Home » 2009 » Currently Reading:

Interview with Quirino Mancini, Partner, SCM Partners – The Italian market is really a must-be-there one – Legal Gaming Special

March 25, 2009 2009

A group like Grupo Lottomatica in its annual results for 2008 referred to the Italian Government’s “unprecedented” need for revenues as a driver for growth in its business this year.

Agreeing with the same, Quirino Mancini, Partner, SCM Partners, says the likeliest scenario in the short- /mid-run is that the Government needs to somehow fix or at least reduce the Treasury’s budget gap and this will pave the way to the legalisation and regulation of more gaming products such as online poker and other cash games.

In an interview with Bulletbusiness.com, Mancini spoke about the recent approval of the regulations by the Upper House and the future course of action on this front, chances of Italy to become a fairly flexible, and certainly improvable, regulatory model and other issues. Excerpts:

Earlier this year, you had mentioned that new online gaming regulations were being delayed despite being in the Italian regulator’s pipeline for several months now. Is there any development on that front?

The Upper House (Senate of the Republic) approved the regulations last week. They are in fact embedded in a piece of primary legislation which covers also other and unrelated matters and is aimed at implementing altogether various directives issued by the European Commission over 2008.

Such legislaion is now supposed to be reviewed, discussed and then approved also by the Lower House (House of Deputies). The relevant scrutiny process will probably start after the Easter break and will certainly take several weeks to complete.

Forecasting for gambling sector, you had recently mentioned that the deeper the recession, all the better for those anyhow engaged in the provision of offline/online gaming services in the Penisnula. But recently, shares in Italian lottery and gaming group Lottomatica fell by 5.3 percent to 12 euros after Goldman Sachs, which has a ‘buy’ rating on them, cuts the target by 10 percent to 20.3 euros. In fact, Goldman Sachs mentioned: “Despite the habitual nature of gambling, demand is not entirely impervious to economic performance”. How do you assess the overall sentiments related to gambling business specifically online at this juncture in Italy and what makes you bullish or bearish going forward?

Although the gaming sector too is suffering from the global recession times, I still take the view that solid and very diversified (in terms of both assets, operations and products) companies like Lottomatica profitably active on a worldwide scale are even today a good and reasonably safe shelter for those willing to invest their savings in the stock market, and of course Lottomatica is not the only one.

In terms of your expectations, Italy stands good chances of becoming a fairly flexible, and certainly improvable, regulatory model that other regulators could replicate elsewhere in Europe in the years to come. Can you elaboarte on what positive and negative factors are associated with liberalisation at this stage?

Quite frankly as long and as much as the Commission will not be able to harmonise the rules across Europe – something which is not exactly around the corner – I do not see any negative factors associated with a state-controlled liberalisation of the European gaming markets along the lines of the Italian regulatory model which indeed is ripe for being further refined and then exported, with some inevitable adaptations, across the Alps.

You had also mentioned that as per the legal & regulatory policy in Italy, the authorities have sort of tried to entice foreign operators to seek a local licence by opening up the domestic market through (i) the award of a large batch of new licences and (ii) a controlled yet progressive gaming liberalisation. When you say gaming liberalisation, how competitive do you think domestic and foreign gambling companies are as of today and how do you think this is expected to change in lets say the next couple of years?

There is in my view a very close and direct relationship between clear, uniform and fair rules, on one hand, and competition on the other.

Take the Italian example which I’m very familiar with. At the moment the local market is quite packed with nearly 40 operators already holding an AAMS-granted remote gaming licence yet they are not so competitive on the domestic market nor on the international one.

Indeed at the domestic level the various restrictions still partially in place in terms of games that are already legal and regulated versus those still illegal (like gambling), and the quite burdensome administrative requirements to be complied with by all AAMS licensees make the gaming offer pretty much standard and similar from one ‘.it’ platform to another so the operators do not enjoy enough freedom and flexibility to diversify enough their offers. By contrast at international level where such Italian regulatory hurdles like (i) the domestic-only pool liquidity rule for poker tournaments and (ii) the gambling ban is not in place and therefore online casino and Vegas-style gamess are allowed, the ‘.com’ gaming sites enjoy a big advantage business/operations-wise.

In a nutshell, the key to the best competiveness for foreign and domestic gambling companies is to provide and enforce the same (pro-liberal) rules for all and I very much hope that, in addition to the money factor, this will be the other driver for AAMS to complete its market liberalisation mission.

You had recommended realistic and swift action on part of gaming operators in terms of identifying opportunities and then acting in accordance with to the local licencing regimes. How do you think companies need to approach a market like Italy as this juncture? What sort of advice would you give to them for encashing on opportunities in an earnest manner?

The local market is already crowded but there still are fairly good business opportunities in terms of consolidation and integration between local and foreign operators.

I reckon that for every foreign operator seeking Italian market entry there are out there at least three or four potentially great business opportunities in terms of acquisition, joint venture or other commercial partnership deal. It is first of all a matter of generally knowing the hard facts and key rules of the Italian gaming market, having a clear understanding of what kind of business plans one wishes to launch in Italy, what kind of profile a suitable local partner should have and then conducting all necessary and appropriate due diligence checks to ensure that no time and money is wasted in pursuing the wrong strategy and/or an unfit prospective partner.

Italy, along with parts of Spain, has been targeted by several British bookmakers as the government has begun to liberalise its betting shop industry. But in July last year, William Hill withdrew from Italy after 18 months, writing off £1m and agreeing to sell its embryonic joint venture. In this context, how do you think some of the relatively bigger and established gaming and betting companies are going to approach Italy in the time to come?

To put it very simply, the record of the last three years, the number and identity of AAMS licences granted thus far shows that from the viewpoint of most international gaming operators the Italian market is really a must-be-there one.

Almost all of them with very limited and motivated exceptions are already active here and those who are not might soon call in or come back as the case may be. Money talks and last year the Italian gaming industry altogether generated a turnover in excess of €52bn.

GamingLaw

Posted by:

Legal Gaming in Europe Summit 2013 – Summary Day 1

Legal Gaming in Europe Summit 2013 Day 1 Summary Video







Video: International Gaming Law Summit 2011 Highlights

International Gaming Law Summit 2011 Highlights Video



Copyright: http://www.calvinayre.com

To get the latest news follow us on

twitterlinkedintwitterlinkedin

Archives