GPWA Times Magazine - Issue 16 - May 2011

limited to lotteries and a small amount of horserace betting in the legal market. There is already a highly developed un- derground betting market mainly con- ducted by telephone and in cash. Ukraine The ban on gambling in Ukraine has seen the land-based operators adapt their business model to become more “interactive.” Instead of the old gam- ing machines that are now banned, the gaming halls have installed terminals to allow players to gamble on sites whose servers are based outside Ukraine’s borders. A gambler pays to use the ter- minals for Internet access and can load funds onto their account. Such a move shows that there is a de- mand for gambling among the popula- tion of 46 million people and that the terminal model clearly works in a coun- try where Internet penetration is only around 30 percent. The model has been copied from Russia, where a similar situ- ation has arisen following its complete closure of the gaming market (with the exception of the geographically remote gaming zones). Croatia Croatia is a country with a small popu- lation – 4.4 million people – but with an extremely competitive retail betting market catering to gamblers. With over 2,000 betting shops in operation, Croa- tia has one of Europe’s highest ratios of betting shops per capita. Online firms have increased their pres- ence in Croatia with advertisements on some of the most popular portals as Cro- atians (especially the younger genera- tion) become more accustomed to using the Internet for eCommerce and trusting online payment methods. In the first week after the national lottery’s Internet betting service was launched in 2010, the Internet account- ed for 20 percent of all of the lottery’s sports betting turnover (it also has 482 betting shops). Argentina There was something of a false start for Argentina as an online gambling market a few years ago when several European- based operators obtained licenses in the province of Misiones. The complication arose from the fact that the key city of Buenos Aires – population 13 million – is governed autonomously and did not recognize the online gambling licenses issued in other provinces. But there are signs that Argentina is preparing to be more accepting of online gambling, and some operators are positioning them- selves accordingly. Internet penetration is also among the highest in the region. PokerStars signed a US$600,000 spon- sorship deal in 2009 with River Plate, one of the biggest and most emblematic football teams in Latin America. The deal enables PokerStars to promote its services via the River Plate website and also live via matches in Argentina and in Latin America through the South Ameri- can equivalent of the Champions League – “La Copa de Libertadores.” As GBGC reported in a previous edi- tion of its Interactive Gambling Report last year, there are now a couple of cable channels devoted entirely to gambling in Argentina – the Poker Channel and Poker Sports. The Poker Channel launched in June 2010 and broadcasts the World Series of Poker, the European Poker Tour and the World Poker Tour, among other events. Poker Sports went live at around the same time and its schedule is specifically based on poker. The channel covers both international and local tournaments. Several of the major poker rooms are ad- vertising on the channel, including bwin, 888.net, Full Tilt and Party Poker. The final analysis Of course, despite all the factors listed above there is no guaranteed measure of what will constitute a viable emerging market. Along with these external factors there is also a role for operators to play in educating gamblers and stimulating demand. It may be hard to believe, but a little over a decade ago there was no great tradition for playing poker in the U.K. One of the frustrations for both opera- tors and affiliates alike is the point when an emerging online gambling market becomes an established market. At this point governments usually get involved, create domestic licensing regulation, set the taxes too high and ruin the model for everyone but the taxman. Lorien is Head of Research for Global Betting and Gaming Consultants, a specialist, international consultancy based in the Isle of Man. “ When an emerging online gambling market becomes an established market ... governments usually get involved, create domestic licensing regulation, set the taxes too high and ruin the model for everyone but the taxman. ” 34 Searching for the Next Mother Lode — Emerging Online Gambling Markets