EUROPEAN STATE LOTTERIES AND TOTO ASSOCIATION
EUROPEAN STATE LOTTERIES AND TOTO ASSOCIATION
EUROPEAN STATE LOTTERIES AND TOTO ASSOCIATION
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E U R O P E A N S T A T E L O T T E R I E S A N D T O T O A S S O C I A T I O N<br />
No 28 September 2008
The Executive Committee of<br />
the European State Lotteries<br />
and Toto Association<br />
President<br />
Dr. Winfried WORTMANN, Managing Director<br />
WESTDEUTSCHE LOTTERIE GmbH & Co. OHG, Germany<br />
1st Vice-President<br />
Mr. Christophe BLANCHARD-DIGNAC,<br />
President – General Director<br />
LA FRANÇAISE DES JEUX, France<br />
2nd Vice-President<br />
Mr Jussi ISOTALO, Deputy Managing Director<br />
VEIKKAUS OY, Finland<br />
MeMBers<br />
Prof Vesna BAKRAN, General Manager<br />
HRVATSKA LUTRIJA d.o.o., Croatia<br />
Mr. Gonzalo FERNÁNDEZ RODRÍGUEZ, General Director<br />
LOTERÍAS Y APUESTAS DEL ESTADO, Spain<br />
JUDr. Ales HUSAK, Chairman of the Board of Directors<br />
and General Director<br />
SAZKA a.s., Czech Republic<br />
Mr Léon LOSCH, Director<br />
LOTERIE NATIONALE, Luxembourg<br />
Ms Liliana MINCA (GHERVASUC), President,<br />
General Manager<br />
COMPANIA NATIONALA “LOTERIA ROMANA” SA, Romania<br />
Dipl. Ing. Friedrich STICKLER, Deputy General Director<br />
österreichische Lotterien, Austria<br />
Ms Dianne THOMPSON, Chief Executive<br />
The National Lottery CAMELOT, United Kingdom<br />
Mr Tjeerd VEENSTRA, Director<br />
De Lotto, Netherlands<br />
Contents<br />
1. Message from the President<br />
3. Editorial<br />
4. Instant Lotteries<br />
15. Prof. Virèn<br />
16. Philippe Vlaemminck EL Legal Adviser<br />
18. ELISE<br />
21. Members’ News<br />
22. Premium Partners<br />
25. Semi-Premium Partner<br />
26. Workshops<br />
General Secretariat<br />
Bernadette Lobjois<br />
Secretary General<br />
Av. de Béthusy 36<br />
CH-1005 LAUSANNE<br />
Tel. +41 21 311 30 25<br />
Fax +41 21 312 30 11<br />
internet: http://www.european-lotteries.org<br />
E-mail. info@european-lotteries.org<br />
NOVEMBER<br />
• EL/WLA Responsible Gaming<br />
Seminar<br />
“The Business Case for<br />
Responsible Gaming”<br />
Dates:<br />
12 – 14 November 2008<br />
Location:<br />
Brussels / Belgium<br />
Host: Loterie Nationale<br />
• Directors’ Conference<br />
on Competition Law<br />
Date: 19 November 2008<br />
Location: Brussels / Belgium<br />
Hosted by<br />
CSR &<br />
the business case Responsible<br />
Gaming<br />
November 12 - 14, 2008<br />
Brussels/Belgium<br />
DECEMBER or<br />
FEBRUARY 2009 at the latest<br />
• Info Sharing Seminar<br />
Dates: to be confirmed<br />
Location: to be confirmed<br />
Host: to be confirmed<br />
Registration for all our seminars<br />
can be done online at<br />
http://www.european-lotteries.org<br />
Is traditional advertising dying???<br />
Is there any real evidence that new revolutionary ideas have been universally embraced,<br />
or become universally successful at the expense of the more traditional<br />
approach to advertising?<br />
In the age of fragmented advertising, mobile personal connections, volatile consumer<br />
demands, are the fundamentals of advertising still appropriate or do we<br />
need not only to continually adjust but to become even more avant-gardistes?<br />
Do we need radical different approaches? Or, is it, paradoxically, time to be conservative?<br />
All these questions and more will be addressed in the upcoming joint EL/WLA<br />
Marketing seminar to be held in London Jan 28-30, 2009.<br />
You can already register on our Web site www.european-lotteries.org, on which the<br />
preliminary program of the seminar will be posted in due time.<br />
As the previous seminars have been attended at full capacity, please register early<br />
as seats and hotel rooms are limited.<br />
Also, please note that the participants have the possibility, during their stay, to visit<br />
the largest international Casino and Gaming Exhibitions ICE and ICEi taking place<br />
at Earl’s Court, London from January 27 to January 29 2009.<br />
An excellent opportunity to network.<br />
THE MATERIAL, VIEWS, OPINIONS <strong>AND</strong> COMMENTS EXPRESSED BY THE AUTHORS, THE SPEAKERS <strong>AND</strong> THE PANELISTS ARE THEIR<br />
OWN <strong>AND</strong> DO NOT NECESSARILY REPRESENT THE POSITION OF PANORAMA OR EL <strong>ASSOCIATION</strong>. PANORAMA ACCEPTS NO LIABILITY<br />
FOR THE ACCURACY OF <strong>STATE</strong>MENTS MADE BY ADVERTISERS. ALL RIGHTS RESERVED. NO PART OF THIS MAGAZINE MAY BE REPRO-<br />
DUCED WITHOUT WRITTEN PERMISSION FROM EL GENERAL SECRETARIAT.
Ladies and Gentlemen,<br />
Dear friends,<br />
If any evidence was still required to document<br />
the necessity of EL’s presence on<br />
site at Brussels, then evidence has been<br />
supplied in an impressive manner during<br />
the last months. The discussion about<br />
the financing and the integrity of sport,<br />
the debate under the EU Trade Barrier<br />
Regulation on the blocking of internet<br />
gambling in the U.S., the new attitude of<br />
the EU Commission towards the infringement<br />
procedures, the increasingly organized,<br />
joint preparation for the discussions<br />
within the Council and with the Commission,<br />
all these matters have been accompanied<br />
very closely by our representation<br />
in Brussels. The organization of games of<br />
chance in the EU is no longer a question<br />
which is discussed merely within the Directorate-General<br />
“Internal Market and<br />
Services”. The direct and indirect effects<br />
on the sport, on the social institutions, on<br />
the prevention of money laundering and<br />
fraud are now concerns for Directorates-<br />
General. We as European Lotteries have<br />
substantially contributed to this.<br />
We have succeeded more clearly than<br />
before in illustrating that and why staterun<br />
gambling operators are different<br />
from commercial operators. This “we are<br />
different” had mostly been regarded as<br />
thesis. We are now able to prove that and<br />
why we are different.<br />
This discussion had started with the keyword<br />
“integrity of sport”. In nearly all<br />
kinds of sports, especially soccer, it becomes<br />
more and more obvious that the<br />
typology of the betting offers does not<br />
only exert considerable influence on the<br />
behaviour of the betters, but involves severe<br />
dangers for the reputation and the<br />
integrity of the sport and the athletes.<br />
Message from the President<br />
The risk potential of certain live bets cannot<br />
and must not be toned-down. The big<br />
sports organisations took up the matter.<br />
With our sports betting monitoring programme,<br />
with the Matchinfo activities,<br />
the herein committed EL Members make<br />
an important contribution under the umbrella<br />
of EL. The decisions of the General<br />
Assembly in Cyprus give us the mandate<br />
and the creative power for further development.<br />
It is absolutely essential.<br />
Not only in Europe, but also worldwide is<br />
responsible gaming a commitment which<br />
has concrete, observable consequences.<br />
This must be valid particularly in Europe,<br />
where the legal debates on the organisation<br />
of the gambling sector are carried out<br />
as virulently as on no other continent.<br />
In this context, we always talk as well<br />
about facts and figures. That the figures<br />
are speaking in our favour is not a question<br />
of belief but a provable fact. It is<br />
therefore a matter of great importance<br />
that we as European Association are able<br />
to deliver quickly reliable data to the European<br />
institutions for their work. If it is<br />
not us, who else could be able to provide<br />
information about the gambling sector,<br />
where so many misunderstandings subsist?<br />
For this reason, in this Panorama<br />
edition I would like to recommend warmly<br />
the ELISE report to you. And I want to<br />
emphasize once again how important it is<br />
that the basic factors are collected by us<br />
– not to gain an advantage in the competition,<br />
but to supply the responsible persons<br />
in our countries with the orientation<br />
data for their decisions.<br />
Even if our General Assembly at Limassol<br />
could only be short, it has taken important<br />
decisions which are pointing the way<br />
and has thereby taken up aspects which<br />
had been prepared during the “Industry<br />
1<br />
P AN RAMA<br />
Days” Conference. At this point, I would<br />
like to cordially thank once again our<br />
industrial partners as well as our host,<br />
the Cyprus Government Lottery, in the<br />
name of all participants. Now we have to<br />
make the best of the next months to set<br />
the course for the congress at Istanbul in<br />
June 2009.<br />
The concept of two EL locations, Brussels<br />
and Lausanne, has proved to be<br />
worthwhile. To communicate better than<br />
ever before the results of our actions to<br />
our Members remains the challenge that<br />
we will rise to for the future.<br />
Cordially yours<br />
Winfried Wortmann<br />
President
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EXPERIENCE MEETS VISION.
Editorial<br />
The evolution of scratch off games<br />
and a taste of our next seminars<br />
Scratch cards have been a very popular<br />
form of games, mainly because they<br />
present an opportunity to win instantly<br />
with a low initial investment. Since its<br />
advent, the scratch off ticket has taken<br />
many forms, included many different<br />
prize structures and a variety of versions<br />
– the latest being online scratchies. There<br />
also is a trend in some countries towards<br />
more expensive scratch tickets that offer<br />
high jackpots.<br />
The history of instant scratch games is<br />
relatively modern, making its first appearance<br />
in 1974 in the US, with a game<br />
launched by the Massachusetts State<br />
Lottery. In 1978, there was another first<br />
for instant games, when the Loterie Romande<br />
of Switzerland introduced the<br />
first scratch off ticket in Europe. Since<br />
then, instant games have been consistently<br />
well received by players and in the<br />
seventies, eighties and early nineties;<br />
most European Lotteries have opted for<br />
this novel form of playing. We are pleased<br />
to present you in this issue of Panorama<br />
an evaluation, made by various Lotteries,<br />
of their experiences with this game and<br />
the different approaches taken to keep a<br />
high level of interest in that game.<br />
2008 has been a very busy year for our<br />
seminars and will continue to be until<br />
December. We are proud to report that<br />
our meetings are getting more and more<br />
attention, so don’t forget the next seminar<br />
on Responsible Gaming, which we<br />
organize in partnership with WLA and<br />
that promises to be highly informative.<br />
Definitely this year, the palm goes to<br />
ELU (European Lottery University) that<br />
has beat all records with 48 attendees<br />
coming from all over, including Canada<br />
and Africa. We are already gearing up<br />
for 2009 and the first seminar will tackle<br />
traditional approach versus avant-garde<br />
3<br />
P AN RAMA<br />
campaigns in the Communication and<br />
Advertising field. This joint WLA/EL Marketing<br />
reunion will take place as usual in<br />
London, and participants will have an opportunity<br />
to visit ICE, the largest International<br />
Casino & Gaming Exhibitions.<br />
All information are available in due<br />
time in our website, in order to allow<br />
you to book in advance your travel<br />
schedule.<br />
I would like to remind our Members that<br />
we are now working on our new 2007<br />
report ELISE, which will be finalized in<br />
November. Also, a seminar on Info Sharing<br />
is being worked out and further detailed<br />
information will be sent later. If any<br />
Lottery is willing to organize this event,<br />
please contact the Secretariat General.<br />
I hope you will enjoy this issue and I look<br />
forward to seeing you at our next seminar.<br />
Bernadette Lobjois<br />
Secretary General
4<br />
A world of creativity<br />
with scratch-off tickets<br />
Scratch-off games are fast-action<br />
products that reward players with instant<br />
win. Although instant lotteries are not<br />
very old, going back only to the seventies<br />
and eighties – Switzerland’s “Loterie<br />
de la Suisse Romande” being the very<br />
first organization in Europe to launch<br />
a scratch-off game, this product has<br />
slowly gained a dynamic position in any<br />
Lottery’s offerings. As the instant game’s<br />
popularity increased across Europe, the<br />
need for more creative designs, exciting<br />
play themes, larger prizes and payouts<br />
became apparent. In some countries,<br />
the presentation of instant games as part<br />
of TV shows resulted in huge success,<br />
as the example of “Le Millionnaire” in<br />
France can attest. Nevertheless, such a<br />
phenomenon did not necessarily repeat<br />
in other European countries, and by<br />
the 1990s, certain instant lotteries even<br />
experienced an important drop.<br />
Therefore, Lottery organizations decided<br />
to rethink their instant game approach<br />
and since then, scratch-off tickets have<br />
occupied an important share of the<br />
European lottery market. To insure<br />
regular success, Lotteries have evaluated<br />
and implemented a slew of variants for<br />
their instant games – some on a regular<br />
basis, others on occasion: Adding more<br />
play areas on scratch-off tickets, allowing<br />
a larger variety of prizes from important<br />
jackpots to a multitude of low-tier prizes<br />
and as a more recent introduction, higherprice<br />
point for these tickets.<br />
We have asked some of our members<br />
to give us a general idea of the instant<br />
market in their country, emphasizing<br />
the differences between low-price point<br />
tickets versus higher-price tickets.<br />
The Austrian Lotteries launched their<br />
first instant game in 1995 and since then,<br />
they have been providing their players<br />
with 12 to 13 different scratch-off tickets<br />
in the price range of €1.50 to €5.00. In 2000<br />
and 2001, the Lotteries experimented<br />
with higher priced tickets of €7.00 and<br />
€6.50 and €7.50 in subsequent years until<br />
2006. This was only a partial success with<br />
the consumers, so the Austrian Lotteries<br />
did not repeat this price point.<br />
In Croatia, the first instant game was<br />
launched in 1987 and the scratch-off<br />
offering remains at a low-price point.<br />
P AN RAMA<br />
Instant Lotteries<br />
The increase of the price of the instant<br />
ticket is done slowly because the Lottery<br />
does not think the Croatian market has a<br />
demand yet for high price tickets.<br />
The Baden-Württemberg Lottery in<br />
Germany does not offer scratch-off games<br />
at a high-price point at the moment. The<br />
highest ticket cost is e2.00 which is very<br />
successful, along with their other instant<br />
games priced at e1.00. In 1999 and 2000,<br />
the highest price ever set for scratched<br />
tickets was DM 5.<br />
In the next few pages, we are presenting<br />
the very interesting comments of<br />
some Lotteries on instant games, play<br />
formula and payout structures and<br />
price points: La Française des Jeux/<br />
France and Lottomatica/Italy talk about<br />
experiences with high-price tickets up<br />
to e10; Veikkaus/Finland has presented<br />
some years much higher priced scratchoff;<br />
Szerencsejáték Zrt /Hungary and<br />
the Loterija Slovenije / Slovenia prefer<br />
to tailor their instant games to their<br />
market’s preferences rather than ticket<br />
price, while Swisslos/Switzerland has had<br />
a long standing with high-price lottery<br />
games. All these presentations are full<br />
of practical evaluations and could be<br />
excellent references on the diversity of<br />
scratch-off games.
