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Interactive GamblingMarket DynamicsSimon HollidayH2 Gambling Capital
Lottery ExpoLas Vegas, 16 November 2010
Agenda• Interactive Gambling Market Background
• The European Story• Particular Reference to Lotteries• Case Studies
• US Past and Present
• US Market Potential• Gaming• Lotteries
• Final Word on Mobile
Internet Gambling the Global Picture• It’s 15 Years Old: $29bn
Industry 2010
• Over 2,600 Real Money Sites Operated by 660 Site Owners
• Largest Markets Include:• US Japan• UK Germany• Italy France• Canada
Global Internet Gambling Gross Win ($bn)
Internet Gambling; The Product Mix• Sportsbetting Largest• Betting Exchanges• In Play (or Live Betting)
• Bingo and other Gaming is the Fastest Growing• Slots/Other Side Games
Important
• Poker is Hard Going• (Esp for Non-US Facing Sites)
• Casino Strong Growth• Live Dealer• Slots
Internet Gambling by Product 2010e
The European Regulatory Story
State Lottery Products on the Internet• Approx. 35 Lotteries Offer
Interactive Products
• Global 2010e – Interactive Gross Win $2.8bn• 3.0% State Lottery Total
• European 2010e• Gross Win is $2.3bn• 80% State Lottery Total• Excludes Non-Lottery
Products
• European 2010e Total• $3.0bn Inc. Sports-Poker-Casino
Global State Lottery Core Games Gross Win ($bn)
The European Lottery Internet Story• Following UIGEA Europe became
the World’s Largest Market
• Lotteries Key Players on the Internet• Core Lottery Games• Sportsbetting• Poker• Other Casino/Bingo
• Strengthening their Hand in Regulated Markets• Sazka• Lottomatica• SISAL• La Francais de Jeux
European State Lottery Interactive Gross Win ($bn)
European Lotteries and Internet Poker• Monopoly Markets• Sweden 2006
• Svenska Spel• Poker SEK305m 09 (-18%)
• Austria 2008• Win2Day• Poker €6.5m 09 (+29%)• (Also Casino Games)
• Competitive Markets• Italy 2008
• Lottomatica/SISAL
• France 2010• La Francais de Jeux
Svenska Spel Interactive Gross Win (SEKm)
France: A Case Study• FDJ Monopoly Lottery &
Sports
• Interactive Sports/Horse Mkt Opened Up – June 10
• Interactive Poker Added – June 10
• FDJ Late to Market with Poker
• Onshore Interactive Gross Revenues• €567m 10e• €906m 11e• €1.36bn 15e
French Interactive Gambling Gross Win (€m)
Italy: A Case Study• Open Interactive Markets• Betting Early 07• Tournament Poker Sep 08• Bingo Dec 09• Cash Poker Mid-Jan 11• Casino (Ex Slots) Late Q1 11
• September 2010 Market Shares• Lottomatica 15.6%• SISAL 6.3%
• Onshore Interactive Gross Revenues• €910m 10• €1.93m 12e• €2.12bn 15e
Interactive Gambling Gross Win (€m)
Interactive Gambling MKt Share Sep 10
The US Market Past and Present• Offshore US Internet
Gambling Market• Peaked at $6bn
• UIGEA• Significant Reduction
Initially
• Today Approx.• $5.2bn
• Continues to Grow Offshore Operators Act Without Penalty
US Offshore Internet Gambling Gross Win ($bn)
The US Internet Gaming Potential• Poker – The Most Likely?
• Casino/Bingo – Could Follow as Legislators/ Regulators became More Comfortable
• Sportsbetting – Only in States Where Legislation Pre-Dates Federal Ban?
• Year 3• All States All Gaming
$16.6bn• 12 Largest States Poker
Only $3.4bn
US Regulated Interactive Gaming Gross Win ($bn)
Why Interactive has to be the Future for Lotteries• Convenience• What the Consumer wants• New Media - where you need to be to Capture the Attention
of many Consumers (Esp the Younger ones) much of the time
• Opportunity to Engage with the Customer 24/7
• Opportunity to Broaden Product Reach and Develop the Interest of Games
• Enable more Regular Play
• Not Just Computers/Internet – Mobile Devices will be Just as Important
US Interactive Lottery Market?• Lottery Products• Just as Likely as Poker?
• Greater Proportion of Instants Vs Draws
• Excludes EGMs• (Casino/Bingo)
• Assumption 50% of Interactive Cannibalized From Land Based
• $8bn Sales 10 – (14%)• $15bn Sales 15 – (>20%)
US Lotteries Potential Interactive Sales ($bn)
Interactive Includes Mobile• Windows Approx. 15% of Operating Systems Sold in 2011
• Increasingly People are Accessing the Internet via Mobile Devices• Google Android• Apple OS4
• In the UK Betting/Lottery seeing nearly 15% of Interactive from Mobile
• Japan Racing Association Majority of Interactive Revenues Mobile Since 08
• Mobile Gambling Nearly $3bn Gross Win this Year• And Set to Grow!
Thanks for ListeningAny Questions?Simon HollidayH2 Gambling [email protected]
Lottery ExpoLas Vegas, 16 November 2010