This document summarizes Simon Holliday's presentation on onshore interactive gambling in the Netherlands. The key points are: 1) The global interactive gambling market continues to grow steadily at around 8% annually, reaching €26.5 billion in 2013. Onshore markets now account for 40% of revenues and are expected to reach 52% by 2018. 2) The EU gambling market reached €11.6 billion in 2013. Fully regulated onshore markets in several countries are capturing more revenue, totaling €2 billion in 2013. 3) The offshore Dutch interactive gambling market is currently worth around €225 million annually but the onshore market resulting from regulation could range from €150-300 million depending on

1. Onshore
Interac-ve
Gambling
in
the
Netherlands
Simon
Holliday
H2
Gambling
Capital
Gaming
in
Holland
Amsterdam
23
June
2014
www.h2gc.com

2. AGENDA
• Interac-ve
Gambling
Market
Update
• EU28
Market
Trends
• Dot
Country
Markets
-­‐
Recent
Performance
• Current
NL
Gambling
Market
• Dot
NL
Expecta-ons
/
Changes

3. Interac-ve
Gambling
Market
Update
• Con-nued
Overall
Strong
Growth
• Dot
Com
Markets
• Developing
Regions
• Product
Innova-on
• Mobile
Channel
• Weaker
Performance
• Onshore
Regulated
Markets
• Poker
• 2013
Globally
Interac-ve
Gambling
Up
7.8%
to
€26.5bn
• Current
Year
a
Further
13%
of
Growth
to
€30.0bn
• Globally
8.3%
of
Gross
Gambling
Revenues
are
Now
Interac-ve
(8.9%
14
/10.2%
18)
• Highest
in
the
Nordics
where
mid-­‐30%'s
• UK
mid-­‐to
High
20%'s
• Southern
Europe
s-ll
Low
to
Mid-­‐Single
Digit
• Dutch
Market
Currently
11%
-­‐
Onshore
Regula-on
by
2018
14%
(20%
Gross
Win
Tax)
to
18%
(10%
Gross
Win
Tax)
• Onshore
Ac-vity
Accounted
for
40%
of
Global
Interac-ve
Revenues
2013
/
Expected
to
be
52%
by
2018
• Low
Point
Just
Under
30%
in
2006

4. EU28
Market
Trends
• All
Gambling
€11.6bn
Gross
Win
2013
-­‐
14%
of
Total
with
41%
Onshore
• 14.2%
Growth
Expected
in
Current
Year
• Bebng
and
Gaming
Only
€10.1bn
-­‐
20%
of
Total
with
33%
Onshore
• 12.5%
Growth
Expected
in
the
Current
Year
• UK
-­‐
Largest
European
Market
€2.96bn
(bebng
and
gaming
only)
29%
of
the
Total
European
Market
• Just
18%
Onshore
(Going
Forward
PoC
to
Capture
Taxa-on
for
the
Treasury)
• 6
Fully
Compe--ve
Markets
Up
and
Running
with
Bebng
and
Gaming
Gross
Wins
Totalling
€2bn
in
2013
• Another
€1.3bn
in
Monopoly
Markets
or
Those
Restricted
to
Land
Licensees
• A
Number
of
Other
Markets
Expected
2014-­‐15

