Balkans Opens Up For Online Gambling Market
After expanding in continental and southern Europe, the global gambling
industry is now going east and focusing on the Balkan states and Eastern
Europe for its further expansion. Especially the Balkan states are
increasingly drawing a lot of interest, despite - or perhaps because - of the
current global economic crisis. And the key figures of the Balkan gambling
market account for this interest: A market size of Euro 4.5 billion (gross
revenue), above-average popularity of gambling, particularly of sports
betting, 130 million people, and the impending EU-membership of many
states, just to mention a few.
Total gambling market of Euro 4.5 billion and more to come
The Balkan gambling markets (Greece, Turkey, Croatia, Slovenia, Serbia,
Montenegro, Romania, and Bulgaria) already have a remarkable market size, and
most experts confirm that the Balkan markets have a great growth potential in the
coming years:
- Total gambling market of Euro 4.5 billion - In 2007 the total gross revenue
(after payout of prizes) of the Balkan gambling market was ca. Euro 4.5 billion
according to MECN's latest study about the region; the figure for
turnover/wagers came to ca. Euro 25 billion.
These figures include only gambling operations with local licenses. If the
business of foreign online gambling operators were included, the overall
market size would exceed Euro 5 billion.
- Great growth potential - More than 60% of the experts surveyed by MECN
believe that the growth potential of the Balkan gambling market is great or
even very great. Hardly any market insiders (only 3% all surveyed experts)
believe the market has only a small growth potential.
- Increasing liberalisation - On the whole, the experts believe that the Balkan
nations will liberalise their gambling markets.
Total Balkan online gambling market worth ca. Euro 520 million
The Balkan markets enjoy a growing Internet and broadband penetration. In total,
there are about 43 million Internet users (average penetration rate of ca. 36%)
and about 7 million broadband connections. Nevertheless, these figures are below
the European average and still leave room for significant growth.
According to MECN's estimates, the Balkan states as a whole have an online
gambling market worth about Euro 520 million (gross revenue), and most of the
revenue is made by foreign operators without local licenses. But the market size
differs significantly from country to country, and Turkey and Greece have the
largest markets.
The key factor influencing the size of the online gambling market is the market
structure (foremost of the betting sector): Whereas in competitive markets, such
as Croatia, Serbia, and Romania, the foreign online gambling operators can
capture only about 1%-3% of the total market, the situation is very different in
monopolistic markets such as those in Greece and Turkey. In such markets some
foreign online operators alone can realise Euro 20-30 million in gross revenues
annually.
Online gambling and betting sectors drive the Balkan gambling market
The market worldwide is driven to a large extent by betting and interactive
gambling. The market insiders surveyed by MECN see these two sectors as
having the biggest growth potential for the Balkan market as well. Traditional
games, such as lotteries and casino, are expected to have a rather limited growth
potential.
Some forerunners among the gambling operators are paving the way
Some forerunners among the global key players in the retail and online gambling
market are already getting established in the Balkan states. Regarding online
gambling, Sportingbet is currently realising about 5% of its business in Bulgaria
alone whereas Bwin and Bet-at-home have just recently increased their focus and
investments in the Balkan region.
Leading Internet operators offer localised offerings in nearly all Balkan
states
More and more Internet operators are adding Balkan languages and currencies to
their localised offerings. As the exhibit below shows, nearly all of the operators
analysed offer localised versions in Turkey and Greece whereas Serbia and
Montenegro still seem to be uncharted territory in this respect.
According to the MECN report, about 20%-30% of the operators surveyed are
currently planning to increase their investment in the Balkans - primarily in
Croatia, Romania, and Greece. The majority of the operators surveyed are
currently in the process of developing their Balkan market strategy and evaluating
whether/how to increase their investment and focus in the near future. A
worthwhile exercise, we think.
The MECN study can be obtained at: http://www.balkan-gambling.mecn.net
MECN is a network of experts and consultants advising, among others, clients in
the gambling industry. For more information, please visit us at http://www.mecn.net
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