Led by Poker, Italian Growth Story Continues

In Italy the population’s passion for gambling appears to show no bounds as records continue to be broken.

The first quarter of 2009 saw turnover on all forms of gaming average 150 million euros per day, and the first data for April reveal no slowdown in spending.

Italy’s slot machines alone generated 6 billion euros in turnover while scratchcards continued to attract interest, with the range of Gratta e Vinci products clocking up 2.6 billion euros in the first three months of 2009. Spending on traditional Lotto, meanwhile, came in at 1.4 billion euros during the same period.

Sports betting hit new records. The amount staked was up to 1.1 billion euros in the first quarter and, for the month of April, grew 20 percent to over 400 million euros versus the previous-year period.

It appears, though, that the Italian punters are beginning to wise up. The percentage payout rose to over 82 percent (meaning bookmakers’ profit margins shrunk to below 18 percent). Nevertheless, those figures are substantially higher than the percentage operators tend to retain in other markets.

Online poker continues to fuel increases in turnover -- both directly and indirectly -- but online gaming of all forms has increased substantially of late: a result of new punters being attracted to poker, then crossing over to other products.

This phenomenon is certain to go on. In the wake of a recent earthquake in L'Aquila, the government announced plans to raise tax revenue through further liberalization of the gaming sector. The income will be used to fund reconstruction projects in affected areas.

Significantly, cash games are to be introduced to Italian poker rooms, the sports betting product is due to become more competitive and online bingo is due to be introduced before long.

In the first three months of 2009, online-gaming spend totalled 850 million euros, with average daily turnover increasing as the quarter progressed.

March spend topped the previous month’s with a daily figure of 10.2 million euros per day -- 5.2 million euros of which came from poker. And between January and March, poker brought in 467 million euros.

Sports betting turnover was just short of 330 million euros during the three-month period. Online scratchcards, meanwhile, proved to be more popular than horseracing, with spending on the games reaching 22.7 million euros compared to 22 million euros on racing.

As expected, the domestic market leaders in the online poker market are beginning to lose market share since the arrival of some of the overseas industry heavyweights.

But Gioco Digitale S.A. is still maintaining its lead despite a sharp fall in its turnover in April. Total tournament fees for the month were down over 12 percent to 51.3 million euros, but still accounted for 27.9 percent of April’s total of 184.7 million euros.

The specialist operator Microgame, which provides a white label service to smaller Italian operators and a number of larger concerns like Globet and Betshop, managed to consolidate its market share. The dozens of poker rooms on the network produced 47.8 million euros in tournament fees during April, up 67 percent on March’s figure, yielding a share of 25.8 percent.

The big winner in the poker market was PokerStars, which, having built up a substantial customer before gaining licensure, was able to hit the ground running when it launched the real-money product in March.

By April, PokerStars had managed to secure fourth place in the market (behind Lottomatica S.p.A.) by generating over 16 million euros, or 8.7 percent of the monthly total.