Italian sport book is dramatically changed in the last two years. Information we have, mostly for online legal betting, let us understand how and why.
• GGR of online legal betting grew YoY 25% in 2015 and 31% in 2016. Offline betting segment fell instead -13% in 2015 and grew 14% in 2016.
• Offline betting still holds in 2016 a 62% share. It was 73% in 2014.
• Margin in 2016 is equal to 8,6% for online betting and 16,8% for offline betting, almost the double. Margin left around 5 percentage points in 2016 vs 2014, in both segments.
• Narrowing of margin is offset for about 1 point out of 5 by tax reduction, thanks to introduction on taxation on margin, both for online and offline betting.
Furthermore, about online gambling only:
• Turnover of in-play betting was 48% of total in 2014, it became 66% in 2015 and remained almost steady in 2016.
• Mobile gambling share was 15% in 2013, raised to 26,5% in 2014 and to 30% in 2015. It became more than 50% in 2015.
As it can be seen, dynamics deeply differ between 2015 and 2016. Key drivers are consequently also different. They can be found in the supply-side:
• Late 2014 bet365 entered dot.it market, taking from dot.com a large higher spending customer base.
• Some operators that collect by CTDs (Data Transmission Centres) entered the legal offline market thanks to regularization let by Stability law, in particular Goldbet since first half of 2016 and PlanetWin late 2016.
• Same CTDs’ operators entered the dot.it market as well, in particular Goldbet late 2015 and Betaland late 2016.
• During 2016 some international online operators chose to diversify enlarging gaming offering to betting, in particular 888 and PokerStars.
A further circumstance, homogeneous to previous ones in my view, is:
• Big Italian betting operators active both offline and online developed in the last years a multichannel strategy. They recognized growing relevance of online channel and understood its synergy with the ground-based one in Italy.
Let us now move on to facts’ analisys.
2016 betting expenditure is in total 16% more than 2014 one only, two years that both hosted a big football event. The increase in the period can be wholly attributed to entry on the Italian legal market by operators already active in Italy by dot.com websites and/or CTDs.
That means there was not increase of gambling volume and players really new were few. Market evolution substantially consisted of:
• transfer from illegal market to legal one,
• migration from offline to online,
• shift of shares among operators.
Increase of online betting GGR is fundamentally due:
• In 2015 to bet365 entry. It easily reached in 2015 a share around equal to 20%, then in 2016 its betting volume grew at the expenses of its direct competitors, but its share of market stands.
• In 2015 and in 2016 to guided migration of betting volumes from offline to online by Eurobet, Snai and Sisal, which gain market share. Those operators do not resign evolution toward online but they use it instead, aware of the strategic factor consisting of their control on places on the territory, because an increasing number of players use online channel but remain tied and attend to betshops and other public premises and consider gambling part of social live in meeting places.
• In 2016 to the entry in the dot.it market of CTDs’ operators. Their business model is based on player acquisition, retention and provision of payment services at physical premises, having turned their CTDs in PVRs, i.e. points of sell and of recharge and withdrawal.
About offline betting, steading GGR notwithstanding controlled migration toward online is fundamentally due to increasing shares of regularised operators. Their share is raising. It is now around 15% of offline legal market. It could reach 25% if and when Stanleybet will enter regular market.
Fast development of mobile channel is a determinant of market transformation. But today, in the betting sector, it moves volumes from offline to online. It does not create new market.
It remains complex to understand and explain why in Italy, against a number of Internet user equal to 38 million and 20 million people active on social sites, people holding a gambling account still are little more than 3 million and active players per month is around 750.000: active players are less than 2% of Internet users.
