Finding your way around Italy

1
Finding your way around Italy
2
Finding your way around Italy

• Understanding the opportunities
• in the newly liberalised Italian betting and
• gaming market

3
Understanding the rules of the game

• The Italian way
• Liberalisation and central control

4
Understanding the rules of the game

• 1950s
• 320 horseracing betting shops in the country
  converted to tote system in 1990s by SNAI
• 1999/2000
• Bid process for 1000 licences discriminatory
  rules to favour incumbent (SNAI) and keep out
  overseas competition
• Disaster follows hundreds of operators go to
  the wall and most Italian punters continue
  betting off-shore

5
Understanding the rules of the game

• Q1 2006
• Access to non-Italian betting gaming websites
  blocked by AAMS
• Q3 2006
• Tender for betting and gaming licences (including
  poker) announced
• Q3 Q4 2007
• Tender for new on-line bingo licences
• Tender for unsubscribed betting licences from
  2006/07 bid process
• Remote licences available for 2008

6
The betting landscape after the bid process

• 6000 new sports outlets
• 9000 new horseracing outlets
• 3000-4000 Punti Remoti (sale of top-up cards,
  Internet access, sign-up facilities)
• 1000 CTDs (200 Stanley, c.1000 others)
• 100 existing .it Internet sites (Totosí market
  leader)
• 800/- Existing Betting Shops (operating with
  licences granted in 2000)

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The appeal of the Italian market
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The appeal of the Italian market

• Sports Betting Margin
• In retail outlets 28 before tax
• On-line approx 15 before tax
• Horseracing
• Tote commission approx 12
• Fixed odds multiples c 30

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The Legal Betting Business
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Lottery Products in the Italian Gaming Market
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Bingo and Scratchcards in the Italian Market
12
Total Betting Gaming in the Italian Market
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The rise of the slot machine in Italy

• 2004 4 billion turnover
• 2005 10.7 billion turnover
• 2006 13.9 billion turnover
• 2007 up to 24 slot machines per betting shop,
  networked roulette games, max. 70 slots per bingo
  hall

14
The legal situation in the betting gaming
market

• The game of cat mouse
• ends in a draw
• Corte Costituzionale decision 12.06 and
  Placanica case 02.07
• Vs
• The Italian
• tender process

New Italian Gaming Law 2007
New Italian Gaming Law 2007
15
The legal situation in the betting gaming
market

• European bookmakers invest 400M
• ( 500M guarantees) in the bid process
• Legal challenge to blocking of overseas websites
  defeated in courts
• Legal challenge to bid process defeated
• Betting duties fall from 17 to 5
• European rulings deemed to refer to the pre-bid
  legal situation

16
The legal situation in the betting gaming
market

• BUT
• New decisions in favour of Stanley in Cassazione
  and local courts
• CTDs sending bets offshore still open
• 1000s of unlicensed Punti Remoti still operate
• Possible action by CORIPRO trade association
  representing ricevitorie

17
How to enter the Italian market the options

• The Stanley route (unlicensed)
• Wait for 2008 on-line licences
• Bid for unassigned licences
• Acquire licences from 2000
• Acquire licences from 2007
• Acquire/invest in an existing operator

18
How to enter the Italian market the options

• Keep it legal too much invested by operators,
  too much for government to lose
• Acquire licences from 2000 they have a story
  and protection
• Wait for 2008 on-line licences if on-line only
  operation
• Acquire/invest in an existing operator some
  good opportunities out there

19
The future of Italys betting gaming market

• 2008 most Italian gamblers use licensed
  operators for betting and poker
• No more unlicensed outlets exist
• 2009 the Italian government realises it is too
  much hard work to try and control everything and
  relaxes its grip
• France, Greece and others in Europe follow
  Italys example?