TrustPartners Srl
TrustPartners
Confidential
OVERVIEW OF ITALIAN GAMING &
GAMBLING MARKET
October 2010
TrustPartners
Confidential
ABOUT TRUSTPARTNERS
TrustPartners (www.TrustPartners.eu) is a management consulting company, wh...
Confidential
- 2 -
TrustPartners
GAMING AND GAMBLING IN ITALY: OUR REPORT
In the last few years world gambling market’s gr...
Confidential
- 3 -
TrustPartners
TrustPartners
Overview
of Italian Gaming &
Gambling market
October 2010
2 TrustPartnersOM...
Confidential
- 4 -
TrustPartners
3 TrustPartnersOMG10_PR
GROWTH EXPECTATION OF THE ONLINE MARKET IN ITALY – GROSS MARGIN *...
Confidential
- 5 -
TrustPartners
5 TrustPartnersOMG10_PR
SKILL GAMES LEGISLATION – POTENTIAL PAYMENT FOR LICENSEES
Total t...
Confidential
- 6 -
TrustPartners
7 TrustPartnersOMG10_PR
THE ONLINE BINGO MARKET – EXPECTED YIELD
Higher margin for the
Op...
Confidential
- 7 -
TrustPartners
9 TrustPartnersOMG10_PR
THE ONLINE POKER IN ITALY – ACTIVE GAME ACCOUNTS IN MONEY GAMES *...
Confidential
- 8 -
TrustPartners
11 TrustPartnersOMG10_PR
THE ABRUZZO DECREE EFFECTS – INTRODUCTION TO CASINO GAMES
• Casi...
Confidential
- 9 -
TrustPartners
INDEX OF THE REPORT
1. Gaming & gambling market in Italy P. 3
1.1 Normative context
 Law...
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Abstract - Italian Gambling market report - Oct 2010

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Abstract - Italian Gambling market report - Oct 2010

  1. 1. TrustPartners Srl TrustPartners Confidential OVERVIEW OF ITALIAN GAMING & GAMBLING MARKET October 2010
  2. 2. TrustPartners Confidential ABOUT TRUSTPARTNERS TrustPartners (www.TrustPartners.eu) is a management consulting company, which has developed a strong know-how and experience in several Italian regulated industries – such as Gaming & Gambling, Pharmaceutical and Tobacco – as well as Energy and Public Administration industries. In the last few years, TrustPartners supported leading Gaming & Gambling Operators to set up and achieve their business strategies, focusing in the online gaming market, new games/channels launch (Poker, Skill Games, Instant Lotteries, Scratch Card, Bingo, Sports Betting, Mobile Channels, Innovative Marketing Technique, etc), start-up of new companies in Italy dealing with Authorities, Technical Providers and Marketing Services Operators, in respect to the new Italian regulations. In late 2008, TrustPartners decided to develop the first Italian Gaming & Gambling Market annual report, based on the national market analysis (in terms of products, Client’s target, analysis of the most relevant competitor), with breakdown for every single game distributed. Today TrustPartners is considered one of the most important Italian consulting firm operating in Gaming and Gambling sector; due to its consolidate expertise TrustPartners can support Italian and International Clients may wish to enter in Italian online gaming and gambling market, to: - define its positioning and identify the most effective strategy to enter in the market (Italian gambling licence acquisition, partnership with an Italian gambling Operator, etc) - obtain a license for online gambling - design an effective concept model for the launch and the management of gaming products and services - select technology Partners and platform providers for online games launch and negotiate agreements - launch products (poker, skill games, bingo, casino games, etc) - develop and manage Clients’ Customer Base - identify and develop an effective multichannel strategy Following you can find an abstract of our report, an useful instrument, in particular for non Italian gaming companies, to preliminary evaluate the opportunity to enter in Italian gaming market.
