TABLE OF CONTENTS. 1. Lottery and Gambling Industry Overview International Gambling Global Betting, Gambling and Gaming Industry

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2 TABLE OF CONTENTS 1. Lottery and Gambling Industry Overview 1.1. International Gambling 1.2. Global Betting, Gambling and Gaming Industry 1.3. Global Online Gaming Market 1.4. Types of Gamblers 2. Europe Lottery and Betting Industry 2.1. Market Overview 2.2. Remote Gambling 2.3. UK Gambling Industry Developments and Size 2.4. Opportunities in Great Britain Gambling Industry Economy and Betting Industry Performance Betting Industry Size Online Gambling in Great Britain Performance in Bingo Segment Casino Industry Horse Racing and Sports Betting in Britain Lotteries in Britain 3. Online Gambling In Germany 4. Industry Trends and Developments 4.1. Updates for Gambling in UK Budget 4.2. Italy and UK Gambling Taxation Method 4.3. Online Betting Licensing to Start in Greece 4.4. South Africa banned Online Gambling 4.5. Russia Imposed Restrictions on Gambling 4.6. Online Gaming in Italy 5. Industry Driving Forces 5.1. Rising Internet Penetration 2

3 5.2. Rising Per-capita Income Motivating People to Participate in Gambling 5.3. Growing Young and Old age Population 6. Future Growth 6.1. Global Gaming Sector 6.2. European Gambling Forecast Future of E-gaming in Europe 6.3. Forecast Methodology Disclaimer 3

4 LIST OF FIGURES Figure 1: Global Gaming Market by Geography in % (2008) Figure 2: Global Gambling and Gaming Industry Gross Revenue ( ) Figure 3: Global Gambling Market share by Product Category in 2010 (%) Figure 4: Global Online Gambling Gross Gaming Revenue ( ) Figure 5: Global Online Gambling Market Share in 2010 (%) Figure 6: Leading UK Markets for GGR (Gross Gambling Revenues) Online Gambling in 2008 Figure 7: Types of Gamblers Figure 8: Betting Industry Supply Chain Figure 9: Europe Gambling Industry Revenue ( ) Figure 10: Europe Remote Gambling, Gross Gambling Yield ( ) Figure 11: Britain Gambling Sector, Gross Gambling Yield ( ) Figure 12: Britain Gross Gambling Yield by Sectors in 2010 Figure 13: Betting Industry Gross Win by Type ( ) Figure 14: Britain On-course Number of Bets by Type (2008&2009) Figure 15: Britain Online Gambling GGY ( ) Figure 16: Bingo Gross Gambling Sales in Great Britain ( ) Figure 17: Great Britain Gaming Machines in Bingo Clubs in 2009 Figure 18: Horserace Betting Levy Revenues in Great Britain ( ) Figure 19: Great Britain Lottery Ticket Sales (2008 & 2009) Figure 20: Germany Number of Internet Gamblers (2008 & 2009) Figure 21: Popularity of Online Games in 2010 Figure 22: Italy & UK Gambling Tax Revenues (Jan-Nov 2010) Figure 23: Global Gross Gambling Yield ( E) Figure 24: Global Gambling and Gaming Market Forecast ( E) Figure 25: Europe Gambling Industry Revenue Forecast ( ) Figure 26: European E-Gaming Market ( E) 4

5 LIST OF TABLES Table 1: Betting Shops in Great Britain by Operators Table 2: Bingo Clubs in Great Britain (2009 & 2010) Table 3: Casino Ownership by Operators in Great Britain (March 31, 2009 & march 31, 2010) Table 4: Internet Users and Penetration in Selected European Countries ( E) Table 5: GDP per Inhabitant in PPS, EU 27=100 Table 6: Young Age Dependency Ratio, Present and Projections Table 7: Population aged between 65 years old or over, Present and Projections Table 8: Macroeconomic Factors Analysis and Sensitivity on the Sector Table 9: Industry Factor Analysis and Sensitivity on the Sector 5

6 GLOBAL BETTING, GAMBLING AND GAMING INDUSTRY In 2008, global gambling and gaming revenues were up by only 3% while growth rate declined in 2009 (2.4%) and the overall industry continued to grow with a slower growth rate. According to estimated figures, year 2010 saw a growth rate of 2.4% in gambling and gaming industry and further expected to grow y/y. For the period , the gambling industry recorded a CAGR of 3.58%. The industry is expected to grow at a CAGR of 3.50%, Figure: Global Gambling and Gaming Industry Gross Revenue ( ) USD Billion GLOBAL ONLINE GAMING MARKET The global online gaming market has grown at a CAGR of 18.21% during the period The market was estimated to be around USD 29.3 billion in Europe stands on top accounting for the highest percentage of the global online gaming market, closely followed by North America, thought in US there are many legal restrictions. Asia and the Middle East accounted for nearly one fourth percent of the market. Figure: Global Online Gambling Gross Gaming Revenue ( ) USD Billion

7 Figure: Leading UK Markets for GGR (Gross Gambling Revenues) Online Gambling in 2008 UK Germany Italy France Sweden EUROPE LOTTERY AND BETTING INDUSTRY The gaming industry showed a positive performance with slight decline in growth percentage during the period of financial crisis because on the one hand people have interest on gambling and on the other hand gambling is a financial backing for the governments because they can impose direct taxes and return money back to the community. Figure: Europe Gambling Industry Revenue ( ) USD Billion USD Million

