The evolution of the gaming industry during the pandemic

A model to understand the evolution of the gaming sector, especially in the post-pandemic era, and to combat illegal activities to protect consumers and businesses. This is the goal of the new chapter of the Project on the Gaming Sector, conducted in collaboration with Luiss Business School and Ipsos as part of the Observatory on Regulated Markets. Following the first report published in July 2021, the project aims to provide industry operators and policymakers with useful data, including for tackling illegal gaming.

Presented today, Wednesday, January 26, in the Zuccari Room at Palazzo Giustiniani by Raffaele Oriani, the research project’s scientific lead and Associate Dean of the Luiss Business School, and Nando Pagnoncelli, President of Ipsos, in the presence of Gianni Pittella, Secretary of the Parliamentary Commission of Inquiry on Illegal Gambling and the Dysfunctions of Public Gambling, Federico Freni, State Undersecretary for the Economy and Finance, and Livia Pomodoro, Chair of the Advisory Board for the Project on the Gambling Sector, the report combines two surveys that provide a snapshot of the sector’s state during the COVID period and the socioeconomic characteristics of the typical gambler.

The first analysis, conducted by Ipsos, involved 300 companies engaged in the distribution of gaming products to retailers, bars, tobacco shops, betting shops, gaming arcades, and betting parlors. The second analysis, based on an econometric model developed by the Luiss Business School, defined the profile of the typical player using data provided by the Customs and Monopolies Agency and Istat.

“Our survey,” said Nando Pagnoncelli, President of Ipsos, “reveals a different perception of illegality in the gaming: 70% of operators believe this phenomenon mainly affects the physical channel and that it spread especially during the pandemic, with serious consequences for the spread of criminal activity. These negative effects are further reinforced by the belief held by 70% of the population and 79% of retailers that it is not easy to detect and punish illegal activities, which are also socially tolerated. This situation weakens the legal gaming distribution network, highlighting vulnerabilities that should be taken into account in the future.”

Ipsos also found that the gaming sector has been heavily impacted by the pandemic: only 35% of retailers say they are satisfied with the performance of their business, and 1 in 6 retailers had to reduce their staff (17%), while only 3% increased it. These repercussions could also negatively impact the local area, leading to a decrease in retail outlets and the spread of illegal activities.

Using an econometric model developed by the Luiss Business School , it was also possible to determine the characteristics (both individual and collective) of gamblers, the influence of per capita household income and per capita spending on recreation on different types of gambling, and how this spending evolved annually and by geographic area. This was made possible by data collected by the Customs and Monopolies Agency and ISTAT over the period 2011–2020.

Raffaele Oriani, the scientific lead for the Research Project on the Gaming Sector and Associate Dean of the Luiss Business School, comments: “The data analysis reveals a consumer population that increasingly views gaming as a ‘normal’ and ‘necessary’ good, a part of their leisure time that cannot be removed from their consumption basket.” Professor Oriani also points out that “to combat the spread of illegal gambling, we need to ensure careful regulation, particularly regarding player behavior and technological advancements.”