ITALIAN REGULATED GAMBLING MARKET : STATE OF THE ART
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The document outlines the state of the Italian regulated gambling market as of September 2018, emphasizing its competitiveness against black and grey markets, the importance of consumer protection, and the generation of public revenue through taxes. It highlights a significant growth in regulated market revenues by 42% from 2007 to 2017, alongside ongoing challenges such as addiction issues and the need for regulatory improvement. The document calls for a reevaluation of strategies to better manage gambling regulations while maintaining consumer awareness and safety.
![ADDICTIONS AND UNDERAGE GAMBLING (AGE 15-64)
In age classes 15-64, high-
risk approach to gambling
is estimable in around 1%
of the Italian residents,
extended in less than 3,5%
considering also the
moderate risk (approx. 1,3
mln people)
Responsible players are
estimable in approx. 13,5
mln in the same age
classes.
Underage gambling is
estimable in near 0,6 mln
of young people.
Over 65-aged players are
2,1 mln (49% of the age
class).
48,9%
35,8%
9,8%
4,1%
1,5%
65,7%
30,4%
2,7%
0,6% 0,5%
0,0%
10,0%
20,0%
30,0%
40,0%
50,0%
60,0%
70,0%
No
players
No risk Low risk Moderate
risk
High risk
M F
Analysis and estimation on CNR [IPSAD®2017-2018; ESPAD®Italia 2017] data.
Prevalence based on CPGI screening (Ferris, Wynne, 2001; Colasante et al., 2013)
(age 15-64)
September, 2018](https://image.slidesharecdn.com/easg2018cangianellidefpublication-190622165926/85/ITALIAN-REGULATED-GAMBLING-MARKET-STATE-OF-THE-ART-9-320.jpg)
ITALIAN REGULATED GAMBLING MARKET : STATE OF THE ART
- 1. EMMANUELE M. CANGIANELLI PARTNER, MAG [email protected] 12th European Conference on Gambling Studies and Policy Issues 12 SEPTEMBER 2018 Freedom of Choice or Limited Opportunities ITALIAN REGULATED MARKET : STATE OF THE ART
- 2. RATIONALS OF THE ITALIAN REGULATED MARKET CONTRAST TO THE ILLEGAL MARKET •Competitiveness of the regulated offer against black and grey one •Many and focused controls on the gambling offer PROTECTION OF REGULATED MARKET •Profitability of the regulated supply chain •Regulated competition among products and operators •Generation of public revenues (tax and duties for gambling-related public services) CONSUMER PROTECTION •Information, awareness, security and fraud-proofing activities •Assistance and care about problematic and pathological addictions •Effectiveness of the prohibition of minor's gambling An extended and integrated model, planned at the beginning of the 2000s, able in balancing different public interests, adapting to the evolution of consumption and technologies and generating positive economic and social value. The Italian regulated market is built on extensive retail electronic control networks that record each wager and its outcomes. Remote gambling, nominative, is also fully registered by public control systems and provides for a national self-exclusion register. September, 2018
- 3. HISTORICAL REVENUES TREND ADM and operators data. 4 historical casino not included 0 5.000 10.000 15.000 20.000 25.000 Gambling Revenues (player's losses) Public revenues Operators revenues Public revenues have always been higher than the operator’s. In 2017, 55,3% of gambling revenues. 19.1 bln 10.6 bln 8.5 bln GGR Mln € September, 2018 Several regulations of existing products on the black market: sports betting, AWPs, online casinos, betting exchanges extended the regulated market by eroding the illegal "market shares".
