and legal status across various jurisdictions.. Here’s an overview of the key differences between these three sectors.

Purpose

eGaming, Esports, and iGaming differ primarily in the purpose of playing them. Video games that are played online solely for fun and amusement are categorized as eGaming. Esports, on the other hand, focuses on video game competition, with participants earning rewards from a prize pool. iGaming is all about gambling and wagering on games with a potential for real-money rewards if your predictions are correct.

Gameplay Mechanics

eGaming is simply focused on playing video games electronically. Players get to enjoy video games while putting their skills, strategy, reflexes, and control to specific aims like completing levels, defeating enemies, solving puzzles, or building structures.

Esports takes this further by introducing a layer of competition between players. With this format, players compete against each other for bragging rights and/or prize money while entertaining an audience of viewers (or streamers). Competitions are meticulously planned out by organizers with specific rules for participant selection, competition formats, time durations, and prize distribution.

iGaming is all about randomness and chance, in addition to online gaming entertainment. Here, players try to predict the outcome of a game of chance (such as slot machines), a skill-based card game (like poker), or a sports event. In some iGaming events (particularly sports betting), players may rely on data, statistics, and their knowledge of the game to predict outcomes, but the actual result of the game is still beyond anyone’s control.

Revenue Models

Many iGaming software programs are free and widely available to players. However, some developers may charge players for hardware, software purchases, or a subscription fee. In some games, players may use money to buy in-game items such as weapons, level access, skins, and themes in order to improve their gaming experience.

Esports revenue is mainly from big brands’ sponsorship that see it as an avenue to advertise or market their products. Some of these sports are also streamed by spectators who pay for tickets or subscription fees on streaming platforms. Players may also contribute money to a prize pool that goes to the winners of the competition.

The revenue model for iGaming is mainly from the bets and wagers placed by players. Registered players on iGaming platforms place real money bets on games with the expectation of winning more money.

Audience

There’s a significant overlap in the target audience of these three forms of gaming. Almost all age groups participate in eGaming since it is accessible to everyone and rarely has any monetary requirement or legal restrictions.

Esports, on the other hand, is played by young professional gamers with young, tech-savvy viewers. Players and viewers of Esports events are concentrated in specific regions with strong gaming cultures. This includes North America, Europe, and Asia.

iGaming is restricted by law to adults (above 18 or 21, depending on the jurisdiction). While younger demographics still show some interest in gambling (particularly in sports betting), the older demographics (millennials and boomers) form the bigger percentage of online casino players.

Legality

While all three industries are similar and have a potential for addiction, iGaming is the most villainized due to the high risk of players losing money and the potential for exploitation. Consequently, it is the most regulated form of gaming in most jurisdictions. In fact, iGaming is expressly banned in many countries all over the world. On the other hand, Esports and eGaming are mostly legal, although players are still encouraged to embrace responsible gaming practices and self-control measures.

The Growth of Esports Betting and Its Impact on the iGaming Industry

Esports betting is one of the major areas of overlap between the iGaming and Esports industries. As the name suggests, it involves placing bets on the outcome of competitive video game matches. This form of betting is similar to conventional online betting. Fans watching professional Esports players or teams can bet on outcomes such as winners, the scoreline, or specific game events like the first kill or first score, among other possibilities.

Many conventional betting platforms now offer markets that include major Esports tournaments. Similarly, many Esports streaming platforms are incorporating betting options, creating a convergence of iGaming and Esports.

Esports betting is on the rise, with huge potential impacts on the online gaming industry. One such impact is on the possible effects on regulations. While the Esports industry is largely unrestricted, betting is prohibited or heavily regulated in many jurisdictions, raising questions about the legitimacy of Esports betting.

The rising wave of Esports betting may potentially aid the expansion of online betting and gambling across regions where it was initially deemed unacceptable. This trend may also make betting more appealing to younger demographics. Seasoned bettors are also likely to get interested in Esports as an alternative to traditional gambling.

Gamification in iGaming: Learning from Esports

Gamification refers to the process of infusing traditional gaming elements into non-game contexts with the goal of enhancing user engagement. Conventional video game developers have mastered the art of offering rewards such as game points, unlocking new levels, scoreboards, and new game perks (weapons or skins) in various games with the goal of enhancing player engagement.