Instant Lotteries<br />
Italy<br />
We started managing instant tickets in<br />
2004. We first offered low price tickets:<br />
in 2005 we had just 1,00 – 2,00 and 3,00<br />
euros games. In the following years we’ve<br />
started a strong product innovation process:<br />
in 2007 only, our scratch-off game mix<br />
was three 1,00 euro games, seven 2,00 euros<br />
games, four 3,00 euros games, two 5,00<br />
euros game and one 10,00 euros game. In<br />
2008, we have launched on the market two<br />
2,00 euros games, one 3,00 euros game and<br />
one 1,00 euros game. In January 2007, we<br />
decided to enter a different price category<br />
for instant lotteries and we launched the<br />
first high price-point ticket of 10e “Mega<br />
Miliardario”. After almost one year, in February<br />
2008 we launched the second 10e<br />
scratch-off ticket: “Colpo Vincente”.<br />
These latest tickets are targeted to a different<br />
customer segment and they are<br />
developed on different themes which are<br />
relevant to the target. One of these games,<br />
“Mega Miliardario” is a key number match<br />
game based on a money theme, the other<br />
one “Colpo Vincente” is a multi-game (2<br />
games) based on a gambling theme. First<br />
of its kind, the high cost “Mega Miliardario”<br />
has performed very well, selling over 730<br />
millions euros during the first 3 months of<br />
sales (35% of the total sales).<br />
Before presenting these games to players,<br />
we conducted several market researches<br />
focused on the product and on the specific<br />
target. In order to match customer<br />
expectations on such high price point, we<br />
developed innovative product features: we<br />
introduced the highest jackpot (1 million<br />
Performance of scratch-off is key<br />
Euros) in the history of instant tickets in<br />
Italy, along with a huge number of lower<br />
prizes. Also, the payout percentage of the<br />
first 10,00 euros game is 75%, while the<br />
average payout of the rest of the games is<br />
around 65%.<br />
Although we have had great success with<br />
these 10,00 euros games, this is as far as<br />
we are willing to go for 2008: we do not<br />
think today our market is ready for games<br />
in an even higher price point but we are<br />
thoroughly studying and testing product<br />
solutions which would be potentially accepted<br />
by our customers even at higher<br />
price points. As a matter of fact, our lowprice<br />
tickets are doing really good and we<br />
are going to continue presenting more low<br />
and mid-price scratch-off games. Our market<br />
researches show that the typical player,<br />
interested in these high price-point games<br />
are mainly males (72%), in the 25-54 years<br />
category (74%). They also play other games<br />
(mainly betting and slot machines). More<br />
than half of them (54%) live in the south<br />
of Italy. They have a higher level of education<br />
than the players of lower price points.<br />
Therefore, we think these players will most<br />
likely be loyal - a fact that is confirmed by<br />
our Customer Satisfaction Surveys which<br />
are telling us that they are very happy with<br />
this kind of games, because of their high<br />
level of suspense and high payout.<br />
Due to the fact that we only offer 2 games<br />
in the high price point range, we do not<br />
expect losing large number of players who<br />
5<br />
P AN RAMA<br />
otherwise would not be able to afford these<br />
high-price games. We have on the market<br />
18 games in the lower price-point range, so<br />
players have wide choice when it comes to<br />
their level of spending.<br />
In order to keep the whole experience a<br />
safe enjoyment, we have meticulously designed<br />
these tickets, their prize structure<br />
and their payout to avoid any excessive<br />
gambling. Also we are considering having a<br />
limited edition of high price points in order<br />
to reduce the product availability on the<br />
shelf. Finally, we are preparing a special<br />
information campaign to discourage excessive<br />
gambling (part of our corporate social<br />
responsibility program) and we have introduced<br />
a dedicated text message on back of<br />
all our new tickets.<br />
Since we started to manage instant lotteries,<br />
we have come to realize that this market<br />
needs continuous innovation. So even if<br />
we build our products to satisfy our players’<br />
needs as longer as possible, we periodically<br />
introduce new tickets to offer to our customer<br />
as much amusement as possible (on<br />
the other side, we eliminate the less performing<br />
tickets). Middle price points tickets<br />
(2-3 euros) need a new launch every 2-<br />
4 months, higher price points (5-10 euros)<br />
need a new launch once a year.<br />
To introduce even more variety in our game<br />
mix, we are currently evaluating new formulas<br />
like “win for life” prizes and combined<br />
games (instants and deferred lotteries).
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6<br />
P AN RAMA
Instant Lotteries<br />
Finland<br />
Veikkaus has a total of seven instants<br />
in the low and regular price categories.<br />
They cost e1, e2, e3, e3.50, e4.50 and<br />
e5. Next to that line of instant games,<br />
Veikkaus decided to experiment with<br />
scratch-off tickets in the higher-price<br />
range between 1985 and 1988. The<br />
Double Instant game, launched between<br />
2 Sept 1985 and 30 Aug 1986, provided<br />
instant cash prizes under the scratch surface,<br />
together with weekly draws and a<br />
jackpot of FIM 1 million (e168 188, corresponding<br />
to e285 247 at present-day<br />
rate). The price of an individual ticket<br />
was FIM 50=e8.41 (e14.26 at presentday<br />
rate). The Mother’s Day Instant and<br />
the Olympic Instant (different tickets for<br />
the winter and summer games) were on<br />
sale between 20 Apr 1987 and 9 Oct 1988,<br />
each of them being seasonal instants.<br />
They cost FIM 50 per ticket (=e8.41;<br />
e13.77 at present-day rate).<br />
After these experiments, Veikkaus<br />
only introduced a more expensive instant<br />
game for Christmas 2007. It was<br />
launched as an alternative to the original<br />
Christmas Instant that costs 5 Euros and<br />
had become a popular scratch-off game<br />
for Finns since 1995. The 2007 Christmas<br />
Calendar Instant cost e10.<br />
The 2007 Christmas Instant, which belonged<br />
to the higher-price category of<br />
e10, did not fulfil our expectations,<br />
since the tickets printing was done too<br />
late in the season and didn’t allow us to<br />
Veikkaus Oy / Finland:<br />
Different price categories for scratch-off tickets<br />
apply foil on them. Also, the timing of the<br />
weekly additional draw and the related<br />
main draw proved us wrong. We should<br />
have had the main draw only after Christmas.<br />
“The additional draws were strongly affected<br />
by the fact that they were made<br />
public in pre-recorded TV shows,” says<br />
Veikkaus Product Manager for Instant<br />
Games, Riitta Mesilaakso-Lehtola.“<br />
We have now learnt from our experience,<br />
and this year we will schedule the draws<br />
differently,” she says. “The high price did<br />
not seem to be an obstacle to buying for<br />
most of the players. Instead, the problem<br />
was that the tickets were hard to distinguish<br />
from the other instants because<br />
there was no foil printing on them. It was<br />
the intended different print design that<br />
was meant to attract people’s interest,”<br />
continues Riitta Mesilaakso-Lehtola.<br />
The prize distribution in the Christmas<br />
Instant focuses on small prizes, in order<br />
to allow as many people as possible, who<br />
have purchased a ticket or received one<br />
as a gift, to gain something and have a<br />
chance to experience the joy of winning.<br />
The jackpot of the additional draw<br />
was and will be fairly large, e100 000.<br />
Veikkaus applies its largest prize payout<br />
percentage – 60 percent – to the Christmas<br />
Instant game. With the rest of the<br />
tickets, the payout percentage varies between<br />
45 and 60 percent.<br />
7<br />
P AN RAMA<br />
”Veikkaus is not planning to eliminate its<br />
inexpensive line of instant tickets. On<br />
the contrary, as time seems to be getting<br />
tougher in the economic sense and<br />
consumers are becoming more and more<br />
careful with their spending, we still need<br />
to offer tickets that don’t cost much,”<br />
analyses Mesilaakso-Lehtola.<br />
Veikkaus will launch another 10 Euros<br />
Christmas Calendar Instant for Christmas<br />
2008. The Christmas Instant is a seasonal<br />
ticket and is sold only before Christmas.<br />
The game is based on the traditional advent<br />
calendar, known to everyone, which<br />
makes it easy for the consumers to play.
Hungary<br />
8<br />
Scratch-off in Hungary<br />
We have had instant ticket games in Hungary<br />
since 1992. There are now 13 types<br />
of instant tickets on our instant game<br />
market. All of them are scratch cards.<br />
The games are sold for 150-200-300 and<br />
500 HUF (from e0,6 to e2). Depending<br />
on the prize, the tickets can show 1-2-<br />
3 or 5 game areas on a ticket. We have<br />
three core games: Black Jack (150 HUF<br />
= e0,6), Astro (200HUF = e0,8) and<br />
Fáraók kincse (200HUF = e0,8). In addition,<br />
we are issuing yearly 5 to 6 new<br />
instant games. The novelties usually appear<br />
every 2 months.<br />
At the moment, our single, higher-priced<br />
ticket of 500 HUF (2e) is the Szuper<br />
Bankó, which has been on sale since December<br />
2007. In terms of number of tickets<br />
sold, the Szuper Bankó game has been<br />
even more successful than the 300 HUF<br />
instant ticket games. As it is the only 500<br />
HUF ticket on the market, it generates<br />
25% of the whole instant revenue. For<br />
500 HUF, you can find 5 different games<br />
on the ticket. Players like that possibility<br />
of 5 games that give them a chance to win<br />
up to 5 times. The way they see the game<br />
is that 1 game costs just 100 HUF. The<br />
jackpot (25 million HUF = e100 000)<br />
and the high number of middle prizes are<br />
also a great motivation.<br />
P AN RAMA<br />
Instant Lotteries<br />
During the period of 2007-08, we have<br />
had one 500 HUF (2e), and 2 different<br />
300 HUF (1,2e) tickets in the higher<br />
price point segment. They already offer<br />
more play areas for the players, but in<br />
exchange for the bigger investment, players<br />
of the high price segment also receive<br />
higher top prizes. The 500 HUF Szuper<br />
Bankó gives players more incentive to<br />
play with its 25 million HUF (100 000e)<br />
top prize. We also provide the players<br />
of the higher price segment games with<br />
higher prize payout. In the case of the<br />
300 HUF tickets, the payout percentage<br />
is 62%. For the Szuper Bankó, it is 65%.<br />
Also, the more expensive the game, the<br />
more play areas can be found on the tickets.<br />
To distinguish these games from the<br />
other game mix, the size of the higherpriced<br />
ticket is larger than the others, and<br />
also it is the only ticket printed on foil.<br />
Are there any thoughts about launching<br />
instant games costing even more?<br />
For the present, we consider 500 HUF<br />
(e2) as the top price point, and we are<br />
planning to launch another game in this
Instant Lotteries<br />
price category. Currently in the Hungarian<br />
instant market, 500 HUF seems to be<br />
the maximum that the players are willing<br />
to pay in the hope of winning. Our top<br />
price point (500 HUF) is far from being<br />
exceptionally high, as it is confirmed by<br />
market researches from other countries<br />
in Europe and elsewhere. Eventually,<br />
in the oncoming years, a new ’top high’<br />
(1000 HUF – 4e) category may appear<br />
in Hungary.<br />
Are some low cost instant tickets going<br />
to disappear? Our 150 HUF tickets are<br />
going to be eliminated starting in January<br />
2009 and we are going to raise the price<br />
of our top core game, Black Jack from<br />
150 HUF to 200 HUF. Before launching<br />
such games, we have conducted some<br />
research to know what the public would<br />
have to say about these new prices. Market<br />
research results show that 200 HUF<br />
as the lowest ticket price point will not<br />
scare off our players from the games. We<br />
may lose some players in the short term,<br />
but with our new captivating instant tickets<br />
and continuous innovations, we will<br />
try to compensate that loss.<br />
9<br />
P AN RAMA<br />
The future of your instant scratch-off<br />
games: In November 2008, we plan to<br />
launch “World Poker Tour”, which will<br />
be the first licensed game in Hungary.<br />
With this scratch card, players will be<br />
able to apply for a second chance draw<br />
where they can win exclusive poker merchandises<br />
over the usual money win. We<br />
are excited about the launch of a Poker<br />
ticket that should be well received, as in<br />
the last 1 or 2 years, the game seems to<br />
have gained significant popularity. As we<br />
hope, this themed instant game will attract<br />
a new target player base. The price<br />
of this ticket will be 300 HUF (1,2e).<br />
Also, as we have done with every game,<br />
we will make sure our constant communication<br />
efforts remain focused on preventing<br />
excessive gambling and juvenile<br />
play.
