Eye on Europe - Sept. 14, 2006

14 September 2006

Bwin Sponsor Stable -- Sponsoring sports has become a re-discovered tool of the international marketing trade. Heike Mayer, the corporate communications officer of bwin, is willing to put the company’s sponsoring cards on the table. bwin has sponsorhip deals with Equestrian WC Aachen in Germany; FIA WTTC in Mexixo; Kite-surf Pro and FC Barcelona in Spain; Club Brugge in Belgium; AJ Auxerre and Girondins Bordeaux in France; 1860 München, VfB Stuttgart and Werder Bremen in Germany; AC Milan and Juventus Turin in Italy; the Portuguese Soccer Federation (bwinLIGA); and World Champion Basketball in Japan. It also sponsors the Red Bull Air Races and at least one FIA Touring car. "In general," Mayer explains, "bwin aims at entering into long term partnerships. This also includes sponsorship agreements. In accordance with the demands of an opportunity-driven dynamic market sponsorship agreements, however, (the deals) also offer opportunities of exit."

The M-Question -- For over a year I’ve been trying to find out the percentage of bwin's distribution via mobile devices. In response to my numerous queries for this information, bwin's Heike Mayer offered, "Please be advised that bwin--as part of its products and sales policy--exclusively offers its products via digital distribution channels. bwin believes that there is a promising future for an innovative 'self-service concept' with distribution channels such the Internet, mobile telephony and interactive television. The virtual nature of online gaming products makes it possible to establish an unbroken chain of fully automated business processes, from registration and payments to customers' accounts to placing bets and claiming winnings." Well, I think not even 2 percent of bwin’s betting turnover will be realized by mobile.

Slot Machines are Not Lotteries -- German FLUXX AG (traded on the Frankfurt Stock Exchange since September 1999) and its shareholders have been through some hard times due to the unclear sports betting situation in Germany. The German Lottery and Pools Organisation (DLTB) is contending the ruling of the Federal Competition Authority of Aug. 28, 2006, according to which they may not boycott over-the-counter sales by commercial agents in supermarkets and filling stations. The main argument advanced by the DLTB is that this form of sales increases the danger of addiction. The dubious culmination of the debate is the draft amendment to the State Treaty on Lotteries, which is to include a blanket ban on advertising for gaming on TV and the Internet. "The state is trying to defend its monopoly with all manner of baffling means," remarked Mathias Dahms, a management board member for FLUXX AG. "It is not even shying away from some fiscally suicidal measures, at the public's expense." According to expert estimates, a total ban on advertising for Lotto would result in a slump in revenue of as much as 70 percent. This would slash the federal states' proceeds, which are used to fund sport, culture and charities, by as much as 2.5 billion. "In preparation for its ruling, the Federal Competition Authority considered the law enforcement objectives of the federal states at length, paying particular attention to a study by the University of Bremen presented by Westlotto, Münster," Dahms explained. "This study concludes that in the majority of individuals at risk of addiction, the problems of addiction were prompted by slot machine games, not lotteries. The addictive potential of lotteries is assessed as very low. Why Lotto is asserting the opposite in public, despite its own findings to the contrary, remains a mystery."

Repeal -- The provincial high court of Dusseldorf has repealed the Federal German Cartel office's decision to open up the lottery market in Germany to private operators. The Cartel on Aug. 28, 2006 prohibited anti-competitive behavior by lottery companies and the German Lotto and Toto Block. The implementation of this latest ruling has been suspended until Nov. 1.

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.