The Italian Job; Initiating with Credit-Hold

Research evidence excerpt

The Italian Job; Initiating with Credit-Hold

. The top three companies by GGR in Gaming Retail collectively

held five licenses, mirroring the five licenses held by the rest of the market.

The gaming franchise segment features two primary product categories: Video

Lottery Terminals (VLTs) and Amusement with Prize (AWP) machines. These are

deployed through a network exceeding 17,300 Points of Sale (POS) and directly

managed gaming halls. The segment also includes Retail & Street Operations,

which involves the direct management of company-owned gaming halls and

AWPs. Lottomatica distributed 82,391 gaming machines nationwide, with 52% of

its VLTs and 70% of its gaming halls strategically located in Northern Italy due to

elevated regional demand.

Professional POS, such as arcades, bingo halls, and betting shops, vary in size and

offerings. Arcades typically house 10-30 slot machines, while bingo halls and

betting shops primarily provide bingo and betting services, respectively, with

gaming machines serving as supplementary offerings. Generalist POS, including

cafés and tobacconists, are non-gaming-dedicated establishments featuring one

to four AWPs.

AWPs provide slot machine games with cash payouts for wagers up to €1. These

machines, commonly found in cafés, shops, and dedicated gaming halls, operate

on chance with players betting against the house. AWPs are characterized by low

spend and low payout ratios. As an AWP concessionaire, Lottomatica ensures

regulatory compliance, manages its AWP network via an IT platform, and collects

taxes for the ADM. AWP machines transmit game data to ADM systems every four

days, not in real-time. Lottomatica's AWP model operates through two channels:

as a concessionaire managing POS and coordinating franchisees, and as an AWP