Can Italian Market Gains Offset the Ring-fence Albatross?Published May 9, 2016 by Lee R
Italian online gambling growth was driven by new powerhouses online casino and sports betting, while poker was stunted.
Online gaming growth is rapidly bringing Italy´s ring-fence problem to a head.
The End of Confusion?
In a country where the regulation picture was muddled up through the last quarter, the government has released surprisingly encouraging figures: the €267m tallied by Italian licensed operators for the quarter ending March 31st represented a jump of 21% from the same period last year.
Casino Verticals Top
Casino verticals checked in with the leading total of €106m earned, for a 38% year-on-year improvement. This gain was a full 7% higher than the growth of casino verticals for all of 2015 (31%).
Coming on Strong
Online sports betting was not far off. Betting growth topped casinos, jumping 42% to €96m. These gains come on the heels of a fantastic January that saw online sportsbook revenue rise 97% to €36m.
More Verticals Grow
Bingo moved up 2.9% to €7.5m, virtual sports 8.2% to €2.6m and exchange wagering a whopping 40% to €875k.
Adapting Regulation Nicely
Though sizeable at 22%, a new flat tax provided a more reasonable alternative to the previous tax based on wagering turnover, enabling Italian providers to enhance their products sufficiently to compete with unlicensed international operators encroaching on Italian bandwith.
Though the Italian tax is still relatively high, any set figure facilitates operators generating stable budgets and reliable strategies for improving their products and drawing more customers.
The problem is the country still suffers from the decision to ring fence its poker market and cut off its poker players from competition (and rolling jackpots) with foreign global markets. Even while tournament revenue increased 6.6% to €22.4m, the dwindling competing player pool drove cash game poker revenue down at almost three times the rate of 18% to €20.7m.
With all this growth, the government may soon have to capitulate and allow international poker play. The gaping revenue and growth disparity along with player turnoff is otherwise likely to accelerate in the opposite direction, an ever-increasing albatross capable of swallowing up the entire market by offsetting the tax gains the government has in other sectors worked so hard to harness effectively.