OEG, GHolding launch Italian JV; Italian VLT spending nearly doubles in H1


olympic-entertainment-italy-vltEastern European casino operator Olympic Entertainment Group (OEG) has entered into a joint venture with Italian operator GHolding to run medium-sized video lottery terminal (VLT) casinos in Italy. Each party will hold a 50% stake in The Box S.r.l., which aims to open its first three gaming joints – each containing 50-70 VLTs – in the northern part of the country by the end of 2013. The JV will mark OEG’s first foray into Western Europe, which CEO Madis Jääger says will be “a major challenge for us,” and thus the first three venues are being viewed as something of a test run. OEG presently operates casinos in Estonia, Latvia, Lithuania, Poland, Slovakia and Belarus. GHolding manages 73 small VLT rooms under the La Casa del Gioco brand – 15 of which it owns and the other 58 under affiliate contracts. Jääger said the JV concept was to combine “the local market knowledge of GHolding and strong capitalization of OEG, ensuring sufficiently rapid growth, as necessary.” OEG plans to invest €4.5m in the JV’s initial phase.

The timing is fortuitous, as VLTs are all the rage in Italy, according to data released by Italian regulator AAMS. Italian gamblers dramatically boosted spending in the first six months of 2012, dropping €44.3b compared to €35.8b in the same period in 2011. Over half that increase came from VLTs, which took in €10.45b in 2012 compared to €5.38b in 2011. Virtually every other channel saw a slight decrease in turnover compared with 2011. Amusement-with-games (AWG) machines took in just shy of €14b, off almost 7% from 2011’s €15.05b. Despite Italy’s strong showing at Euro 2012, sports betting turnover was down 5% to €2.02b, while horseracing’s €522m spend was just two-thirds of 2011’s total.

SISAL’s Superenalotto brought in €1b compared to €1.27b in 2011. Lottomatica wasn’t spared, as scratch cards slipped from €5.37b to €5.05b and Lotto fell from €3.36b to €3.13b. Bingo was off nearly 9% at €872m. Online tournament poker turnover of €693m was less than half 2011’s €1.54b, while the newly created catch-all category of poker cash games and casino games collectively generated turnover of €6.5b. Aside from a healthy performance by VLTs and a mild uptick in bingo, margins on the whole were either flat or down, with sports and racing bets taking the biggest hits.