Tuesday, January 31, 2006

Ladbrokes tips 400% increase in World Cup betting

UK-based international sports betting agency Ladbrokes has predicted that the betting industry will turn over £1 billion during the 2006 World Cup finals in Germany. The worldwide industry saw over £250 million wagered on the last tournament in Japan and Korea in 2002, but developments in betting technology, greater access to the internet and more sociable kick off times are likely to see that figure quadruple, according to the firm.

Ladbrokes spokesman Robin Hutchison told Betting Business (Jan 2006) that "the whole sports betting industry is about to go stratospheric. The last World Cup was big and Euro 2004 bigger but neither will be anything like this year’s festivities ...The internet has revolutionised gambling and the advent of betting in play during matches has sent turnover soaring.”

Worldwide internet betting has grown dramatically in the past four years and is predicted to reach around £10 billion in the UK alone in 2005. According to industry experts Neilsen, the global internet population was around 553 million in 2002. For the World Cup it will be 1.35 billion. Intel estimates that the number of broadband connections is now around 150 million – up from just 58 million at the time of the tournament in Japan and Korea.

Wagers on the World Cup could be even higher if sports betting on the new generation mobile phones was more widely available. A recent European conference suggested that sports betting on mobile phones is being delayed by network operators and betting companies failing to establish a workable revenue sharing structure, Betting Business reported.

Robin Bosworth, a gaming market analyst with Schema, told the December 2005 C-5 Mobile Gambling conference in Madrid that that current mobile betting transaction value in Western Europe is approximately $1-1.5 billion, less than one percent of all betting transactions and less than five percent of all online betting transactions. While his research suggests that mobile betting is a complementary distribution channel and not competitive with online betting, the economics still do not match up with the business models of the telecoms industry. “Most network operators require a revenue share of 50 percent,” he said. “When there is a margin of just eight percent on sports betting, that requirement is going to have to come down to two per cent. Consequently, the subject of revenue sharing takes more time than any other in meetings,” he said.

Although sports betting is the only form of mobile gambling permitted in Italy, Tiziano Tonti, director of games and gaming at network operator 3, confirmed revenue share is a major issue. "Selling voice and ringtones are very easy things to make money from, but when you run the economics of betting over our customer base it’s hard to make it work.” And while 3 should be in a strong position to market live football betting as the operator holds the third generation rights for the Champions League and the principal Serie A clubs in Italy, Tonti admitted: “We will never be able to act like true betting partners because we cannot award betting licenses to partners, nor can we pay customer’s winnings at point of sale.”

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