Eye on Europe - Oct. 4, 2006

4 October 2006

Copy Cats -- The management of Greece lottery operator OPAP will ask its government to adopt aggressive measures to tackle illegal Internet gaming following laws passed in the United States.

Expensive Program -- The Dutch State Lottery, established in 1726, will stop its supporting TV program. Merely 20 percent of the players of the state lottery watch the monthly state lottery show. Only 800,000 viewers, of 16.5 million inhabitants, watch the show. The Dutch state lottery started 15 year ago. The annual production costs in 2004 exceeded 50 million euros. Turnover in 2005 was 672.million euros--3.6 percent less then in 2004 (697.5 million).

Privatization -- The Swedish state is Sweden's largest company owner; approximately 190,000 people are employed by these companies. This week, Sweden's Alliance Party ousted the long-time ruling Social Democrats. The coalition party won a Swedish majority in parliament by promising to sell off its holdings in state-controlled companies. Many expect a three-stage privatization over three to five years. During this period, Sweden's gambling monopolist Svenska Spel, looks like interesting prey. Göran Wessberg, a spokesman of Svenska Spel, explained, "As you know, Svenska Spel is a state company. Therefore, it can of course have no view on its own expressed publicly on the political situation. We know, however, that the four parties in the new government are for a deregulated, or rather re-regulated market, with a license system. It is not a top priority for the coalition, but we expect that within the next two years we will have new gaming legislation in Sweden. The company's CEO, Jesper Kärrbrink, said he would welcome such a license system as long as it is fair to everybody. This is not the case today, he said, with a Wild West situation in which the police and other authorities do not clamp down on illegal betting and illegal promoting of foreign gaming operators.

New Model -- German soccer officially has no influence on the future of the sports betting market; however the top management of the Deutsche Fußball-Bund (DFB)(the German soccer federation) and the Deutsche Fußball Liga (DFL) has tried to influence political decisions. The DFB has over 6 million members, 2 million active players and 170,000 teams, creating the largest membership of any sports federation in the world. In a model that will be presented at the conference of the Prime Minister of the 16 federal countries on Oct. 18, the DFB and the DFL will come to an astonishing result: Income from the state betting organizations would be significantly higher if monopolists were replaced by private operators within a surrounding of concessions and licenses. In Germany, a fragmented market leads to a lower turnover that accounts especially for Internet betting. The German development of justified estimations can be read for oddset as follows: In the year 2000, turnover for the monopolists was 0.5 billion euros; for private operators, zero. In 2004, the numbers were 0.451 billion against 1.729 billion, compared to 0.3 billion and 2.5 billion in 2006 and an estimated 0.5 billion and 4.5 billion (a ratio of 9-1) in 2010. The tax is now 25 percent, but will decrease to 16 percent, which can flow to the sports organizations. But in the new model, the income will be significantly higher than that under existing conditions.

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.