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GBGC predicts 2012 growth to slow; Betfair hopes fixed-odds fixes fixing fears

TAGs: Betfair, Europe, GBGC, Global Betting & Gaming Consultants

gbgc-gaming-growth-slowdown-2012Global Betting & Gaming Consultants (GBGC) are predicting a pan-European dampening of betting companies’ gross gaming yield (GGY) growth in 2012, thanks to an overall decline in spending brought on by the Euro-zone’s economic turmoil. A new GBGC report taps Italy as the continent’s likely star performer in 2012 with a 5% boost in GGY, but that’s a sharp drop-off from the 24% growth the country is expected to record this year. France’s GGY is expected to top out at 2.3% growth, while Ireland and Spain are expected to shrink 1.6%. The UK will see growth of 3.5%, thanks in part to Olympic tourists making detours into local casinos. UK sports betting yield will be up 5.5%, which sounds alright, until you consider that the UEFA European Championships traditionally generates a 7-8% rise.

This pessimism may have contributed to the rather grim column The Independent’s James Moore just published on the prospects of various public gaming companies. To be fair, Moore isn’t entirely bearish, suggesting Paddy Power is “one to be on the right side of,” Ladbrokes “is not overpriced,” mobile specialist Probability is worth buying (mainly because some larger company will likely consider it worth acquiring “for a substantial premium”) and William Hill is a “strong buy.”

And then out comes Moore’s hatchet. While he thinks that bwin.party has positioned itself “smartly” if the US online poker market liberalizes, Moore doesn’t advocate buying shares “based on something that is more a hope than an expectation.” Moore also suggests that if bwin.party can make a go of its “unusual” twin-CEO structure, “it will be a first.” Meanwhile, there are “more attractive” places to invest than Sportingbet, and 888 Holdings “just doesn’t look that compelling.” Despite Betfair looking “a better bet than it did six, or even three months ago,” Moore thinks the exchange is overpriced and faces considerable challenges going forward because “rival bookies have stopped moaning about it and started competing.”

Perhaps, but Betfair is also preparing to compete with their bookie rivals on their home turf: fixed-odds wagering. Outgoing CEO David Yu says Betfair’s fixed-odds addition (expected to launch before the Euro 2012 kickoff) will mean bettors will have “no reason to go anywhere else.” In addition to enabling the company to offer traditional sportsbook bonuses, a fixed-odds offering will also provide inroads into regulated markets on the continent where exchanges are viewed with suspicion, in part for their prominent roles in match- and race-fixing scandals. Speaking with GamblingCompliance.com, Yu singled out Spain, “where exchanges are going to come in the second round of licensing, that is where having a sportsbook is really helpful.”

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