Snaitech CEO on plans to replicate its retail success online

Words by Gerard Starkey

In 2016, revenues from Italy’s online gambling market topped €1bn for the first time following a 25% increase on the previous year. The figures confirm Italy as the second biggest regulated market in Europe behind the UK, despite online continuing to be overshadowed by the county’s vast retail sector.

While in the UK online and retail are roughly the same size, the popularity of Italy’s retail gaming machines means online only makes up approximately 5% of the total market. As such, there arguably remains plenty of headroom for digital growth in Italy, and it’s an opportunity Snaitech chief executive Fabio Schiavolin is keen to seize upon.

Speaking to EGR Intel, Schiavolin admits the retail-focused strategy of legacy Snai had been to the detriment of the online business, but since the 2015 merger with Cogetech – where he had been CEO – the enlarged business is taking online very seriously indeed.

The firm posted 25% growth in digital revenues in Q1, building on the 23% growth in online revenues throughout 2016, but remains a relatively small player compared to the likes of PokerStars and bet365, which lead the poker and sports betting markets respectively.

Snaitech’s previous focus on retail is understandable. In 2016, Snaitech total revenues were €898m, of which online contributed a modest €50.2m. But a sharpened focus on product since the merger, coupled with greater investment in online marketing, should have digital rivals sitting up and taking notice.

Here Schiavolin gives us an update on the merger integration, why online is now the number one Snaitech priority and his plans to build a leading omni-channel business.

Snaitech CEO, Fabio Schiavolin

EGR Intel: How did the recent Snai-Cogetech merger go and what has this done for the online business?
Fabio Schiavolin (FS): 2016 was a year of change and progression with the successful merger of Cogetech into Snai representing the cornerstone of the entire year.
The challenge was to harmonise the structure by exploiting the potential of both realities: the youth Cogetech dynamism combined with the deep-rooted Snai solidness, the long and deep experience in the betting field with the leadership in the gaming machines. The result of this transaction inspired the new corporate name, Snaitech, as the perfect balance of complementary expertise. In this new scenario, the Group recorded a revenue increase of approximately 25% in the online business across betting, bingo, tournament games and online slots compared to 2015. The goal was to consolidate even further the online footprint through the augmentation of our products offering along with cross-selling activities implemented on the retail network, which lead the growth in our betting and gaming businesses.

EGR Intel: In 2016, digital revenues were around 6% of total Snaitech revenues. Is online an area of focus for you?
FS: The online business initially suffered from Snai strategy, which focused mainly on retail. However, over the last two years, the Group has entirely changed the course of its online business by leveraging brand awareness in order to successfully achieve a top quartile market share.

“Over the last two years, the group has entirely changed the course of its online business by leveraging brand awareness”

This year is a crucial year for the Group as we have allotted 40% of our marketing budget in digital marketing to explore innovative techniques such as programmatic and geo-targeting. Our main goal is to fully exploit synergies between channels and consolidate a consistent omni-channel strategy for 2018.

EGR Intel: How do you see Snaitech within the online market? Have you given your local and foreign rivals too big a head start?
FS: Concessioners operating in the online business only, with the exceptions of bet365 and PokerStars, are currently facing challenging competition from the late entrance of those multi-channel concessioners which started to invest massively in the digital business. Overall, Snaitech ranks number five in terms of GGR in the online business, with outstanding performances in betting (2nd), horseracing (1st), virtual betting (1st) and skill games (3rd). We believe Snaitech has built a solid mix of innovative solutions on products and marketing and this will lead us to continuous and organic growth.

Snaitech sportsbook Snai is one of the biggest retail brands in Italy

EGR Intel: The online market, particularly casino and sports betting, has grown rapidly in recent years. What in your view has driven this growth?
FS: The growth of the online market is mainly driven by the entrance of new competitors, the change in taxation and the regulatory progress made on the offering side. Today we see a safer industry as the majority of illegal operators have been stopped or became legal and a competitive market environment. Also, the launch of DFS, esports betting, live casino and other products have been crucial for growth.

EGR Intel: How do you view the quality of Snaitech’s online product? Are there any particular areas you feel you need to improve in?
FS: The progress of Snaitech digital environment has been exceptional in the last two years with a new website, a new mobile site, a new native apps portfolio and new retail features which have settled our presence in the online segment. We believe in innovation as a source of success and we are constantly working on developing new features for the market. We now have an instant roulette in the sports tab, which is driving additional revenues to casino and is boosting cross-sell; a fun game to improve customer retention and a unique solution for mobile streaming with an on-screen betting widget. We also believe that the mobile segment, currently weighting 70%, is a key target where we deliver sound performances. In the next few months we will continue to focus on the mobile segment by launching new apps for bingo, live casino and slots and develop as well as new features such as HTML5 games in the sports app, share your bet and a brand new app for retail customers.

“We do our best to frame betting and gaming within the entertainment sphere, by promoting principles of responsible gaming”

EGR Intel: UK operators have been investing in the omni-channel experience in order to achieve a 360-degree view of the customer. Is this something Snaitech is looking into?
FS: We believe in a broader and consistent customer journey across channels. We are already delivering solutions to enhance our omni-channel approach – place your bet on mobile and collect in the shop, bet tracker, cash in/out through shops, live roulette, multi-channel content for slots, live score and editorial content tailored for retail. We are also investing to consolidate our leading position as the top omni-channel operator: our next developments will be focused on this and our flagship stores Snaitech Vincendo will be the lab for those innovations.

EGR Intel: How would you describe the image of gambling among Italian politicians and the public? Does the industry have a perception problem?
FS: As part of this industry, our contribution is to establish a constant and constructive dialogue with institutions, specifically a strong commitment on fair information on gaming. We do our best to frame betting and gaming within the entertainment sphere, by promoting principles of healthy and responsible gaming: it is the first and most important step to recover the gaming perception back to normality. On this purpose, defending legal gambling, protecting children, preventing pathological gambling, spreading the culture of healthy gaming, communicating clearly and responsibly with the clients are all part of the same effort to scale betting and gaming down to its entertainment nature.