italian online gaming data report september 2010
TRANSCRIPT
Italian Online Gaming
Data Report
September 2010
Contact:
Scott Longley, Head of GamblingData
Suite 704, 91 Waterloo Road
SE1 8RT London
Tel: +44(0)207 921 9980
Email: [email protected]
http://www.gamblingdata.com
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ITALIAN ONLINE GAMING DATA REPORT –
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Background:
With the passing of the Bersani Law in 2006 the Italian government began issuing more than 16,000
sports-betting shops and corners licences and also opened up the online sports-betting market to
more liberalisation. In September 2008, tournament-only poker was launched. Latterly, the Abruzzo
legislation opened up the way for cash poker, online casino and online bingo operations, though to
date only the last of these has gone live.
As the first major market in continental Europe to liberalise its online gaming market, Italy has
unsurprisingly been the subject of intense interest and conjecture. The monthly publication of
turnover figures by the Italian regulator Amministrazione Autonoma Dei Monopoli Di Stato (AAMS)
offers for the first time the opportunity to online operators to truly benchmark performances in a
given territory and gain an insight as to how newly-regulated markets perform and mature.
The 2009 market performance:
The Italian gaming market was worth a total of over
€54.4bn in 2009 by turnover. Slot machines were by
far the largest segment at €25.6bn with scratchcards
and other lotteries next largest at €9.4bn. Sports-
betting was worth a total of €4.03bn for the year,
both online and offline, while online poker was worth
€2.35bn.
(See Figure 1: ‘The Italian Gaming Market 2009’)
Slot machines
Scratch cards and other lotteriesSports-betting
Online poker
Other
The Italian Gaming Market 2009
Source: GamblingData, AAMS Fig. 1
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The latest picture:
The July 2010 statistics released by the regulator for
the whole of the gambling market show that the
Italian gaming market continues to be dominated by
machine play with over 54 percent of the €4.54bn
wagered by Italians over the month coming from this
sector.
(See Figure 2: The Italian Gaming Market, July 2010)
The total amount was down from the €4.7bn in June, itself the lowest monthly total since
September 2009, but was still 7 percent higher than in July 2009. The figure brought total gaming
spend for the first seven months of the year to €34.5bn, up 13.1 percent on the €30.5bn registered
in January to July 2009.
The machine total of €2.45bn in July was helped by the introduction within the past two months of
the first swathe of VLTs, also introduced under the Abruzzo legislation. Scratchcards and minor
lotteries contributed €670m of the total, or 14.8 percent, while the numbers games Superenalotto
and Win For Life grabbed a 5.5 percent share of the market or a spend of €251m. The Lotto games –
the equivalent of the National Lottery - rose to €445m in July, or a 9.8 percent share of the market.
Bingo stood at €135m, or 3 percent, skill games (tournament poker) – got a 5.5 percent share or a
turnover of €236m. Sports betting suffered from Italy’s early exit from the World Cup (see World
Cup analysis below) and fell to €216m from €346m in June, or a 4.8 percent share of the market.
Slot machines
Scratch cards and other lotteriesSports-betting
Online poker
Other
The Italian Gaming Market July 2010
Source: GamblingData, AAMS Fig. 2
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The online sports-betting market:
Analysis of the online sports-betting market shows
that the established Italian betting and gaming names
dominate the space, but not quite to the degree that
they have a lock on the retail betting space.
According to figures obtained by iGaming
Consultancy, in the first six months of the year, while
in the land-based sphere Snai, Lottomatica and Sisal
dominated the landscape with a combined market
share of over 72 percent in the first half of 2010, their
combined total in online only comes to just over 46
percent.
(See Figure 3: ‘Total sports-betting market share,
2010H1’)
But none of the big three are the biggest online, at least in the first half of 2010. This title goes to the
Microgame network, which comprises over 130 sports-betting and online poker providers and which
in the first half had over a 26 percent market share and a turnover of €198.8m. Next up comes the
Lottomatica and Totosí pairing which had a combined turnover of €182.5m. Behind that comes SNAI
Sports-betting
Other Online
The Online Market by Turnover Jul-10
Jan
Feb
Mar
Ap
r
May Jun
Jul
Au
g
Sep
Oct
No
v
Dec
2010
2009
Source: GamblingData, AAMS
Online Sports-betting Turnover Jan-09 to Jul-10
0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00%
SNAI
LOTTOMATICA
SISAL
MICROGAME
COGETECH
EUROBET
PIANETA SCOMMESSE
INTRALOT
TOTO 2000
BWIN ITALIA
GIOCODIGITALE
OTHER
Operator
Online Sports-betting Market Share 2010H1
Source: GamblingData, iGaming Consultancy Fig. 3
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with a market share of 13 percent and a turnover of €98.6m and Sisal/Match Point which grabbed a
first-half market share of just over 9 percent and a turnover of €68.7m.