  3. 3. Confidential - 2 - TrustPartners GAMING AND GAMBLING IN ITALY: OUR REPORT In the last few years world gambling market’s growth rate increased constantly. It is also expected to continue like that in the next following years. • Italian gaming market increase, in terms of turnover, in the period 2004- 2010E, has been 15 %. The new market regulation since 2007 (Bersani’s regulation) contributed pretty much to the national figures and trends • 2010 turnover is expected to reach 57,4 billion €, with an increase of 5,5% in respect to 2009; Italian ARPU level is one of the highest worldwide: Client expenditure amount at around 1.000€ / year • Slot Machine is the most profitable product, with around 49% of the overall turnover; also Lotteries (instant lotteries included) and Lotto, even if in decrease, still have a good leverage in the offline market • Highly significant is the online channel, thanks to the Poker launch in late 2008. 2010 online turnover will be more than 4,7 billion €, with an increase of 25% vs 2009, in terms of margin for the Operators • Looking forward to 2011-2013, figures will increase strongly, thanks to the ‘cash game’ model (for Poker and Skill games) and new other products launches (V7 instead of Totip, Bet Exchange, VLT) • Interactive channel will raise up turnover thanks to the cash model for Poker (to be launched in 2011) and overtake 9Billion € in 2013
  4. 4. Confidential - 3 - TrustPartners TrustPartners Overview of Italian Gaming & Gambling market October 2010 2 TrustPartnersOMG10_PR THE MARKET GROWTH IN ITALY – GROSS GAMBLING TURNOVER • The Italian gambling market growth has registered a CAGR just bit higher than x,x% in 2004/2010E period… • ... particularly due to the struggle against the illegal Slot machines market (today almost completely under the AAMS control) • The expected growth in 2010 vs 2009 will be around of x,x% Bil € Lotto Slot machines Totalizator games Bingo Horse racing betting Lotteries (including G&V) - + x,x% + x,x% + x,x% Growth Year X on Year X-1 2004 2005 20072006 2008 + x,x% xx xx xxxx CAGR ‘04/’10E +x,x% xx Poker & Skill games online Sports betting Other * TOTAL xx + x,x% 2009 2010E + x,x% xx (*) Including: Totocalcio, Totogol, Il9, Big Match, Source: TrustPartners analysis on various sources (AAMS, Agicos, Agipronews, etc) October 2010
  5. 5. Confidential - 4 - TrustPartners 3 TrustPartnersOMG10_PR GROWTH EXPECTATION OF THE ONLINE MARKET IN ITALY – GROSS MARGIN * (**) For online Poker and Skill Games the margins have been calculated considering the different taxation between Tournament and Cash mode Rake for Casino games equal to 8 % in line with new average values in the main European markets (*) Margin assigned to the Licensee (after the unique tax and player pay-outs) mln € • The new products launch will let the online gambling market to reach a margin of about vxx mln € in 2013 • Since 2009 Poker has become the most profitable product on the interactive channel • Margins of Poker are expected to increase, even if a lower growth rate in respect to the Turnover (due to a lower “Cash” rake instead of Tournament) 2.008 2.009 2010E 2011E 2012E 2013E Betting S.games ** Poker ** Gratta&Vinci X,x% X,x% X,x% X,x% Variation Year X / Year X-1 - xx xx xxxx xxTOTAL Bingo Superenalotto Casino Other xx X,x% Source: TrustPartners analysis on various sources (AAMS, Agicos, Agipronews, etc) October 2010 4 TrustPartnersOMG10_PR THE ITALIAN GAMING MARKET – ONLINE SEPTEMBER 2010 MARKET SHARE Total mkt share LottomaticaLottomatica SisalSisal OthersOthers MicrogameMicrogame EurobetEurobet SnaiSnai Player % of GGT X,x% X,x X,x% X,x% X,x% X,x% X,x% X,x% X,x% Betting S.EnalottoPoker/SG PokerstarsPokerstars Bwin - GiocoDigitale Bwin - GiocoDigitale Instant lottery * Bingo Just online players Leading players in the online Poker market PartypokerPartypoker (*) Market share as distributors of the unique licensed Operator, Lottomatica Source: TrustPartners analysis on various sources (AAMS, Agicos, Agipronews, etc) October 2010
  6. 6. Confidential - 5 - TrustPartners 5 TrustPartnersOMG10_PR SKILL GAMES LEGISLATION – POTENTIAL PAYMENT FOR LICENSEES Total turnover Max payment for the Licensee * Unique Tax Minimum Jackpot value Allocation of the turnover • Payment for Licensee can be at the most equal to x,x% of the overall turnover • The unique tax is x,x% provided by the Bersani decree in 2006 • The basic rate destined to jackpots has been fixed at x,x% according to the AAMS regulations • The Cash mode game, which was supposed to be launched in 2011, counts on a different taxation (x,x% on Licensee gross margin) Data in % (*) Included the license fee, calculated on annual base of x,x%. Source: TrustPartners analysis on AAMS data, October 2010 6 TrustPartnersOMG10_PR SKILL GAMES MARKET IN ITALY – EXPECTED YIELD • The expected percentage, in terms of margins on turnover, for Skill games is higher than Poker and approximately at x,x% • The cash game launch in 2011 will cannibalize the tournament way of playing, achieving x,x% of total skill games margin in 2013 Yield mln € 2009 2010E 2011E 2012E 2013E xx xx xx xx xx Source: TrustPartners analysis on various sources (AAMS, Agicos, Agipronews, etc) October 2010