For iGaming platforms, the primary motivation is the possibility of earning monetary rewards from successful wagers. However, some iGaming platforms are beginning to learn from the eGaming and Esports industry by introducing gamification elements. These include offering loyalty points, organizing tournaments, leaderboards, and other interactive bonuses. Borrowing these user engagement techniques for your iGaming business is a smart marketing tactic that can encourage players to play more.

This is the entire premise of social casinos, a type of gambling platform where players play games for the gamification and social aspects instead of real money rewards. These platforms are characterized by traditional iGaming elements, but without real money wagers, and this makes them legal across many jurisdictions.

Shared Technologies: What Powers Both Worlds

The Esports, eGaming, and iGaming sectors are all forms of digital entertainment. This means they all rely on the internet and are connected by key technologies that make them accessible to players. The same technologies adopted by the top Esports companies are also widely used across other gaming sectors. Some of these technologies include:

Live Streaming

Esports platforms rely on live streaming technology to show ongoing matches and tournaments to fans all over the world. On platforms like Twitch, Esports and eGaming events remain the most popular forms of live stream content consumed by viewers. These platforms also have features that allow viewers to comment and interact with players while watching live matches.

Many online gaming and gambling platforms have bought into this trend as well, offering live streaming and betting options to players. This allows players to watch real-life games in real time and place live bets based on changing odds as the event progresses. Similar to this is the possibility of playing live dealer games. This mimics the real casino experience via video streaming technology, allowing players to participate remotely in games being streamed from a casino floor or studio thousands of miles away.

Blockchain

Blockchain is another technology with far-reaching impacts across various niches of the online gambling and gaming industry. This secure and decentralized system powers payment processing on various iGaming and Esports platforms. Decentralized payments through blockchain technology are democratizing access and powering cross-border participation in online gaming. This is particularly important for the iGaming industry, where legal limitations cut off many people across various jurisdictions from participating.

Beyond payments through virtual currency, blockchain technology also has several other potential uses in the gaming industry, including helping players get paid, contract management, and fostering transparency in gaming platform development.

Considering the potential benefits of blockchain adoption in the gaming industry, many iGaming companies, Esports tournament organizers, and casino software providers are forming strategic partnerships with companies that provide useful blockchain integrations.

Mobile Integration

These days, the majority of internet traffic comes from mobile devices. This trend applies to the gaming industry as well. Statistics show that out of $187 billion generated in the gaming industry in 2024, $92 billion (49%) comes from the mobile gaming industry, exceeding game consoles and PCs significantly.

Mobile gaming has made online gambling, gaming, and Esports accessible to a broad spectrum of demographics, from serious gamers to casual players. Consequently, software and platform developers within the industry are taking a mobile-first approach to development. Mobile gaming involves optimizing platforms, games, or software to display perfectly on mobile devices, accounting for the smaller screen size, resolution, and differences in control.

Market Size and Growth: Esports vs iGaming

Although Esports emerged relatively recently (compared to iGaming and eGaming), this industry has risen to prominence, captivating millions of viewers and players all over the world. It has evolved from a barely popular niche interest to a global phenomenon enjoyed by millions.

The Esports market is currently projected to be worth about $4.8 billion in 2025. This is expected to grow to about $5.9 billion by 2029 based on a cumulative annual growth rate of 5.56%. Similarly, the Esports betting market, which is an offshoot of this industry, is currently worth $2.8 billion.

Comparatively, the global online gambling industry had an estimated market size of $78.66 billion as of 2024 and may be worth up to $153.57 billion by 2030, giving a CAGR of 11.9%. The growing popularity of Esports is more akin to traditional sports betting. The Esports industry now has several professional teams and players competing in some of the biggest gaming tournaments all over the world.

For instance, the 2025 Esports World Cup, scheduled to be hosted in Riyadh, Saudi Arabia, will host over 32 teams in the biggest multi-game Esports tournament in the world, and promises a prize pool of up to $27,000,000 for the top 16 organizations in the Championship event. The growing popularity of streaming platforms (such as Twitch and YouTube) is also contributing to the growing popularity of Esports content and the industry’s rapid growth.

