William Hill sees Spain as better bet than Italy

[Shame About Ray]

From The Guardian

By Marc Jones
LONDON, Feb 22 (Reuters) - British bookmaker William Hill is concentrating its efforts on cracking the Spanish sports-betting market, hoping the as-yet untested region will be a better bet than the heavily regulated Italian sector.
William Hill is working in partnership with Spain's second-biggest gambling company, Codere, to open up betting shops in parts of the country where gambling laws are being relaxed.

"We are trying to build a pan-Spanish business," Julian Graham-Rack, the head of William Hill's international business told Reuters.

"Spain is an unproven market in many ways. So far it's a gross-win tax market and one where regulators have not sought to be very prescriptive around the products you can bet on, so it's a bit more open."

Madrid, where roughly 15 percent of the Spanish population lives, and the Basque region have both decided to allow sports betting shops for the first time, and other parts of Spain are thinking about doing the same.

"There's a couple of places considering it (opening up); Catalunya is one, and Valencia is potentially another," said Graham-Rack.

"If you look at Spain, around half of the population live in five of the country's 17 regions."

GAMBLING BOOM
According to figures from consultants MECN, the Spanish betting market is expected to grow to 39 billion euros ($57.79 billion) by 2010, with the sports betting market set to hit 4.5 billion euros.

"Spain has got huge potential. The Spanish have a propensity to gamble, and they bet aggressively online, and Spain has one of the biggest lotteries in the world," said one analyst who asked not to be named.

"People like William Hill and Ladbrokes could easily have an estate of 800-1,000 betting points (shops), and kiosks in other places like cafes and bingo halls in the next five to eight years," he added.

While UK bookmakers are being drawn abroad by the chance to tap into a whole new market of sports gamblers, they have also been attracted by the possibility of being allowed lots of highly profitable slot machines in every shop.

Graham-Rack added that Spain was potentially a better opportunity than Italy, where gambling laws are also being eased, but the country's government has made the process of getting licences costly and complex.
"Italy is a complicated market ... The local incumbents are very protected, because the old betting shops have got exclusion zones around them."
"It's a turnover tax there, as opposed to a gross win tax, and the regulations, in terms of what you can bet on, are very well controlled, so you are operating more as an agent for the government rather than a private operator."

In Italy, privately owned Coral is way ahead of the rest of the UK pack.
It has 250 franchised betting shops open and another 110 due to open in time for this summer's Euro 2008 soccer championship. Ladbrokes is targeting 62 shops and 50 kiosks, while William Hill will have 22 shops and 33 betting kiosks by then.

"There's no doubt you will take bets in Italy. It's just whether you can create enough scale and efficiency to become sufficiently profitable," said Graham-Rack.

"Italy is a market with proven demand, where the challenge is delivering supply profitability. In Spain the supply is much easier, and the challenge is ensuring the demand," he added.