Market data focus: Italy 11/11/2009

THE ITALIAN GAMBLING MARKET is huge. This year it is expected that regulated activities will generate just under €18.7bn in 2009, making it by far the largest European egaming and betting market. Italy took the mantel of Europe’s largest market and the world’s third-largest market from the UK as far back as 2006. The value of the latter’s domestically regulated market is expected to be €10.4bn during the current year, as more internet activity moves offshore.

Although an onshore regulated market in Italy has led to activity moving in the opposite direction, the existing land-based industry is so large (particularly lotteries and gaming machines), that the percentage of the money lost by Italians online is expected to be just 5% this year. This compares to a rate of between 18-20% in the UK, where egaming performs in line with ecommerce in general, and more like 25% in the likes of Sweden, where broadband penetration and internet use are relatively high. Going forward, H2 expects the proportion of Italian egaming to increase to 7.3% by 2012.

ITALY’S ONSHORE INTERNET POKER turnover may have fallen for the past three months in a row, but it still stood at €177.4m in August. Overall the first year of onshore tournament poker has generated a turnover of €1.6bn. H2 expects this to increase to €2.2bn for the calendar year 2008, or gross revenues of approximately €280m.

In total, Italy’s regulated internet gaming sector generated a turnover of €243m during July, rising to €272m during August. The latter represented a 257% increase on August 2008, the last month without regulated internet poker activity. During the year to August, the total turnover generated by Italy’s regulated internet gaming market was €3bn, of which betting accounted for 43%, gaming for 54% and lotteries just 3%.

Going forward, and with the addition of cash games and casino, we expect onshore regulated internet gaming to generate gross revenues of approximately €630m during 2010 rising to nearly €800m by 2012. PokerStars recently established an onshore presence in Italy, demonstrating the draw that the regulated market has. The impact of the increased opportunity to offer egaming (poker, casino and skill games) has been to gradually transfer activity from off to onshore. Prior to the licensing regime being established, all egaming that Italians engaged in was conducted via offshore sites. This year this proportion is expected to reach roughly 50% (we believe poker is currently running at approximately 80%), growing to around 90% by 2012.

Figures supplied by gambling data business H2 Gambling Capital, an official eGaming Review data partner, from H2's eGaming and new Regulated data reports.

This article first appeared in the October issue of eGaming Review.

Posted: 11/11/2009