  7. 7. Confidential - 6 - TrustPartners 7 TrustPartnersOMG10_PR THE ONLINE BINGO MARKET – EXPECTED YIELD Higher margin for the Operators on the online Poker and Skill games, and equal to x,x% of the overall turnover mln € Yield xx xx xx xx xx 2009 2010E 2011E 2012E 2013E Source: TrustPartners analysis on various sources (AAMS, Agicos, Agipronews, etc) October 2010 8 TrustPartnersOMG10_PR 2005 2006 2007 2008 2009 2010E 2011E 2012E 2013E • 2010-2011 growth rate is generated to the cash game launch • Cash game is more appealing to the players than the tournament model and will shortly get a relevant market share; unfortunately the estimated margin is lower (x,x% vs x,x%) … • … this will slow down the margin’s growth rate for the following years Legalized gamesGaming on foreign websites THE ONLINE POKER IN ITALY – GROSS GAMBLING MARGIN mln € xx xx xx xx xx xx Source: TrustPartners analysis on various sources (AAMS, Agicos, Agipronews, etc) October 2010
  8. 8. Confidential - 7 - TrustPartners 9 TrustPartnersOMG10_PR THE ONLINE POKER IN ITALY – ACTIVE GAME ACCOUNTS IN MONEY GAMES * • Poker legalization in Italy has contributed, and is still contributing, to reduce drastically the number of Italian players on foreign websites • This trend is completely tied to the legalization of ‘cash’ game, main mode present on the international websites Legalized gamingGaming on foreign websites ‘000 Users 2008 2009 2010E 2011E 2012E 2013E xx xx xx xx (*) With at least one game / year Source: TrustPartners analysis on various sources (AAMS, Agicos, Agipronews, etc…) October 2010 10 TrustPartnersOMG10_PR MAIN EXPECTED MODIFICATIONS Launch of new productsLaunch of new products Description • Launch of new products both in the online and offline channel Changing regarding existing products Changing regarding existing products • Changing on the existing products in terms of game modality, taxation and winnings maximum limit • Activation of new game modalities for card games, in line with the offer in Europe (cash modality) Monitoring of Licensees activity Monitoring of Licensees activity • Bigger Licensees responsabilization in the activities management Modifications introduced by the Abruzzo decree Modifications introduced by the Abruzzo decree Source: AAMS GU n.97 28/4/2009
  9. 9. Confidential - 8 - TrustPartners 11 TrustPartnersOMG10_PR THE ABRUZZO DECREE EFFECTS – INTRODUCTION TO CASINO GAMES • Casino games represent in the international scene around x,x% of the online market (considering also card games, that – in Italy – are part of skill games) • In Italy, the launch of casino games will probably have a very steep answer curve in the first years, following with the experience of Poker • At the end of 2013, it is forecasted a relevant market share in the online channel2009 2010E 2011E 2012E 2013E Gross margin mln € - xx xx- xx 12 TrustPartnersOMG10_PR • The game machines’ increase on the Market will contribute to strengthen the Slots leadership in terms of market share on the total turnover of game products • It is expected that VLT will gain Slot machine’s market at around x,x% / year • At the end of 2010 there will be installed around xx VLT in Italy and more than xx at the end of 2011 • Forecasts shows an average revenues per VLT of about xx – xx k€ / year VIDEO LOTTERIES – DECREE EFFECTS ON THE SLOT MACHINE MARKET Total market Bil € Source: AAMS data based on 2009 GGT 2009 2010E 2011E 2012E 2013E xx xx xxxx xx Slot machine VLT
  10. 10. Confidential - 9 - TrustPartners INDEX OF THE REPORT 1. Gaming & gambling market in Italy P. 3 1.1 Normative context  Law regulation description  Operator duties analysis  Revenues breakdown by product 1.2 Key elements  2004-2010E Italian GGT  2008-2013E Italian online GGT: breakdown by product  2008-2013E Italian online GGY  Gaming online / offline top competitor market share 1.3 Main player: detailed description 2. The online Games: Skill games market P. 45 2.1 Games description  Products typologies  Contents 2.2 Italian Skill games market  Law regulation description  Operators duties and customer target  2009-2013E GGY  Competitive scenario 3. The online Bingo P. 66  2009-2013E GGY  Offer characteristics 4. The online Poker P. 71  2005-2013E GGY  2008-2013E Game Accounts  Portfolio analysis  Offer characteristics 5. Market evolutions: key changes P. 81 5.1 Expected modifications 5.2 Impact on the market  Impacts on Betting market  Impacts on Poker and Skill games market  Impacts on Slot machine market  Launch of Casino games 6. Glossary P. 96

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