Regulatory Landscape

As highlighted above, one of the key differences between eGaming, Esports, and iGaming is their legal status. In general, eGaming is considered legal and acceptable in most societies since it isn’t considered gambling. While there are often ethical concerns about the risk of addiction as well as the content of certain games (games showing violence or sexually explicit content), it is often up to the players themselves, or parents, to determine if they want to play a game or not.

The same is true for Esports as well, which remains a largely unregulated niche since it is considered a harmless form of organized play. Tournament organizers and platform operators may set specific rules for participation in individual competitions, but these aren’t restrictive rules or limitations.

Unlike Esports and eGaming, iGaming isn’t always legal. Gambling is frowned upon and considered dangerous in many cultures, which is why different countries or regions have specific laws guiding their online gambling industry.

Most countries heavily regulate the industry, permitting only licensed gambling operators to run casinos and sports betting platforms. It is even completely banned in some countries due to cultural and religious beliefs.

Laws may also vary across different states within a country or for different forms of gambling. For instance, while betting on sports is permitted across many US states, casino gaming is only allowed in a few states. All of these regulatory issues can make it challenging for players to access legal iGaming options within their jurisdictions. You have to research and confirm the laws and regulations in your location before engaging in any form of online gambling to avoid any issues with the law.

Risks and Social Concerns on eGaming and iGaming

eGaming and iGaming are both considered forms of entertainment and leisure. While one gets more scrutiny and oversight than the other, it is important to recognize the inherent risks and social concerns associated with both of these industries, starting with the risk of addiction and the potential negative impacts on general well-being.

Even without real money gambling, playing too many online games can affect an individual’s life, social relationships, and even physical health in various ways. It causes problems with time management, which can affect all aspects of a person’s work, life, and relationships.

Focusing too much on this activity also means the individual will spend more time buried in games instead of facing their real-life responsibilities. The social isolation that comes with gaming can affect a person’s social skills and their ability to form real connections.

The potential to lose real money makes iGaming even riskier. In addition to the increased stress and anxiety caused by gambling addiction, people who gamble are likely to run into money problems that only get worse the more they try to chase wins.

There’s also the risk of exploitation by unscrupulous gaming and gambling operators that do not care about age restrictions, responsible gambling, or player safety. This is why regulators set high standards for the online gambling industry, and operators are expected to comply with these standards to preserve the integrity of the industry and make playing games relatively safe for players.

Future Trends: How AI, AR/VR, and Blockchain Are Shaping the Future of Both Esports and iGaming

In the coming years, the line between Esports, iGaming, and online video gaming will likely blur even further as these industries continue to evolve. We’re already seeing the emergence of new forms of gaming, such as Esports betting trends and chess Esports, due to the convergence of these industries. These new niches promise novel experiences and new rules of engagement for players, operators, and policymakers.

Many of the advancements in online gaming (Esports, iGaming, and eGaming) are a result of emerging technologies. Cutting-edge video technologies such as Virtual Reality (VR) and Augmented Reality (AR) are at the forefront of the industry’s technological advancement. Games and platform developers are leveraging this technology to create virtual gaming environments that are both realistic and immersive.

Artificial Intelligence (AI) is another technology that is helping to shape the future of digital entertainment. Developers are leveraging AI algorithms to tailor gaming experiences to user preferences. Generative AI is also proving useful for game designs, dialogue, and other types of game media.

The growing acceptance of digital currencies on digital gaming platforms will also shape the future of the industry. By adopting blockchain technology, online casinos can improve efficiency in financial transaction processing and circumvent the limitations of traditional payment systems. It will also prove useful in enhancing the transparency and security of online gaming platforms.

Final Thoughts on Esports vs iGaming vs eGaming

Online gambling, Esports, and gaming are among the most popular forms of digital entertainment available to players today. Although each one is distinct, they also share significant overlap, especially in terms of underlying technology. Investors and operators can leverage this overlap and draw inspiration from it to market each niche effectively, appeal to new audiences, and even create new and exciting game niches.

To learn more about these industries, including how to invest in Esports or execute a gaming software development project, get in touch with us. We have expertise in all of these areas and will help you take advantage of the abundant opportunities available in the industry. Contact us now to get started with software development!