iGaming Daily

Martyn (00:07.118)
The UEFA Euro 2024 championships have concluded on a sombre note that football will not be coming home to England. The end of the six week tournament marks European gambling entering its summer break as bookmakers lower betting activities and regulators enter recess periods. Yet prior to this well -earned Europe saw developments on Western and Eastern fronts. In Italy,

the ADM has submitted its official plans to launch a new regime for online gambling concessions, priced at a hefty 7 million euros per license. Whilst in Croatia, a new government has pledged to fast -track a gambling overhaul, bringing in stringent player protections and market controls. I'm Martin Elliott, and welcome to today's edition of iGaming Daily, brought to you in partnership with OptiMove, the number one CRM marketing solution for the iGaming market.

56 % of the EGR Power 50 personalises player experiences with Octomove. And as a special offer, they're offering new clients a free first month. For more information and to claim that free first month, go to octomove .com forward slash SBC. Now, joining me today to discuss all things European is SBC's content director, Ted Menmure. Hi Ted, how are

Teddy (01:29.515)
Very well, Martin. Disappointed, but I'd like to begin by reading to our audiences Rudyard Kiplings, if. So Martin, you know, if you can keep your head when all about you are losing theirs and blame it on you, then one day you will be a man. That's the only line I know.

Martyn (01:39.655)
Yes.

Martyn (01:58.414)
Yeah, that's fine. mean, sadly, it was actually somebody who's technically not yet a man who was making a big difference in the final. Spain's 17 -year -old winger who, you know, what a sensational player that young lad is. Really looking forward to, and I'm, you know, I'm clutching at straws here, but I'm really excited by what he might achieve over the next few years and watching him play. Even if that

reduce England's of winning a major tournament even further. I couldn't help noticing, Ted, that you seem to have themed this, the subjects for today, around Gareth Southgate's greatest defeat with Italy and Croatia on the agenda.

Teddy (02:45.314)
Again, it proves what I said. Garry Sasko is cosmic and he is divine and he rules everything around me this summer. I'm sorry audiences.

Martyn (02:57.922)
Yeah, yeah, that's that's true. I am going to for the first time express a little bit of sympathy for Southgate. You know, we all know his tactical approach, he's cautious and so on, but it wasn't his fault that some of the players couldn't make simple passes or control the ball and so on last night. It was just a bad night all around, I think. So I'm going to give him a bit of a pass. He's the

the best England manager of my lifetime in terms of results. Although I did prefer watching the team when Terry Venables and Bobby Robson were manager.

Teddy (03:38.841)
We'll just end it by saying Southgate forever. Yeah.

Martyn (03:41.313)
Yeah, yeah, well, until the end of the week anyway. then but hands off Eddie Howe is the the main message the FA needs to take from this. Right, I suppose we should actually talk about something gambling related for once. we've talked a lot about elections and football the last few weeks. So let's return to our stock in trade, I guess. So so the first half of the show, we're going to talk about Italy and then we're going to talk

Teddy (03:56.977)
That's

Martyn (04:11.151)
Croatia a bit later on. So let's start with Italy then. So why is it so important for Italy to sort of launch this new licensing regime for what is already sort of quite a large online sector they have

Teddy (04:29.925)
Yeah, good question. So.

The, I think this is reflected to kind of like generational issues that have happened in Italian gambling, especially with regards to the online market. So the mechanism in how the ADM granted its original online concessions has been a point of conflict for over a decade since Italy brought its online gambling regime in 2011.

And when it launched the regime, it launched it in very kind of loose terms with regards to licensing in terms of what are the exact terms of play, how the concessions are granted and the longevity of the actual licenses in themselves. over the past five years, as the licenses have been kind of reaching an end and there's been a lot of

legal challenges. It's a point of conflict for the industry in which it's kind of blocked the legal passages for the operators to kind of reapply.

and it needed kind of the central government to kind of intervene, take away the mandate from the ADM and say, look, we're now going to launch a new regime. The regime has been kind of kept out of the actual kind of reorganization decree, but once it goes, it undertakes its assessment, it will then be integrated with the rest of the decree. You have to remember that in Italy, the government operates, when it wants to change mandates,

Teddy (06:08.755)
it via a decree so everything's kind of implemented in phases and this is a critical phase for the reorganization of Italian gambling it's sorting out online gambling licenses.

Martyn (06:19.888)
Sure. obviously the headline part of this is the fee, 7 million euros, which is a 35 times increase on the concessions back in 2018, I believe. So why have they gone for something that's just so expensive, such a huge increase?

