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PADDY POWER BULLISH ON ITALY

July 12,2012 : PADDY POWER BULLISH ON ITALY
 
New Reuters interview shows UK gambling group is making its presence felt
 
The management of Paddy Power's Italian online gambling initiative took a bullish line in an interview with the Reuters news agency Thursday, saying that since May the company has made good progress in the dedicated market, helped by good business in the recent Euro 2012 football betting.
 
Giovanna D'Esposito, the md of Italian operations, told the new agency: "Over a two-year horizon we hope to have a top five position in the online market ... but I think we can do better than that."
 
Europe's biggest bookmaker launched in Italy in May, attracted by a liberalised gaming industry forecast to grow 12 percent to more than Euro 90 billion in 2012 despite difficult economic conditions.
 
Around three-quarters of Paddy Power profit is generated online in Europe, and the company is leveraging this experience in a market where retail companies have been slower to take full advantage of internet opportunities.
 
"The three biggest Italian companies have 80 percent of the retail market but only 40 percent of the online market," communications chief Alessandro Allara said. "Our opportunity is dramatically bigger online because those companies are not using their power in retail to reinforce their position online, or they are not interested in it."
 
Reuters reports that in June 2012 Italians bet over Euro 260 million on sport, with the Italy-Germany football semi-final alone delivering Euro 9 million. The regulator AAMS says that about a third of sports betting in Italy was done online.
 
In the first full month it was operational, Paddy Power Italy took Euro 3.6 million in bets, equivalent to a 4.2 percent share of the online betting market and roughly half the size of the online operations of established competitors Sisal and Snai.
 
D'Esposito anticipates that this stake will grow to 6 percent by the end of the year and to at least 10 percent by 2014, with the company becoming profitable in 2-3 years.
 
He also expects Paddy Power to lead the nascent Italian mobile betting sector as it develops, again leveraging its considerable experience in the sector.
 
D'Esposito revealed that the company is planning a television marketing campaign timed for the start of the Italian Serie A football season in late August.



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