Instant games were first launched in<br />
France in 1984. For more than 20 years,<br />
our scratch-off game business boomed<br />
without any high price point launch. It<br />
even reached record sales of 3.4 billion e<br />
in 2000 with only low and mid-price products.<br />
It is only in September 2005 that we finally<br />
launched a high price ticket: The product<br />
is named 7Extra, it is a 10e ticket presented<br />
in a cardboard pack package.<br />
The original theme was about money, but<br />
it has been relaunched twice since 2005<br />
with other themes: once in 2006 (casino<br />
theme) and once in 2007 (7 wonders of<br />
the world theme). This game has remained<br />
alone in this high price point segment and<br />
no additional product has been launched<br />
since then. Sales are still low compared<br />
to the results registered by the rest of the<br />
game mix: 7% of total instant game sales.<br />
The Concept :<br />
The Name of the product is 7Extra<br />
(meaning in French : that’s great!).<br />
The ticket consists of 7 scratch off<br />
games + one bonus game presented in<br />
detachable strips and sold in a cardboard<br />
pack. Due to its larger size, the ticket is<br />
10<br />
Scratch-off, another path to success<br />
highly visible on the shelves. Another interest<br />
is that the theme is renewed every<br />
year.<br />
Benefits for the Consumer:<br />
The game offers an opportunity to win a<br />
high prize: 100000e (ranks N°2 behind<br />
Millionnaire’s 1Me). It presents another<br />
opportunity to maximize overall winning<br />
odds with a rich scratch-off experience:<br />
1. 7 different games,<br />
2. Among them, 3 games with a perceived<br />
value of 1e, 3 with a perceived<br />
value of 2e and 1 with a perceived<br />
value of 3e,<br />
3. Every pack offers a minimum of 3e.<br />
P AN RAMA<br />
Instant Lotteries<br />
7Extra has been quite successful in 2005<br />
and 2006, but sales have now stabilized<br />
around 250Me:<br />
Years<br />
300<br />
250<br />
200<br />
150<br />
100<br />
50<br />
0<br />
7Extra: Turnover and market share<br />
2005 2006 2007<br />
CA 7Extra<br />
Market share<br />
8,00%<br />
7,00%<br />
6,00%<br />
5,00%<br />
4,00%<br />
3,00%<br />
2,00%<br />
1,00%<br />
0,00%<br />
Above: Sales in Me/ % of FDJ scractchoff<br />
game sales<br />
70% of sales have been additional to the<br />
range and cannibalization has remained<br />
low.<br />
This novelty was quite an experience.<br />
The launch of this game was essentially<br />
a technological challenge:<br />
• Because we wanted a printed cardboard<br />
pack and not a blister pack (in<br />
order to get a more premium look),<br />
the manufacturing process required a<br />
specific printing machine.<br />
• Due to the fact that the product was<br />
made of 7 different scratch-off games<br />
+ 1 bonus game, each with their own<br />
prize structure that should suitably<br />
combine to make the overall expected<br />
prize structure, the printer was<br />
obliged to develop a new programming<br />
technology.<br />
• Because only 1 “master” game (out of<br />
the 8) bore logistics and financial data<br />
and should be activated while still in<br />
the pack, a window needed to be created<br />
on the pack... which required a<br />
new cutting technique.<br />
• Because each of the 8 games could<br />
be paid separately and did not bear<br />
all data, each of them needed to be<br />
linked to the “master” game, which<br />
required to adapt programming.<br />
In order to explain this new concept to<br />
consumers, the launch has been strongly<br />
advertised through TV and POS materials.
Instant Lotteries<br />
Overall, 7Extra consumer base remains<br />
small and quite specific.<br />
The acceptance of such high price point<br />
tickets is based on several factors. With a<br />
high price point, players expect:<br />
• A game with better odds,<br />
• More scratch-off zones and games<br />
than what is offered on 3-5e tickets,<br />
• A high top prize,<br />
• Obviously lots of intermediate prizes<br />
(between 30e and 200e), which provide<br />
an attractive return on investment.<br />
Since the top prize for 5e tickets (with 5<br />
games inside) was already 50 000e, we<br />
decided to opt for a 100 000e top prize<br />
for the 10e 7Extra ticket. It ranks n°2<br />
within the gaming range (behind Millionnaire<br />
top prize of 1Me).<br />
The payout is another important factor.<br />
For 7Extra, we are offering a payout percentage<br />
of 70% and it’s among our largest<br />
payouts of our game mix:<br />
1e games: 62.5% or 63%<br />
2e games: between 60% and 66%<br />
3e games: between 68% and 70%<br />
5e games: between 68% and 75%.<br />
7EXTRA Sept. 13th, 2007 edition<br />
750 000 printed tickets<br />
overall odds : 1 out of 4<br />
No. of prizes Prizes Total<br />
1 100 000 e 100 000 e<br />
9 1 000 e 9 000 e<br />
500 100 e 50 000 e<br />
4 500 50 e 225 000 e<br />
10 000 30 e 300 000 e<br />
27 400 20 e 548 000 e<br />
51 920 15 e 778 800 e<br />
93 170 10 e 931 700 e<br />
310 000 5 e 1 550 000 e<br />
252 500 3 e 757 500 e<br />
750 000 5 250 000e<br />
TRJ 70,00%<br />
Since we launched our latest sport event<br />
game (5e Pékin 2008) with a 75% payout<br />
percentage, we plan to relaunch 7Extra<br />
soon, increasing the product payout<br />
to 75%. We are also considering launching<br />
tickets in 2009 or 2010 in the 20e or<br />
more price range, but we will first further<br />
enrich our 5-10e range.<br />
Beside 7Extra, la Française des Jeux<br />
runs a promotional operation for Christmas<br />
and New Year that consists of a gift<br />
pack filled with tickets sold at a price<br />
point of 20e.<br />
This promotional activity started in 1994<br />
and is now a major consumer rendezvous.<br />
It consists of 4 different gift packs, each<br />
of them filled with FDJ standard tickets<br />
whose cumulative value equals 20e. The<br />
selling period extends from early December<br />
to mid January.<br />
These offers of gift packs have been renewed<br />
regularly:<br />
1992-1996: Classical gift packs<br />
1997: Pop-up gift packs<br />
1998: Musical gift packs<br />
1999: Calendar gift packs<br />
2000-2002: Musical gift packs<br />
2003-2005: Glossy gift packs<br />
2006: Zip gift packs<br />
2007: Zip gift packs (with hologram)<br />
They are always strongly advertised<br />
through TV, radio, Internet and POS material.<br />
Since a lot of them are offered to<br />
non-consumers, they are one of the best<br />
means to recruit new consumers for this<br />
category.<br />
Example of 2007 gift pack:<br />
11<br />
P AN RAMA<br />
POS material avertising 2007 gift packs:<br />
This operation is a true consumer success<br />
and boosts scratch-off game sales by<br />
25-30% compared to an average week.<br />
Overall, additional sales account for 2%<br />
of yearly total sales.<br />
Though a promotional event, gift packs<br />
now tend to be considered as a product<br />
in itself by consumers.<br />
Additional sales generated by gift packs<br />
N.B. : 2001 results have been badly<br />
impacted by the change of currency<br />
(switch to euro).
120 M<br />
100 M<br />
80 M<br />
60 M<br />
40 M<br />
20 M<br />
0 M<br />
+ 73,1 M<br />
+ 25,3%<br />
+ 77,7 M<br />
+ 30,5 M<br />
+ 24,1%<br />
Passage<br />
l’<br />
+ 9,4%<br />
+ 79,5 M<br />
+ 79,3 M<br />
Focus of our marketing activity<br />
1e 2e 3e 5e 10e<br />
2007 Numero Sudoku: new 1,2,3 Adjugé: Tous derrière 7Extra:<br />
Fétiche: product launch auction theme le XV de France: casino<br />
relaunch St Valentin: game sport event game theme<br />
calendar game (rugby) relaunch<br />
Jan.- Millionnaire: St Valentin: Pékin 2008: 7Extra:<br />
June relaunch calendar game sport event game 7 wonders of the<br />
2008 Totemia : travel (Olympics) world theme<br />
theme game relaunch<br />
Enquête: police<br />
investigation theme<br />
game<br />
Our range for the 2007-08 period:<br />
1e 2e 3e 5e 10e<br />
Jan. Goal Millionnaire Vegas Tous derrière 7Extra:<br />
2007- Banco Astro Tac O Tac le XV de France: 7 wonders<br />
June Morpion Black Jack 1,2,3 Adjugé Pékin 2008 of the world<br />
2008 Numero Solitaire Totemia (Olympics)<br />
range Fétiche Dédé<br />
Super Bingo<br />
XIII<br />
Sudoku<br />
Scrabble<br />
St Valentin<br />
Enquête<br />
Number 4 11 4 2 1<br />
of<br />
products<br />
+ 25,8%<br />
12<br />
+ 89,8 M<br />
+ 87,6 M<br />
P AN RAMA<br />
+ 82,9 M<br />
+ 74,1 M<br />
1999 2000 2001 2002* 2003 2004 2005 2006 2007<br />
Additional sales in Million uros<br />
% of sales increase vs annual average week<br />
Providing games at a high price point will<br />
certainly not eliminate our offering of lower<br />
cost instant tickets. French players are<br />
still very much interested in cheap, accessible<br />
tickets, which sometimes are their<br />
exclusive purchase.<br />
+ 25,2%<br />
Scratch-off, another path to success<br />
+ 28,7% + 28,4% + 28,5%<br />
However, in 2007 and 2008, our marketing activity has been mainly focused on widening<br />
and renovating our mid-price offer, and not the high price segment:<br />
+ 25,1%<br />
Besides, before launching a new game<br />
format, we always consider any risk that<br />
could create a discriminatory environment<br />
against low-cost ticket consumers<br />
who would no longer afford buying lottery<br />
tickets. As a state-owned company, this is<br />
50%<br />
45%<br />
40%<br />
35%<br />
30%<br />
25%<br />
20%<br />
15%<br />
10%<br />
5%<br />
0%<br />
Instant Lotteries<br />
not a risk we can take. Also, eliminating<br />
low-price tier games would not be affordable:<br />
There would be probably a risk of losing<br />
consumers if we were to eliminate low<br />
price tickets to exclusively concentrate on<br />
a high price range.<br />
The cheaper segment (1e tickets)<br />
plays an important role in recruiting new<br />
consumers.<br />
The 2e segment is totally key since it<br />
still accounts for the major part of our<br />
business (58% of sales in 2006 and 55%<br />
in 2007).<br />
We are consolidating the 3 and 5e segments<br />
by switching some of the products<br />
from 2 to 3e (St Valentin for example)<br />
and launching new 5e references.<br />
With a high price ticket such as 7Extra, we<br />
attract few consumers. Penetration is low:<br />
6% versus 51% for total scratch-off game<br />
range.<br />
Consumers are regular players :<br />
• who also buy 1, 2 and 3e tickets (70%<br />
of them),<br />
• who spend more than the average consumer:<br />
6,7e per week versus 3,3e,<br />
• who also buy more different tickets<br />
than the average consumer: 10,7 versus<br />
4,9 each year.<br />
We do not consider that high price tickets<br />
create a specific problem. However, it is<br />
our duty to promote responsible behaviour<br />
towards gaming whenever it is possible.<br />
This is why we always mention our<br />
“restez maîtres du jeu” (stay in charge)<br />
claim on any print communication (tickets,<br />
POS material, website...) and we always<br />
make sure our commercials comply<br />
with our advertising policy.<br />
Always looking at launching higher<br />
priced tickets is not our strategy. Overall,<br />
we think we need to balance winning<br />
odds and attractive jackpots to maximize<br />
growth. While we are planning to launch<br />
other high price tickets (some with much<br />
higher top prize than current 7Extra), we<br />
are also launching mid-price tickets with<br />
very high winning odds (one ticket with<br />
winning odds of 1 out 2 for example).<br />
The objective is to answer different consumer<br />
needs and profiles.
