Online Gambling in Western Europe:

The online gambling industry in Europe is developing apace and set to deliver significant revenue opportunities both for the gambling industry and the telecoms and media companies delivering the application to the customer.

Mott MacDonald Schema's comprehensive study of this market - Online Gambling in Western Europe - takes a far-reaching look at the growth of interactive gambling services in the mobile, digital TV and internet arenas, and examines the implications for fixed and mobile operators, gambling organisations, and other players in the value chain.

To gain an understanding of how the gambling market will evolve, Mott MacDonald Schema's research focused on a range of key questions and issues:

• How fast will consumer gambling usage migrate from the retail environment to internet, interactive TV and mobile based services?
• How will gambling applications be bundled with multi-media and broadcast services?
• What regulatory controls will affect demand in Europe?
• Which business models will be adopted for the delivery of different services, and what will be the relative importance of alternative models?
• How should market players position themselves in order to maximise return on investment?

The gambling market in W. Europe, measured in terms of the total amount of money bet on all forms of gambling, exceeded US$120 billion in 2000, and will increase at an average annual rate of 7% between 2000 and 2005.

There are big differences between European countries in terms of the overall importance of gambling, the type of services allowed, and the way the industry is regulated. To assess these market dynamics Mott MacDonald Schema's research programme had two major strands of work:

• research with more than 70 leading players in the communications, media and gambling industries
• a major survey of more than 6,000 European consumers to assess current use of gambling applications and propensity to use online services.

The consumer survey involved interviews with 6,197 consumers in six European countries. An analysis of current levels of participation in gambling is shown below:

Current participation in gambling, by gender and country


Online gambling in Europe is developing rapidly as organisations in the betting industry turn to new channels to stimulate the market. Schema estimates that the online element will grow fast from less than 1% of gambling spend in 2000 to around 10% by 2005 - a market in excess of US$15 billion in Western Europe. Online services are being developed by bookmakers and other betting organisations acting independently, and also working in conjunction with mobile portals, mobile operators, web sites and digital TV companies.

The availability of new channels enables gambling organisations to tap into new markets, in particular those consumers who might be reluctant to bet on-course or at a betting shop. For example:

• one major on-line betting company reports that 10% of its business is generated by female customers, whereas for a typical betting shop the figure is only 3%
• Pari Mutuel Urbain launched digital TV services accompanied by a major advertising campaign and found that revenues increased through all channels.

Study Outline:
Online Gambling in Western Europe

Summary

Introduction

The gambling market in W. Europe

Analysis of consumer expenditure on gambling:

- Overall expenditure on entertainment; proportion spent on gambling/lotteries

- Factors leading to a growth in gambling spend

- Disparity between actual and declared gambling spend


Current European gambling market

- comparison of major country markets; key country differences

- analysis of market by retail, on-course, telephony and online distribution channels


Gambling legislation


Online gambling - market size and growth

Developments in gambling services on the fixed internet, mobile internet and interactive TV

Key enablers

Online gambling revenue forecasts by country, channel

Online gambling legislation


Consumer attitudes to online gambling

Analysis of Schema's consumer survey

Current participation in gambling

Comparison of gambling usage by country, age, gender, lifestyle

Propensity to gamble in future using new online channels

Business models and value chains

Strategic opportunities

Broadband Interactive Entertainment Report:

Mott MacDonald Schema produced a major report examining the demand for interactive entertainment applications in Europe delivered over the internet, digital TV and mobile. The study covered six countries (UK, France, Sweden, Italy, Germany, Spain) and provided a detailed analysis of the demand for location based services, music and video clips, gambling, messaging and lifestyle services. The study consisted of a major user survey of 6,000 households exploring their propensity to adopt services along with issues such as preferred brands, price sensitivity and features. In addition a major programme of research was undertaken with the industry to examine their attitudes towards service delivery and their views on the roles of the different players in the value chain. Over 70 leading operators, content providers, regulators and vendors were interviewed. The final part of the programme of work was an extensive market modelling exercise to determine the revenue by application and country over the period 2002-2006.