Italy launch costs Paddys 15.5m in 2012
Expansion into regulated market accounts for majority of 20.5m in start-up losses " investment in mobile gaming to continue while social gaming strategy as yet undefined.
Establishing a presence in the Italian egaming market accounted for three quarters of Paddy Power’s 20.5m losses in 2012, an investment which will see a flurry of new Italy-facing products during 2013.
The operator invested around 15.5m in launching its Italian sportsbook and casino offering, while the remaining 5m was pumped into new mobile and social gaming products.
The start-up losses were announced as part of Paddy’s impressive full-year results this morning which revealed a 15% year-on-year rise in group profits to 139.2m.
Paddy’s head of online Peter O’Donovan said the first nine months of operation in Italy had “gone well so far”, having launched its sportsbook on schedule in May 2012 and online casino in December.
The investment in its sportsbook product and marketing has seen Paddys take just over a 5% market share. This year, meanwhile, will see the release of Italy-facing live casino, mobile casino and bingo products.
“The early part of our Italy strategy has gone well and we’re very happy with the results we’re seeing from the level of investment we’ve made,” said O’Donovan. “We’ve more than 40 people based in Rome helping to drive and run the business so it is a material opportunity for us.”
Significant spend on mobile product launches, including mobile casino brands Roller and Vegas, along with its social sports betting game BetDash accounted for the remaining 5m in losses.
Aside from BetDash “ which has now been integrated into Paddys core sportsbook allowing for a single wallet “ O’Donovan said a long-term social gaming strategy had not been decided.
Investment in this area is current focussed on “understanding and driving” the Facebook marketing platform, and O’Donovan claimed its slots app on the social network “ recently removed “ was as a “test bed for some of the functionality rather than a social gaming strategy or anything like that”.
“Social, however you define it, is certainly a big part of the consumers’ future. Currently our focus and efforts are understanding and driving the marketing platform and understanding the product implications of that.
“If you look at social casino as it is today it is a very female dominated, fun to play environment which is a distance away from say real-money casino. So the intersection between those will be interesting and whether the same virility that drives success in the current social slots products transfers to real-money only time will tell.”