Cogetech revolutionized the Italian gaming and gaming industry – European CEO


Fabio Schiavolin, CEO, Snai Group











In recent years, the Italian gaming market, with an estimated turnover of 88 billion euros, has grown at an extraordinary rate. An increase of 60 billion euros in 10 years has propelled Italy to first place in Europe for business volume and per capita spending, an expansion made possible by cutting-edge regulation.

Over the past 15 years, in terms of gambling regulations, Italy has been one of the most active countries in Europe. The Italian model corresponds to a licensed environment, open to national and foreign operators through tendering procedures. The regulator, the Italian Customs and Monopolies Agency (ADM), is the guarantor of the legality and security of the industry, and its efforts have made Italy a virtuous example in the fight against the operators of illegal and irregular games.

On the other hand, ADM has created the conditions for the development of a much larger number of operators choosing to enter the market with long term investment plans. Nowadays, the Italian gaming market is a consolidated environment, attracting a growing number of foreign investors.

To fully understand the trends in the Italian gaming market and the possible future development of the industry, the European CEO spoke with Fabio Schiavolin, a manager with 20 years of experience in the sector and CEO of Snai Group. Starting his career in 1996 at CIRSA, Schiavolin co-founded Cogetech in 2004, a joint venture with Gtech Corporation, which immediately established itself as one of the most dynamic and solid operators in the AWP network.

Schiavolin has led the company for over a decade and under his leadership Cogetech has grown exponentially thanks to its close-knit, young and dynamic team. Integrity, strength and passion helped the company to grow and it quickly established itself among the main Italian players. From 2006, Cogetech was able to meet increasingly complex customer needs and launched into the field of value-added services and proximity payments with Paymat Servizi, a secure and efficient technological platform entirely developed in-house. This growth path recently witnessed an important milestone when, in November 2015, Cogetech merged with Snai, the leader in sports and horse betting in Italy with 110 years of history. This new group, which has major development projects, has been entrusted to Schiavolin.

Starting with the end, how did the Snai-Cogetech merger come about?
The merger is not the end, but rather the beginning of a new story. In November 2015, the Snai group finalized the acquisition of the Cogemat group as part of a cashless transaction, in which the former Cogemat shareholders entered into the new shareholder structure of the Snai group.

This combination, one a leader in sports and horse betting, the other strong in slots and retail betting, gave birth to Italy’s largest publicly traded gaming company. from Milan. The merger between these two entities created a leading group in the Italian gaming market, with pro forma revenues in 2014 of over € 960m, total betting deposits amounting to around € 1.5bn, a share of gaming machines market over 15 percent (with over 70,000 units) and a network of around 19,000 outlets. The idea behind the merger was to combine the strengths of both and give life to a group capable of playing a leading role in the industry, both in Italy and abroad.

Over the past 20 years, the gaming market in Italy has undergone profound changes. The regulator has led the transition from more traditional video games placed in bars and racetrack betting, to fixed odds sports and horse betting

How has the gaming industry evolved over the years in Italy?
Over the past 20 years, the gaming market in Italy has undergone profound changes. The regulator has led the transition from more traditional video games placed in bars and racetrack betting, to fixed odds sports and horse betting, bingo, online games, slots and VLTs. Through this process of evolution, new players, including international ones, have entered the market and the constant distinction between offline and online games has grown.

Today, gaming machines represent 55% of market bets, followed by lotto, lotteries and scratch cards (€ 17bn), cash casino games (€ 12.5bn) and bets ( € 7.8 billion), which are growing strongly with contributions from online, and, in last place, bingo (€ 1.6 billion) and games of skill – such as poker tournaments (0, 7 billion euros). This growing complexity is forcing operators to face new challenges.

In this context, the new Snai Group benefits from a significant advantage; it represents the perfect synthesis of experience and dynamism which, in a few years, has enabled the firm to become a leader in its field.

How does the Italian gaming market differ from other European markets?
With its concession environment, Italy has been a pioneer in gaming regulation since 1999 and has been seen as an example by other countries for the past 10 years. The legislator’s efforts have guaranteed the integrity of the market and the certification of its products, and have created, through the mechanism of long-term concessions, the stable conditions essential for the development of solid and competitive players. These efforts have been made to fight against the phenomenon of illegal gambling, which is a real cancer with negative effects for the State, businesses
and citizens.