Instant Lotteries<br />
Slovenia<br />
Our oldest instant game is called Ekspres<br />
Loterija and was launched in<br />
1971. In 1993, we added a new instant<br />
game called HIP Loterija. In 1997, it was<br />
IZREDNA Sreka and in 2004, the KVIZ<br />
Srečka game.<br />
Today we are selling all four categories<br />
of instant games. Each category has different<br />
parameters (price, percentage<br />
payout, prize-structure and Jackpot, play<br />
style). Every year, we launch from 2 to<br />
6 different games in each category, for<br />
a total of 10 to 12 different games. One<br />
instant game stays usually on the market<br />
from 3 to 6 months and there are at least<br />
6 different games on the market at the<br />
same time.<br />
In the Slovenian market, every game that<br />
has a price tag of more than 3,00 e is considered<br />
a high price ticket. We launched<br />
the first high-price instant ticket for 5,00<br />
e in the end of the year 2007 in the category<br />
of IZREDNA Srečka. The game was<br />
printed in smaller edition and designed<br />
as a New Year’s card. The size of the ticket<br />
was at least twice as big as the normal<br />
ticket. The player had to scratch 12 fields<br />
representing the months of the year and<br />
he had to match at least 3 bells to win a<br />
prize. The more bells he matched, the<br />
bigger was the prize. The payout rate<br />
was 80% and the highest prize 30.000,00<br />
e. This was the only high-price ticket in<br />
Slovenian market.<br />
Scratch-off tailored to Slovenian preferences<br />
In 2007 we have been offering 12 different<br />
games. The most successful game is<br />
Izredna srečka, which is also the most<br />
expensive among all instant games but<br />
has the most attractive prizes and payout<br />
percentage. Our players prefer simple<br />
tickets with non-complicated play style<br />
(like discovering the prizes). Games are<br />
designed with different themes. The<br />
most successful theme in the last two<br />
years has been casino-style games. Since<br />
2003, we have been also offering the socalled<br />
New Year’s ticket, with very good<br />
sale results. The game is more expensive<br />
than an ordinary game in the category of<br />
Izredna srečka and has a higher percentage<br />
payout (up to 80%).<br />
Category First launch in Price Payout percentage<br />
EKSPRES Loterija 1971 0,50 e 50,00% - 60,00 %<br />
HIP Loterija 1993 1,50 e 60%<br />
IZREDNA Srečka 1997 2,00 e - 3,00 e 70,00% - 80,00%<br />
KVIZ Srečka 2004 1,00 e 60%<br />
13<br />
P AN RAMA<br />
The sales figure of the 5,00 e game was<br />
below our expectations. We believe that<br />
the main reason was the price because<br />
our players are not used to pay more<br />
than 3,00 e for a ticket. We improved our<br />
returns by introducing a marketing approach,<br />
which allows a player to receive<br />
a present for buying two or more tickets.<br />
We specifically designed this game to<br />
make sure it would get the best acceptance<br />
from the public. The game had<br />
one large Jackpot and a lot of lower-tier<br />
prizes. The lowest prize was equivalent<br />
to the price of the ticket. The payout<br />
percentage was 80% and almost 65% of<br />
the tickets won a prize. The payout percentage<br />
was higher than the payout percentage<br />
in other instant tickets and at<br />
the same level as in some extraordinary<br />
games (such as the New Year’s tickets) in<br />
the segment of Izredna srečka.<br />
We do not plan to launch instant games<br />
costing more than 5,00 e at the present<br />
time. According to our market research<br />
and survey, our players are not prepared<br />
to pay more than 5,00 e for a lottery<br />
ticket even if the Jackpot would be more<br />
attractive. We’ll continue with the existing<br />
strategy – offering four categories of<br />
instant games with different parameters<br />
(price, percentage payout, prize-structure,<br />
Jackpot and play styles).
Switzerland<br />
Switzerland has a long tradition of high<br />
price point tickets: The first lottery ticket<br />
was sold in 1937 at a price point of CHF<br />
5.--. One could consider this to be a super<br />
high price point.<br />
The first instant game was launched in<br />
1975 at a price point of CHF 5.--. The<br />
already existing passive tear-open ticket<br />
lottery was simply transformed into a<br />
pre-drawn tear-open ticket.<br />
In the early 90ies the price of the above<br />
ticket was risen to CHF 10.--. A very successful<br />
game called “Benissimo”, this<br />
ticket is still no. 1 in sales in our jurisdiction.<br />
For Swisslos, the high price point is not a<br />
new price segment as our variety of current<br />
games can attest:<br />
CHF 10.-- Benissimo (a tear-open ticket<br />
with a draw on a TV-Show)<br />
CHF 15.-- Piratenschatz (two multigame<br />
tickets in one pouch)<br />
CHF 20.-- 6-Pack (6 tickets in one<br />
pouch)<br />
CHF 100.-- Millionenlos (a multi-game<br />
ticket with a draw on a TV-<br />
Show, and a ticket presented<br />
at the end of the year which<br />
was introduced in 1999).<br />
14<br />
An experience with high price instant tickets<br />
Besides the high price segment, we offer<br />
games at the lower price points:<br />
P AN RAMA<br />
CHF 1.-- 1 ticket<br />
CHF 2.-- 2 tickets<br />
CHF 3.-- 3 tickets<br />
CHF 4.-- 1 ticket<br />
CHF 5.-- 4 tickets<br />
CHF 6.-- 2 tickets<br />
CHF 7.-- 1 ticket<br />
CHF 8.-- 1 ticket<br />
CHF 9.-- 1 ticket<br />
Looking at all of our products, the most<br />
successful scratch-off game we have<br />
launched – game with remarkable results,<br />
is “Millionenlos” (in the price point<br />
of CHF 100.-)<br />
(CHF 1.- = EUR 0,62 approx.)<br />
Instant Lotteries
Prof. Viren<br />
Prof. Matti Viren<br />
University of Turku, Department of<br />
Economics, Finland.<br />
Gaming markets are changing rapidly.<br />
This change manifests itself in institutions,<br />
the nature of games and in the volume<br />
and pricing of gaming. Formally, the<br />
institutional set-up has not changed very<br />
much during the past ten years. However,<br />
under the surface a great deal has<br />
happened. The most important engine of<br />
change, of course, has been the internet,<br />
which has enabled cross-border gambling<br />
in an unprecedented scale.<br />
Although we do not know the volume of<br />
cross-border sale exactly, we can use the<br />
estimates of a recent survey conducted<br />
across European Lotteries 2 . According to<br />
this survey, cross-border sales constitute<br />
an average of 7.4 percent of the gaming<br />
companies’ total sales. It is not a strikingly<br />
big figure but when we look at the individual<br />
games, we are faced with certain very<br />
high percentages. For example, while<br />
cross-border sales in lotto are around<br />
one percent, their share in sports betting<br />
amounts to up to 39 percent. From the<br />
point of view of existing companies andgovernments,<br />
the situation is alarming<br />
already because it entails major losses of<br />
revenue. Governments are also concerned<br />
about tax revenue: private bookmakers do<br />
not pay taxes on their cross-border sales,<br />
which, in turn, is detrimental to the governments’<br />
fiscal position.<br />
Whatever will happen, it is clear that we<br />
are moving towards more competitive<br />
markets and prices will fall (accordingly,<br />
the prizes and the payout ratios will in-<br />
Gaming in the new market environment:<br />
what do we know about the consequences<br />
of the changes? 1<br />
crease).Thus, while the average payout<br />
ratio of the European companies is now<br />
at 53.3 percent as compared to 48.5 percent<br />
ten years ago, all companies expect<br />
it to increase substantially in the next<br />
ten years. According to the current European<br />
state lotteries, if all restrictions<br />
were abolished, the payout ratios could<br />
reach 70 percent. This would obviously<br />
increase the volume of sales. Using the<br />
lotteries’ subjective estimates as a benchmark,<br />
we could say that such a change<br />
in the payout ratios would increase the<br />
overall demand by almost one third.<br />
Quite clearly, such changes would show<br />
in all indicators: expenditures, production,<br />
employment, advertising and, maybe<br />
most importantly, problem gambling.<br />
It is certainly worth trying to analyze the<br />
nature and magnitude of these effects in<br />
more detail. It is not easy and we cannot<br />
always arrive at unambiguous results;<br />
yet some results are quite obvious. Very<br />
briefly, we could state:<br />
• Gambling is good; its overall effect on<br />
welfare is clearly positive. Hence, there<br />
is no need to prohibit gambling altogether,<br />
nor should reasonable growth of the<br />
gambling sector be prevented.<br />
• The demand for gambling is relatively<br />
sensitive to prizes – yet not only to average<br />
prizes but rather to the whole distribution<br />
of prizes. With “better” prize<br />
schemes – and with “better” games<br />
gambling will increase even if the average<br />
price level and household income<br />
did not change.<br />
• From the point of view of problem gambling,<br />
the biggest threat may not come<br />
from the sole expansion of gambling but<br />
from the change in the nature gambling<br />
to more intensive activities with higher<br />
frequency.<br />
• We should be worried about the market<br />
structure in the gambling industry because<br />
the gaming sector is not a prototype<br />
of free competition: in fact, by abolishing<br />
a public monopoly we may get a<br />
private monopoly instead.<br />
• The fiscal issues are quite complex<br />
because they concern the role of the<br />
governments and the measures which<br />
governments can take in order to secure<br />
their fiscal needs and protect consumers<br />
without jeopardizing free entrepreneur-<br />
15<br />
P AN RAMA<br />
ship and free competition. The fact that<br />
gambling generates large revenues does<br />
not constitute a justification for government<br />
intervention as such.<br />
• There are numerous public policy issues<br />
which have not been properly considered<br />
yet. They include both crime and<br />
misuse and the need for regulation and<br />
control. The public policy concerns also<br />
cover lobbying and interplay between<br />
various suppliers and beneficiaries of<br />
gaming revenues. All interest groups<br />
and organizations claim that they are<br />
just trying to improve consumer welfare,<br />
although even the opposite might<br />
be true.<br />
Quite often, the alternatives are presented<br />
as choices between black and white.<br />
But gaming is not that simple. Take, for<br />
instance, problem gambling. One may argue<br />
that, thus far, problem gambling has<br />
been well under control, and that it only<br />
represents a problem for a small minority,<br />
say one percent of the adult population,<br />
which appears a typical estimate<br />
in most jurisdictions. But we have to be<br />
careful in quantifying the significance<br />
of problem gambling. Small numbers of<br />
participation may not necessarily mean<br />
small economic impact. Moreover, the<br />
historical record of controlling problem<br />
gambling does not automatically translate<br />
to similar performance with different<br />
settings of games and gaming volumes.<br />
The implication of all this is quite simple:<br />
before we make affirmative conclusions<br />
we had better find out how things are. And<br />
that means simply more fact-finding, more<br />
analysis, and more research.<br />
In several speeches I did mention that<br />
since 1994 until 2007 the European Court<br />
of Justice did rule in 14 preliminary cases<br />
on gambling services. In 2008 the same<br />
European Court has already received 14<br />
new preliminary referrals. As such this<br />
proves that the legal disputes surrounding<br />
gambling in the EU are creating the need<br />
for regulatory solutions.<br />
1 This article is based on a new book “Gaming<br />
in the New Market Environment” (Matti<br />
Viren, editor), Palgrave/Macmillan, 2008.<br />
2 The survey was conducted by the Finnish<br />
National Lottery Veikkaus in April 2006.
In several speeches I did mention that since<br />
1994 until 2007 the European Court of Justice<br />
did rule in 14 preliminary cases on gambling<br />
services. In 2008 the same European<br />
Court has already received 14 new preliminary<br />
referrals. As such this proves that the<br />
legal disputes surrounding gambling in the<br />
EU are creating the need for regulatory solutions.<br />
In his opinion in the Placanica case, the Advocate<br />
General mentioned on the last page<br />
of his opinion that the Member States did<br />
already miss several opportunities to regulate<br />
gambling services at EU level. Although<br />
the comment is surprising and unfair, considering<br />
the inadequacy of the solutions<br />
proposed by the Commission, it shows that<br />
the Court is not willing to become the final<br />
arbitrator in what is becoming an increasingly<br />
difficult political problem.<br />
Notwithstanding this, one has to admit that<br />
the European Court has acted in this area<br />
with great respect for the sensitivities and<br />
problems at stake. The Court, as always,<br />
took up its own responsibility as far as the<br />
Court could go and did substantially contribute<br />
to create conditions allowing the<br />
Member States to understand what is possible<br />
within the actual context of the Treaty.<br />
From Schindler to Placanica the Court has<br />
designed the legal framework for gambling<br />
services under the Treaty and the limits<br />
thereof.<br />
The Treaty as such does indeed not provide<br />
for full answers to the complexity of<br />
the gambling issues and the Court understands<br />
this. The Portuguese internet gambling<br />
case did show how far reaching the<br />
difficulties are. None of the Member States<br />
16<br />
Where does Europe (want to) go?<br />
By Philippe Vlaemminck, EL Legal Adviser<br />
present, and there were many intervening,<br />
nor the Commission does want the gambling<br />
market to be driven by market forces.<br />
Already in Schindler, the Advocate General<br />
explained in a very high level and well argued<br />
opinion that applying market rules to<br />
gambling services will not lead to a better<br />
allocation of resources as aimed at by the<br />
Treaty.<br />
Today, however, the institutional crisis is<br />
deep. The Commissioner in charge of Internal<br />
Market questions does not want to<br />
do anything else than to apply the Treaty<br />
to gambling services. This could undermine<br />
the structures set up by the Member States<br />
to respond to addiction and criminal problems<br />
clearly connected to gambling. He has<br />
initiated infringement cases against an increasing<br />
number of Member States, proving<br />
by this that there is no simple legal problem,<br />
but rather a very serious political problem.<br />
The infringement cases will not bring solutions,<br />
but rather increase the problems.<br />
Strangely enough the Commissioner for<br />
Internal Market does not want to take up<br />
the political challenge, although the awareness<br />
of the problem is growing inside the<br />
Commission that, as the President of the<br />
Commission is stating, “a friendly solution”<br />
must be searched together with the Member<br />
States.<br />
The other institutions, who did refuse the<br />
earlier inadequate solutions (E-commerce<br />
Directive, Services Directive) proposed by<br />
the Commission, do take up their political<br />
responsibility although legally they don’t<br />
have the right of initiative.<br />
Indeed, following a meeting of the Government<br />
Agents to the European Court on July,<br />
10, 2007, the Member States decided to start<br />
a dialogue on this matter. It took up until the<br />
current French Presidency before the idea<br />
was implemented through the “Services<br />
and Establishment Working Group” of the<br />
Council. During the Competitiveness Council<br />
in December 2008 the French Presidency<br />
wants to report on the discussions in this<br />
Working Group. Surprisingly during the first<br />
meeting in July the Commissioner on Internal<br />
Market denied even to participate in this<br />
dialogue with the Member States instituted<br />
by the French Presidency. Let’s hope that<br />
this changes and that the Commission Services,<br />
who have over the years acquired a<br />
substantial knowledge of the problems and<br />
P AN RAMA<br />
Legal<br />
understand the sensitivities, can participate<br />
and contribute to this dialogue. This<br />
is indeed the only way to come to terms in<br />
this difficult area. The discussion although<br />
strongly focused on the problems of the online<br />
gambling market, will cover all aspects<br />
of gambling. A questionnaire has been sent<br />
to all Member States who are expected to<br />
provide input by 12 September.<br />
Also the European Parliament wants to<br />
contribute to a better solution. Indeed also<br />
the Parliament did initially reject the proposed<br />
solutions of the Commission, but is<br />
aware that the Treaty as such does not provide<br />
the solution. During the debate on the<br />
White Paper on Sport, it became clear that<br />
the European Parliament acknowledges the<br />
important role and contribution of Lotteries<br />
to the European sport model based upon<br />
amateur and grass root sports.<br />
In September, the IMCO Committee of the<br />
European Parliament wants to address the<br />
question of gambling in an own initiative report.<br />
Although initially the European Parliament<br />
was considering to look into the questions<br />
of the online gambling market only,<br />
the expectations are that the Parliament<br />
will take into consideration all consumer related<br />
aspects as well as the public order elements<br />
of crime prevention. The Parliament<br />
also wants to order a short study on some<br />
aspects of the gambling market to prepare<br />
its own work.<br />
Both initiatives can only be welcomed and<br />
show how both institutions take up their political<br />
responsibility to find proper political<br />
and regulatory answers, if necessary under<br />
secondary EU law, something that the European<br />
Court could as such not do.<br />
Today it is clear that a single Member State<br />
cannot provide all answers to regulate properly<br />
the gambling sector. The principle of<br />
subsidiarity as outlined in the Protocol of<br />
the Amsterdam Treaty does therefore require<br />
the European Union to look for the essential<br />
cross border aspects of the problem.<br />
This is what has to be done. The coming<br />
months will show us where Europe wants<br />
to go. European Lotteries can substantially<br />
contribute, as an experienced think tank<br />
and as the representative of the vast majority<br />
of the gambling sector, to the fact finding<br />
and the regulatory solutions.
