The Swedish state-owned lottery company Svenska Spel and the French horse betting giant PMU published their cooperation contract about week ago. Nowadays it is normal to have that kind of international co-mingling operations but normally the lottery “family” and the horse betting “family” have done that among own “families”. I have already written about the fragmentation of the lottery world and now it seems that the same might happen in the horse betting world too. It is old-fashioned way to talk about lotteries, casino companies, sports betting operators or horse betting companies. All of them are just gambling companies which might have different kind of history and background, but which are offering quite similar products for their customers.
What I mean by “family” of lotteries or horse betting companies? Lotteries have their own associations like European Lotteries (EL) and World Lottery Association (WLA). Horse Betting companies have had similar organization called European Pari Mutuel Association (EPMA) and European casino operators have European Casino Association (ECA). Those associations are mainly just for discussions and lobbying but nothing to do with business. But the members of same organization have used to cooperate with the other members at the business level too. We have good examples of that from lottery business where lotteries have games like Euro Millions and Euro Jackpot.
Horse betting companies have tried to build up common European or even global level horse betting product, but they haven’t managed to do that yet. Co-mingling, which means participating in games of other horse betting company, has been popular among EPMA-members already long time. The biggest European horse betting companies, PMU from France and ATG from Sweden, have mainly acted as hosts of those common games. In practice it has been impossible for other companies than traditional horse betting companies to join in those pool-based games. But now it seems that there is big change going on among horse betting companies and it’s easy to foresee that similar thing will happen among lotteries soon or later.
As I already mentioned, horse betting companies have had association called EPMA where they have had some members also outside Europe. PMU has been the most active and dominant member of that organization which has had tight relationship with the European horse racing organizations. I don’t know what happened last year, but for some reason PMU wasn’t willing to continue anymore there in EPMA and decided to move towards WLA. I know that the other European horse betting companies thought seriously if they should do the same than PMU. There are already few companies like Danske Spil, Loterie Romande and Veikkaus which are members of EL and WLA but also of EPMA. Anuhow the decision of EPMA-members was to establish new association instead of joining in WLA.
The new horse betting association has already been established and the name of that organization is World Tote Association (WoTA). That new association is more global than EPMA was. There are now official members like Hong Kong Jockey Club, Singapore Pools, Tabcorp and Phumelela. The most remarkable thing is that the biggest European horse betting operator PMU is not the member of WoTA. That will break the horse betting “family” although the total turnover of WoTA companies is still as huge as 20 B€. It seems that with PMU the other gambling operators could offer big horse betting pools if they want to accept the business conditions set by PMU.
For some reason horse betting has been gambling area where specific companies established by horse racing organizations have taken care of business. Other gambling operators haven’t had interest or challenge to enter in that market. The situation in UK and Ireland has been different due to traditional reasons but in the other countries that has been the case. I’m not sure how much business interest gambling operators have had towards horse betting area, but they should consider that now. Horse betting is surprisingly big business. The total GGR of horse betting is about 25 B€/year which is 6 % of total gambling business. Would it be possible that gambling operators, including lotteries, could have share from that? Of course they could!
According to estimates of H2GC horse betting won’t manage very well among the other gambling verticals in the future. But it seems that the volume of horse betting won’t decrease in coming years – H2GC expects that horse betting will develop yearly by 0-1 % in next 5 years. I believe that horse betting has increased a lot this year during Covid-19 in some countries like the Nordics where we have managed to organize races despite of corona virus.
Cooperation deal between PMU and Svenska Spel is good example how the gambling world has changed and is going to change. There are still lotteries and horse betting companies but I’m sure that in the near future winners will be gambling operators who offer wide portfolio of different gambling products. Current lotteries and horse betting companies have similar strength and it is existing big pools which are difficult to reach from zero level. That’s why operators should work together and not only with their old “family members”.