9 th European Conference on Gambling Studies and Policy Issues Loutraki, Greece, 20 September 2012 1
European Context Regulatory Scenario (retail sector) - Licenses System Scenario - - Lotteries - - Retail Sports - - Retail casinos and gaming machines - Regulated market Not regulated/prohibited Spain regulated at regional level Green: where casinos or gaming machines are regulated Red: both forbidden/unregulated EU Member States (MS) decides about type of games, volume and number of operators notwithstanding choices of other MS: Prohibition (if effective) Monopolistic approach Concession model Mixed model Gaming is generally restricted by national legislation: policies vary from country to country and range from heavy regulation to virtually regulation-free jurisdictions 2
European Context Liberalized markets Italy and UK are considered benchmarks in terms of liberalization Market / Business Lotteries Sport Interactive (Skill Games) Gaming Machine UK Italy Spain France (only online) Greece Belgium Already liberalized Expected to be liberalized in the mid term 3
Domestic Regulatory Context Italian Regulator (1/2) Public Tenders are setup by AAMS in order to license specific gaming products (Gaming Machines (AWP/VLT), Sports and Horse betting (Fixed-odds, Parimutuel, Pool games..), Bingo, Skill Games (including Poker and Casino Games) ) All licensed gaming platforms operate trough AAMS IT subsidiary, named SOGEI The introduction of licenses into the market are restricted and monitored by AAMS: through dedicated regulated tenders (for new licenses) through acquisitions of existing licenses Depending on each business regulatory model, licenses can be granted to a single /multiple operators The Italian Gaming Authority (AAMS - Italian State Monopolies Administration) regulates every gaming activities in Italy 4
Domestic Regulatory Context Italian Regulator (2/2) 2000 2007 Start of 1st concession LICENCE RELATED TO SPECIFIC POINT OF SALE Yes 2003 No Licensees: 300+ PoS: 300+ (the licensees) Market: <2Bln Revenues model: license fee 18% Licensees: Lottomatica, Sisal,Snai Market <0,1 Bln Revenues model: license fee3,45% Licensees:10 players Market: ~30 Bln Revenues model: market fee (~11-12% total value chain) 2004 Licensees: 1300+ (Old licenses) + ~14,5k (New Bersani licenses) PoS: /Horse Agencies ( Old licensees) + shops & Corners + Horse shops & corners Market: ~4 B (Sport) + ~1 B (Horse) Revenues model: bookmaker Licensees: ~30 Market ~ 8 Bln ** Revenues model: license fee 2 6% of wagers 2008 2000 Licensee: Lottomatica PoS: ~ 34k Tobacconists (FIT) Market: ~ 6,8 Bln Revenues model: license fee ~6% Licensee: Lottomatica Market: ~10 Bln PoS: ~65k Revenues model: license fee ~ 3,9% 1993 2003 1998 2010 Licensees:10 players Market: ~12 Bln Revenues model: market fee (~ 5,5-6,5% total value chain) Operators : Lottomatica, Sisal, Snai Market: ~0,4 Bln Revenues model: license fee ~ 3,45% Licensee: Sisal Market: ~3,3 Bln Revenues model:license fee ~3,7% PoS: ~26k No MONO-OPERATOR LICENSES Yes Source: AAMS, estimates (based on 2011 data) ** Poker, Casino games, Skill games, Bingo 5
Italian gaming market went into a process allowing that all games were managed by private operators... ITALY 2000 ITALY 2011 State Managed Privately Managed Not regulated State Managed Privately Managed Not regulated Lotteries Other games Sport Horse/ Race Poker / Skill Games Gaming Machines Sport Horse/ Race Poker / Skill Games Gaming Machines Exclusive Concession Competitive market
...thus generating the entrance of many new players ITALY 2000 ITALY 2011 Lotteries Gaming Machines Skill Games Lotteries Gaming Machines Skill Games
Italian gaming market Wagers trend 2003-2011 WAGERS EVOLUTION (B ) CAGR 03-11E +23% Regulation of interactive business (Poker Tourn. and Skill games) Gaming machines: regulation of VLTs Interactive: regulation of Poker Cash and Casino Games Gaming machines: regulation of AWP from July, starting strong boost of illegal market emersion (estimates of previous illegal market 20-30 B) Sport tender: 16.700 new licences ( Bersani decree ) AWP: 2 generation Italian gaming market experienced a sustained growth trend, driven by regulation of new products (pushing emersion of illegal market) and liberalization (increasing competition) Source: AAMS (excludes Casino) (*) Others include Bingo and Horse betting 8
Italian gaming market industry Concessionaires key figures >100 concessionaries of sport and horse betting >140.000 retailers Industry key figures >5.800 (1) companies >200 concessionaires of physical Bingo halls >100.000 (1) employees (FTE) 10 Concessionaires of Gaming Machines, with 3.000+ machine operators >200 concessionaires of interactive games 2 Concessionaires of Lotteries A large industry, equivalent to 1,2% of Italian GDP in 2011, and with a considerable employment base Note: (1) belonging to Sistema Gioco Italia association (Confindustria)
Lottomatica Italia has gained a strong positioning in the Italian market July 2010: VLT launch Today: #1 position Aug 2011: Casino games launch (interactive) Today: #1 position Oct 2008: Poker Club launch (interactive) Today: #2 position 2008: Totosì acquisition (online betting) Today: #2 position 2007: Better launch 2004: AWP launch Today: ~60k AWPs; # 2 position Revenues and EBITDA (2011E, Index) EBITDA Mix (2011) 2004: G&V launch Today: ~65k PoS 347 456 Services 5% &Interactive 7% GM 31% 2003: Totobit acquisition Today: ~350 M transactions, ~30k PoS Index (2002=100) Index (2002=100) S&W 32% Lotto: Traditional LTM Business Today: ~35k PoS CAGR 15% Revenues CAGR 18% EBITDA Lotto 26% EBITDA MIX 10
Grazie, Merci, Thank you Eleonore Para Institutional Relations Italy eleonore.para@lottomatica.it 11