Strategy and vision

General

Our strategy is to develop the business through geographic and product diversification. Leisure & Gaming is positioned to realise the long-term growth prospects coming on-stream as countries across Europe open regulated betting and gaming sectors. In parallel we will further develop our online business to deliver increased volume from pan-European players.

We see the online reach of Betshop.com acting as a door-opener into new territories and as our presence becomes assimilated into local culture the appreciation in brand equity will continue to be accrued by both our on-the-ground and online operations.

By constantly improving the customer offering and refining the operating procedures in our key Italian market, we have developed an exportable model that can be tailored locally to optimise performance and realise the potential of new markets. The company is sufficiently nimble to test and adapt the model in order to best exploit the second tier markets that are starting to open. We can also draw on a raft of unique experience gained from negotiating the hurdles thrown up by what might be perceived as slow and problematic legislation.

The emphasis on product improvement, diversification and service excellence will continue to be applied to our dedicated online betting and service offerings.

Underpinning growth in established and nascent markets will be rigorous control of costs, excellence of IT infrastructure, odds compilation and risk management, and judicious investment in the people who can most effectively deliver our vision.

Italy

Doing business in Italy in virtually all sectors has traditionally presented challenges to new entrants. The Italian sports-betting market, with its complex regulatory environment and unique business culture has presented significant challenges to many of our competitors. Betshop Italia, through its franchise network model, has succeeded in overcoming many of these market hurdles by using local partners and management with strong familiarity and cultural awareness. Local expertise has been reinforced through the appointment of Fabrizio Motterlini, ex president of Sisal spa (one of the country’s largest gaming operators), as CEO in Italy.

 

The network of local partners will continue to be rationalised to encourage the most pro-active to flourish; a process considerably assisted by the enthusiasm of our partners for the partnership structure and their loyalty to the Betshop brand.

 

Current operations are designed to satisfy Italian customers’ preference for betting in a physical outlet. As the market matures, Betshop Italia will start to market its online channel and has already established a telephone betting call centre service in Reggio Calabria to add value for existing customers and attract a new profile of client. This channel diversification and the balance between services to address customer preference will constantly be fine tuned.

 

Recent additions to the Betshop Italia offering have seen the introduction of poker for fun and the trialling of slots. The company is ready to introduce other skill games as soon as regulatory approval is granted. The introduction of fixed margin products such as pool betting, lotteries and bingo will increase turnover and yield per customer.

 

At September 2009 there were 589 outlets (an increase of 13% year on year), of which approximately 65% are dedicated Betshop betting sites, with approximately 29,000 active bettors.  

New territories

The BetShop model successfully imported into Betshop Cyprus will expand from the 49 outlets current at September 2009 (2008: 26) and is already delivering ahead of forecast. In addition, Betshop has particularly strong ties to Cyprus as the group's odds-compilation team is based there. Odds compilation is a crucially important aspect of our operation – the science of balancing bettor appeal with maintenance of margins.

With Greece delivering a promising number of online players, and receipt of a Greek offline licence anticipated during 2009, it is predicted that the launch of Betshop Greece will enjoy a similar pattern of growth and success to that of the Cyprus business.

Similar development into other European territories will be undertaken as legislation makes licences available and suitable, highly motivated local partners are identified.

Online

Betshop.com will continue to provide a complimentary offering to the Betshop land-based presence. The proprietary operating software will be upgraded to remain fresh and innovative. The extensive network of affiliates and agents will be further developed.

 

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