5. EU
Dot
Country
Markets
-­‐
Recent
Performance
• Current
Year
Expec-ng
7.9%
Dot
Country
Mkt
a
Growth
vs
EU28
Average
14.9%
• Lower
GDP
Growth
• Total
Value
Onshore
Bebng
and
Gaming
Ac-vity
Approaching
€2.1bn
• Offshore
Ac-vity
Sta-c
c€900m
• Overall
Ini-al
Market
Upside
Expected
Upon
Onshore
Regula-on
• Combined
On
and
Offshore
Will
Grow
the
Market
–
Amount
will
Depend
on
Tax
Rate
/
Any
Other
Restric-ons
• New
Onshore
Market
Will
Not
Surpass
the
Size
of
Previous
Offshore
Market
at
20%
Gross
Win
Tax
(Closer
to
15%
to
Achieve
this)
• Channelling
–
Average
c70%
• Can
Vary
From
Less
than
50%
(Highest
Tax
/
Lack
of
Product
Ver-cals
/
No
Interna-onal
Pooling)
• To
85%
• Op-mal
Likely
to
be
95-­‐97%
• Structural
Restric-ons
on
Growth
Beyond
Market
Launch
• Where
Applicable
Domes-c
Liquidity
Bigger
Factor
/
Cri-cal
Mass
to
Develop
Momentum
• Predominantly
the
Same
Operators
Moving
Onshore
/
Development
of
Local
Monopolies'
Offer
• Ini-al
Land-­‐grabs
-­‐
Market
Sehles
Operators
Cau-ous
as
Paying
Tax
on
Bonuses
which
can
be
as
High
as
20%
in
Dot
Com
Gaming
• Affiliates
Opera-ons

6. Current
NL
Gambling
Market
• Netherlands
15th
Largest
Gambling
Market
in
the
World
(7th
Largest
in
the
World
• Average
Gross
Win
per
Adult
€164
(25th
World/
14th
EU28)
–
EU28
Average
€193
• %
of
GDP
Accounted
for
by
Gambling
c0.40%
(EU28
Average
c0.65%)
0.0#
0.5#
1.0#
1.5#
2.0#
2.5#
2003#
2004#
2005#
2006#
2007#
2008#
2009#
2010#
2011#
2012#
2013#
Land# Interac6ve#
Be#ng&
4%&
Gaming&
52%&
Lo1eries&
44%&
NL Total Gambling Gross Win (€bn)"NL Gross Win by Product"
Be#ng&
14%&
Gaming&
48%&
Lo1eries&
38%&
EU Gross Win by Product"
EU Total Gambling Gross Win (€bn)"
0"
10"
20"
30"
40"
50"
60"
70"
80"
90" 2003"
2004"
2005"
2006"
2007"
2008"
2009"
2010"
2011"
2012"
2013"
Land" Interac5ve"

7. Dot
NL
Expecta-ons
–
On
Going
Changes
• Changes
to
Our
Approach
/
Key
Drivers
• IMF
GDP
Forecasts
• Evolu-on
of
Benchmark
Markets
• Adjustments
in
the
Mix
of
Benchmark
Markets
• Allowance
for
any
Change
of
Pace
in
Current
Marke-ng
• Changes
in
Regula-on
/
More
Detailed
Assessment
of
the
Exact
Similari-es
/
Differences
with
the
Dot
DK
Regula-on

8. Dot
NL
Expecta-ons
• Currently
An-cipated
that
the
Offshore
Dutch
Market
will
be
Worth
c€225m
in
the
Current
Year
• With
a
20%
Gross
Win
Tax
• Onshore
Bebng
and
Gaming
Ac-vity
First
Full
Year
Could
Range
From
c€150m
(29%
GWT)
to
c€300m
(10%
GWT)
• Ini-al
Bebng
and
Gaming
Channelling
Could
Vary
from
60%
to
90%
• Latest
Update
of
Model
/
Start
Date
• Execu-ve
Market
Report
0"
50"
100"
150"
200"
250"
300"
350"
400"
2013"
2014e"
2015e"
2016e"
2017e"
2018e"
Onshore" Offshore"
Be#ng&
47%&
Casino&
32%&
Poker&
11%&
Bingo/
Other&
10%&
NL Interactive Gambling Gross Win (€m)" NL Interactive Gambling Gross Win by Product"

9. Further
Details:
Simon
Holliday
H2
Gambling
Capital
simon.holliday@h2gc.com
www.h2gc.com
H2
Annual
Gambling
Data
&
Market
Intelligence
Subscrip:on
Service
Online
Access
for
Unlimited
Users
within
an
Organisa5on
to
Over
250
Datasets,
Reports
and
Updates
with
c1,000
New
and
Updated
Pos5ngs
Expected
in
the
Coming
12
Months
Including
Netherlands
Updated
Dataset
/
Execu5ve
Market
Report(Slide
Deck
Format)
in
July