CasinoBeats Summit: ‘Historically underpenetrated’ Italian market has ‘tremendous’ potential for growth

Despite the challenges that operators hoping to break ground in the Italian market are faced with, the country is still oozing considerable growth potential, panellists at the CasinoBeats Summit concurred.

Speaking on an Altenar-sponsored panel titled ‘Italy: iGaming’s true land of opportunity?’ gaming industry leaders delved into how firms looking to enter the Italian market can overcome the regulatory hurdles placed before them to unlock the ‘tremendous’ potential the country has to offer.

Kicking off the discussion, Quirino Mancini, a partner at SBC Advisory Partners identified some ‘very good opportunities’ for growth and progress despite the various obstacles in the way, including the fiercely competitive nature of the market and the legislation in place.

“In Italy, there are verticals which can be launched,” he explained. “One of them is fantasy sports and the other one is esports. It’s a bit frustrating as an advisor to receive calls from potential clients and then to have to give them the bad news, and tell them ‘look, think about it because it is challenging’. It’s not just the fact that it’s a very highly competitive environment, but there are also very strict regulations.

“If we go to the nitty-gritty of operating in Italy, ask one of those guys who got a licence in 2018 how easy it was for them to simply establish an online banking account. This is another element of tragedy and irony at the same time – you are in legitimate business, you hold a licence, you pay gaming taxes to the Italian state, you deliver a perfectly legal, legitimate and highly regulated business, but still, if you go to any in Italy, and you tell them, ‘this is my licence, this is the company, this is the name of my great-grandmother and her shoe size,’ it’s still not just enough to get an online bank account up and running.

“These are the challenges that I have to warn potential clients of, and most of them understandably reconsider their plans, because they are still very tempted and they are still very lured into the Italian market but they also need to make sure that they can deliver a sustainable business.”

Although there are still several factors for potential entrants into the Italian market to consider before making the move, Italian’s gaming sector has enjoyed unprecedented growth during the pandemic, with the market now boasting the record of the ‘second-largest gaming market in Europe’, as highlighted by panel moderator and G3 reporter, Will Bolton.

In particular, Marco Castaldo, CEO of Microgame, emphasised that the ‘historically underpenetrated’ online gaming sector in the country has benefitted from the aftermath of the coronavirus crisis.

“We were below 10% in 2019 and the rest of Europe was around 25% on average. Start with the fact that if Italy moves in the direction that we see elsewhere in terms of consumer habits, technology and industry practices, there’s room for the online segment of the market to grow tremendously.

“Add to that the factors that Marco mentioned before in terms of the backlash on physical gaming and on street gaming that occurred after there was a visible growth of these gaming machines. They were actually being legalised but all of a sudden they became visible, and there’s been this tremendous political backlash with, especially local regulators, coming up with distance limits and opening our limits to essentially try to ban a WPS from bars and the like.

“What are these measures doing there? Of course, increasing the pressure on the industry to look for alternatives. I think one of the big factors in the growth of online and why I think over the pandemic we essentially crossed the barrier of almost five years of industry evolution, was because the pandemic added to this regulatory effect.”

He added: “The regulatory effect was pushing land-based gaming essentially out of society, and so the natural solution is for players to play at home to play on their mobile and so on. Then you have the pandemic, which all of a sudden made most of the operators face the reality that the shops you know are very vulnerable. So, the combination of these factors means that now the whole industry is looking at the fact that you have to address the players’ needs and you have to look at it holistically.”

Following the implementation of ‘one of the harshest advertising bans in Europe’, operators have shown ‘great resilience’ and ‘creativity’, reaffirmed Natalie Berenato, head of online marketing at OlyBet.

Taking the restrictions into account, Marco Tiso, online managing director at Sisal, concurred that there are a multitude of factors to consider when debating the Italian market, but nonetheless statistics which demonstrate the country’s impressive growth.

He began: “If you look at the overall number of Italian gambling, the incidence of online gambling and poker games in Italy was at 8% or 9% in 2019, and after the pandemic, there was an incidence rate of 20%. For slot machine or casino products, 7.7% is played online and 93% is played in the arena.

“We’ll see in the future an omni-channel approach of our customers and the GGR of our customers. There’s more and more spread between retail and online, and I do think that the online business can grow by two or three times as Marco said. The overall business now is already huge because the overall game, then in Italy is at 1.2% of our GDP, while the European average is 0.73% or 0.74%, so we already are in a position of a huge gambling market. I think that the major trend will be shifted from retail to online, rather than an increase in a digital increase of the overall market.”

The CasinoBeats Summit 2021 conference and exhibition on 14-15 July takes place in an innovative integrated live and digital format. A select audience of senior executives will attend in person at the InterContinental in St Julian’s, Malta, while a global audience of industry professionals will participate in the event online. 

The conference agenda focuses on the next generation of slots and products, key established and emerging markets around the world, leadership in igaming, and marketing and affiliation. The programme also includes the inaugural Game Developer Awards ceremony. 

Register for a free online pass for the event at the CasinoBeats Summit website.

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