A greater challenge to the established operators looks to be coming from Bwin Italia/Gioco Digitale
which between them had an online market share of 11.8 percent in the first half or a combined
turnover of €89m. But the combo has been growing its share of the market from around 10.9
percent in January to 16.5 percent in June. Still, it should be noted that this figure would represent
less than 5 percent of the total offline and online market in June.
The figures from July, moreover, show Bwin/Gioco Digitale falling back again slightly in market share
to 14.6 percent and a turnover of €9m, though the recently announced deal which will see Italian
football’s second division, Serie B renamed Serie Bwin for the next two seasons might boost these
figures once more once the new football season gets underway.
Lottomatica and Totosí took top spot in July at 22 percent share of the market and a turnover of
€13.5m. Microgame’s network fell back to second with €12.8m while Sisal’s Matchpoint was fourth
with 11.1 percent or €6.8m and SNAI was fifth with 8.9 percent and a turnover of €5.5m. The total
market was worth €61.5m in the month.
With the figures obtained by iGaming Consultancy, we also can see statistics for the payout ratio for
the sports-betting operators and hence get a clearer idea of the gross gaming revenues. So, given an
average payout ratio of 84.3 percent in online sports-betting, it means that the turnover figure of
€754.4m in the first-half of 2010 translated to a total gross gaming revenue of approximately
€118.5m across the sector. In comparison, the gross gaming revenue for the retail sector hit around
€334.9m or a payout ratio of 79.5 percent. (Figure 4, ‘Turnover/Gross Gaming Revenue for Online
and Offline Betting, Jan-Jun 2010’)
Turnover
Gross Gaming Revenue
Turnover and Gross Gaming Revenue for All Channels Jan-10 to Jun-10
January February March April May June
Source: GamblingData, iGaming Consultancy Fig. 4
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Margins across operators differed significantly. The total market leader SNAI achieved online
margins of a shade under 18 percent in the first half, leading to gross gaming revenues of €17.6m,
compared with just under 13 percent for Lottomatica and gross gaming revenues of €11.9m.
(See Figure 5, ‘Online Margins by
Operator, 2010H1’)
However, its Totosí brand – aimed
at more hardened gamblers – saw
it margins come in just over 7
percent for the first six months of
the year leading to gross gaming
revenues of €5.58m. The next
most punter-friendly operator was
Gioco Digitale which returned over
92 percent of revenues to its
players leaving it with a gross
gaming revenue of €1.8m for the
half-year.
Parent company Bwin, meanwhile, achieved margins of just over 12.5 percent and gross gaming
revenues of €8.28m.
It should be noted that the rise of sports-betting online has spelled bad news for pool or tote betting
which has seen turnover fall significantly year-on-year for every months of 2010. In the year-to-date
pool betting revenues stood at €1.59m in the year to July, down over 24 percent on the first seven
months of 2009.
Also worse off in 2010 to date is online horserace betting where total yearly revenues to date are
also down on 2009 at €16.7m, albeit only a 4.6 percent decline on the first seven months of 2009. A
recent report from GamblingCompliance suggested the horseracing sector generally was suffering
the most from the rise of other forms of sports-betting and online gaming. The story pointed out
that as recently as the middle of the past decade, the Italian national tote processed nearly €3bn of
bets per year. But by 2009 it had fallen to below €2bn and in the first five months of 2010 the total
was just €800m.
0.00% 5.00% 10.00% 15.00% 20.00% 25.00%
SNAI
LOTTOMATICA
MATCH POINT
MICROGAME
TOTOSI
COGETECH
EUROBET
PIANETA SCOMMESSE
INTRALOT
TOTO 2000
BWIN ITALIA
GIOCODIGITALE
OTHER
Operator
Online Margins by Operator 2010H1
Source: GamblingData, iGaming Consultancy Fig. 5
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The World Cup:
The bare figures for sports-betting in Italy during the recent World Cup held in South Africa point to
the growing popularity of a big soccer tournament with punters and its value to the operators.
Compared with four years’ previous -
when Italy won the World Cup in
Germany - total betting turnover on the
tournament as a whole rose 70 percent
to €344.9m. Meanwhile a margin of
just a shade under 29 percent meant
they got to share a gross gaming
revenue pot of around €97.8m.
