Worldwide revenues for gambling on mobile phones will reach $16bn (£9bn) by 2008, with mobile casino, lottery and sports gaming making up the bulk.

A report by consultants Alexander Resources - Mobile Gambling: Casinos, Lotteries & Betting - has predicted that 2.5G and 3G wireless technologies and phones will play a "prominent" role in the growth of mobile gambling.

The report identified three segments that are expected to account for the majority of mobile gambling revenues.

Mobile casino-style betting for customers with high-end phones will allow users to play against the system or other users in real time. Revenues in this sector are expected to reach almost $6bn by 2008.

Secondly, mobile lotteries will evolve that allow users with simple digital phones to play. Lottery sales from such gaming phones are expected to reach slightly more than $5bn by 2008.

Lastly, Alexander Resources expects mobile sports and other betting to open up gambling and allow users to play more frequently.

Players will be able to make real-time bets on the outcome of particular events and dynamically bet through their handset on the outcome of a particular micro event during a game. Revenues by 2008 are forecasted to reach $5bn.

But the study also warned: "Certain user, payment, security, privacy, regulatory and technology challenges could at worst stymie this market even before it gains traction, or at best could heavily influence the amount of revenues forecasted."