(This post has been published in Italian also)
During 2014 and mostly in the last part of the year there had been a relevant evolution of Italian sport book market. I disregard here further change that will come from the regularisation, still in progress, of more than 2,000 CTDs. I am now referring instead to the change of market volumes and structure consequent to the introduction of so called complementary program, to the related strong increase of in-play betting and to the entry of bet365 in the legal dot.it market.
The common belief is that the role of online gambling is strongly increased in few months and that bet365 has reached a leadership position not only in the online betting segment but in the whole betting sector (online + offline) as well.
The scope of this change is actually exaggerated. And that is potentially dangerous at a time like this when the Government is re-defining gambling sector legislation, because wrong interpretation of market evolution could mislead the policy makers and entice them to wrong choices. This possible bias has the same mother of frequent misinterpretation regarding gambling trend in the last years, namely use of turnover to compare games and situation which totally differs in pay-out and margin. I am going to analyse that with reference to the Nov ’14 – Jan ’15 three-months-period, when bet365 became fully operational in the Italian market.
Complementary program introduction little has changed ground-based betting. Betting on complementary program represents only 5% – 10% of total bets. Furthermore, gambling in the shops has grown 6% year on year, in Nov ’14 – Jan ’15, on the basis of ADM data.
Remote gambling situation is totally different. Complementary program changed Italian betting profile. Online betting on complementary program currently represents 40% – 50% of total turnover, despite this offer is concentrated on few licensees. But complementary program mostly consists of in-play bets, which payout is much higher that that of pre-play offer, because in-play bet is repeated again and again by the player. For the remaining part complementary program concerns minor events / categories, more difficult to book, showing pay-out higher than that of official ADM program.
Operators and experts says that bet volume on complementary program reaches 75%, even 80%, for bet365 and is around 60% for Bwin, William Hill and Paddy Power. On the basis of ADM’s data, remote betting collection increased 73% in Nov ’14 – Jan ’15, in confrontation with the same period of previous year. This increase can be undoubtedly traced to bet365’s volumes as well as to the increase of collection of other above-mentioned licensees. But there is a plot twist here, because online betting GGR decreased instead 5% YoY in the same period.
And there is even more. It could seem bet365 holds a share equal around to 14% (estimation reported by specialised press internet agency, based on licensees declarations) on total betting market – offline + online – similar to Gtech, Snai and Sisal ones. But if we look at what matters, if we look at the GGR, situation becomes different. Bet 365 margin worths about 4% – 6% of turnover, in connection to the huge share of in-play betting on complementary program, while margin of traditional betting leaders is around three time as big.
Growth of online betting business is only apparent, if we measure it properly.
