The rise of virtual betting
Lorien Pilling, Director Global Betting and Gaming Consultants talks about virtual betting
Scritto da Lorien Pilling, Director Global Betting and Gaming Consultants
Virtual betting has become an increasingly important part of the betting operator’s portfolio of services, both online and in betting shops. For a long time derided as 'cartoon betting', virtual betting is finding favour with both operators and gamblers for a variety of reasons. Better graphics: very simply, the look and feel of virtual betting events has improved greatly as display screen technology and computer graphics have improved. This makes it more enjoyable for the gambler to watch and get involved with the event. Trust: gamblers have become more accepting of random number generator-based games (RNG) at the same time as trust has decreased in some live sports because of match-fixing and spot-fixing scandals, as well as “phantom” matches[1]. A desire to extend the 'betting window': betting shops have long used virtual racing to give betting shop customers events to bet on in the morning when there tends to be fewer live sports events. Internet betting operators are now applying the same principle – betting events 24/7. A need for higher, stable margins: the increased regulatory costs of running a betting business, especially in Europe, have hurt operators’ profits. Internet betting is generally high volume, low margin, so virtual betting helps give operators a stable margin without the worry of a period of bad sports results. Better margins help offset some of the additional expenses over which they have little control: gambling taxes, sports data levies, betting rights etc.
VIRTUAL BETTING IN ITALY - Italy’s gambling regulator AAMS first permitted betting on virtual events in 2013. AAMS has the following game description for virtual betting: Virtual bets are bets placed on computer-simulated events whose outcome is displayed through an animated graphic or by means of a real event previously recorded. A virtual event can be imagined as a visual representation of the extraction of a pseudo-random number. The odds are assigned by a system certificate and are created in such a way that the competitors with a higher probability of being selected lower odds and vice versa, taking into account that the theoretical win percentage must be applied as provided by Decree of February 12, 2013. A customer can bet either on a single event (single bet) or a combination of event (multiple bet); in this case the share of the payout is equal to the product of the individual units offered to the results indicated for each event. The basic cost of a bet on virtual events is EUR 0.50. Bets cannot be made if they result in a payout of more than Eur 10,000. Winning receipts should be submitted for payment within 90 calendar days from the date of the last event being bet. Virtual betting was only available for a small portion of 2013 and total turnover was just EUR 17 million. The payout ratio was 82%, meaning operators kept just Eur 3 million in winnings.
In 2014 turnover for virtual betting was Eur 1,148 million and gross win was Eur 186 million, a margin of 16.2%. In 2014 virtual betting accounted for 18.3% of betting turnover in Italy and 15.5% of betting gross win.
Italy betting gross win (EUR million) by activity 2014
Source: GBGC analysis, AAMS
As at Q4 2014, Inspired Gaming Group believed it “supplies over 90% of the land-based and online virtual sports market in Italy”. Inspired’s Italian clients include: Intralot Italia, Betclic Everest, Microgame, and Gamenet.