ECN gathered information from regulators and operators combining expert advice with localized research. Interviewing 90 marketers and operators the data is comprehensive. The Balkan gambling market numbers are there along with the latest in legal and tax legislation. Internet gambling is one of the sectors in the report that many investors are taking a close look at.
With 43 million Internet users and about 7 million broadband connections, new participants will define the market potential for online gambling in the region.
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. The consulting firm MECN has compiled a new study, "The Balkan Gambling Markets," analysing these exciting markets in great detail.
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 and more to come.
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. 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: 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. Intralot a company from Greece, and a leading provider of state-of-the-art integrated gaming systems, is leading the charge in the Balkan states. Intralot provides top notch game content, network integration, transaction processing and services. It’s subsidiaries and business offices around the globe spans five continents in 40 countries.
Online gambling and betting sectors drive the Balkan gambling market. 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 realizing 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 localized offerings in nearly all Balkan states.
More and more Internet operators are adding Balkan languages and currencies to their localized offerings. As the exhibit below shows, nearly all of the operators analyzed offer localized versions in Turkey and Greece whereas Serbia and Montenegro still seem to be uncharted territory in this respect.
Future investment strategy of gambling operators - it’s time to think 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.
60% of the experts interviewed offered the opinion that a process of liberalization is coming, assuring the online gambling public that a legalized and properly regulated industry is possible. Optimism is the key word in the Balkan online gambling market, now that the research has been completed.
The MECN study can be obtained at: http://www.balkan-gambling.mecn.net