(See Figure 6, ‘Turnover and Gross
Gaming Revenues for World Cup 2010’)
Of the total gambled, just under 74 percent was gambled in land-based establishments while just
over 26 percent was gambled online. If Italy had gone further in this year’s version, that rise might
have been even higher. In the group stages turnover was up 82 percent over the same period in
Germany 2006 to €191.5m while the most popular betting matches of the 48 group stage games in
betting turnover terms were Italy’s three ties against Paraguay (€8.92m), Slovakia (€7.64m) and New
Zealand (€7.61m).
But the biggest turnover on individual matches came in the knock-out and stages with the final
between the Netherlands and Spain being the largest betting match of the tournament at €18m
staked with Germany v Spain the next biggest betting heat with a total turnover of €13.7m.
Of particular interest to the operators will be the amount of in-play betting or live betting that took
place during the World Cup. In total about 20 percent of the total came from in-play betting. During
the final, of the €18m total, €2.22m was bet in-running and AAMS noted that there were 69 markets
open on the final, with the most popular being the name of the winner (€5.98m) and the least
popular being Fabregas to score with only €5 wagered.
Turnover
Gross Gaming Revenues
Turnover and Gross Gaming Revenues for World Cup 2010
Source: GamblingData, AAMS Fig. 6
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One operator who spoke to GamblingData suggested that when it came to in-play betting there was
“something of a regional split” evident from the degree of take up. “In the north they are more
sophisticated bettors and are very much into in-running betting. But in the south it’s a different
culture. There they go to the cafe to chat with friends while they have a drink and a bet.”
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The bellwether – Lottomatica
As the biggest Italian gaming operator Lottomatica is due more attention. In the first half, the
company’s Italian operations achieved revenues of €591.9m, a 3.4 percent decrease on the first half
2009. The company said its lottery operations garnered revenues of €327.2m, down from €360.9m
in the first six months of last year. Instant-ticket/scratchcard wagers also fell back to €4.83bn from
€4.96bn in the same period 2009 while Lotto wagers for the first half came in at €2.4bn, down from
€2.9bn. The sports-betting operations combined saw a 12.2 percent increase for the half-year to
€560m, up from €499.2m in the first half of 2009. Gaming machine wagers rose to €2.2bn from
€2.1bn. The company pointed out in its accompanying statement that it remains the largest gaming
machine/AWP operator in Italy, and that it became the first company to install a tranche of VLTs in
mid-July, after period close. The company hopes to have 1,000 machines installed by the end of
2010.
Marco Sala, chief executive and managing director, said in the earnings call accompanying the
results that the VLT installation was a “great demonstration of the value of the group”. “When we
created the Lottomatica group of companies, we envisioned a time when we would be able to
integrate and leverage the core competencies of the combined organisations to address an
opportunity. That is what is occurring in Italy with our machine gaming and interactive businesses as
Spielo and G2 help our Italian operations to differentiate themselves from their competitors.”
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The poker market:
The statistics produced by AAMS for the Italian poker
market, opened up in September 2008 and until very
recently producing hugely impressive month-on-
month growth figures, have caught the headlines as
far as the liberalisation of the Italian online market is
concerned. Despite the seasonal slowdown witnessed
this past summer, the figures are still impressive. The
total market in terms of turnover was worth €1.89bn
in the first seven months of the year compared with
€2.35bn in the whole of 2009. July represented
something of a slowdown from the peak monthly
turnover of €290.8m seen in March this year, but at
€236m it was still 28.1 percent up on the monthly
figure from the previous year and if the rebound from
the tail end of 2009 is replicated this year, then the
poker market can be expected to far exceed the total
turnover figure for last year.
The leading operator remains Microgame which despite its problems with regard to possible action
against ‘totems’ on the part of the regulator continues to hold its position at the top of the table
with its network of white-label operators based largely in the centre and south of Italy. (See Figure 8:
‘Italian Poker Market by Operator, Sept 08 – Jun 2010)
Poker
Other Online
The Online Market by Turnover Jul-10
Jan
Feb
Mar
Ap
r
May Jun
Jul
Au
g
Sep
Oct
No
v
Dec
2010
2009
Source: GamblingData, AAMS
Poker Turnover Jan-09 to Jul-10
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Microgame achieved a turnover in July of €63.7m, down 9.4 percent on June and though it is still
comfortably Italy’s number one with a 27.5 percent market share it has fallen back slightly from the
29 percent share from the previous month.
But coming up on the rails is PokerStars which has been grabbing share in the Italian poker market
since its late entry in early 2009. According to Italian gambling market information provider
Agipronews, PokerStars continued to cement its second place in Italy with a turnover of €49.1m in
July or over 21 percent of the market, albeit the turnover total was down slightly on its peaks in
March and May of €53.8m.
