Online Gambling: Forecasts and assessments to 2010

Table of Contents

Tables and charts

Executive Summary

• Online gambling forecasts
• UK
• World
• Assumptions in our forecast model

1. Coverage

• Remote Gambling
• Remote gambling business model
• Operational impact of supplying online
• gambling products
• Single wallets and shared purses
• Territorial coverage
• UK
• UK gambling market
• Offshore operators
• Gambling product categories
• Basic gaming formats
• Sports betting ("Sportsbook")
• Fixed Odds
• Exchange or Peer-to-peer (P2P) betting
• Spread Betting
• What is spread betting?
• Financial spread betting
• Gaming
• Online gaming
• Poker
• Peer-to-peer Skill Gaming
• Games
• Competition Formats
• Third party suppliers

2. Market drivers and barriers to growth

• Regulation
• Regulation in the UK
  • Existing UK regulatory situation
  • UK Gambling Act 2005
  • UK regulatory reform
  • The Gambling Commission:
  • Regulating remote betting
  • Regulating remote gambling across national borders
• The single market? Regulation in the EU
  • Greece
  • The Netherlands
  • Hungary
  • Denmark:
  • Norway
  • Sweden
  • Germany
  • France
  • Italy
  • Europe
  • 2006 and beyond
• Regulating Remote Betting in the USA
  • Enforcement
  • Guerilla Marketing

3. Platform installed base

• Narrowband vs Broadband
• UK consumers purchasing online
• Internet
• UK installed base
• Western Europe (excl UK) Installed base
• US Installed base
• Total Installed base
• Blackmail, extortion and DDOS
• Interactive Te levision Gambling ("iTV" Gambling)
• What is iTV gambling?
• UK iTV installed base
• Connected Mobile devices
• Can mobile gambling stand alone or is it an
• extension of online gambling?
• How do we get to our customers?

4. Sports betting company pro. les

• William Hill
• Ladbrokes
• Coral Eurobet
• Victor Chandler
  • Tote Sport
  • Tote ownership and planned sale to the British racing industry
• Tote Products and Performance
• ukbetting
• Paddy Power
• Rank Group
• Stanley Leisure
• Sportech
• Sportingbet
  • Acquisitions
  • Global reach, local execution
  • Performance
  • Sportingbet enter Paradise
• Future
• Skybet
• Stan James
• Betonsports
• Betinternet
• Bet365
• Gamebookers
• Unibet

5. Exchange betting company pro. les

• Betfair
  • Introduction
  • Background
  • The effect of Betfair on the wider
  • gambling industry
  • Development
  • Product
  • Performance
  • Poker
  • Expansion: International exchange betting markets
  • The Future
• Betdaq
• iBetx 124
• Betsson

6. Poker and gaming

• PartyGaming
  • Background
  • Performance
  • Performance
  • Join the Party?
  • The Future
• 888 Holdings
  • Background
  • Performance
  • The Future
• Empire Online
  • Performance
  • Empire: potential bid target?
• The Gaming Corporation
  • Background
  • Structure
  • Performance
• Gaming VC
  • Spread Betting Company Pro. les
• Sporting Index
• IG Index
• The Future

7. The National Lottery

• Introduction
• Products
• Distribution

8. Future directions for online gambling

• Regulation: the Gatekeeper
• UK: 2006 Gambling Act taking shape
• Impact on online operators
• iTV Gambling
• Europe: state vs the European market
• US: regulation largely ineffectual, online gambling . ourishing
• Players and products: the shift from hardcore to casual
• The importance of scale
• Industry shakeout: the march of consolidation
• London Listings
• Online gambling mergers and acquisitions
• Growth by acquisition
• High street operators

Glossary

Table and charts

• UK gross margin by operator type 2005
• UK gross margin by operator type 2010

Executive Summary

• UK gross margin 2000-2010
• UK gross margin split by operator type 2000-2010
• UK gross margin % split by operator type 2000-2010
• UK active client accounts 2000-2010
• UK gross margin growth 2005-2010
• World gross margin split by operator type 2000-2010
• World gross margin 2000-2010
• World active client accounts 2000-2010
• World gross margin split by operator type 2000-2010

1. Coverage

• UK taxed betting, lottery and bingo stakes 1995-2005
• UK taxed stakes by product 1995-2005
• HMCE duty receipts from UK gambling 1996-2005
• Arcade gaming: William Hill Triple Hi Lo
• Ladbrokes virtual racing: betting on Golden Guineas
• Ladbrokes virtual racing: racing on Golden Guineas
• Betfair football match odds
• Sporting Index football markets on
• Middlesbrough vs Basle 06/03/2006
• Spread betting example
• CasinoWebcam.com screenshot
• Screenshot of William Hill Poker Lobby
• WSOP main event 1st prize money:
• No limit Texas Hold'em $10,000 1971 - 2005
• Midasplayer allowed jurisdictions

