Eye On Europe - May 12, 2006

12 May 2006

Better Late Than Never -- On May 10 IGN published an article on Italy's new policy prohibiting Internet service providers from carrying gambling sites. We had reactions from the European Betting Associations (EBA), the Gambling Authorities of Malta and Didier Dewyn of Unibet. We waited for more than four days to publish the article because we also wanted a reaction from the Remote Gambling Association, whose members (33 in all) include some of the world's largest and best known remote gambling companies. One day after publishing the article I heard from the association's chief executive, Clive Hawkswood, he stated the following in an e-mail: "Rob, just a quick summary of what we've done so far regarding Italy: three complaints to the European Commission regarding both non-notification and substantive issues; legal action against AAMS in the Lazio Administrative Court; various lobbying efforts in Italy; currently considering civil action in addition to the case already before the courts; liaising with other interested parties in Gibraltar and Malta so that as much as possible we can coordinate our efforts; and persuaded the British government to raise our concerns with their Italian counterparts." We also asked Fulvio Sarzana, the attorney appointed by Assoprovider (an association representing nearly 200 Italian Web sites), for a reaction. As of now, we haven't heard back.

Good Times in Poland -- They keep messing around at Totalizator Sportowy Sp. zo.o. (Poland's national lottery). Politicians are fighting for vacant positions on the supervisory board, and after a court case, sacked CEO Miroslaw Roguski could return to his old position. In the meantime, Q1 2006 revenues for the European Lotteries member were down by more than 20 percent. To compensate, management--and politicians--have decided in there wisdom to raise the price of lottery tickets by more than 60 percent. So it is not so strange that the foreign Internet operators are having good times in Poland. Above that, there is hardly any legislation, especially relating to Internet sports betting, concerning foreign competition in the gambling space. The main foreign players are Betsson, SportingBet, BetandWin and Expekt. Online betting has already taken over among punters in the 20 to 35-year-old group. Totalizator Sportowy is losing its business for four main reasons: Online sports betting companies entering the Polish market; offline sports betting companies with private capital; the management of Totalizator Sportowy, which is mainly chosen by the political key persons and not by any management skills; and corruption, which is a still a major problem in the national capital among companies and the administration. Transparency International places Poland at the No. 74 on its Corruption Perceptions Index (CPI), which ranks countries in terms of the degree to which corruption is perceived to exist among public officials and politicians. Who is going to help this member of the European Union and the European Lotteries?

Responsible Gaming -- In its always interesting monthly news bulletin, "eNews," Finnish monopoly and EL member Veikkaus recently had the following to say about big sporting events: "They bring sports close to the general public, making more people take an interest in them. The mere media presence is important for the events and their popularity. Big sports events of course also speed up the sales of betting games. However, for us in Veikkaus, it is more important to offer games by which sports buffs can gain extra excitement whilst viewing sports. This is what provides a sound basis for responsible gaming." A very strange conclusion, it seems to me, as many would suggest the very opposite is true.

eNews Is Hard to Find -- Also in "eNews," Veikkaus reports that during the first quarter of the year, turnover increased by 1 percent (compared to Q1 2005) to 342.6 million euro. The increase was slowed considerably in part because there was one draw less in both Lotto and Joker than during the first quarter of '05. The games to speed up the growth of the turnover the most were games with high event frequency, such as fixed-odds betting and keno. Veikkaus, which advertises itself as the first Internet operator (incidentally, this is not the case) did not mention any percentages of turnover via the Internet. What's more, there is no mention of any e-matter in eNews. Time for a name change?

IGN nevertheless pursued Veikkaus' e-stats and received the following information from the group: During the period of January-April 2006, total sales were 53 million euros (a 33 percent increase over the same period last year). The numbers break down as such: 50 percent from odds betting, 21 percent from lotto games, 14 percent from keno, 9 percent from "other" sports betting, 3 percent from "eInstant," and 3 percent from other products.

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.