Lower down, it will be interesting to see what happens to the combined Gioco Digitale/Bwin and
PartyPoker market share once the PartyGaming/Bwin merger goes through early next year. As it
stands, in July the Bwin/Gioco Digitale combo managed a share of 15.3 percent of the market or a
turnover of €35.5m in July. PartyPoker meanwhile, an avowed late starter in Italy, had a market
share of 2.2 percent in July but it is thought that the combination of the merger with Bwin and the
launch of cash games could dramatically alter the picture in the next six months or more.
0
10
20
30
40
50
60
70
80
90
Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10
Turnover (€m)
Microgame Pokerstars Lottomatica PartyPoker
Gioco Digitale Bwin Gioco Digitale/Bwin
Italian Poker Market by Operator Oct-09 to Jul-10
Source: GamblingData, Agipronews, Agicosnews Fig. 8
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An avalanche of tournaments:
Interesting statistics are
produced by AAMS on the
sheer volume of
tournaments that take place
online in Italy per day. In
July, over 12.6 million
separate tournaments were
held online, attracting 36.6
million participants at an
average entry size point of
€6.45. As the regulator
points out, the participation
rates can vary from between
two people and several
thousand, but a basic
calculation suggests that the
average number of players per tournament is less than three. (See Figure 9, ‘Number of Poker
Tournaments/Number of Tournament Entries, Jan-Jul 2010’)
The figures suggest that the tournament poker scene is much more akin to cash poker in the rest of
Europe with players getting involved in a proliferation of micro-tournaments with small entry fees.
This was confirmed by Mor Weizer, chief executive at Playtech, who admitted that in the Italian
marketplace, his network’s offering was “trying to replicate cash games”. He added: “It’s the way
Italians play poker. Cash games are still more popular than tournaments.”
Noting that “a lot of players still play with sites like Full Tilt”, Weizer suggested that Italian poker
players were still attracted to the local brands and hence the tournament offering had been
designed to resemble some of the feel of cash games in terms of game turnover and speed of play.
Bearing this in mind, Weizer admits to the obvious thought that when cash games are introduced at
some point either later this year or early next some cannibalisation is likely to take place. But at the
same time, it is likely that cash games – and the new online casino market which is also waiting for
0
5
10
15
20
25
30
35
40
45
50
Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10
Million
Tournament entries Tournaments
Number of Poker Tournaments and Entries Jan-10 to Jul-10
Source: GamblingData, Agipronews, Agicosnews Fig. 9
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regulatory clearance before opening later this year or early next – will grab more of the grey or
offshore market and so should see the legal Italian market grow once again in absolute terms.
This was confirmed by analysts who pointed out that the lift being hoped for by many operators by
the introduction of cash games might be less than hoped. One analyst suggested that the rise in
turnover when tournament poker becomes cash poker will be “muted”. “It won’t be a huge uplift,”
he suggested. Nick Batram from KBC Peel Hunt, meanwhile, added that while there would be
something of a positive movement, “it’s not going to be like suddenly switching the lights on”. “It
will be more like turning the dimmer switch up a few notches.”
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Other Games
Bingo:
Bingo is the new kid on the block in online terms having only been first licensed in December of last
year. Growth has been steady with total revenues since launch standing at €67.6m. In July, total
market revenue hit €11.1m up from €10.1m in June.
Gratta e vinci and superenalotto (Win for Life):
The online scratch and win numbers for the first seven months of 2010 show the product to be
declining severely in popularity with monthly double-digit declines in 2010 culminating in a 38
percent fall in July to €2.91m. The year-to-date total is off by 19 percent in the first seven months at
€36.3m. Superenalotto/Win for Life, however, has taken a small share of the online market with
monthly sales in July of €1.68m. Total sales in the first seven months of the year hit €10m.
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The grey/illegal market:
Though it is hard to divine who exactly is operating in the ‘grey’ market in Italy, there are some
names which have become public in recent months. London-listed Gaming VC has recently entered
into a spat with provider G2, part of the Lottomatica empire, with regard to its Italian-facing
operations. While once having a licence under the brand name Betpro, Gaming VC recently sold the
licence, but it continues to take Italian bets under its CasinoClub and Betaland brands.
Meanwhile, though an Italian language site is by no means an absolute proof that the site in
question is taking bets in Italy, it can be noted that many of the leading European-facing offshore
operators also have Italian language offerings. Notably, many of these operators make a feature of
online casino offerings. Mor Weizer, chief executive at Playtech, refused to put a percentage against
the size of the grey market in Italy, but suggested it was “quite significant”, adding that he believed
that many of these operators might well consider taking licences once casino gaming was allowable.
