EYE on Europe - July 11, 2006

11 July 2006

Early Checkout -- Last week, Google Checkout, Google's new service that makes online shopping faster, was introduced in Europe. IGN asked the Google Checkout team if one could buy betting tickets via this new service. The answer: "Betting tickets appear to fall under our content policies for gambling-related content and, thus, are not allowed." In the meantime, Google Checkout was banned by eBay.

Gambling Event -- The biggest global gambling event, the World Cup, has finished, and even the very high expectations have been more than surpassed. All operators saw better results then projected. For example, turnover going into the semifinals for Greek operator OPAP's "Stihima" fixed-odds betting product was around 420 million euro.

AAMS -- The Italian Independent State Monopolies Administration (AAMS) continues to block gambling-related Web sites. The latest victim is Tipp24, the German Internet lottery company. The group acts as a broker, enabling its customers to participate in almost all games of chance offered by state-owned and state-licensed lotteries in Germany. The group has offered lottery services in Spain through its wholly owned subsidiary, Ventura24 SL (www.ventura24.es), since 2002 and in Italy through its wholly owned subsidiary, Puntogioco24 s.r.l. (www.puntogioco24.it), since 2005. Tipp24 AG is currently evaluating its options in reaction to the Italian blocking order. Persistent blocking of the Italian Web site would result in a reduction of sales for the fiscal year 2006 by a low single-digit percentage point from a group perspective. As the Italian business currently makes a negative contribution to earnings, Tipp24 AG does not expect a negative impact on consolidated earnings in the short to mid term, although long-term potential positive contributions to earnings would no longer be possible.

Lark of Europe -- The Belgium gambling scene is the lark of Europe. The National Lottery (NL) is still in the stone age. It has no Internet products or sports betting, even though they have the rights for these products. They do, however, have a very expensive hobby: a professional cycling team with some 40 employees on the payroll. The cycling team, which is participating in the Tour de France, should promote their Lotto product. A Belgian newspaper, De Tijd, revealed in the meantime that a consumer organization found out that 85 percent of the points-of-sale for lottery products have sold scratch cards and lottery tickets to minors. NL's press department reported that the National Lottery is not responsible for controlling the sales counters; it is the responsibility of the Gaming Commission, whose responsibilities also include controlling games of chance and controlling the holders of licenses. On the Gaming Commission's Web site, you can find 25 contact e-mail addresses. Last week, IGN tried to get in touch with the Commission, sending more than 10 e-mails. . . . No reply at all. And to end with something very positive: Most EuroMillions jackpots have been won in Belgium!

Monopolies: Out! Exclusive Rights: In!Norsk Tipping's 2005 annual report starts with an interview with President and CEO Reidar Nordby in which Ingebrigt Steen Jensen asks, "How do you think Norsk Tipping¹s gaming monopoly is doing?" Norby responds, "Well, to start, I think 'monopoly' is an awful word. Monopolies are associated with large, sluggish, lazy enterprises, characterized by poor operations and lack of competitiveness. Monopolies are dull; you're making me want to yawn. 'Exclusive rights' is a far better term. And at the same time I want to say that having a monopoly or exclusive rights is not a privilege, it is a serious obligation to manage an enterprise in a socially beneficial manner." Question 2: "How are exclusive rights doing, then?" Answer: "They have been undermined, but must be revitalized. This is partly due to the exclusive rights we have in many of our business areas becoming fictitious due to international competition, i.e. foreign bookmakers, online gaming, online poker, etc. And partly because gaming machines here at home are responsible for a steadily larger, and in my view clearly negative, part of the turnover from gaming in Norway-­three times more than Norsk Tipping's total turnover. In 2005, Norsk Tipping had a total market share of 20 percent of gaming in and from Norway." Nordby, the former president of the World Lottery Association, makes it clear: Don't use the word "monopolies" anymore, just like it is forbidden within the EL and the WLA to mention the word "gambling." Only the word "gaming" is allowed!

Rob van der Gaast has a background in sports journalism. He worked for over seven years as the head of sports for Dutch National Radio and has developed new concepts for the TV and the gambling industry. Now he operates from Istanbul as an independent gambling research analyst. He specializes in European gambling matters and in privatizations of gambling operators. Rob has contributed to IGN since Jul 09, 2001.