17<br />
P AN RAMA
ELISE<br />
18<br />
European Lotteries<br />
Information Sharing Extended<br />
The need for aggregated quality data<br />
on Lotteries<br />
“Do we have the data we need to support<br />
key messages about Lotteries in the<br />
European Union?” asked the business intelligence<br />
people at Veikkaus, the Finnish<br />
national Lottery, at the beginning of<br />
2007. Could we, for example, state with<br />
accuracy the amount of money provided<br />
by Lotteries in the EU for societies in the<br />
form of taxes or money for good causes<br />
last year? Or could we tell whether sales<br />
have dropped or increased over the last<br />
five years?<br />
In spite of the number of questionnaires<br />
each Lottery deals with every year the<br />
answer was “No, not really”. Each Lottery,<br />
of course, has a very good and accurate<br />
picture of the situation in its own<br />
jurisdiction. However, stakeholders outside<br />
the sector often want an aggregated<br />
snapshot. Data should be grouped meaningfully<br />
and summarized at appropriate<br />
levels to give an overall picture based<br />
on accurate details where, for example,<br />
comparisons between jurisdictions are<br />
easily made.<br />
Information Professionals Working Seminar<br />
In December 2008 or at the latest February 2009 a Seminar<br />
on Info Sharing will be organised.<br />
The Lotteries who are interested to host this workshop are kindly invited<br />
to contact the Secretariat General<br />
P AN RAMA<br />
ELISE<br />
Such aggregated comparable data are<br />
necessary to have a meaningful and fact<br />
based policy discussion both nationally<br />
and regionally. The latest aggregated<br />
snapshots are from the Swiss Institute of<br />
Comparative Law in its “Study of Gambling<br />
Services in the internal market of<br />
the European Union”, June 2006 and<br />
“The Case for State Lotteries” by London<br />
Economics from September 2006. However,<br />
data in these reports are five years<br />
old and apply different terms for measuring<br />
the economic activities of Lotteries.<br />
Both reports underlined the need for better<br />
data and this is exactly what ELISE is<br />
all about.<br />
From data to key messages<br />
Grapes and wine are obviously not the<br />
same. You make good wine from grapes<br />
harvested at the right time and from<br />
the right fields; matured under constant<br />
surveillance by oenologists and bottled<br />
and served at the right temperature in<br />
the right glass. Likewise, data is not the<br />
same as information. You make good information<br />
by first choosing and defining<br />
the data you need to support the message<br />
you want to give. Then you collect<br />
the data. Thirdly, you control the data<br />
and make sure they can be meaningfully<br />
aggregated and finally you paint the aggregated<br />
picture and deliver your key<br />
messages.<br />
ELISE so far<br />
To define which “grapes” should be collected<br />
from which “vineyards” and how<br />
the storage and “fermentation process”<br />
should be handled, EL and Veikkaus arranged<br />
a two day workshop in Helsinki in<br />
February 2007. Some 30 lottery business<br />
intelligence experts discussed the framework<br />
and gave a small group of people<br />
the mandate to compile a new questionnaire<br />
which, for a start, could replace the<br />
general annual EL questionnaire.<br />
The group defined the data they wanted<br />
and for each data entry a small explanation<br />
was added to make sure that everyone<br />
would understand the same reading,<br />
for example “Gross Gambling Revenue” or<br />
“Number Game”. The “harvest” was done<br />
by EL which sent out the questionnaire
ELISE<br />
to some 57 European Lotteries (EEA lotteries<br />
plus three outside the EEA which<br />
participated in the workshop) in June<br />
2007. When a questionnaire was returned<br />
to EL, the people from the working group<br />
with the best knowledge of this Lottery<br />
made a thorough data verification. Was<br />
everything completed and did the data<br />
look right compared to other sources like<br />
annual reports, TLF or WLA?<br />
Following the “harvest” and the data control,<br />
the Veikkaus Business Intelligence<br />
Unit converted all figures into Euros and<br />
compiled the aggregated data. Finally, on<br />
the basis of the aggregated data, a report<br />
with information about the Lotteries in<br />
the EU could be prepared.<br />
ELISE results<br />
Some 54 of 57 Lotteries in the EEA answered<br />
the data survey giving a response<br />
rate of 95%. Here are a few of the results.<br />
In 2006, the total economic activity measured<br />
as gross gambling revenue (sales minus<br />
prizes) of the 51 Lotteries in the EU<br />
(27) was e 32.2 bn. The figure reflects<br />
the expenditure of European consumers<br />
from activities offered by state licensed<br />
national Lotteries.<br />
The two main activities were number and<br />
instant games accounting for 87% of the<br />
total. However, in many jurisdictions state<br />
Lotteries are entrusted by their governments<br />
to operate more than the games<br />
considered by most to be “traditional lotteries”.<br />
Some 31 national Lotteries in 15<br />
EU member states thus offer pari-mutual<br />
sports wagering and fixed odds betting is<br />
offered by 28 national Lotteries in 13 EU<br />
member states. Gross gaming categories<br />
from those two categories accounted for<br />
e 2.3 bn.<br />
Total mandatory money for good causes<br />
and Treasury, a feature which distinguishes<br />
national Lotteries from private<br />
for profit operators, came to e 20.6 bn.<br />
or the equivalent of e 42 per capita on<br />
average in the EU.<br />
The report was approved by the EL Executive<br />
Committee at its meeting in June<br />
2008 and is now available at the EL internet<br />
site https://www.european-lotteries.org<br />
where all the results can be seen.<br />
It was also sent to the participating Lotteries<br />
together with the aggregated “raw”<br />
data which allow each lottery to do its<br />
own bench marking and analysis.<br />
The vision for the future<br />
The collection of 2007 data has started<br />
and a new report is planned for the<br />
end of this year. The questionnaire was<br />
slightly amended to reflect the experiences<br />
of the first round but not so much<br />
that time series could not be made. Focus<br />
for 2007 will be on EU Lotteries and<br />
data like money for good causes and the<br />
use of Internet.<br />
EL and its Members are in a unique position<br />
to collect data from its own activities.<br />
The vision is thus to create a solid base<br />
of well defined, high quality aggregated<br />
lottery data at the EU level. This in turn,<br />
will allow EL and its members to share<br />
their knowledge of Lotteries with outside<br />
stakeholders to ensure a fact based policy<br />
discussion of Lotteries and their position<br />
in the European Community.<br />
19<br />
P AN RAMA<br />
Jean M. Jørgensen,<br />
Nordic Lottery Advice<br />
Fact box<br />
The ELISE working group is chaired by<br />
Mr. Léon Losch, EL Executive Committee<br />
member and Director of the Loterie<br />
Nationale, Luxembourg, facilitated by<br />
the EL General Secretary Bernadette<br />
Lobjois the members are:<br />
• Ms. Alexandra Perrier, International<br />
Relations Manager, La Française des<br />
Jeux, France<br />
• Ms. Annukka Ruuhela, Business Intelligence<br />
Manager, Veikkaus, Finland<br />
• Ms. Lydia Cano Houzé, Responsible<br />
International Games, Loterias Y<br />
Apuestas Del Estado, Spain<br />
• Mr. Ulrich Engelsberg, Senior Referent,<br />
Westdeutsche Lotterie, Germany<br />
• Mr. Wolfgang Leitner, Senior Manager<br />
& Ms Astrid Baier-Löw, Österreichische<br />
Lotterien, Austria<br />
• Mr. Richard Hickson, Policy and Public<br />
Affairs Manager, Camelot, UK<br />
• Mr. Jean Moreau Jørgensen, Nordic<br />
Lottery Advice, Denmark.
Ýstanbul Awaits You...<br />
20 AN RAMA<br />
P<br />
www.el2009.org
Members’ News<br />
Sweden<br />
2008 has been a very turbulent year for<br />
the lottery and gaming business in Sweden.<br />
The foreign operators are marketing<br />
themselves (illegally) more and more<br />
aggressively – one of them has even<br />
opened a retail shop in Stockholm City<br />
without being stopped, a “maffioso” is<br />
standing trial for operating illegal gaming<br />
machines and murdering competitors,<br />
the Government has declared that the<br />
possibility of selling out parts of Svenska<br />
Spel should be looked into, Svenska<br />
Spel is frequently accused by the Gaming<br />
Inspection for letting under-age adolescents<br />
play the VLTs and the CEO and<br />
two of its deputy managers suddenly left<br />
the company in April when a new chair<br />
had been appointed by Anders Borg, the<br />
Minister of Finance, and it was evident<br />
that he and the Svenska Spel top management<br />
had different views on how to<br />
run the state lottery.<br />
- It was quite a surprise to me, when I<br />
suddenly was asked to chair Svenska<br />
Spel, says Margareta Winberg, former<br />
top politician in Sweden and recently<br />
ambassador to Brazil. I have very little<br />
experience from the gaming business,<br />
apart from inaugurating the Stockholm<br />
Casino some years ago when I was deputy<br />
prime minister and was asked to do<br />
so by the then CEO Meg Tivéus. I suppose<br />
the minister wanted me because<br />
I am a quite well-known person and I<br />
am not afraid of speaking my mind on<br />
sensible issues.<br />
The mission she got from Mr Borg was<br />
quite clear – Svenska Spel must be much<br />
Interview<br />
with Margareta Winberg,<br />
Chair Svenska Spel<br />
more responsible in its marketing and<br />
product development, maybe to calm<br />
down the opposition from EU and the<br />
danger of being forced to give up the<br />
present restrictive gaming legislation.<br />
- I did not know very much about Svenska<br />
Spel and its CSR and gaming responsibility<br />
strategy when I accepted<br />
this position in April, she admits and<br />
obviously Mr Borg had little clue of<br />
what has been done and what is going<br />
on at Svenska Spel. Now I have changed<br />
my view – I am impressed of the committed<br />
work for responsibility and<br />
gaming awareness by all staff at Svenska<br />
Spel and the retailer awareness.<br />
Given the mission I received I have of<br />
course focused on all matters concerning<br />
CSR and how Svenska Spel can still<br />
market the games it offers properly. It<br />
is also obvious that the links between<br />
the owner and the lottery must be improved.<br />
I think that I will have the ear<br />
of the minister more than the previous<br />
chair and that matters will be better<br />
from now on.<br />
Some people were hesitant to the appointment<br />
of Mrs Winberg as chair<br />
– they were afraid that there would be<br />
too much talk about responsibility which<br />
could harm sales but it seems that this is<br />
not the case. Maybe it has even been an<br />
advantage to have such a public person<br />
leading the organisation since media are<br />
very keen on quoting her whenever she<br />
speaks in public. And so she does very<br />
often.<br />
- Now, I always take the opportunity of<br />
praising Svenska Spel and its CSR activities<br />
– I realise that it has a top reputation<br />
in the global lottery world for its<br />
responsible program - and I hope that<br />
this message gradually gets across to<br />
politicians, journalists and the players,<br />
she says with emphasis.<br />
No other Swedish lottery chair person<br />
has been so well-known as Margareta<br />
Winberg, This also means that she gets<br />
many calls e.g. from problem gamblers<br />
so by now she is very much aware of the<br />
adverse side of our business but this in-<br />
21<br />
P AN RAMA<br />
formation she can use in her daily work<br />
which takes up much more of her time<br />
than she expected. An important task for<br />
her is to find a new CEO.<br />
- We are looking for a good leader who<br />
is flexible and has a good insight into<br />
politics, she says.<br />
However, this could take some time,<br />
there will be a state report on the lottery<br />
business due Mid-December which<br />
will indicate how the Government wants<br />
to handle number games, sports betting,<br />
charity lotteries, bingo halls, VLTs and casino<br />
in the future. Some politicians would<br />
favour that the Government only keeps<br />
the “dangerous games” such as casinos<br />
and gaming machines and opens up for<br />
license system for the other products.<br />
- The new CEO also has to settle in Visby.<br />
I don’t see that as a problem, Margareta<br />
Winberg says. The city is very<br />
