Betfair faces up to testing Italian job
Operator has found the Italian market a difficult one to crack so far, but is set to ramp up product and marketing in 2015
By its chief executive’s own admission Betfair “arrived late to a very crowded market” when it launched in Italy in April and amid a strong set of H1 results last week with group profits up 51% year-on-year, its Italian operations were a cause for concern.
Breon Corcoran, Betfair CEO, said the firm had managed to grab just 1% of the sports betting market since launching in the country, significantly behind the likes of William Hill and Paddy Power with 9% and 8% respectively.
And by comparison since its launch in September Bet365 has taken almost a third of the sports betting market, owing to what Corcoran labelled a “phenomenal product offering” in the country.
But Betfair has been dealt a tougher hand than most Italy-facing sportsbooks with Italian regulator AAMS only sanctioning exchange betting in April this year and Betfair’s core product remains handicapped by various betting and depositing restrictions.
As a result Betfair has remained frugal when it comes to marketing expenditure in Italy to-date, but heading into 2015 Corcoran says the firm is ready to move through the gears and try and catch-up with the competition.
Pushing hard
“We have to push hard to compete [in Italy],” Corcoran said during an analyst presentation last week, admitting that product regulation in the country had taken “quite a lot of time” to catch up to a level that Betfair was comfortable with.
Since then the operator has launched Cash Out in Italy and said as is the only operator to possess the capability in the country it will provide the firm with substantial differentiation in a crowded market.
Marketing efforts are to be ramped up significantly, too. Betfair has begun to establish a brand presence in Italy and is to advertise across established media channels such as La Gazetta dello Sport, Sky Calcio and Italy’s subscription television operators Mediaset Premium and Rai.
“The right thing to do is to push hard in Italy and then get to a decision next year as to what opportunity we have in the market,” Corcoran said.
But competition in the country is only set to increase further. Bet365’s storming entry to the market is set to be followed by a ramping up of operations at the Gazzetta dello Sport-branded sportsbook RCS Media launched in partnership with Playtech, while PokerStars and Full Tilt-branded sportsbooks are also due to launch next year.
Italy remains a hugely important country for any regulated market focused operator and Betfair will want to give its Italian business every chance of succeeding next year.
But it might need to push even harder than it thinks.