Teddy (06:46.702)
So the seven million pound license and okay, seven million pound license, but it's spread over nine years, right? And the license fee was endorsed or was approved by METH, the Ministry of the Economy and Finance of Italy. And they believe that that is now reflective of a market in which it's starting to see kind of that level of saturation, but it's dominated by gambling PLCs such as Flutter.

Flutter itself being part of Flutter, Entain, 365, Schneitech and Lottomatica.

The other thing is that it's also going to reflect kind of the transition of what's happening to Italian gambling, which is going from very much from retail to online. So the growth factor or the growth segment of Italian gambling is that online transition. That is where the the operators are competing and that's the vertical that should be should face higher taxes or high licensing fees. It's some the licensing fees

have caught the attention or they have divided opinion in Italian gambling. A lot of people believe that it is kind of an invention by the government to mold the industry in a certain way, getting rid of smaller competition and kind of putting the boundaries in favor of the larger enterprises. But we'll see how that plays out.

There's definitely a lot of tough questions regarding licensing and whether smaller operators can compete in the market.

Martyn (08:29.999)
Yeah, it seems to be a trend across Western and Northern Europe at the moment to move towards models where small players are really going to struggle to, you the economy, just even to afford the not just the licence fee, but all the regulatory support and so on they need. So it'd be interesting to how this plays out in one of the big established markets here. Do you think this represents

this proposal represents real progress for the market.

Teddy (09:05.299)
I think the important question is that, look, Italy is sticking to a program. The reorganization of gambling needed to take place over 15 years ago, and at least Italy is going in one direction. I think that overall, one of the positive things is that the government is tackling the hard question.

Even in the, one of the reasons why they need a new regime is because they need to kind of sort out the issue of skin gambling in Italian gambling, Italian online gambling, which has become kind of an unlicensed, very exposed vertical to the black market. And again, if these measures work, one of the things is that Italian gambling's exposure to the black market is about a, is circa a billion a year.

So if that kind of comes into play, that's a great growth area for the licensed market. And that is an area for them to compete with. And actually, when you reflect back on the seven million pound fee, if it's seven million pound fee to compete in a market that can get an extra billion, that is of the that is to the interest of the operators. So it's positive all round. Yeah, there are elements of the unknown, but that always comes to play when when a government overhauls its

Martyn (10:20.848)
Yeah, absolutely.

Teddy (10:30.139)
It's lose.

Martyn (10:31.79)
Yeah, well there's always a fear of changes in any industry I think so, you know, when you put it, when you catch in those terms about the bigger market opportunity it certainly looks good. So, final question on this, do we know time scales yet

Teddy (10:49.252)
The time scale is this concession. The online gambling regime, once it passes its EC approval, it's between three to four months to begin the implementation of measures from the decree to come in. So all the Italian licenses have been warned about the process.

It's coming up for a final review. It will be kind of indoctrinated into the reorganization decree. And again, as mentioned, this is the first important phase of that decree going forward.

Martyn (11:22.614)
Okay, well so overall unreal positive signs in in Italy so we will leave the the market in Italy for the moment and when we come back after the break we will be making the short journey across the My geography was better. I'd know what the sea was though. No, no, it's it the Aegean I think over to over to Croatia But anyway, we will be talking about Croatia when we come

Teddy (11:41.718)
Hehehehe

Martyn (11:55.954)
Okay, welcome back to part two of today's iGaming Daily when we will be looking at potential changes coming up in the gambling market in Croatia. So Ted, just to begin with, the Prime Minister made a pledge last week and it was fairly detailed in there, sort of why has it happened now? What sort of grounds has the Prime Minister had to come out and make this announcement?

Teddy (12:27.474)
So, Croatia's seen a period of kind political flux. It had its general elections in May because the coalition government basically dissolved. There was no kind of harmony there. And Andrei Plakovic called a snap election in which he sneaked in a majority, but confounded kind of with a minority partner.

but he does now carry a mandate and one of the pledges there was that he is going to reform or overhaul Croatia's gambling act of Croatia's gambling act and he's gonna he's gonna implement it on the grounds that there's been a lot of concerns by local mayors

municipal councillors on just the overall exposure of Croatian citizens to gambling harm, to gambling.

Martyn (13:26.61)
Okay, and presumably around that, think you half -mentioned it there in your answer. So player protection and fears about a rise in problem gambling are driving this kind of discussion.

Teddy (13:44.221)
Yes, so, look, I mean, in writing this article and having kind of contact with people on the ground in Croatia, one of the things that it's.

