Exclusive: SkyBet applies for Italian licence
Sportingbet's former head of marketing Adam Lewis hired on initial three-month contract to assess and work on potential Italian venture - details still be decided as to how operation would work.
SkyBet, via its UK-listed parent company BSkyB, has applied for an Italian online gaming licence, eGaming Review can exclusively reveal.
eGR has learned that the UK operator, on course to record more than £100m in full-year revenues in 2012, has paid around 300,000 for an Italian online gaming licence to local regulator AAMS, however it is yet to decide how it will proceed there, if it does at all. It is also not known at present what products the licence would cover, however Sky Italia is known not to be involved in the application.
A spokesman for the company yesterday confirmed the news saying that despite “not having any plans to expand overseas”, it had applied for a gaming licence in Italy, describing it as a “prudent move and one which will help us keep our options open for the future.”
“As a forward looking business we always look at new opportunities,” he added.
A number of executives are known to have evaluated the situation and the market share SkyBet could attain if it decided to go live, however eGR understands the finer strategic details of whether this would be in conjunction with Sky Italia or as a standalone SkyBet UK operation is still yet to be decided. This also applies to the resources SkyBet UK would allocate to its potential Italian operation.
One senior industry executive told eGR that if SkyBet decided to activate its licence it had the potential to “blow the market apart”. “If they do a good job they could be the largest sports betting player there by some distance,” he said. “They have all the subscriber details from their TV network so the cost of the licence application would soon be recouped.”
A source close to the matter told eGR that Sportingbet’s former head of marketing Adam Lewis had been hired on an initial three-month contract to assess and work on a potential Italian venture. SkyBet is known to have taken Lewis on with a view to potentially retaining his services in an international development role. Lewis has a strong international marketing background having worked in gaming in a number of countries including Spain where he is known to have set up a bingo business.
The Italian egaming market has recently shown signs of recovery after a difficult start to the year with gross gaming revenues (GGR) across all products growing 7.7% in February, according to AAMS figures, though a number of verticals including sports betting, have seen further decline in revenues.
The market saw revenues rise to 78.6m, up 21% on January’s takings of 65.2m, with skill games, card games and game of chance continuing to perform strongly, posting GGR up 55% year-on-year to 46.5m for the month.
However, after posting revenues of 52.5m from skill games, card games and game of chance in January this year, GGR declined 11.4% month-on-month. Fixed-odds sports declined with GGR down 23.6% from 33.5m in February 2011 to 25.6m this year, but up 377% on this January’s takings of 5.36m itself a 71.7% year-on-year decline.
Although not connected to Sky Italia, one of country’s largest television networks, SkyBet is known to have left the door open for a potential partnership if its licence is accepted and activated in future.
SkyBet is part of BSkyB, which is 39% owned by Rupert Murdoch’s News Corporation, while Sky Italia is wholly owned by the media tycoon. Sky Italia, that rebranded to BSkyB in June 2010, has more than four million subscribers, according to the News Corporation website. BSkyB is the UK’s largest digital pay-TV platform reaching a third of all homes and has rights for Premier League football, Formula One motor racing as well as a number of other premium sporting events including tennis, cricket and darts.
In December last year SkyBet managing director Richard Flint (pictured) told eGR that the company would have invested in a number of international markets if the News Corporation-BSkyB merger had not been shelved in 2011.
In an interview published in the January 2012 issue of eGR magazine, the former Flutter.com product director said that following pressure on News Corp chairman Rupert Murdoch to cancel his bid for his remaining stake in Sky in a backlash to the News of the World phone hacking scandal, the 250-employee business had re-focused its efforts on doubling its current 6% market share of Sky Sports bettors in the next five years.
SkyBet is on course to record more than £100m in full-year revenues following continued revenue growth into the third quarter. In an analyst call yesterday following BSkyB’s third-quarter results, BSkyB CFO Andrew Griffith revealed that revenues for the egaming arm are approximately £80m for the year to date, up 43% compared to the corresponding period in 2011.
Speaking to eGaming Review in January, Flint said that the growth recorded in the first half of the financial year had been “Driven by sports betting on the back of our TV campaign and our work in mobile,” although today’s group numbers did not break out individual product verticals.
First-half gross profits from the egaming arm had risen 35% year-on-year following the TV campaign, launched by the company in September 2011.
In yesterday’s analyst call BSkyB chief executive Jeremy Darroch said “It feels like we’ve got good momentum in SkyBet, which we can build upon as we move to the next year.”