Presumably these new entrants might include leading Playtech licensee Titan which currently offers
Italian-language sports-betting and poker – as well as casino – but does not appear to be a part of
the Playtech Italian network.
However, anecdotal evidence would suggest that many offshore operators will still be unwilling to
pay the taxes that go hand-in-hand with being licensed and hence will remain on the grey side at
least for the foreseeable future.
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New entrants:
More perhaps than cash poker, it will be the introduction of online casino games in Italy which is
likely to be the cause of a rush of new entrants into the market. Companies such as William Hill and
888 have stated recently that they are either in the process of or already have gained a licence for
Italian operations. 888 said in late August that it felt it was “well-placed to capitalise” on its position
in Italy via a joint venture with Endemol which will see it offer Big Brother and Deal or No Deal
branded games to the Italian market. 888 has also signed up both Bwin/Gioco Digitale and
Microgame to its online casino offering ahead of regulation. Playtech also said in late August that it
had a number of current licensees eyeing up entry into Italy with a casino offering. “We are seeing a
lot of interest,” said Weizer. “They are already in the licensing process. These are casino specialists
looking to replicate what they have elsewhere. These are significant operators.” Speaking earlier in
August, Jim Ryan, chief executive at PartyGaming, said the company would be looking to do a deal
with an offline operator to get a jump on the competition. “We hope to marry our online capabilities
with a land-based operator and we will hopefully get into that market before the vast majority,” he
said at the time of Party’s interims results in August. In contrast, Ladbrokes announce back in May
that it had ceased online operations as a result of the sale of its offline estate of shops to Cogetech.
Nick Batram, analyst at KBC Peel Hunt, said the introduction of casino games would mark a step
change in the Italian market. “Casino will be a transformation,” he told GamblingData. “That will be
like flicking on a switch.”
But there was more caution from one Italian market operator who wished to remain anonymous. “I
think Italy is somewhat misrepresented,” he said. “Now I agree, casino is significant. But from the
recent past, when we opened up tournament poker, it took from our sportsbook. So I think that
there is a certain level of spend. I don’t know if the market is growing. I’m not at all sure the market
is expanding.”
He added that he feared that the era of market expansion was likely drawing to a close and that a
consolidation would be taking place in the coming months and years. “I think the smaller operators
will fall by the wayside,” he said. “I think you need 2,000 shops and corners. I think that is the
sustainable level. The fear is the market might be wrapped up.”
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Market participants – leading players:
Main Online Sports-Betting Operators:
Lottomatica Runs the Better and Totosi brands
Sisal Runs the MatchPoint brand. Also operates the Superenalotto and sports-betting
games such as Totocalcio and Totogol. Also operates AWP machines
SNAI Sports-betting and horserace-betting provider, and ancillary gaming services
provider
Microgame Network currently running 130 sports-betting and poker brands
Eurobet Italia Owned by Gala Coral
Intralot Secured a large number of sports-betting and horserace betting licences with
Bersani and has a white-label deal with PartyGaming for online poker
Cogetech Bought the 142 Pianetta Scommese shops from Ladbrokes in April 2010
Toto 2000 Owner of the Strike Scommese brand
Leisure & Gaming Owns the Betshop brand and is a major licensee on the Microgame network
Bwin Also owns the Gioco Digitale brand. Soon to merge with PartyGaming
Merkur Win Owned by the Gauselmann Group
GBet Gmatica’s sports-betting and poker online operation
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ITALIAN ONLINE GAMING DATA REPORT –
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Main Poker Operators:
Microgame Network of over 130 sports-betting and poker independent licensees including
Betshop
PokerStars Global online poker powerhouse
Bwin/Gioco Digitale Gioco Digitale grabbed an early lead in the online poker market before falling back
and being bought by Bwin
Lottomatica In the poker market with the Better and Totosi brands, owns the Boss Media poker
network via its G2 online gaming software supply operation
SNAI Runs its poker operation on the Playtech network
Sisal Runs its poker operation on the Playtech network
PartyGaming Admitted it was slow to recognise the opportunity in Italy
Betclic of the Mangas group which also runs the Expekt, Bet-at-home and Everest brands
GBet Owned by Gmatica
Gamenet Machine operator which runs a poker offering on the Playtech operation
Leonardo Service
Provider
A network with a number of poker and sports-betting licensees
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ITALIAN ONLINE GAMING DATA REPORT –
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SE1 8RT London
Tel: +44(0)207 921 9980
Email: [email protected]
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