Abstract
The aim of this study is to analyze the impact that the specific nature and characteristics of the game of poker have had on the development of the Internet poker industry in Italy and on the competitive strategies of on line gambling operators. It facilitates the overall understanding of the different effects that the legalization of Internet gambling in Italy has had on the evolution of the poker industry, in respect to other gambling sectors. Based of existing literature, the study has shown that two distinctive features define the game of Internet poker. The first is connected to the nature of games of skill that distinguishes poker; the second, instead, is linked to the fact that Internet poker is a ‘player-versus-player game’, i.e. it requires the simultaneous presence at gaming tables by multiple players. In order to analyze the market dynamics of the Internet poker industry, from a methodological viewpoint the study is supported by an empirical investigation that concerned all the ‘on line poker rooms’ in Italy that were remote gambling licenses or sub-licensees in 2018. The results of the empirical analysis have highlighted that the progress of market sales and competitive strategies that have typified the evolution of the on line poker market in Italy seem to be strongly influenced by the specific characteristics of the game of poker. This has led to the affirmation of a distinctive structure of competition in this market, that differs from that of other categories of on line games. The empirical analysis carried out has also made it possible to show that the legalization of on line gambling, that started in 2008, has opened the Italian regulated gambling industry to competition from foreign ‘Internet pure players’, who have acquired a strong market position in the on line poker sector. The results of the research provide interesting indications to policy makers in the field of the regulation of on line gambling and also bring out interesting implications of a managerial nature that help to devise competitive strategies more consistent with the specific characteristics of the game of poker.
Highlights
In recent years the gambling industry in Italy has been affected by a series of changes in which regulatory and technological developments have led to a very high growth in market sales
The market data provided by the ‘Customs and Monopoly Agency’ (Agenzia delle Dogane e dei Monopoli), the regulating body of the Italian gambling sector, shows that in 2017 the total amount wagered in Italy grew seven-fold compared to 2003, exceeding 101 billion euros, while the Gross Gambling Revenue (GGR) – the amount wagered minus the winnings returned to the players – was almost 19 billion euros, more than tripling the 2003 values (Customs and Monopoly Agency, 2018)
The development of the Internet gambling industry started in Italy, in an embryonic form, between the end of the 90s and the beginning of the 2000s, thanks to two regulatory interventions that gave road to an experimental remote gambling collection by some authorized dealers (Sbordoni, 2010)
Summary
In recent years the gambling industry in Italy has been affected by a series of changes in which regulatory and technological developments have led to a very high growth in market sales. Some researchers (among others: Gainsbury et al, 2015; Hing et al, 2014; Gainsbury, 2012; Williams, Wood, & Parke, 2012; Forrest, 2012; Pilling & Bartlett, 2012; Morgan-Busher, 2012; Wood & Williams, 2007) examined how the possibility of offering games via the Internet has impacted on the purchasing behavior of consumers and on the dynamics of development in the gambling industry at international level They have shown, in general, that remote gambling: has led to a transition of players from land-based gambling houses to interactive gambling; making it possible to connect players at a low cost, creating new forms of betting; and has allowed new companies specializing in the sale of on line games to enter in various geographic gambling markets, increasing competitive pressure in many national contexts. For each of the on line poker rooms active in Italy an in-depth elaboration and analysis was carried out on: a) the information reported on the company sites (for the gambling operators the Internet site represents a virtual store through which poker games are provided and the characteristics of the company and the assortment of games offered are communicated to the potential customer); b) official market data (type of gambling concession, market shares, etc.) provided by the Customs and Monopoly Agency and by the Journalistic agency on the gambling market (Agimeg); c) data coming from a series of secondary sources (specialized magazines, market research, etc.); d) information obtained through direct contacts (via email or telephone) for the purpose of acquiring data that did not result from the other sources used
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