attractive, so is the job – and it is on<br />
Gotland that we have our main office,<br />
she concludes.<br />
At the upcoming WLA congress in Rhodes<br />
she will have the opportunity to meet other<br />
people from the lottery world. – I am<br />
looking forward to learn more about this<br />
fascinating, different business, she says<br />
on her way to open the 17 th Spelakademi<br />
(Gaming Academy) in Visby, where she<br />
among other speakers will listen to Jean<br />
Jørgensen speaking on current legal cases<br />
and French consultant Mr Marco Lopinto<br />
about the new legislation in France.<br />
Interview by Göran Wessberg<br />
Senior Advisor to Svenska Spel
Compared to lotteries in other parts of<br />
the world, most European lotteries do<br />
not experience the same success with<br />
instant tickets. Their market share for<br />
instant tickets generally ranges between<br />
1 and 20 percent. The corresponding figure<br />
in the U.S., for instance, is from 50 to<br />
70 percent. Lotto, Keno, sports betting<br />
and other games sold via a retailer terminal,<br />
the Internet and mobile phone represent<br />
the lion’s share of the European<br />
lottery market.<br />
There are, however, exceptions like<br />
France, UK and Sweden, where instant<br />
tickets are popular. Italy is another example<br />
where sales have increased tremendously<br />
in recent years. The main reason<br />
Italy’s Monopoli di Stato has experienced<br />
such phenomenal growth can be traced<br />
to Scientific Games’ Cooperative Services<br />
Program (CSP), a performance-based<br />
business model in which a third-party<br />
provides specialized services traditionally<br />
handled by the lottery. Third-party<br />
compensation is determined by lottery<br />
sales, a model proven to deepen the business<br />
relationship between lottery and<br />
third-party supplier because the attendant<br />
risks and rewards of managing<br />
the business are shared more equally.<br />
The lottery is able to respond more<br />
quickly and efficiently to changing market<br />
demands.<br />
A CSP implementation was a key initiative<br />
of the Monopoli di Stato’s bold vision<br />
in 2003. At the time, the Italian gaming<br />
regulatory body charted its plan to re-<br />
22<br />
Instant tickets –<br />
the Untapped Lottery Segment in Europe<br />
vitalize its instant scratch-off category.<br />
It has been four years since Monopoli<br />
di Stato implemented CSP and today<br />
its Gratta e Vinci product line routinely<br />
smashes sales records. Annual Gratta e<br />
Vinci sales in 2004 (pre-CSP) were 165<br />
Mil. e; by the end of Calendar 2008, sales<br />
are projected to be around 8.3 billion e,<br />
an increase of about 4,000 percent.<br />
Eyes Have Been Opened<br />
Italy’s growth has opened the eyes of<br />
European lotteries. Increasingly, CSP is<br />
now viewed as a viable business model<br />
for arresting declining or stagnating instant<br />
lottery sales. Five more lottery<br />
jurisdictions, in fact, have begun using<br />
the CSP business model. Key objectives<br />
embedded within each relaunch are what<br />
Scientific Games refers to as the 15 determinants<br />
of instant ticket demand.<br />
Among them:<br />
• Further develop product portfolio<br />
and adapt marketing strategy. Players<br />
say they want more tickets, they<br />
want fresher tickets, and they like to<br />
see something new and different every<br />
time they go into a retail location.<br />
• Optimize product positioning and improve<br />
players’ winning experiences.<br />
• Create more exciting games.<br />
• Enhance instant lottery presentation in<br />
retailer shops and promote the games.<br />
When retailers feel the excitement,<br />
they sell more actively.<br />
• Implement an efficient and effective<br />
ticket distribution system (need-based,<br />
24-hour delivery of tickets).<br />
P AN RAMA<br />
“Some lotteries will experience moderate<br />
sales increases from executing three<br />
or four determinants, but are unable to<br />
achieve the level of success they could if<br />
they would only make the commitment<br />
to execute all 15. That’s really the key<br />
to maximizing instant sales,” says John<br />
Walsh, Senior Vice President, Global<br />
Sales & Services for Scientific Games.<br />
On August 1 st , MSL, Ukraine’s largest lottery<br />
operator, began selling instant tickets<br />
under the CSP business model. “After<br />
witnessing Scientific Games’ success<br />
in other European countries, we realized<br />
Scientific Games would be the perfect<br />
partner to help grow instant ticket sales<br />
in the Ukraine,” said Georgiy Lozhenko,<br />
President of MSL.<br />
The Whole Story<br />
Premium<br />
Scientific Games has a whole division<br />
dedicated solely to the service side of<br />
the lottery business. This division is now<br />
comprised of over 200 people whose collective<br />
skills and talents can run from one<br />
to a myriad of components of a lottery’s<br />
business – including everything from<br />
sales and marketing to distribution and<br />
warehousing.
Premium<br />
It only takes a second to get the thrill of<br />
an instant game, but it takes an all-out<br />
effort to keep players coming back for<br />
that titillating kick. Instant games look<br />
deceptively simple, but they are the most<br />
demanding product for a Lottery market.<br />
There’s far more to it than just printing<br />
and distributing scratch cards, or creating<br />
a successful product mix: A specific<br />
instant game product, susceptible to fluctuations<br />
in the market, comes and goes,<br />
while the brand itself remains.<br />
Intralot faces the challenge to create a<br />
successful brand with lasting power. Our<br />
aim is not just to mix together the right<br />
ingredients and come up with a catchy<br />
product that risks losing its flair; our aim<br />
is to develop a leading and lasting brand.<br />
Backed by almost 15 years of experience<br />
on Instants worldwide, INTRALOT<br />
is keen and capable to rise to this challenge.<br />
While players might never think twice<br />
about playing an instant, at INTRALOT<br />
we ask ourselves and others, and get<br />
answers to some very critical questions<br />
when designing such a brand: What do<br />
players actually think and feel about instant<br />
games? What are the demographics,<br />
the market and the competition in<br />
the area where the instant games will<br />
be introduced? How can we best tailor<br />
product mix, payout percentage, and<br />
prize structure to deliver maximum excitement<br />
and increase players’ chances?<br />
What should the average selling price be<br />
and how many games should be offered<br />
at any one time?<br />
At INTRALOT we rely on top graphic art<br />
designers to produce fresh, eye-catching<br />
themes, striking graphics, and userfriendly<br />
tickets with information for both<br />
players and agents. Having reached the<br />
designs appropriate to each market we<br />
make it our business to choose the printer<br />
supplier who is most appropriate for<br />
each Lottery and who can best meet local<br />
needs for each and every market.<br />
The success of an instant game brand<br />
is based as much on the winning design<br />
of its tickets as on the agents selling the<br />
Creating a successful<br />
brand for instants<br />
products, since they are the ones who<br />
can appeal to consumers with zest and<br />
enthusiasm. We pay particular attention<br />
to the agents’ density, the payment terms<br />
and procedures, the agents’ incentive<br />
programs that will be offered by the Lottery<br />
and the agents’ inventory levels. IN-<br />
TRALOT ensures that the selling, cashing<br />
and settlement systems of traditional<br />
channels are designed to breed credibility<br />
as well as to maximize profitability and<br />
minimize the workload of agents and consumers<br />
alike. In its goal towards expanding<br />
consumer reach, INTRALOT strongly<br />
promotes the use of alternative distribution<br />
channels, whenever possible.<br />
A strong well balanced network as previously<br />
described is reinforced and supported<br />
by a powerful advertising strategy<br />
to tap into the public spirit of gaming and<br />
foster the brand image. We develop exclusive<br />
promotional and purchase material<br />
that support the brand and add a significant<br />
brick to the success and growth of<br />
the games. At all times INTRALOT analyses<br />
sales data in depth and uses them as<br />
a powerful managerial tool for recalibrating<br />
all aspects of Instants operation.<br />
To accomplish all of this takes more time,<br />
effort and resources than is required for<br />
any of the other Lottery products to be<br />
marketed. To make Instants successful,<br />
23<br />
P AN RAMA<br />
the optimization of all these factors is an<br />
absolute “must” as opposed to the easy<br />
recipe of “higher jackpots” that is the<br />
normal remedy for the Numerical games.<br />
Every Lottery that aims at achieving success<br />
in Instants should combine all the<br />
above ingredients that go into making a<br />
leading brand effectively so as to optimize<br />
the final result in the market.<br />
INTRALOT, having specific experience<br />
in a number of jurisdictions around the<br />
world is best suited to be the effective<br />
and credible partner to any Lottery for a<br />
profitable operation of Instants.<br />
With the in depth knowledge of all aspects<br />
of Instants operation and with the<br />
security of a mature worldwide operator,<br />
INTRALOT can set the goals needed and,<br />
in close cooperation with the Lottery,<br />
achieve them, so as to satisfy the shortand<br />
long-term needs of the marketplace,<br />
and create a loyal customer base which<br />
will grow, as satisfied customers spread<br />
the word.
READY, SET, GO!<br />
Historically, bringing a start-up or existing<br />
lottery online from start to finish has<br />
been complicated and involved a substantial<br />
investment of time and money.<br />
So much so that smaller Lotteries might<br />
consider the prospect of creating a truly<br />
secure, reliable, and manageable online<br />
Lottery too daunting a task. This is no<br />
longer the case.<br />
GTECH has designed a solution in response<br />
to the need for a quick and cost<br />
effective way for new Lotteries to get up<br />
and running and selling tickets fast, the<br />
GTECH GO Platform. GTECH GO is<br />
an all-in-one, plug-and-go system containing<br />
the games and basic applications<br />
critical to automating and running the<br />
day-to-day operations of a start-up lottery.<br />
GO allows Lotteries to begin selling<br />
tickets quickly and easily, earning revenue<br />
sooner.<br />
“GTECH is committed to providing innovative,<br />
cost effective, and relevant solutions<br />
to all Lottery operations, no matter<br />
what size or structure,” said GTECH<br />
President and CEO Jaymin Patel. “The<br />
GO solution was designed by our engineers<br />
to provide all of the automated<br />
tools that are needed to run a profitable<br />
start-up lottery with a timely, low cost,<br />
24<br />
GTECH GO is an end-to-end solution<br />
equipped with preloaded games and<br />
promotions, retailer management tools,<br />
built-in security and redundancy, reporting<br />
and accounting capabilities, and an<br />
industry-proven transaction engine and<br />
communication control system. GO leverages<br />
more than 25 years of industry<br />
experience, time and field tested applications<br />
and security measures and a true<br />
culmination of industry best practices.<br />
“We’ve been helping lotteries around the<br />
world run their business for nearly 30years,”<br />
continued Mr. Patel. “We know<br />
what it takes to successfully and securely<br />
start a lottery from scratch and look forward<br />
to working with governments that<br />
are interested in running a start-up lot-<br />
P AN RAMA<br />
Premium<br />
tery. Our goal is to have them selling<br />
lottery tickets quickly and easily, while<br />
starting to contribute to good causes<br />
and earning profits in approximately 90<br />
days,” concluded Mr. Patel.<br />
The GO platform runs the most popular<br />
games including: Lotto, Rapid Draw Keno,<br />
Numbers, Raffle, and 1x2 Sports Wagering<br />
Game. All of the games available include<br />
standard play slips, game tickets,<br />
and screens that are configured with the<br />
Lottery’s logo during the sale process. In<br />
other words, with GTECH GO, you are<br />
receiving all of the benefits of a fully automated<br />
lottery without a time consuming<br />
installation or high costs. With the<br />
new GTECH GO solution, the efficiency<br />
of online lottery has become more accessible<br />
to Lotteries around the world.
