Martin Oelbermann Gaming Guru

Greece, Turkey Key to Balkan Markets, MECN Consultant Says

In the emerging Balkan gambling markets, Greece and Turkey are the dominant pair, together accounting for about 65 percent of the region's gross win.

In a recent study called "The Balkan Gambling Markets," MECN estimated that the Balkan markets, by gross win, were worth about 4.5 billion euros in 2007.

The region is comprised of eight countries -- Greece, Turkey, Croatia, Slovenia, Serbia, Montenegro, Romania and Bulgaria -- and generated about 25 billion euros in turnover/wagers during the same period.

Greece, by far, is the region's largest market, and in 2007 produced gross revenue of 2 billion euros, while Turkey -- a distant second -- produced approximately 900 million euros.

Moreover, total annual gambling spend in Greece, per capita, came in at 190 euros, which is nearly 1 percent of gross domestic product and far above the European average -- including the United Kingdom.

According to a survey MECN administered as part of its study, their sheer size seems to make the Greek and Turkish markets the most attractive in the Balkan region.

Nevertheless, Turkey and Greece still maintain the toughest legal barriers for private, foreign operators to overcome.

Whereas Greece joins other European Union member states in struggling with European Community law, the Turkish state -- in its current "pre-EU-membership" phase -- has a freer hand where legal regulations are concerned.

Strict online gambling regulations in Turkey, which took effect in 2007, and the arrest of two Sportingbet employees there in 2008, demonstrate the political will for enforcement does -- and will likely continue to -- exist.

According to various sources consulted by MECN, in 2007, Greece had more than 3.5 million Internet users, reflecting a penetration rate of approximately 30 percent. By mid 2008, there were about 1.2 million broadband connections there.

Turkey, meanwhile, had about 26 million Internet users during the period -- reflecting a penetration rate of around 37 percent -- and, as of September 2008, had around 4.5 million broadband connections.

MECN estimates that, taken together, Greece and Turkey's online gambling markets are currently worth around 450 million euros by gross win -- each being of similar size.

As of October 2008, nearly all of the operators analyzed -- including Bet-at-Home, Betsson and Unibet -- offered localized versions of their products in Turkey and Greece. Sportingbet, for example, grew second-quarter net gaming revenue by 5.8 percent over 2007, mainly due to a strong performance in Greece where revenue grew by more than 80 percent.

In addition to foreign operators, two licensed Turkish Internet agents are active in the market: Bilyoner.com.tr and Nesine.com.

Bilyoner commenced operations in August 2004, while the second agent, Nesine, followed in September 2006. These sites are licensed by the Turkish authorities to sell Spor Toto or Milli Piyango products via interactive channels.

As prohibitive legislation in Turkey makes criminal the provision of online gambling services by foreign operators, some operators, like Bwin Interactive Entertainment A.G. and PartyGaming, have temporarily discontinued their operations there.

On the other hand, Sportingbet continues to accept bets from Turkish gamblers and justifies its decision to do so by arguing that it has no physical presence in Turkey, but has its licensed and regulated facilities in other jurisdictions.

Sportingbet has reduced its exposure to Turkey, but according to its second-quarter results for the 2009 fiscal year, it still derives about 13 percent of its net gaming revenue from the country.

MECN emphasizes both Greece and Turkey are markets to watch closely in the coming months.

Balkan States Nascent, Attractive Market for Industry, Consultant Says