2. Market drivers and barriers to growth

• 1st time callers to GamCare naming Internet as 'primary mode' of gambling
• Internet betting and gaming types used by gamblers who approached GamCare in 2004
• GamCare primary modes of gambling from compulsive gamblers
• UK Regulation timeline.
• Operational areas audited by GamCare for accreditation
• Antigua active online gambling licensees as at November 2005
• Major online gambling licensees located in Gibraltar
• A-Z of online gambling brands licensed by the Kahnawake Gaming Commission
• A-Z of online gambling brands licensed by the Kahnawake Gaming Commission
• Screenshot of Zeturf race card - 16/01/2006
• Turnover generated by US gamblers:
• BETonSPORTS sports betting gross win seasonality
• Screenshot of pokerstars dot net website
• Screenshot of pokerstars dot com website
• BETonSPORTS marketing spend by outlet 2005
• Betcris press release on Angelina Jolie and Brad Pitt's baby

3. Platform installed base

• UK broadband consumer pricing: average monthly cost 2000-2010
• UK households - online and broadband penetration 2000-2009
• UK online penetration overview 2000-2009
• UK broadband penetration 2000-2009
• UK broadband households and penetration 2000-2009
• Western Europe (excl UK): broadband households and penetration 2000-2009
• Western European broadband household penetration by territory (excl UK)
• Western European (excl UK) territories - broadband household penetration 2000-2009
• US households - online and broadband penetration 2000-2009
• US online penetration overview 2000-2009
• US broadband penetration 2000-2009
• US broadband households and penetration 2000-2009
• Aggregate broadband household penetration:
• UK / rest of Europe / US
• UK / W Europe / US households and broadband penetration 2000-2009
• UK return path enabled households 2001-2010
• BSkyB DTH subscribers 2000-2009
• NTL and Telewest digital cable subscriber numbers 2000-2009
• Return path enabled households in
• UK / Germany / France / Italy / Spain 2001-2010

4. Sports betting company pro. les

• William Hill Interactive . nancial performance 2000-2005
• William Hill Group . nancial performance 2000-2005
• William Hill Interactive performance chart 2000-2005
• William Hill Interactive performance chart 2000-2005
• William Hill gross margin rate by delivery channel
• William Hill . nancial performance of respective delivery channels: shop / telephone / interactive
• William Hill Pro. t Conversion Analysis Chart
• William Hill active sports betting customers 2000-H1 2005
• Hilton Group Financial Summary 2000- 2005
• Ladbrokes gross margin by division chart 2000-2005
• Ladbrokes gross margin by delivery channel 2000-2005
• Ladbrokes gross margin by sales channel percentage split
• Ladbrokes eGaming customer analysis
• Ladbrokes eGaming gross margin by product 2004-2005
• Ladbrokes gross margin split 2004-2005
• Ladbrokes gross margin percentage split 2004-2005
• Ladbrokes eGaming split between sports betting margin and other online product classes 2004-2005
• Ladbrokes eGaming active users by product chart 2000-2004
• Ladbrokes turnover split between UK and non-UK based gamblers 2001-2004
• Gala Group gross margin performance 2000-2004
• Tote group - nancial performance 2001-2005
• Tote group gross margin and gross margin rate 2001-2005
• Tote online gambling turnover 2002-2005
• Tote Group revenue split Totepool /
• Totesport remote / Totesport retail 2003-2005
• ukbetting gambling division turnover:
• Internet and telephone
• ukbetting gross margin and gross margin rate 2002-2005
• ukbetting content network
• ukbetting online gambling registrations 2000-2005
• Paddy Power LBO growth ROI and England
• Paddy Power turnover split by sales channel 2001-2005
• Paddy Power turnover 2001-2005
• Paddy Power telephone gross margin and gross margin rate 2001-2005
• Paddy Power Interactive Betting . nancial performance 2001-HY 2005
• Paddy Power Gross margin % split by sales channel 2000-2005
• Paddy Power Interactive clients active in previous three months 2000-2005
• Paddy Power sportsbook and gaming / poker gross margin split 2004-2005
• Bluesq gross margin and operating
• pro. t 2001-2005: all remote sales channels
• Rank Interactive Gross margin mix
• Rank Interactive performance
• Blue Square performance - all channels
• Sportech product distribution (000s)
• Sportech Football Pools performance 2002-HY 2005
• Sportingbet registered userbase 2000-Q1 2006
• Sportingbet Australia & Asia territory - no. sports bets transacted by sales channel
• Sportingbet registered userbase by origin
• Sportingbet major acquisitions
• Sportingbet brands
• Sportingbet brands (continued)
• Sportingbet group performance
• Sportingbet turnover by geographical origin 2001-Q1 2006
• Sportingbet gross margin analysis
• Sportingbet gross margin analysis 2001-2005
• Sportingbet quarterly poker growth
• Sportingbet average number of poker
• games dealt per day Q1 2005-Q1 2006
• Sportingbet average daily poker rake Q1 2005-Q1 2006
• Sportsbook.com Paradise Poker promotional webpage, December 2005
• Sky Vegas Live rolling daily schedule
• Skybet revenue and margin 2001-2005
• Skybet turnover and gross margin 2001-2005
• Sky iTV poker
• Sportsbook and casino: bet volume and av. bet size
• Betonsports gross margin seasonality 2003-H1 2005
• Betonsports 'NF-Hell': NFL winning streaks 2004-2005
• Betonsports gross margin mix %
• Betonsports gross margin mix 2003-2005
• Betonsports H1 2005 gross margin
• Betonsports Q3 y-o-y comparison
• Betonsports active customers - new customer acquisition 2003-2005
• Betinternet Turnover 2000-2005
• Betinternet channel split 2001-2005
• Betinternet gross stakes by product 2003-2005
• Betinternet gross stakes by product
• Betinternet gross margin composition 2003-2005
• Unibet group turnover 1999-Q3 2005
• Unibet group margin by territory 2001-Q3 2005
• Unibet origin of gross margin by %
• Unibet registered and active customers 2001-Q3 2005
• Unibet gross margin split between sports and non-sports betting to Q3 2005
• Unibet gross margin mix 2001-Q3 2005
• Unibet poker performance Q4 2004-Q3 2005