Semi-Premium<br />
Grupo Selco adds 1,000 more Wincor<br />
terminals to its network<br />
Venezuelans like games of chance. Every<br />
available centímo is saved for a visit to<br />
the outlets of the country’s numerous lotteries.<br />
With more than 3,000 networked<br />
branches, Grupo Selco is the largest provider<br />
of lotteries, IT systems and support<br />
services in Venezuela. For years now,<br />
the company, which is headquartered<br />
in Barquisimeto and has a branch office<br />
in Caracas, has purchased its hardware<br />
from Wincor Nixdorf, a global IT group<br />
headquartered in Germany. Wincor Nixdorf<br />
has meanwhile installed around<br />
3,000 Xion /M terminals in the Caribbean<br />
nation – and 1,000 alone were commissioned<br />
at the start of the year. With<br />
this delivery, Venezuela’s leading lottery<br />
company has expanded once again a network<br />
of outlets that has almost doubled<br />
from 1,600 to 3,000 in just two-and-a-half<br />
years!<br />
Wincor Nixdorf’s Xion /Mtop terminals<br />
are of the very highest standard the company<br />
has to offer. In addition, the associated<br />
Xiprint+thermal printer outputs<br />
tickets at high speed. The powerful duo<br />
permits rapid handling at the point of<br />
sale. Since 2002, Grupo Selco has cooperated<br />
closely with the local branch office<br />
of Wincor Nixdorf in Venezuela. With the<br />
aid of the local competence team, Wincor<br />
Nixdorf’s developers have been able to<br />
go on developing the system solutions on<br />
site and ensure smooth operation of the<br />
terminals.<br />
Passion for lottery<br />
This fine partnership is also visible ‘on<br />
the outside’: Grupo Selco has adopted<br />
the blue color of Wincor’s terminals as<br />
an identifying feature – it calls its 3,000<br />
outlets throughout the country “punto<br />
azul” or blue point. “Our collaboration<br />
with Grupo Selco is a classic success story<br />
that perfectly reflects our strengths,”<br />
says Andreas Kohlmann, Head of the<br />
Lottery Solutions Business Unit at Wincor<br />
Nixdorf. “Our teams work and live all<br />
around the world. They understand the<br />
needs and cultures of our local customers.<br />
That simplifies communication and<br />
strengthens mutual trust – a recipe that<br />
makes for successful, long-term customer<br />
relationships,” sums up Kohlmann.<br />
Contact:<br />
Wincor Nixdorf Lottery Solutions,<br />
Markus Sauter (Head of Marketing),<br />
Max-Stromeyer-Str. 116,<br />
D-78467 Konstanz,<br />
phone +49 (0)7531 94226-31,<br />
markus.sauter@wincor-nixdorf.com.<br />
25<br />
P AN RAMA<br />
Wincor Nixdorf in brief:<br />
Wincor Nixdorf is one of the world's leading<br />
vendors of IT solutions and services for retail<br />
banks and retailers. The company’s portfolio is<br />
oriented toward optimizing business processes<br />
at banks and retail companies, and is aimed<br />
primarily at cutting costs and complexity and<br />
improving service to the end customer. The<br />
company leverages know-how from its core<br />
business with banks and retailers to diversify<br />
into related sectors such as lottery companies.<br />
Wincor Nixdorf has a presence in over 90 countries,<br />
with its own subsidiary companies in 36<br />
of these. A total of more than 9,000 employees<br />
work at the Group. Wincor Nixdorf is the No.<br />
1 supplier of electronic programmable pointof-sale<br />
systems (EPOSs) in Europe and No.<br />
3 in the world. Wincor Nixdorf advanced in<br />
2007 to capture the No. 2 spot worldwide for<br />
shipments of automated teller machines, increasing<br />
its world market share to 21 percent.<br />
Its customers include 18 of the world’s 25 leading<br />
banks and 17 of the 25 leading retailers.<br />
Wincor Nixdorf generated sales of 2.15 billion<br />
euros in fiscal 2006/2007. In the first three<br />
quarters of the current fiscal year 2007/2008,<br />
the Group increased its sales revenues by 8%<br />
to 1,738 million euros, a jump of 12% after<br />
adjusting for exchange rate effects between<br />
the euro and U.S. dollar. A major driver of this<br />
growth was strong business in Europe; in addition,<br />
significant growth rates were posted in<br />
the regions of Asia/Pacific/Africa and America.<br />
Despite subdued overall economic conditions,<br />
Wincor Nixdorf expects sales to grow by 8% for<br />
fiscal 2007/2008 as a whole. Additional information:<br />
www.wincor-nixdorf.com
26<br />
Report legal seminar Porto 28 – 30 May 2008<br />
To everyone’s satisfaction the legal seminar<br />
this spring was held in the charming<br />
city of Porto. Despite some rain, the seminar<br />
was again a big success, not only because<br />
of the magnificent location and the<br />
very pleasant environment. Many thanks<br />
to the Santa Casa da Misericordia de Lisboa<br />
for hosting a terrific seminar.<br />
After a most welcome port wine (what<br />
else ?!) in the sky bar of our exquisite<br />
hotel and a nice dinner on Wednesday<br />
evening, we were ready for the kick off of<br />
the seminar on Thursday morning.<br />
The meeting was opened by Mr. Vitor<br />
Porto, the Managing Director of the Santa<br />
Casa da Misericordia de Lisboa, emphasizing<br />
the key issues lotteries have to<br />
deal with in the current legal and political<br />
environment. Mr. Porto considered it<br />
to be a great honour to be able to host a<br />
EL legal seminar on this very crucial moment<br />
in time.<br />
Afterwards the Chairman, Mr. Tjeerd<br />
Veenstra was happy to introduce his new<br />
concept of this legal seminar, thereby<br />
thanking all the members for their contribution<br />
with regard to the country briefings<br />
handed in before the seminar.<br />
The real work started on Thursday morning<br />
with a brand new item on the agenda :<br />
the collection and sharing of data by EL’s.<br />
Pernille Sonne announced the creation of<br />
a new legal survey that will be finalised<br />
soon and will amongst others gather legal<br />
data on the issues the different members<br />
are currently dealing with in the framework<br />
of infringement cases launched by<br />
the Commission against several member<br />
states. This aims at supplementing the<br />
legal database on the EL’s web site. Jean<br />
Jørgensen – alias the numbers man, as he<br />
P AN RAMA<br />
Workshops<br />
called himself – presented to us the new<br />
European Lotteries Information Sharing<br />
Extended (ELISE), which will enable<br />
EL and its members to supply statistics<br />
to support the key messages that are<br />
brought forward in the legal and political<br />
debate. The EL General Delegate, Mr.<br />
Rupert Hornig, rightly urged the members<br />
to provide the association with data<br />
on all key issues, in order to strengthen<br />
its position on the European arena and<br />
back up the legal and political arguments<br />
put forward by EL. The strategic value of<br />
data is indeed the basis of each EL position.<br />
Next on the program were the legal developments<br />
with regard to the numerous<br />
pending and new preliminary referrals,<br />
presented by EL Legal Advisors, Mrs<br />
Annick Hubert and Mr. Philippe Vlaemminck.<br />
Special focus went to the recent<br />
hearing in the Portuguese preliminary<br />
case, and the specific legal arguments<br />
that could be developed in upcoming cases.<br />
This was followed by an overview of<br />
the status of the different infringement<br />
cases the Commission launched against<br />
several member states and an assessment<br />
of the common items they address.<br />
Traditionally we had an extensive round<br />
table whereby each member (per country)<br />
had the opportunity to share the<br />
national developments concerning regulation,<br />
court cases and specific legal concerns<br />
with their colleagues. Like in the<br />
past this has proven to be a very effective<br />
source of information about what’s going<br />
on in each member state.<br />
The final presentations of the day made<br />
by Mr Jean Jørgensen and Mr Rupert<br />
Hornig, EL’s General Delegate in charge<br />
of public affairs in Brussels, were providing<br />
the lawyers an overview of the<br />
economic position of a few “competitors”<br />
and the political opponents and allies.<br />
Economics and public affairs are indeed<br />
a very different matter than legal affairs<br />
and in particular for lawyers not their<br />
normal piece of cake. Mr. R. Hornig explained<br />
that these items were of strategic<br />
importance in the EU arena.
Workshops<br />
After a great evening organised by our<br />
host, opening with a nice tour disclosing<br />
us the charm of the city of Porto and ending<br />
with a famous Port cellar visit with a<br />
nice dinner, the seminar continued for<br />
the usual second (half) day.<br />
This second day started with an excellent<br />
and detailed presentation by Anne<br />
Pattberg of Camelot on the EL CSR approach<br />
and certification. The presentation<br />
did prove that EL and its members<br />
do spend a substantial amount of time<br />
and resources to find a proper framework<br />
for one of the key issues addressed in the<br />
EU legal debate. A lively debate took<br />
place on this matter.<br />
The second presentation of the day by<br />
EL’s Legal Advisers, Mrs. Annick Hubert<br />
and Mr. Philippe Vlaemminck , went<br />
through the latest developments in the<br />
WTO saga on Internet gambling and the<br />
subsequent Trade Barriers action. The<br />
intervention made by EL was explained<br />
in detail as well as the need for further<br />
coordination.<br />
After the coffee break, several lawyers<br />
coming from different jurisdictions, Mr. A<br />
Van ‘T Veer, Mr. G. Jaeger, Mr. M. Janot,<br />
Mr. E. Romppainen and Mr. R. Von Leesen<br />
did present and discuss their views on legal<br />
compliance with regard to advertising<br />
and insider win policy. The presentations<br />
did prove that, according to the states<br />
concerned, a variety of different, but essential<br />
measures are applied.<br />
Finally the Chairman of the EL Legal<br />
WG summarized the two days discussion<br />
in a comprehensive way in its closing remarks.<br />
SCML was also praised as an excellent<br />
host of the seminar.<br />
By Annick Hubert &<br />
Philippe Vlaemminck<br />
EL Legal advisers<br />
27<br />
P AN RAMA
Hosted by:<br />
Société de la Loterie de la Suisse Romande<br />
SWISSLOS Interkantonale Landesloterie<br />
Integrity<br />
& Competition<br />
Challenges<br />
in Sports Betting<br />
June 9 - 12, 2008 Lausanne/Switzerland<br />
Sports Betting<br />
Seminar<br />
During the EURO 2008<br />
28<br />
“Integrity and Competition” –<br />
EL Sports Betting Seminar<br />
Lausanne 9 to 11th June 2008<br />
The programme had a good mix of non lottery<br />
key note speakers and lottery betting<br />
experts when 85 enthusiastic sports and<br />
odds specialists from 20 countries met in<br />
Lausanne, Switzerland, to discuss integrity<br />
and competition in sports betting. Like the<br />
EURO 2008 football championships was<br />
co-hosted by Austria and Switzerland, the<br />
seminar was generously hosted by Swisslos<br />
and La Loterie Suisse Romande. Jean-Luc<br />
Moner-Banet, CEO of La Loterie Swiss Romande,<br />
welcomed the participants and underlined<br />
the importance of both the integrity<br />
and competition issues facing the Lotteries<br />
sports betting operations.<br />
“Can we beat you? Probably not - but<br />
some of us do”<br />
Was the conclusion by Peter Dahlenmark, director<br />
of Betting Analysis, and a professional<br />
punter who earns his living as a punter and<br />
as sports betting lecturer. He outlined the<br />
tools he uses to beat the sports betting operators.<br />
Monitoring of markets and a thorough<br />
understanding of how prices (odds) are set<br />
through a mixture of competition, emotions,<br />
local knowledge and some times over<br />
reactions to rumours are some of the tools<br />
applied by both lottery odds compilers and<br />
professional punters. However, an important<br />
difference, as Dahlenmark explained, is that<br />
punters don’t have to bet but Lotteries must<br />
provide the odds. “Follow the money but go<br />
against the media rumours and public opinions”,<br />
was another piece of advice for punters<br />
wanting to become successful.<br />
Saving the integrity of sports<br />
Representatives of the world’s largest sports<br />
federations, UEFA, FIFA, and IOC demonstrated<br />
how seriously they considered the<br />
integrity issue and how much they were doing<br />
to keep their sports free of manipulation<br />
and match fixing. FIFA representative, Detlev<br />
Zenglein and Pâquerette Girard-Zapelli<br />
of the IOC ethics Commission used the occasion<br />
to inform that they had just entered<br />
an agreement which puts FIFA’s Early Warning<br />
System in charge of monitoring betting<br />
patterns on the Beijing games. The General<br />
Director of the French Tennis Association,<br />
Jean-Francois Vilotte, explained how they<br />
worked to ensure the integrity of their sport<br />
and about their efforts to create internationally<br />
agreed measures. Jens Nielsen from<br />
Danske Spil and chair of EL sports betting<br />
working group outlined EL’s efforts to move<br />
P AN RAMA<br />
Workshops<br />
from a voluntarily based monitoring system<br />
to a professional and full time committed<br />
body.<br />
“Don’t count on voluntary commitments<br />
from gaming operators”<br />
Many governments in Europe are currently<br />
reviewing their gaming legislation and they<br />
should not count on betting operators voluntarily<br />
paying for measures like monitoring<br />
systems, education and development of rules<br />
to ensure a clean sport. “The U.K. Gambling<br />
Act of 2005 does not oblige bookmakers to<br />
pay to maintain a clean sport. With very few<br />
exceptions they simply do not pay” said William<br />
Bush, director of the English Premier<br />
League. Governments must actively address<br />
the impact that the gambling industry has on<br />
sports and it must make clear provision in<br />
the gambling legislation. William Bush gave<br />
an introduction to a paper from Salford University,<br />
February 2008, which examined the<br />
risks to sports of corruption in betting. The<br />
paper also included a list of bet types and<br />
their potential dangers of inducing manipulation.<br />
Bets like “first to get a yellow card”<br />
were “comedy bets” and should be avoided<br />
all together.<br />
Competition and how to do better<br />
Walter Watson, De Lotto and Andreas<br />
Mattes, both members of the EL sports betting<br />
mailing group, showed how EL lotteries’<br />
sports betting sales had developed over<br />
the last thee years. Whilst fixed odds betting<br />
had increased for some lotteries, pools<br />
betting showed a negative trend for all with<br />
the exception of LAE from Spain. Päivi Puhakka,<br />
Veikkaus, explained how they had<br />
hand-picked 100 private retailers for special<br />
treatment with education, exchange of idea<br />
forums and marketing material to the mutual<br />
benefit for both them and for Veikkaus. How<br />
betting was best done in sports arenas in the<br />
Netherlands, the Czech Republic and Sweden<br />
was explained by Walter Watson, Ludek<br />
Rasocha, Sazka, and Lennart Nilsson and Ola<br />
Carlsson of Svenska Spel.<br />
The primary value was not sales in itself but<br />
the opportunity to show the sports betting<br />
brand to the right customer group.<br />
David Sargeant, Finsoft, provoked the audience<br />
suggesting the death of the Long List.<br />
The static paper version should be replaced<br />
by dynamic, multi-sport and yet customized<br />
coupon style lists. In Norway, they aim<br />
at having all online play registered using a<br />
player card before the end of the year. Kai
Workshops<br />
Kristiansen, Norsk Tipping, presented the<br />
history of player cards in Norway and today<br />
they have more than 2.1 million cards for<br />
an adult population of only 3.6 million. The<br />
new chip card gives a top secure identification,<br />
allows cash free payment and connects<br />
the punter with his or hers preferred banc<br />
account. For Norsk Tipping, the database on<br />