Creation gambling, it's in a very kind of tricky place at the moment. It is a growing industry. It does contribute to the economy. Overall, people do look at kind of it as a net positive. However, you're talking about a gambling regime that hasn't been revised since its implementation. The other factors here is that, again, like we witnessed in other Eastern European jurisdictions, there is such a difference

rural communities versus urban communities in terms of spend and GDP. And I mean, talking to one of our creation partners, they said that one of the concerns there is that in certain towns, there are more betting shops and there are bakeries or there are kind of retailers. It's definitely an agenda that needs to be viewed by the government.

And the other high is the high index of gambling addiction in Croatia, which is 40 ,000 citizens registered or have gone to the healthcare services noting that they are at risk of gambling addiction, which index is amongst the highest in Europe.

Martyn (15:06.815)
Population's not that big in Croatia, is it? Four million -ish, think, some part of that. So that is a significant chunk of people, I guess, in that case. So you can understand the motivation behind moves to tighten up the regime there. There's a lot of detail already in this, and obviously the headline is, again,

Teddy (15:10.024)
Mm -hmm. Yes.

Martyn (15:35.79)
related sort of advertising and a fairly strict new code on that. But it's not the only thing. Do you think there's a chance that Croatian authorities will achieve this high proficiency of controls that they're aiming to implement here?

Teddy (15:58.624)
Good question. Again, you've to revert back to if you break down, there is a lot of high proficiency of technical controls, but also centralized controls. And that's always a.

That's always a hard objective to achieve for any government. And we can see that this can take up for even for Western governments. That can take over a period of a year or two years, especially when it comes to player registries, which is one of the one of the mandates that the Croatian government wants to implement a player registry and then from which it will then build a very kind of comprehensive self exclusion monitor for the industry. Again, the

The Ministry of Finance has said that they believe that gambling should be monitored more by the centralised government than it is at the moment over kind of online and land -based verticals. We'll have to see. Again, this is a draft decree. So we have to see in terms of what timeline they want to fast -track in there and how they're going to schedule or kind of modify the provisions to follow.

Martyn (17:13.108)
Sure, I guess just to conclude on this, because I know that you mentioned timelines, that they're very keen to get this through as the government has publicly expressed a desire to get these measures through as quickly as possible. If you look at the of the wider road map in Croatia, how does it mirror other sort of Eastern European nations?

Teddy (17:38.711)
I think 2024 has been a transformative year for the majority of EE nations and if you look at Romania, they're going to go into a revision of their gambling laws and it started with kind of a prohibition on rural towns having gambling venues. I don't think Croatia have gone that extreme. If you look at Bulgaria and Romania again, they're revising their

their gambling laws with regards to advertising. They want to of implement a stricter code, not necessarily bankit bans, but really tighten up advertising policies in terms of when gambling advertisers can be streamed on what mediums, also kind of online protections. So you've got to take kind of each nation on an individual basis, but...

the market is getting more restrictive. And again, I think it points towards like, which operators can undertake the quickest transitions and accommodate adjustments and change to those regulatory practices. I don't think a difference between the West and East in how the terms of play are stipulated across markets.

Martyn (18:58.244)
There's a very clear direction of travel across the industry in Europe, think, isn't there? it's probably, you know, we talk about the details quite a lot and the people we talk to have, you know, working operators have very strong views one way the other on all these things. But is it just a sign that the online market is maturing? It's still a relatively young industry, but, you know, putting

putting in these sort of levels of controls and so on is just a sign that it's becoming more established and a more important part of the economy in a lot of these places.

Teddy (19:36.97)
Yeah, I mean, looking back, mean, Eastern Europe is still very much, and I think for a lot of Western operators, it's still viewed as a market, you know, a growth, these are viewed as growth markets, right? But I think, I think like in their strategy now, they just have

they have to counter for regulatory factors that they've already done in Western Europe. So if you're going to launch in one of these markets, how much of a factor will advertising restrictions be? How much will be a tougher kind of compliance mandate that you have to accommodate? Gambling is never easy, right? But I think these are kind of calls that you now have to really, really deeply analyze in your business strategy.

And again, I think the cost of market entry will go up. look, gambling PLCs are gambling PLCs and they can't, it's no longer about just accommodating one market as we've seen kind of, you know, with the likes of FDJ going for Kindred, international growth has to be in everyone's profile. And it's a tough nut to accommodate, but they have to do it.

Martyn (20:57.309)
Yeah, I think that's the case. well, thank you very much for joining me today, Ted, to talk all things Italian and Croatian. You've covered these stories on SBC News, and we'll put some links in the show description. And I know you'll be covering these along with your team, these stories along with your team for the next few months until these new regulatory regimes reach fruition.

But also, thank you for listening and we'll be back with another edition of iGame in Daily tomorrow.