EUROPEAN STATE LOTTERIES AND TOTO ASSOCIATION

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Switzerland Switzerland has a long tradition of high price point tickets: The first lottery ticket was sold in 1937 at a price point of CHF 5.--. One could consider this to be a super high price point. The first instant game was launched in 1975 at a price point of CHF 5.--. The already existing passive tear-open ticket lottery was simply transformed into a pre-drawn tear-open ticket. In the early 90ies the price of the above ticket was risen to CHF 10.--. A very successful game called “Benissimo”, this ticket is still no. 1 in sales in our jurisdiction. For Swisslos, the high price point is not a new price segment as our variety of current games can attest: CHF 10.-- Benissimo (a tear-open ticket with a draw on a TV-Show) CHF 15.-- Piratenschatz (two multigame tickets in one pouch) CHF 20.-- 6-Pack (6 tickets in one pouch) CHF 100.-- Millionenlos (a multi-game ticket with a draw on a TV- Show, and a ticket presented at the end of the year which was introduced in 1999). 14 An experience with high price instant tickets Besides the high price segment, we offer games at the lower price points: P AN RAMA CHF 1.-- 1 ticket CHF 2.-- 2 tickets CHF 3.-- 3 tickets CHF 4.-- 1 ticket CHF 5.-- 4 tickets CHF 6.-- 2 tickets CHF 7.-- 1 ticket CHF 8.-- 1 ticket CHF 9.-- 1 ticket Looking at all of our products, the most successful scratch-off game we have launched – game with remarkable results, is “Millionenlos” (in the price point of CHF 100.-) (CHF 1.- = EUR 0,62 approx.) Instant Lotteries
Prof. Viren Prof. Matti Viren University of Turku, Department of Economics, Finland. Gaming markets are changing rapidly. This change manifests itself in institutions, the nature of games and in the volume and pricing of gaming. Formally, the institutional set-up has not changed very much during the past ten years. However, under the surface a great deal has happened. The most important engine of change, of course, has been the internet, which has enabled cross-border gambling in an unprecedented scale. Although we do not know the volume of cross-border sale exactly, we can use the estimates of a recent survey conducted across European Lotteries 2 . According to this survey, cross-border sales constitute an average of 7.4 percent of the gaming companies’ total sales. It is not a strikingly big figure but when we look at the individual games, we are faced with certain very high percentages. For example, while cross-border sales in lotto are around one percent, their share in sports betting amounts to up to 39 percent. From the point of view of existing companies andgovernments, the situation is alarming already because it entails major losses of revenue. Governments are also concerned about tax revenue: private bookmakers do not pay taxes on their cross-border sales, which, in turn, is detrimental to the governments’ fiscal position. Whatever will happen, it is clear that we are moving towards more competitive markets and prices will fall (accordingly, the prizes and the payout ratios will in- Gaming in the new market environment: what do we know about the consequences of the changes? 1 crease).Thus, while the average payout ratio of the European companies is now at 53.3 percent as compared to 48.5 percent ten years ago, all companies expect it to increase substantially in the next ten years. According to the current European state lotteries, if all restrictions were abolished, the payout ratios could reach 70 percent. This would obviously increase the volume of sales. Using the lotteries’ subjective estimates as a benchmark, we could say that such a change in the payout ratios would increase the overall demand by almost one third. Quite clearly, such changes would show in all indicators: expenditures, production, employment, advertising and, maybe most importantly, problem gambling. It is certainly worth trying to analyze the nature and magnitude of these effects in more detail. It is not easy and we cannot always arrive at unambiguous results; yet some results are quite obvious. Very briefly, we could state: • Gambling is good; its overall effect on welfare is clearly positive. Hence, there is no need to prohibit gambling altogether, nor should reasonable growth of the gambling sector be prevented. • The demand for gambling is relatively sensitive to prizes – yet not only to average prizes but rather to the whole distribution of prizes. With “better” prize schemes – and with “better” games gambling will increase even if the average price level and household income did not change. • From the point of view of problem gambling, the biggest threat may not come from the sole expansion of gambling but from the change in the nature gambling to more intensive activities with higher frequency. • We should be worried about the market structure in the gambling industry because the gaming sector is not a prototype of free competition: in fact, by abolishing a public monopoly we may get a private monopoly instead. • The fiscal issues are quite complex because they concern the role of the governments and the measures which governments can take in order to secure their fiscal needs and protect consumers without jeopardizing free entrepreneur- 15 P AN RAMA ship and free competition. The fact that gambling generates large revenues does not constitute a justification for government intervention as such. • There are numerous public policy issues which have not been properly considered yet. They include both crime and misuse and the need for regulation and control. The public policy concerns also cover lobbying and interplay between various suppliers and beneficiaries of gaming revenues. All interest groups and organizations claim that they are just trying to improve consumer welfare, although even the opposite might be true. Quite often, the alternatives are presented as choices between black and white. But gaming is not that simple. Take, for instance, problem gambling. One may argue that, thus far, problem gambling has been well under control, and that it only represents a problem for a small minority, say one percent of the adult population, which appears a typical estimate in most jurisdictions. But we have to be careful in quantifying the significance of problem gambling. Small numbers of participation may not necessarily mean small economic impact. Moreover, the historical record of controlling problem gambling does not automatically translate to similar performance with different settings of games and gaming volumes. The implication of all this is quite simple: before we make affirmative conclusions we had better find out how things are. And that means simply more fact-finding, more analysis, and more research. In several speeches I did mention that since 1994 until 2007 the European Court of Justice did rule in 14 preliminary cases on gambling services. In 2008 the same European Court has already received 14 new preliminary referrals. As such this proves that the legal disputes surrounding gambling in the EU are creating the need for regulatory solutions. 1 This article is based on a new book “Gaming in the New Market Environment” (Matti Viren, editor), Palgrave/Macmillan, 2008. 2 The survey was conducted by the Finnish National Lottery Veikkaus in April 2006.
Page 1 and 2: E U R O P E A N S T A T E L O T T E
Page 3 and 4: Ladies and Gentlemen, Dear friends,
Page 5 and 6: Editorial The evolution of scratch
Page 7 and 8: Instant Lotteries Italy We started
Page 9 and 10: Instant Lotteries Finland Veikkaus
Page 11 and 12: Instant Lotteries price category. C
Page 13 and 14: Instant Lotteries Overall, 7Extra c
Page 15: Instant Lotteries Slovenia Our olde
Page 19 and 20: 17 P AN RAMA
Page 21 and 22: ELISE to some 57 European Lotteries
Page 23 and 24: Members’ News Sweden 2008 has bee
Page 25 and 26: Premium It only takes a second to g
Page 27 and 28: Semi-Premium Grupo Selco adds 1,000
Page 29 and 30: Workshops After a great evening org
Page 31 and 32: Workshops Kristiansen, Norsk Tippin
Page 33 and 34: Workshops In the INTRALOT session,
Page 35 and 36: Workshops 500 collaborators/manager

EUROPEAN STATE LOTTERIES AND TOTO ASSOCIATION

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