How did the legislator intervene to regulate the sector?
Due to the complexity and sensitivity of the game, the sector needs to be regulated in a way that takes into account the demands of social protection and the industrial and economic value of the sector to state coffers. Indeed, state regulatory initiatives can be divided into two main areas: the regulation of illegal gambling operations and the introduction of new gambling offerings.

In the first area we can mention the long and very demanding AWP regulation (2004-05), which gave Italian operators the possibility to successfully adhere to a clear legal process. In the second area, we refer to in-game betting and VLTs, which have been driven by technological innovation. Today, the games sector in Italy has a complex and constantly evolving architecture, with guaranteed public and treasury interests balanced with consumer protection.

What trends are registered on the Italian market?
From a demand point of view, in recent years the Italian gaming market has reached a level of maturity in different product lines. Regarding the online sphere, the average spending of Italian players in 2015 remained broadly stable compared to 2014, with a significant acceleration recorded in the second half of the year, confirmed by the first data from 2016.
This dynamic is the result of opposing trends: on the one hand, spending on sports betting and slot machine games has increased; on the other hand, poker and bingo have suffered. From an industrial point of view, the greatest innovation has been the entry of foreign operators, already active in the dotcom environment. This led to a 37.5% growth in online yield, mainly linked to sports betting.

In the physical market, we are all working to optimize distribution networks with ever more incisive actions, focused on controlling systems. In terms of the evolution of the offering, I expect that in the near future, gamers will switch to a true omnichannel experience, thanks to the technological integration between physical, mobile and online gaming. In the years to come, we will also see a steady growth in live betting, due to the extensive use of player-owned devices to choose, compose and close the bet. Information, quotes, statistics and news must be immediately accessible, thus leaving more room for entertainment; with the mobile sector, new technologies will guarantee greater simplicity and speed of payment systems, while respecting security. Our goal is to ride these trends, building a user experience that precisely meets all of our
customer expectations.

How do you see your leadership improving the competitiveness of the sector?
I proudly recognize that my killer app is my exceptional team. I founded Cogetech and from the very beginning I chose people who were ready to help in the start-up phase and able to move successfully into the consolidation process. You cannot achieve a leading position in the market without a leading team in the market.

If I had to list some of our business drivers, I would cite customer-oriented strategy, partnerships, innovative offer and commitment to responsible gaming. From a supply point of view, Cogetech has always stood out for its innovative and high-quality products, as well as its fast and efficient customer service. We decided to focus on every detail of the process and we were able to create a cohesive and capable group. We have placed the emphasis on the reliability of our commercial management, the variety of the range of products offered and an always high technological level. The expertise and professionalism of the employees are the real added value of this young and, at the same time, solid company.

Aware of evolving in a very specific sector, we do not only focus on the offer, but also invest a lot in the dissemination of a responsible gaming culture. Cogetech’s objective has always been to guarantee the possibility of playing in complete safety, this is indeed an integral part of the company’s mission. However, our work in this area has not been limited to initiatives targeted at customers. Even Cogetech employees, collaborators and managers need to be kept informed and frequent trainings are organized to educate all stakeholders.

Cogetech has also promoted concrete training and development programs throughout its network of operators. Since 2011, the Global Gambling Guidance Group, an international organization dealing with issues related to responsible gambling with cutting-edge rules and protocols in Europe, has granted the Cogetech website (www.iziplay.it) the international certification for responsible gaming .

What are your plans for the future?
Following the merger, Snai Group is poised to dominate the Italian market. The overall return in all segments is around 10 billion euros, of which 3.4 billion euros for VLTs and 4 billion euros for AWPs. One of our strengths will be our extensive presence in the region, with more than 1,000 stores.

We will also focus on technological innovation; we want to expand the range of entertainment products and provide new, more intuitive games. The game experience will be the differentiating element, along with the digital interaction.

Finally, leading a strong public group in Italy, which combines the particular aspects of two entities that are both similar and different, will allow us to assess new partnership opportunities, both nationally and internationally. This is one of the main benefits of the merger between Snai and Cogetech. Thanks to this integration, we have the expertise, the critical mass and the resources not only to be the leader in Italy, but also to launch growth projects abroad.