customer registered transactions, of course,<br />
offer great value for CRM purposes.<br />
In 2006, the Italian gaming markets were<br />
re-regulated by the centre-left Prodi government<br />
and Massimo Temperelli, Sisal, gave a<br />
comprehensive overview of the markets after<br />
the implementation of the new regulations.<br />
The particularities of odds compiling on tennis<br />
was explained by Croatian Danijel Svigir<br />
and Marko Stokuca, Hrvatska Lutrija. Steen<br />
Madsen, Danske Spil and Ronald van Beek,<br />
De Lotto, outlined odds compiling on cycling<br />
and a Nordic panel with Johan Elevant, Svenska<br />
Spel, Jens Nielsen, Danske Spil and Niko<br />
Marttinen, Veikkaus, gave an update on the<br />
current live betting situation. Danske Spil<br />
sell 56% of their live betting through retailers,<br />
Svenska Spel only 12% whilst Veikkaus<br />
do not at all offer it through retailers. A new<br />
game concept build on LAE’s Quinigol was<br />
presented by Juan Lopéz Martinez of the<br />
Spanish LAE. Punters must predict the correct<br />
score of 5 matches but could choose to<br />
predict only one or two matches. LAE was<br />
presently developing the game for the Spanish<br />
market but they saw a potential multi-jurisdictional<br />
formula which might appeal to<br />
other lotteries.<br />
“There is a future for Lotteries sports betting”,<br />
said EL Legal Adviser Phillip Vlaemminck,<br />
but competition and the ongoing legal challenges<br />
make it difficult to predict how it will<br />
look. The CEO of the Swedish Spelinstitutet,<br />
Thomas Nilsson, shared his 20 years of experiences<br />
working with research and treatment<br />
of problem gambling. He strongly advised the<br />
Lotteries to continue using new technology<br />
not only to create new games but also to provide<br />
tools for players to prevent them from<br />
sliding into the problematic zone of spending<br />
too much time and money on gaming.<br />
Self-service and focus or follow<br />
The final business session had four presentations<br />
by the EL Premium and Semi-premium<br />
partners. Panos Pournaras of the Intralot<br />
partner Betting Company, Greece, saw<br />
great potential in the retailer environment.<br />
He suggested that self-service terminals and<br />
monitoring screens with a multitude of panels<br />
could enhance the sports betting punters’<br />
experience. Wincor Nixdorf’s Markus Sauter<br />
showed the multipurpose terminals they<br />
used at the Manchester City arena and also<br />
emphasized the benefits of self-service terminals.<br />
From Scientific Games International,<br />
Stefan Allmer, suggested that Lotteries<br />
should not necessarily offer the same huge<br />
variety in their sports betting offers as private<br />
bookmakers but be more selective. The<br />
CEO of GTECH’s Finsoft subsidiary, Predrag<br />
Popovic, outlined how Lotteries could match<br />
the private bookmakers. They could, among<br />
others, outsource services like monitoring<br />
and risk management, enhance their existing<br />
strengths and “glocalise” i.e. offer the whole<br />
range of products through all channels but<br />
given a local flavour.<br />
Three evenings – six Euro 2008 matches<br />
– and live betting<br />
The evenings were, of course, loaded with<br />
the Euro 2008 football championships. During<br />
the first evening, Svenska Spel’s Lennart<br />
Nilsson and his colleagues organized a<br />
live betting competition. Divided into eight<br />
groups, the participants competed on who<br />
could make the most of 1,000 monopoly<br />
money betting at Svenska Spel’s live betting<br />
equipment. Some had listened carefully to<br />
the professional punter Dahlenmark’s advice<br />
as the winning group more than doubled<br />
their 1,000 fictive money. The second<br />
evening, the hosting Lotteries Swisslos and<br />
Loterie Romande hosted a great barbecue at<br />
a beautifully located hotel up in the mountains<br />
with a fantastic view over Lake Geneva<br />
and the snow covered Alps. The last evening<br />
featured public viewing on a gigantic screen<br />
and a little mourning from the Lottery odds<br />
compilers complaining about the evenings<br />
costly football results.<br />
Thanks to the EL General Secretary, Bernadette<br />
Lobjois, and her colleagues for the<br />
excellent organisation of the event. Also,<br />
a warm thanks to the members of the EL<br />
sports betting working group and its chair,<br />
Jens Nielsen, Danske Spil, for having put<br />
together a stimulating and very business<br />
relevant programme. Finally, thanks to the<br />
two hosting lotteries Swisslos and Loterie<br />
Romande and to all the participants for<br />
having created a rewarding and memorable<br />
learning experience.<br />
EL Moderator<br />
Jean Moreau Jørgensen<br />
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30<br />
Report of 2008 Industry Days<br />
Limassol Cyprus 18 to 20 June 2008<br />
Among over 200 delegates attending the<br />
2008 Industry Days in Limassol, Cyprus<br />
in June 2008, were senior staff members<br />
from the three Premium Partners,<br />
GTECH, INTRALOT and SCIENTIFIC<br />
GAMES, and the Semi-Premium Partner,<br />
WINCOR NIXDORF; the host Director,<br />
Stavros Michael, and members of his staff<br />
at the Cyprus Government Lottery, as well<br />
as Lottery Directors and staff from almost<br />
50 EL Member State Lottery and Betting<br />
Companies.<br />
Keynote papers addressed the challenges<br />
of advertising in our world of fragmented<br />
media, and explored the mind of 18 to 25<br />
year-olds and future consumer trends in<br />
Europe<br />
The key messages from Mr Antonis Gortzis<br />
were that in 2007, for the first time ever,<br />
the total global spend on advertising on<br />
the internet exceeded the total spend on<br />
advertising on the radio, and while “traditional<br />
advertising” was not yet dead, it was<br />
arguably not in the best of health.<br />
The Trend Analyst, Mr. Sean Pillot de<br />
Chenesey, challenged the audience with<br />
provocative concepts such as<br />
• Contemporary life is all about FUD …<br />
Fear, Uncertainty and Doubt<br />
• Young adults are intelligent and responsible<br />
• My Space and Face Book may soon be<br />
in decline, but people would continue<br />
to be interested in being digitally connected<br />
• We have TMI (too much information)<br />
and TMC (too much choice)<br />
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Workshops<br />
• “Renaissance Marketers” are needed to<br />
help us find “Brand Souls”<br />
Over the space of four mini-seminars, the<br />
four Partners delivered a vision of the<br />
future and what was required for those<br />
suppliers and consumers who wished to<br />
survive in it.<br />
In the SCIENTIFIC GAMES session we heard that one size does not fit all, if your aim<br />
is to provide the best service to customers. When developing your new media distribution<br />
channels you should not neglect to serve the needs of existing channel users. The<br />
needs of the “low and moderately involved customers” must also be looked after. The<br />
Nordic experience with the in-lane lottery ticket distribution points in supermarkets<br />
was described, including how the new facilities were achieving high levels of “natural”<br />
take-up by players. The Hessen experience with relaunching scratch cards and almost<br />
tripling sales over two years was shared.
Workshops<br />
In the INTRALOT session, we were exposed<br />
to a world where user-generated<br />
content would expand to feed the needs<br />
emerging from the growth in social networking.<br />
Paradoxically, we seemed to be<br />
moving from niche marketing to mass<br />
markets but, at the same time, the new<br />
consumers were expressing a preference<br />
for one-to-one marketing over mass marketing.<br />
New facilities and channels such as Bilyoner.com<br />
(a legal private portal offering<br />
access to authorised gaming in Turkey, including<br />
horse racing and the Turkish National<br />
Lottery) and SBox (a subscription<br />
tv channel for sports betting, incorporating<br />
sports news and statistics) were demonstrated<br />
as examples of where the future may<br />
already be with us.<br />
GTECH explored a new taxonomy of distribution channels – Lottery Retail (traditional<br />
retail channels), Lottery Direct (web, mobile and tv), and Lottery Entertainment (VLT<br />
and Casinos). They also presented the top-line results from a market research study<br />
carried out across ten jurisdictions where a very interesting trend emerged for the<br />
18 to 25 year-olds. When asked for preferences between different types of games this<br />
group, surprisingly, showed a marked preference for playing scratch card games (some<br />
licensed properties) and a preference for peer-to-peer card games. We also learned<br />
that, in Europe, technology will not be a qualifying requirement for playing, but the key<br />
will be to offer social gaming to new communities of players in a socially responsible<br />
environment.<br />
WINCOR NIXDORF session began by<br />
exploring how “The Wisdom of Crowds”<br />
worked when compared with the decisions of<br />
experts. Prediction Markets were explained<br />
and the example was given of a project to<br />
predict the Future of the New German Gaming<br />
Regulation “Staatsvertrag”.<br />
Prediction markets are now outperforming<br />
polls and experts in predicting unknown<br />
events. Experimental Prediction Markets<br />
are now being run by universities, companies<br />
offering software solutions, internet<br />
gaming companies and financial service<br />
companies.<br />
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The “Days” ended with two back-to-back<br />
moderated sessions where five Lottery Directors<br />
raised issues and developed questions<br />
for, and joined in an open discussion<br />
with, senior representatives from the four<br />
Partners. Issues discussed ranged from<br />
the ownership of Lottery operating companies;<br />
responsible gaming; agent retailer<br />
monitoring; evolution of distribution channels,<br />
and what future is there for a world<br />
game. There may not have been complete<br />
agreement reached on “where does the<br />
future lead us” (the theme of the Industry<br />
Days) but like so many social interactions<br />
nowadays, it was more about the journey<br />
than the destination.<br />
The EL President closed the proceedings<br />
with a heartfelt thanks to the Cyprus<br />
Government Lottery, and appreciation of<br />
the work of the Secretary General and her<br />
ever-helpful staff.<br />
Ray Bates,<br />
EL Honorary President<br />
Moderator
32<br />
THE <strong>EUROPEAN</strong> LOTTERY UNIVERSITY<br />
EDITION 11<br />
HELD IN DUBROVNIK – CROATIA<br />
AUGUST 31 - SEPTEMBER 5, 2008<br />
The Lottery business is simple and yet<br />
complex. The formula to develop a<br />
successful lottery management training<br />
program is thus both simple and complex.<br />
Simple because, basically, it would include<br />
conceptual topics on the major business<br />
functions, challenges and issues and,<br />
complex, because it needs to be updated,<br />
adapted and enhanced to reflect the<br />
changing panorama of the lottery industry,<br />
and innovative and creative enough to<br />
attract participants from all over Europe,<br />
year after year.<br />
Actually, the reputation of the ELU is<br />
overflowing Europe. This 11 th edition<br />
included also participants from Canada<br />
and Zambia. That had the indirect effect of<br />
bringing additional and different experiences<br />
and lottery background, to be shared with<br />
their European counterparts.<br />
The 11 th ELU was held in Dubrovnik,<br />
following the invitation from the Croatian<br />
National Lottery which demonstrated,<br />
after ELU 9 at Zadar also in Croatia, their<br />
hospitality and dynamic management.<br />
48 managers and representatives from more<br />
than 25 different organisations attended, for<br />
5 days, the ELU following the steps of 450 of<br />
their colleagues.<br />
The program covered most components of<br />
the lottery business model:<br />
- management of the lottery organisation<br />
with presentations on structure, state<br />
monopolies, the legal environment, corporate<br />
social responsibility and business continuity,<br />
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Workshops<br />
- the games offered with presentations on<br />
the different families of games, Instants<br />
games, Sports Betting, Interactive<br />
games,<br />
- the distribution channels with<br />
presentations on New Technology<br />
Trends, Branding, Marketing in today’s<br />
environment, Communications and<br />
advertising, Retailing and POS,<br />
- the control and distribution of funds<br />
with presentations on Finance and<br />
Control, and Risk Management,<br />
- the design of an Instant game, the<br />
development of a launch strategy from<br />
idea-to-market, the development and<br />
implementation of a modern lottery<br />
organisation, panels, workshops and<br />
structured discussions.<br />
The participants were thus grouped in six<br />
“organisations”, identified by planet, and<br />
had to compete to present a business plan<br />
including the various components of the<br />
elaboration and development of a modern<br />
lottery organisation. This year’s winners,<br />
was the Elucky Lottery as selected by<br />
a jury composed of Ray Bates, Reidar<br />
Nordby and Jean Marc Lafaille.<br />
The faculty included as well André Chaker<br />
(Finland) Evangelos Cosmidis (Greece),<br />
Alexandros Gerontikos (Greece), Vincent<br />
Hotyat (Belgium), Georges Nahon (USA),<br />
Gilbert Rehayem (Canada) and Philippe<br />
Vlaemminck (Belgium).<br />
Supported by Ray Bates, since 2006<br />
EL Honorary President, championed<br />
and organized by Bernadette Lobjois,<br />
Secretary General and designed and<br />
moderated by Gilbert Rehayem, the ELU<br />
is now considered to be the finest and<br />
most successful management training of<br />
its kind in the Lottery world. As mentioned<br />
above, over 11 years, it has attracted over
Workshops<br />
500 collaborators/managers from all over<br />
Europe and others continents. ELU<br />
alumni now hold high-level positions in<br />
all EL member Lotteries. ELU has been<br />
enhanced, improved and enriched to<br />
offer a unique combination of academic<br />
presentations, case studies, workshops<br />
and networking.<br />
A well-deserved thank-you to Ms Vesna<br />
Bakran, CEO of the Croatian National<br />
Lottery, for her warm hospitality, for the<br />
second time, to Bernadette Lobjois, the EL<br />
Secretary General for the overall excellent<br />
organization of the seminar, and a special<br />
debt of thanks to all speakers involved in<br />
the seminar who, due to their experience<br />
and knowledge, presented brilliantly the<br />
many aspects of this sector. A special<br />
thanks to all the participants who made<br />
the ELU, by their comments, participation<br />
and involvement, a beneficial, useful and<br />
entertaining initiative.<br />
The next ELU promises to be even more<br />
exciting … rendez-vous in 2009!!<br />
Gilbert Rehayem<br />
EL Moderator<br />
33<br />
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Access. Reach. Grow.<br />
Wave Hello to the Future.<br />
Scientific Games delivers on its commitment to be a good neighbor and good global citizen and,<br />
as such, is committed to socially responsible gaming and sustainable business practices.<br />
Wave is designed, engineered and tested from the ground up with a single<br />
purpose: to make it faster and easier to sell and manage lottery products at<br />
retail. As a high-performance, intelligent gaming terminal, Wave offers<br />
retailer access to business solutions for growing and tracking product sales,<br />
integration with point of sale systems, and the smallest footprint of any<br />
full-function lottery terminal in the market today. Combined with Scientific<br />
Games’ Fulline lottery solutions, Wave empowers lotteries to access new<br />
markets, reach new players, and grow lottery sales.<br />
Contact your Scientific Games Regional Director for more information.<br />
P P<br />
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©2008 Scientific Games