The Official Gazette of Italy on Dec. 12 announced the bid winners for gambling distribution in Italy.
The highlights:
Lottomatica Italy obtained 1,144 sports betting rights, 500 horse race betting rights and nearly 50 percent of the sports betting available for the corner shops in the main Italian towns.
Intralot Greece acquired 33 percent of the 1,278 licenses for the large exclusive sports betting points of sale (POS)--a total of 416 licenses--plus 164 licenses for non-exclusive POS (corners or shop-in-shops) and nine licenses for horse race betting POS.
Gala Coral obtained 403 licenses.
Ladbrokes was awarded 33 dedicated horseracing licenses (betting centers), 58 dedicated sports betting licenses (betting centers) and 51 non-dedicated sports betting licenses (betting points).
William Hill obtained 100 licenses.
Lottomatica
Lottomatica S.p.A. has been awarded 1,144 sports betting rights and 500 horse racing betting rights; the concessions will expire in December 2015. The effect of this award is that Lottomatica is the leading operator in the sports betting sector covered by so-called "corner" distribution.
The group also obtained all the horse racing betting rights for which it tendered as well as
the right to enter the Internet and interactive channels, starting by offering the sports betting and with the possibility in the future of offering other games.
"The results of the tender are in line with our top expectations," commented Marco Sala, managing director and general manager of Lottomatica's Italian operations. "We met our goal to play a leadership role in the betting sector and with such outcome Lottomatica enters for the first time this important segment of the Italian market. The sports betting market in Italy alone is worth about 2 billion euro and it is expected to double during the next two or three years. We congratulate AAMS on their far-sighted strategy.
We focused on sports betting corners and today we obtained the major number meeting the goal of concentration in the main Italian towns.
"Entering this new gaming segment is a fundamental important step for us, allowing us to keep a closer look-out for the various opportunities at international level, as we have now acquired the technical and business skills necessary to manage the book risk."
The accomplishment is all the more appreciable in that the corners for which rights have been obtained are especially concentrated in the main Italian towns, where Lottomatica has achieved approximately 46 percent of the rights available for the corners. The Lottomatica brand will, thus, have an additional chance to increase its visibility from one end of the peninsula to the other, from north to south.
Lottomatica's commercial network has already contacted the main gaming outlets in Italy to build up one of the most important networks of sports betting professionals.
Lottomatica Scommesse, the subsidiary set up for this purpose, will manage the betting operations.
Intralot SA
Within the context of an international tender to expand the Italian betting market, Intralot states that, through a subsidiary company, it rendered as the most important international sports betting house in Italy and the second most important overall amongst the companies that participated based on the characteristics of the tender. Intralot is already the largest sports betting company globally, with a total handle of 4.5 billion euros annually.
Intralot acquired 33 percent of the 1,278 licenses for the large exclusive sports betting POS that were finally granted, or a total of 416 licenses. Moreover, the company obtained access to a new type of network for Italy by acquiring 164 licenses for non-exclusive POS (corners or shop-in-shops), which according to the characteristics of the tender will have lower turnover compared to the exclusive POS. Further, nine licenses for exclusive horse race betting POS were acquired, a new product for the company. Finally, licenses to distribute sports and horse racing through the Internet were also obtained. The duration of all licenses is nine years, and the total investment is estimated at 65 million euros.
The distribution of the licenses covers the whole country--both geographically and population-wise--with special emphasis in areas considered to be significant potential markets.
For this project Intralot will invest in modern technology and know-how both in retail as well as Internet distribution, which has proven to be very competitive and is expected to boost the games' turnover. A new subsidiary (85 percent owned by Intralot and 15 percent owned by an Italian group that already operates in the sports and horse race betting markets) has been established to handle these operations.
"The expansion of the Italian betting market was very successful, as this move will bring multiple benefits, such as significant revenues to the Italian state, healthy competition through official betting organizers, containment of illegal betting and an increase of jobs in the country," Intralot CEO Constantinos Antronopoulos said. "This significant achievement and the benefits that are expected to arise will inevitably attract the interest of other countries, both in Europe and elsewhere, towards this direction."
Intralot's footprint straddles five continents, with 37 subsidiaries, eight business offices, over 3,600 people and revenues of 523 million euros for 2005 and 700 million euros for 2006.
Gala Coral Group
Gala Coral, Europe's largest integrated gaming company, was awarded 403 licenses for the price of roughly US$60 million.
Ladbrokes
Ladbrokes has been awarded a total of 142 new betting licenses in Italy, following its recent tender application, including 33 dedicated horseracing licenses (betting centers), 58 dedicated sports betting licenses (betting centers) and 51 non-dedicated sports betting licenses (betting points such as news agents, bars and cafes, where franchisees will offer Ladbrokes betting services as additional products to their core businesses).
Ladbrokes expects the first of its new licenses to become operational within three months. The new licenses are spread geographically throughout Italy.
The company has also successfully applied for remote betting licenses for horseracing and sports betting, which were issued on a non-competitive basis to companies that complied with regulatory standards.
Ladbrokes' strategy is to establish an Italian retail estate through both new licenses awarded in the tender process and acquisition of existing centers.
Ladbrokes in November 2006 acquired three betting centers in Turin, representing its first steps into the Italian market. The centers started trading under Ladbrokes ownership in early December. The company continues to be in discussions to acquire further betting centers.
Ladbrokes also announced that it had established a joint venture partnership with the Italian odds provider Panetta Scammers. The JV established Ladbrokes as a government-accredited provider to betting centers in the Italian market, where all betting centers are required to work with a provider to connect to government computers as well as receive odds and liability management services.
The British betting sector alone was worth £45.08 billion in stakes in 2005 (Keynote 2006).
Christopher Bell, chief executive of Ladbrokes plc explained, "We are very pleased with the outcome of the tender which represents a major step forward for us in Italy. We have appointed an Italian Chief Executive who brings extensive local knowledge of the industry to our operations and we will continue to expand our Italian business through acquiring further existing licenses."
William Hill
William Hill PLC Public Relations Director David Hood said the company's involvement in the Italian bidding process was very low-keyed, and they are happy to have obtained some 100 licenses.
The lists of the new concessionaires published on the Italian Official Gazette by the Italian Monopolies Authority on Dec. 28, 2006 can be found on the AAMS Web site (www.aams.it).
It is estimated that the Italian sports betting market is currently worth around 2 billion euros and the horseracing betting market 2.1 billion euros. The total betting and gaming market is estimated to be worth 28 billion euros.