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Exploring optimal market entry strategies in the new regulatory environments

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What has just happened?

•  In 2011, broadened its online gambling portfolio introducing poker cash and casino games •  The related application period for issuing up to 200 new online licenses was closed on December

31st 2011

•  The online gambling was introduced in 2010 with a narrow portfolio (Sport betting, Horse betting and Poker)

•  The administrative procedure for issuing online licenses started in May 2010 and is still going on

•  In 2009 passed a law that rules online gambling as “complementary” to the land based offer •  The administrative procedure for issuing online licenses started in September 2011 and is still

going on

•  In 2011 passed a law that rules all online games but Bingo •  The administrative procedure for issuing online licenses started in September 2011 and is still

going on

• In 2011 passed a law that rules a huge online games portfolio • The administrative procedure for issuing online licenses started in November 2011 and is

currently over at least for “general licenses”. However no license has been issued up to now

Italy

France

Belgium

Denmark

Spain

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License Fee/ Guarantees

Games portfolio Tax Payout IT Aspects

Italy

• 300/350k € without/with Bingo una tantum

• Guarantee:1,5mln € for not gambling operators

• Betting • Poker • Casino • Lotteries • Bingo

• Betting-Skill: 3% of GGT

• Poker-Casino: 20% of GGR

• Bingo: 11% GGT

• Free •  IT equipment integrated with Sogei

France

• 10k € for license per year

• No guarantees

• Betting

• Poker

• Poker:2% on GGT (with 1€ cap)

• SB: 9,3% of GGT • HB: 14,4% of GGT

• 85% of GGT for Betting (including bonus)

• Frontal

Belgium • Guarantee ranging from 25 to 250k €

• Betting • Poker • Casino • Slot • Bingo

• 11% of GGR • Free

•  Inspections conducted by the Commision des Jeux d’Hasard

Denmark

• 140k € for license per year

• No guarantees

• All but Bingo and

Horse Betting • 20% of GGR • Free

• Data storage in a SAFE secured by Tamper Token

Spain

• 10k € for license

• Guarantee ranging from 500k to 2mln € for the 1° year

• Betting

• Poker

• Casino

• Concursos

• Poker, Casino and fixed-odds betting: 25% of GGR

• Concursos: 20% of GGT

• Free • Sistema de Control

3

Regulatory models

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What has is going to happen?

•  In December 2011 reformed the Interstate Treaty on Gambling, introducing licenses for online sport betting

•  The administrative procedure for issuing the 20 online licenses has not yet begun

•  Because of difficulties in passing a comprehensive law on online gambling, in 2011 set a “transitory period” of 6 months during with all operators having an online license issued in EEUU will be able to work regularly in Greece

•  In 2010 passed a law ruling online casino games, poker and lotteries. •  Since implementing regulation is still pending, the administrative procedure for

issuing online licenses has not yet begun

•  Currently a law about online games is under discussion but so far there is not any draft

Germany

Greece

Austria

Netherland

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Markets’ Analysis: a Methodology

REGULATION

MARKET

GAMBLING MARKET

AREA

REGULATORY PROCESS STATUS

GAMING PORTFOLIO

GAMBLING TAX

REGULATION EFFECTIVENESS

PRO CAPITE GDP €

POPULATION

BROADBAND PENETRATION %

INTERNET USERS %

MOBILE USERS %

GINI INDEX

TRANSPARENCY INDEX

ONLINE MARKET SIZE

ONLINE GAMBLERS %

LANDBASED OFFER

MARKET ACCESSIBILITY

PARAMETER W

16,0%

10,0%

10,0%

4,0%

4,4%

12,3%

7,0%

3,5%

2,6%

2,6%

2,6%

6,2%

3,8%

6,2%

8,8%

It is considered the decisive category

since the regulation features deeply

affect the market attraction

This category determines the market

potential as a whole

It is considered the less relevant

category, since the online gambling is

just opening and the market demand

will be shaped by the offer

RATIO

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0

50

100

150

200

250

300

350

400

112

162 166 134 122 122 122

146 112

156

107

126 112 162 170

84 106

133

130

125

61

63 59

91 74

80

99

99

65

99

Regulation Market Gambling market

6

Avg 340

Markets’ Analysis Results

FRANCE

ITALY

SPAIN

GERMANY

DENMARK

BELGIUM

EIRE

NETHERLAND

AUSTRIA

GREECE

377

378

376

366

355

348

321

305

295

278

MARKETS’ RATING BY INDEX COMPOSITION

Source: MAG International Markets Index