DE FABRITIIS: "ITALY IS STILL BEHIND IN THE BETTING MARKET"

Mauro De Fabritiis is the founder and director of MDF Partners, a consulting firm specialising in the gaming sector. With extensive experience in the gaming market, he has closely followed the evolution of the sector, analysing trends and strategies for its development. In recent years, he has focused on technological innovation, regulation and the economic dynamics of the sector, contributing to studies and research in the Italian and international context.
 

How do you assess the current situation of the horse racing betting market?
The horse racing betting market in Italy is in a structural crisis. In the 1980s and 1990s, Italian horse racing was a benchmark in Europe, second only to France. Today, on the other hand, the sector is in sharp decline, with a progressive reduction in takings and a vicious cycle of disinterest that feeds on itself.

The main causes of the decline are multiple:
 

• Decline in betting: gaming revenue, the sector's main source of funding, has fallen dramatically, undermining the economic sustainability of the entire industry.
• Displacement of key players in the industry: in recent years, owners, trainers, breeders, jockeys and drivers have progressively become disengaged, discouraged by the reduced profitability of the sector and the poor economic attractiveness of racing.
• Decline of racecourses: many Italian facilities suffer from obsolete structures, poor maintenance and an uninspiring entertainment offer, making them less and less frequented by the public. Lack of investment has prevented racecourses from evolving into real centres of aggregation and entertainment, as happens in countries where horse racing is still a competitive and attractive sector.
• Lack of media visibility: horse racing is almost completely absent from major television and digital channels, depriving itself of crucial exposure to attract new generations of fans and bettors.
• Dependence on state funding: the sector has not developed a sustainable business model and continues to rely heavily on public funds, a condition that does not guarantee stability or growth in the long run.

The combination of these factors has created a vicious circle: the deterioration of racecourses and the decreasing quality and competitiveness of racing have further weakened the interest of the public and bettors. The horse racing product as a whole is now unattractive, the young public is less and less involved and horse racing has lost its dimension as an entertainment experience. The consequence is a progressive disaffection on the part of spectators and sponsors, which further aggravates the economic crisis in the sector.

In countries such as the United Kingdom and France, on the other hand, horse racing continues to thrive thanks to an integrated entertainment model and a strong media presence. If Italy wants to revive the sector, it must invest in these aspects and modernise its offer, making horse racing more competitive and sustainable in the long term.
 

Can reducing the tax rate on fixed-odds betting favour development? To what extent and when?
The reduction of the levy on fixed-odds betting was a key action. The misalignment of the taxation of horse racing bets with respect to sports betting has long represented a brake on gaming operators‘ investments, making the offer of horse racing bets uncompetitive, unsaleable and, as a result, not displayed in the dealers’ gaming assortments and not visible to the consumer. This epochal change therefore represents an indispensable step to start reversing a vicious circle that seemed irretrievable.

With the knowledge that intervention on betting was the fastest and most effective way to start a recovery plan, ADM and MASAF did an excellent teamwork to push an almost unhoped-for result at the political level. The action taken on fixed-odds betting lays the groundwork for bringing a strategic ally to the horse racing table: gaming concessionaires who, through their physical and online distribution networks, will be able to give visibility to the product and bring it to the attention of consumers.

However, it is extremely simplistic to think that a reduction in taxation alone can solve the crisis of a sector that has experienced inertia and neglect for twenty years. Structural interventions are needed that can accompany and make dealers' actions effective. These include:
 

• Innovation in the gaming offer: expansion of the types of bets, introduction of live orders, betting exchange and new gaming products capable of attracting young people.
• Improvement of the racecourse experience: transforming facilities into places of aggregation, following the model of French sports stadiums and racecourses, especially through technological interventions that favour the engagement of consumers and fans inside and outside the racecourses.
• Greater visibility and media coverage: today horse racing is almost invisible on national TV. We need to create entertainment formats and invest in communication.

I am convinced that if we act on these aspects in a coordinated manner, within two years, we will be able to see a turnaround and bring attention back to the world of horse racing not only nationally but also abroad.
 