5. Exchange betting company pro. les

• Betfair MOU's
• Betfair market - ante post betting on
• Grand National 2006
• Betfair exchange Blackjack
• Betfair turnover 2000-2005
• Betfair active user recruitment and retention
• Betfair active customer growth 2000-2005
• Currencies accepted at Betfair
• Languages Betfair has translated its website into
• Cherry Group turnover 2001-2005

6. Poker and gaming

• PartyGaming turnover growth 2002-2005
• PartyGaming PTP growth and margin development 2002-2005
• PartyGaming turnover split by product 2002-2005
• PartyGaming revenue by product
• Poker registrations and active players 2002-2005
• PartyGaming turnover split by product 2002-2005
• Casino and Bingo registrations and active players 2002-2005
• PartyGaming user base 2001-2005
• PartyGaming 2005 Q1-Q3 origin of poker registrations
• Origin real money poker registrations Q1 2005-Q1 2006
• PartyGaming turnover by geographical territory 2002-2005
• PartyGaming - origin of turnover % split 2002-2004
• PartyGaming turnover by geographical territory 2002-2005
• 888 Holdings . nancial performance 2002-2005
• 888 percentage split of methods customers use to make deposits
• 888 Holdings group turnover 2002-2005
• 888 revenue by geographical origin
• 888 Holdings geographical turnover split
• Comparative year on year revenue growth rates by territory
• 888 poker and gaming quarterly turnover split 2004-2005
• 888 revenue by product
• 888 Holdings customer growth 2003-2005
• Casino and poker quarterly revenue growth rates Q2 2004-Q4 2005
• 888 revenue per active customer
• 888 active poker and casino player growth
• Empire Online revenue growth 2002-2005
• Empire Online revenue split by product 2002-2005
• Empire Online performance 2002-2005
• Empire Online customer acquisition 2004-2005
• Empire Online active customers 2004-2005
• Empire Online corporate activity 2004-2005
• Empire Online revenue growth 2002-2005
• Gaming Corporation . nancial performance
• Gaming Corporation 05 H1-H2 Revenue analysis
• Gaming VC 2005 turnover split by territory
• Sporting Index Group Turnover 2001-2004
• Sporting Index online registration stages
• IG Group turnover 2000-2005
• IG Group turnover 2000-2005
• IG Group turnover 2000-2005
• IG Group total active customers 2001-2005
• IG Group ebitda and margin 2002-2005
• IG Group active customer analysis 2001-2005

7. The National Lottery

• Lottery revenue allocation
• Participation in any National Lottery game, by age
• National Lottery stakes 1995-2005, all sales channels
• National Lottery interactive sales 2004-2006
• Interactive products launch dates
• National Lottery turnover 2004-2006 (year end 31/03)

8. Future directions for online gambling

• Gambling product category explanation
• Gambling format characteristics summary
• Gambling format characteristics summary (continued)
• Gambling format characteristics summary (continued)
• Gambling format characteristics summary (continued)
• Participation levels of UK population in gambling types
• UK TV personality Keith Chegwin's online Bingo venture
• GBGC Global gross win by sales channel, 1999-2008
• Online gambling transactions 2000-Q1 2006
• Value of online gambling transactional activity
• Number of acquisitions/listings in online gambling industry 2000-Q1 2006
• Number of new listings on London markets 2000-Q1 2006
• Number of acquirors/targets quoted or unquoted 2005 deals only
• Online gambling acquisition value and no. of deals 2000-Q1 2006
• Online gambling operator new listings on London markets
• Online gambling operator transactional activity
• Online gambling operator transactional activity (continued)
• Online gambling operator transactional activity (continued)
• Acquisitions involving high street shops
• Glossary