- 4. REVENUES TREND (RETAIL+REMOTE) 17.7 bln 1.3 bln 0 5.000 10.000 15.000 20.000 25.000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Remote Gambling Retail Gambling Thanks to continuous fighting against black and grey markets, the regulated market revenues grew of 42% from 2007 to 2017 (retail 35%, remote 474%). GGR Mln € September, 2018 ADM and operators data. 4 historical casino not included 7,2% 92,8%
- 5. REVENUES TREND (RETAIL PRODUCTS) 3.3 bln 2.4 bln 1.1 bln 0.4 bln 10.3 bln 0 2.000 4.000 6.000 8.000 10.000 12.000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Lotteries Scratch&Win Betting Bingo Gaming Machines Estimation on ADM and operators dataGGR Mln € Gaming machines established as the ever-growing retail product, attracting 54% of total players' spending in 2017. September, 2018
- 6. REVENUES TREND (REMOTE PRODUCTS) 32 5 583 28 153 569 -100 0 100 200 300 400 500 600 700 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Lotteries Scratch&Win Betting Bingo Poker&Skill Casino games Estimation on ADM and operators dataGGR Mln € After an initial interest in online poker, the launch of online slots in 2012 pushed casino games - together as betting offers - as major remote gambling products. Remote is 7,2% of total players expenditure in 2017 September, 2018
- 7. -20.000 - 20.000 40.000 60.000 80.000 100.000 -2.000 0 2.000 4.000 6.000 8.000 10.000 12.000 14.000 THE PLAYERS (2017) Analysis and estimation on GFK, Nomisma, CNR and MIP research. Residents in Italy age 15-74 Sphere: Players 2017 Slots Casino: 3 mln Lotteries: 8,6 mln Betting: 4,5 mln Bingo: 1,1 mln PoS (unit) Total unique customers 2017: 18,8 mln Scratch&Win: 16 mln Estimate of gamblers in Italy is close to 20 million people; the highest concentration is in S&W and lotteries (3/4 of the players) with some millions of players for betting and slots (AWP and VLT). Online players (registered) are around 1.8 million. The retail network exceeds 80,000 points of sale, of which about 5,000 specialised shopshalls. Remote players 0,4 mln 0,1 mln 1,2 mln 0,1 mln 1,8 mln * * Casino Games GGR mln € September, 2018
- 8. BLACK AND GREY MARKET Slot and casino games 75% Betting 15% Remote gambling 7% Scratch& Win 2% Lotteries 1% Bingo 0% Even with the difficulty of measuring the unobserved and the illegal economy, institutional and research activities in more than twenty years indicate that, despite a large black and grey market continuous exposure, unregulated economic dimensions remain estimable in around 3 - 4 bln € of players expenditure (over 10 billion € in wagers). Unregulated activities are largely concentrated in slots and casino games (with rigged machines or web totems) and offshore betting. Estimation on Italian Parliament, Financial Police, ADM, LUISS, OECD data. Destination of players' spending outside the regulated market September, 2018
- 9. ADDICTIONS AND UNDERAGE GAMBLING (AGE 15-64) In age classes 15-64, high- risk approach to gambling is estimable in around 1% of the Italian residents, extended in less than 3,5% considering also the moderate risk (approx. 1,3 mln people) Responsible players are estimable in approx. 13,5 mln in the same age classes. Underage gambling is estimable in near 0,6 mln of young people. Over 65-aged players are 2,1 mln (49% of the age class). 48,9% 35,8% 9,8% 4,1% 1,5% 65,7% 30,4% 2,7% 0,6% 0,5% 0,0% 10,0% 20,0% 30,0% 40,0% 50,0% 60,0% 70,0% No players No risk Low risk Moderate risk High risk M F Analysis and estimation on CNR [IPSAD®2017-2018; ESPAD®Italia 2017] data. Prevalence based on CPGI screening (Ferris, Wynne, 2001; Colasante et al., 2013) (age 15-64) September, 2018
- 10. EVOLUTION OF THE GAMBLING POLICIES APPROACH 1. CONTRAST TO THE ILLEGAL MARKET 2. PROTECTION OF REGULATED MARKET 3. CONSUMER PROTECTION 1. CONSUMER PROTECTION 2. CONTRAST TO THE ILLEGAL MARKET 3. PROTECTION OF REGULATED MARKET PUBLIC POLICIES 1998-2012 PUBLIC POLICIES FROM 2012 September, 2018