What do you think of the ‘holy war’ between Totaliser and Fixed odds? A rearguard battle?
This opposition is meaningless. International experience shows that the two models can and must coexist, responding to different and complementary gaming needs. Fixed odds guarantee certainty of winnings and a more immediate gaming experience, while the totaliser is traditionally linked to the dream of the big win and requires a larger player base to be sustainable.

Globally, fixed-odds betting is growing, while the totaliser, in order to maintain its attractiveness, needs liquidity, and this is precisely what is lacking in Italy today.
The problem is not to choose between fixed odds and totalisator, but rather to address some structural criticalities that penalise the latter:

• Double totalisator: in Italy there are two separate totalisators, which reduce the available liquidity and create confusion among bettors.
• Lack of attractive prizes: the average payout is lower than international standards, making the game less competitive and less attractive.

The solution is not to pit the two models against each other, but to integrate them into a single race. The first step is to unify the totalisers, so as to increase liquidity and make the system clearer and more competitive. At the same time, it is necessary to innovate the product, introducing mechanisms such as jackpots and multi-stakes betting, which in countries like France and Sweden have proven to be effective tools to attract more players.

The real problem is that there are fewer and fewer horse racing enthusiasts and the audience is dying out, for age-related reasons. It is the audience that is lacking. More than a war between models, we need to create synergies: only by expanding the player base through more accessible formulas such as fixed odds, will it be possible to feed the liquidity of the totaliser and guarantee a sustainable future for the sector.

How does the Italian horse racing betting market fit into the European context? What are the main differences and opportunities for growth?
Italy is far behind the main European countries. In more advanced markets such as the United Kingdom, France, and Sweden, horse racing is a mainstream entertainment product, with high-profile events broadcast on TV, modern facilities, and a strong involvement of young people.

Actions to be implemented in Italy include:

• Better scheduling of races: today the calendar is communicated only two days in advance, making promotion difficult. A stable, annual planning is needed.
• Improved images and data: tracking systems, introduction of advanced graphics, multiple replays and HD/4K cameras to make races more spectacular.
• Increased international presence: collaborate with foreign circuits to increase the liquidity and visibility of Italian races.

This will improve the exportability of Italian racing on international markets. Today, British and French races are sold all over the world thanks to a high quality product, well-structured programming and high technical standards. Italy, on the other hand, struggles to export its product due to the lack of an image and data system adequate to the standards required by global markets. In order to compete internationally, it is necessary to invest in high-level content, to guarantee race schedules compatible with foreign betting schedules, and to build strategic partnerships with major operators in the sector. Only in this way can Italian horse racing regain visibility and attractiveness outside national borders.

There is a segment of the public that believes that the measure to lower the rate on fixed-odds betting is only to the advantage of dealers, who logically do business and therefore look to profit.
I believe that those who think this way are making a basic conceptual error. The idea that keeping levies high generates more resources for the treasury or the industry has been disproved by concrete evidence from the gaming world. The clearest example is that of sports betting, which was originally taxed at 15% of takings: the reduction of the rate (now calculated on the margin at 20.5% for physical and 24.5% for online) has led to an exponential growth in takings, with benefits for the whole system.

A fundamental aspect is being overlooked: the economic sustainability of dealers, who until now were not in a position to display and sell the horse racing product effectively. In fact, they kept it on the back burner compared to other, more lucrative offers. The reduction of the levy will instead make horse racing betting a competitive and visible product, with positive repercussions for the entire industry. A lower levy will allow dealers to invest in the sector, generating benefits for all players involved:

• Bettors: more competitive odds, a wider offer and better playing conditions.
• Horse racing: higher collection means more resources for racecourses, owners and breeders.
• State: an increase in betting volume will lead to more revenue for the state.

To achieve this, it is essential to overcome the current paradigm, in which the State merely finances a sector that continues to burn resources without evolving, and instead adopt a medium-term relaunch strategy that favours the generation of value. Public intervention should be aimed at supporting the sector on the basis of efficiency and quality criteria, rewarding racecourses and operators capable of growing and implementing virtuous strategies.

Masaf and the ADM are already moving in this direction. It is essential that the horse racing supply chain and concessionaires actively collaborate to build a more competitive, sustainable system capable of attracting investment and visibility also at an international level.