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Insight ITALY UPDATE


game with a VLT payout structure. It’s going to be interesting to see how Cash Fruits performs and what type of market it carves out for itself in the VLT sector. “Through experience we are starting to understand the types of locations that work, as opposed to those that under- perform in regards to VLT mini-casino sites,” described Mr. Ronchi. “300- 400sq.m. is about the right size for a VLT location, which must also have the right ambience and an upmarket atmosphere to create the right player experience. 150m locations are simply big bars, which have failed to attract female players and so ultimately have failed to perform as strongly.”


While there remain concerns that the process of implementation has been slow, with 28,000 of the 56,000 machines in the marketplaces after the first year, Mr. Ronchi believes the process will in fact slow dramatically from this point forward. "We have seen the installation of 50 per cent of the allocation of VLT machines in 12 months,” explained Mr. Ronchi. "However, most of this allocation has been installed into existing sites. The process to authorise and open a new mini-casino location can take six month to one year. It will take much longer to site the remaining 50 per cent of VLTs.”


Italy - Government ‘Collect and Win’ figures: September 2011* Game


Equipment (Provisional) of which from VLTs


Bingo


Betting - horse-racing Sports-betting Lottery Lotto


Totaliser Games Online skill games Total


*Measured per million euros


Collection 3,428


1,115 140 90


349 829 635 179


1,246 6.896


Winnings 2,731


984 98 63


279 583 307 122


1,201 5.384


131 131 27 70


246 328 57 45


1.512


Expenditure of the players 697


There appears no quick alternative to siting VLTs in the market. Locations that have opened without the adequate space, mini-casino atmosphere or right mix of service and image, have been expensive failures. The maxim of ‘location, location, location’ remains as important in the VLT market as elsewhere, but the right type of location to match the product to the customer has proved to be equally important. Just as the VLT jackpot has proved to be the driver for high level play, the high level experience also applies to the environment. Locations with 20-30 machines are significantly under performing those with 100-150 terminals.


VLT players are looking for the casino experience and are prepared to ignore the same machine in ‘big bar’ locations, while driving substantial revenue through mini-casino locations. "The expectation of turnover during this period has greatly exceeded our business plan by 50 per cent,” described Mr. Ronchi of the locations that match player expectations. “We believed the market would sustain revenues per device of €1,000 per day, when in fact VLTs are generating €1,600 per day, which is a significant difference. It is going to take longer than expected to develop this mini-casino market, but the rewards are significant when the offer is right.”


December 2011 Page 51


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