This report is essential reading for online gambling operators, investors in the industry, technology providers and sub-contractors as well as media companies looking to generate revenues from broadband services.

Screen Digest forecasts that UK consumer spending on online gambling will increase from 660m in 2005 to 1.6bn in 2010. At the same time the number of active UK clients will grow from 1.1m in 2005 to 2.1m in 2010.

The report profiles 30 online gambling industry leaders. For inclusion in this study operators must either be based or listed in the UK, or target UK-based gamblers. An historic, cultural acceptance of gambling, a regulatory framework which directly confronts the issues unique to online gambling and the benefits of London as a global financial centre have made the UK an essential base for many of the leading operators. Collectively, these operators constitute a large proportion of the total market for global online gambling.

2005 witnessed an explosion in industry consolidation with 32 transactions involving online gambling operators worth over 3bn – up from 9 deals worth 200m in 2004. This report reviews the competitive forces driving corporate actitivity and analyses the key issues which will shape the industry to 2010.

Operators covered in the report:

William Hill
Ladbrokes
Coral Eurobet
Victor Chandler
Tote Sport
Ukbetting
Paddy Power
Blue Square
Stanley Leisure
Sportech
Sportingbet
Skybet
Betonsports
Stan James
Betinternet
Bet365
Gamebookers
Unibet
Betfair
Betdaq
iBetx
Betsson
Partygaming
888 Holdings
Empire Online
Gaming Corporation
Gaming VC
Sporting Index
IG Group
UK National Lottery


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

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