Italian iGaming Market Breaks Record

Italy’s regulated iGaming market has surpassed this past November’s quarter-billion revenue achievement with yet another record-breaking result: the market experienced a 40% month-on-month increase in December 2020, along with an overall 86% growth year-on-year. Such unprecedented growth was fueled largely by online sportsbooks, which raked in an impressive €177.1 million in revenue in December.

The Italian city of Florence in the Tuscany region, featuring its world-renowned bridges over the grand Arno river.

The Italian iGaming market experienced sudden and exponential growth in December 2020 in the face of the coronavirus (Covid-19) pandemic: the sector saw a 40% month-on-month increase at the end of 2020, along with an overall 86% growth year-on-year. ©Mariamichelle/Pixabay

Impressive iGaming Market Largely Thanks to Online Sportsbooks

The almost unparalleled growth of Italy’s online gambling market in December 2020 saw roughly €359 million in revenue generated by the country’s legal operators across all iGaming verticals.

Such noteworthy growth resulted in a 38.7% month-on-month increase when compared to November 2020’s €258.9 million in revenue, while also amounting to an overall 86% year-on-year increase when compared to the same period in 2019.

The market’s standout performance has been attributed to Italy’s online sportsbooks, which likewise saw record-breaking revenue results of €177.1 million in December 2020. This was up 59.5% compared to November 2020’s revenue, as well being up a staggering 94.2% when compared to the same month in the previous year.

Online Gambling Growth is Due to Pandemic-Related Retail Closures

Italy has been particularly hard hit by the global coronavirus (Covid-19) pandemic, recording some of the highest death rates in all of Europe, and prompting the country to go in and out of strict lockdown periods — most recently in both November 2020, as well as over the holiday period in December 2020.

This unsurprisingly resulted in widespread closures of retail sports betting outlets, which had already been suffering stunted growth in March 2020 during the first countrywide lockdown, followed by virtually no growth whatsoever in April and May 2020.

Therefore, the skyrocketing growth of the Italian online gambling market in December 2020 should come as little surprise, and can be strongly linked to the pandemic-related closures of Italy’s physical sports betting outlets.

However, it is also worth paying attention to the fact that retail bookies had suffered losses during the preceding month due to similar lockdown restrictions. The online market, though, had of course also not performed as strongly in November 2020.

Major Retail Outlets See Increase in Players Migrating to iGambling

Based on the iGaming market shares of Italy’s main retail gambling providers, it has become evident that these outlets continue to shift their player base towards online gaming alternatives.

There have already been five Italian retail operators that have overtaken Italy’s online gambling market leader Bet365 — now for the second month in a row.

In December 2020, retail provider Goldbet held the greatest market share at 12.8%, followed closely by Sisal at 12.5%. 

Three more providers held similar market shares in the eleventh percentile range, with Snai’s share coming out to 11.7%, followed by Eurobet at 11.4% and finally Planetwin365 at 11.1%.

Bet365’s share of the Italian iGaming market, in the meantime, dropped down to 10.2%. 

Bucking this trend was operator PokerStars, whose increased share of the market saw it climb to the top 10 for the first time in nearly a year. This demonstrates how far from all online operators are losing their market share to retail providers.

iGaming Growth Follows Sale of Italian B2C Gaming Machines

A major business deal which took place at the end of 2020 between global solutions provider International Game Technology (IGT) and Gamenet Group shows how the Italian gambling market continues to evolve and grow despite the economic ramifications of the global coronavirus (Covid-19) pandemic.

In December 2020, International Game Technology (IGT) announced the closing of a €725 million deal in which it will sell its Lottomatica Videolot Rete and Lottomatica Scommesse B2C gaming machines to Gamenet Group, which is a subsidiary of funds managed by Apollo Global Management.

IGT Chief Marco Sala hopes the deal will aid the gaming solutions provider to monetize its leadership position in the diverse Italian gambling market while maintaining an attractive multiple in comparison to other similar transactions.

Sala continued to explain his company’s nascent partnership by noting how reorienting IGT’s businesses and geographic mix will reframe and simplify their priorities — all while boosting the company’s future profit margin, cash flow generation, and debt profile.

Italian B2C Gaming Business Hold High Valuations

Lottomatica Videolot Rete and Lottomatica Scommesse, the Italian B2C gaming machine business set to be sold by International Game Technology (IGT) to Gamenet Group, have been valued at a whopping €1.1 billion.

In 2019, the two businesses generated earnings that were adjusted before interest, tax, depreciation and amortization (EBITDA) of €206.6 million, along with an aggregated net income of €92.1 million.

Swiss-based banks Credit Suisse International and UBS will act as IGT’s lead financial advisor and financial fairness and opinion advisor respectively.

In the meantime, Gamenet Group, an Apollo Global Management, is being steered by a diverse team of financial advisors, which include Mediobanca, Paul, Weiss, Rifkind, Wharton & Garrison, as well as the Italian offices of Cleary, Gottlieb, Steen & Hamilton and Latham & Watkins.

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