- 11. ITALIAN REGULATED GAMBLING: GETTING STUCK PROS CONS Strong dependence of the State budget from gambling revenues Unresolved role of regional and local councils Significant, even if not epidemic, addiction problems in gamblers population High level of technologies and data management into the controlling systems Competitive regulated market based on concession system (operators provide gambling and control services through public procurement contracts) Extended public control of the gambling market (most of the gambling offer is regulated) September, 2018 Since 2014 several new regulatory projects have been drafted, but lack of concreteness, fear to lose revenues and some risks of unjustified competitive imbalance blocked the redesign of the gambling industry. During next months Government is called once again to propose a new, better-balanced market model
- 12. ITALIAN REGULATED GAMBLING: GETTING STUCK ▪ Regulators together with the Industry need to bet on medium-long term projects and more concrete positions of social responsibility based on ✓ empowerment of social self-controlled players (complete, active information about gambling as entertainment and not as income generation) ✓ identification and exclusion of pathological players (enhancing filtering systems by exploiting the extensive communication networks already active in Italian retail), guiding them to professional assistance and reduce underage gambling ▪ It is urgent to rethink the regulated market strategy maintaining customer satisfaction to beat again the black market ▪ However, enhancing control and data-driven solutions through full on- the-edge technologies historically characterizing the Italian system would boost the deployment on new strategies. September, 2018
- 13. RETHINK HOW TO MANAGE THE REGULATED GAMBLING OFFER IN ITALY SOLUTION STATUS CONTRIBUTION TO STRATEGIC OBJECTIVES EMPOWER RESPONSIBLE GAMBLERS IDENTIFICATION AND EXCLUSION OF PATHOLOGICAL GAMBLERS REDUCE UNDERAGE GAMBLING Increased EGM taxation DONE, further growth planned • • • Tax on winnings > € 500 DONE • • • Reduction of AWPs (from free authorization to 265k + 55k VLT) DONE • • • Distance limits from several places (churches, schools, …)* IN PROGRESS, different regional timelines • • • Commercial hours limitation in retail* IN PROGRESS, different regional timelines • • • Ban of gambling advertising IN PROGRESS • • • EGMs activation only with National Health Card TO BE IMPLEMENTED by January 2020 • • • Reduction and specialization of retail venues PLANNED • • • Pre-commitment through exclusion (self or legal) in all products by a national register DISCUSSED • • • September, 2018 * Autonomous measures of local authorities, not aligned in State legislation POSITIVE NEUTRAL NEGATIVE
- 14. The increase in taxation, reducing payouts, generated an increase in players' spending fully allocated to tax revenues. The "price" of playing time has increased, but the players didn't change their approach. 0 500 1.000 1.500 2.000 2.500 3.000 0 100 200 300 400 500 600 700 Turnover Winnings Gross Revenues (Players expenditure) Tax Net Operators Revenues A NEGATIVE CASE HISTORY: AWP TAXATION September, 2018 Estimation on ADM and operators data. Mln € September, 2018 12,1% 12,2% 11,8% 12,7% 12,7% 13,0% 17,5% 18,5% 75,2% 75,7% 75,7% 75,6% 75,0% 74,4% 71,6% 70,2% 67,0% 68,0% 69,0% 70,0% 71,0% 72,0% 73,0% 74,0% 75,0% 76,0% 77,0% 10,0% 11,0% 12,0% 13,0% 14,0% 15,0% 16,0% 17,0% 18,0% 19,0% Average year taxation Average Payout Ratio Average month data
- 15. ITALIAN REGULATED GAMBLING: A NEW APPROACH September, 2018 A new, integrated strategy for the Italian regulated market EGM heavy taxation, Low payout, rate, Advertising ban, Local distance and commercial hours limits Tax on winnings, EGM cap, EGMs card Reduction and specialization of venues, Pre- commitment trough exclusion The next regulatory session should be used to resolve regulatory ambiguities: ✓ overcoming counterproductive tools for the prevention of the addictions (such as distances or commercial hours limits, or AWPs too high taxation with low payout) ✓ using the existing powerful technological resources for an effective pre-commitment system based on exclusion ✓ generating economic resources fueled mostly by conscious and responsible gambling POSITIVE NEUTRAL NEGATIVE