8 REMOTE GAMBLING In 2009, there were an estimated 2,500 non-state lottery remote gambling sites which were owned by 600 organisations. Remote gambling is the newest and fastest growing part of the world gambling industry. The demand for these services is clearly evident in Europe. In 2010 the gross gaming yield from European players is estimated to be USD ~ billion and figure is expected to rise to USD ~ billion by Figure: Europe Remote Gambling, Gross Gambling Yield ( ) USD Billion

9 UK GAMBLING INDUSTRY DEVELOPMENTS AND SIZE Casino market is vast in the and excluding poker clubs there are 141 operating casinos in the UK but there are also 40 non-operating licences that could conceivably be used to open a new casino. UK accounts for approx 50% of EU gambling spend and in 2010 UK spend estimated to be USD 3.8 to USD 4.6 billion. OPPORTUNITIES IN GREAT BRITAIN GAMBLING INDUSTRY In 2010, British gambling industry generated gross gambling yield of USD ~ billion from USD ~ billion in The GGY generated in 2009 was result of a reduction of 1% on the previous year and reflects a trend present across all but the non-remote betting and lottery sectors. The non-remote betting sector represents the largest market within the industry with a 48% share, followed by the casino (13.7%) and bingo sectors (11.8%). Figure: Britain Gambling Sector, Gross Gambling Yield ( ) USD Billion Note: Great Britain Includes England, Scotland and Wales 9

10 Figure: Britain Gross Gambling Yield by Sectors in 2010 Betting Casino Bingo Remote Lottery Others BETTING INDUSTRY SIZE As of 31 March 2010, 590 individuals or organisations were licensed for the activity nonremote general betting standard (off-course) and 681 for the activity non-remote general betting limited (on-course). 23 operators were licensed for non-remote pool betting as one of their activities. Figure: Betting Industry Gross Win by Type ( ) Figures in USD Million 2002/ / / / / / /09 Horseracing Other Form of Betting 10

11 Figure: Britain On-course Number of Bets by Type (2008&2009) Numbers in Million 2009/10 Horses Dogs Other Total 2008/09 PERFORMANCE IN BINGO SEGMENT Bingo has a great significance in the growth of Betting and gambling sector in Great Britain. There were 2166 bingo operators licensed by the Commission at 31 March 2009 operating 641 clubs, against 2224 operators with 675 clubs at 31 March Table 1: Bingo Clubs in Great Britain (2009 & 2010) Total Premises as on March 31, 2009 Total Premises as on March 31, 2010 % Change Buckingham Bingo Ltd -9% Carlton Clubs plc 0% Gala Coral Group -8% Renk Group-Mecca Bingo ltd 1% Top Ten Bingo -33% Independent/ small operators - Total - Note: 2008/09 total includes converted AGCs, holiday parks and working men s clubs. 11

12 Turnover of bingo in Great britain declined in 2009 with slowdown in economy of the country and falling rate employment on the other hand number of premises were noticed to be lesser in 2010 than Also fall in number of tourist in the country contributed a major portion of fall in gaming industry revenue. There was a very minimal recovery in the total revenue generated in 2010 compared to the previous year. Figure: Bingo Gross Gambling Sales in Great Britain ( ) USD Million Performance has been more positive for gaming machines gross profit within the sector which recorded a 7% increase during 2009/10. BRITAIN CASINO INDUSTRY There were 143 casinos and two card clubs operating at 31 March 2009 and number of casinos declined and reached to 141 casinos as on March The casino industry remains dominated by three companies, namely the Gala Group with 27 casinos, Grosvenor Casinos (part of Rank plc) with 35 casinos and Genting Casinos Ltd with 44 casinos. 12

13 Table 2: Casino Ownership by Operators in Great Britain (March 31, 2009 & march 31, 2010) Total Casinos as on March 31, 2009 Total Casinos as on March 31, 2010 % Change Gala Coral Group 0% Genting UK (Genting Casinos) -2% London Clubs International -9% Rank Group (Grosvenor and "G" Casinos) 9% Other Operators -17% Total -3% HORSE RACING AND SPORTS BETTING IN BRITAIN Over the period of time sports betting and horseracing has gained importance in the overall gambling industry although performance was uncertain especially after Figure: Horserace Betting Levy Revenues in Great Britain ( ) US$ Million 13

14 LOTTERIES IN BRITAIN As of March 31, 2010 there were 419 non-commercial organisations licensed to promote society lotteries. Those societies held 419 non-remote lottery operating licences and 96 remote lottery operating licences. Figure: Great Britain Lottery Ticket Sales (2008 & 2009) USD Million EUROPEAN GAMBLING FORECAST There is a direct and indirect relationship between gambling and gaming industry over the economy growth and impact of changing economic situations over the gambling industry. Tax generated from gambling is accounts for a large portion of revenue which helps the government to use in country s growth also gambling sector helps to reduce unemployment rate by hiring large number of employees for their casinos. In most EU Member States public and publicly-licensed companies dominate the gambling and gaming market. Companies operate under institutional framework conditions which differ strongly from one country to another. 14

15 Figure: Europe Gambling Industry Revenue Forecast ( ) FUTURE OF E-GMAING IN EUROPE Between E European E-gmaing industry is expected to grow by CAGR in gross gambling yield of 7.63%. E-gaming is the fastest growing market led by awarness among young population and expected increase in per capita income after the economic jolt in Figure: European E-Gaming Market ( E) USD Billion USD Billion 15