Historically, the Italian market has been sceptical on online casino, yet in 2020 the industry saw igaming break new ground across the country, with November being a record month for online in delivering €258.9m in igaming revenues, nearly half of which was from casino.
Taking part in the Microgame sponsored session entitled ‘Wake-up call: igaming’s time to rise?’ at yesterday’s SBC Digital Italy, Nicola Tani, editor at Agipro News and moderator for the day, looked at whether the surge was merely a consequence of a pandemic which was depressed of a sports betting market, or if it is set to be Italy’s dominant online force.
Noting that casino games revenue has grown for the eighth consecutive year, with the latest growth showing an increase of 46 per cent in 2020, Tani asked Marco Castaldo, CEO of Microgame, if this new trend is unstoppable and why the product is so successful in Italy.
Castaldo noted that he was unsure if it was unstoppable but was ‘sure’ that it was ‘not going to go away’. He commented: “I think we are seeing an acceleration of an underlying trend that was there in place for some time. I think it’s important to remember that in Italy, the online gaming penetration has been historically quite low.
“For example, the year pre-pandemic, 2019, online gaming penetration overall was 9.5 per cent against the EU average of 23 per cent. Penetration was growing steadily before the pandemic and it was growing due to the usual drivers that we all know; technology, technological trends and demographic trends.”
Castaldo went on to pinpoint that Italy was being held back by its importance of the retail experience for the players, compared to other countries, along with the history of the Italian land-based gaming industry.
“Before the pandemic, there was another factor that is important to remember that there was considerable regulatory pressure on retail gambling because of various regional and local regulations, effectively reducing the supply of land-based gaming,” he continued.
“So we had an uptick in growth of the penetration of online before the pandemic but of course the pandemic has accelerated everything. Growth will continue because what we are seeing now is what I call the ‘first order effect’, people with more time at home and players who have signed up for online accounts because they can’t go to their betting shops.
“The real underlying effect which will make this growth continue is that it’s an industry-wide shift that is now going to accelerate from a retail only strategy for many to a multi-channel strategy. This is going to fuel the growth for online, online casinos in particular, for years to come.”
Joining Tani and Castaldo on the panel was Alessandro Allara, chief digital officer at Gamenet Group, Natalie Berenato, head of online marketing at OlyBet and Alessandro Graziosi, digital director of Snaitech.
Allara provided a different perspective from the overall market figures, noting that his company was seeing an even ‘higher’ acceleration in the last two years.
“For us, 2020 versus 2018 has seen a 147 per cent increase, a dramatic boost,” claimed Allara. “Excluding the pandemics effect, there are reasons why we can expect the market to grow… Fun bonuses is something that’s been proposed to the user in the last few months/years while in the UK for example, this is a more consolidated marketing strategy.
“It’s something that is growing from an organic point of view while also the international operators are tailoring their products more to the local market. My expectation is that 2021 will keep growing. We’ve seen that January is an astonishing month with a 100 per cent growth vs 2020.”
The panel went on to discuss the transition of players from land-based slots to the online sector, with Berenato addressing the importance of cross-selling during the last 12 months.
“It’s fine getting the players through the door, which my colleagues said has been growing, it did help with the acceleration but it’s not just about having players signing up, it’s also all the work that goes behind it, the communication between the land-based and online staff,” it was noted.
“I believe it’s important for the players to experience the loyalty from the land-based/retail will carry on online and they are not just a number.
“I think that the gaming industry is now catching up with the other e-commerce strategies, with companies out there that we kept admiring but we never really took onboard the technology on targeting and cross-selling as some of the other non-gaming e-commerce sites are doing. We had the technology we just never really utilised it well until we learned that it was necessary, especially in Italy where we were lagging a little behind.”
Tani then shifted the conversation towards online poker, which during the lockdown has grown above €200m in GGR. Tani pressed on if the growth of poker is down to the pandemic itself, or if it is something that has been growing steadily in the background.
“I think this is going to be mostly temporary. Having said that, for us, poker never died,” Castaldo continued.
“Poker for the player, must be a form of entertainment and social context and not a source of money. For the operator, it’s an acquisition and a cross-selling tool. It’s not a way to make money.
“Poker represents about eight per cent of the industry GGR. In terms of numbers of players, on our side but also industry-wide as it’s not so different, is 33 per cent of players play poker. The share of GGR is not the important thing, it’s the share of participation.”
Continuing on the same theme, Castaldo went on to passionately discuss the concept of international liquidity within online poker, noting that it is based on a ‘bad assumption’.
“It’s based on the historic assumption that has ruined poker, that the mission of poker is to provide large winnings,” it was concluded.
“I think, being controversial, international liquidity is really the only necessary strategy for a very limited number of operators who are looking to optimise an old poker strategy which I don’t think is good for the business.”