Moderated by GLMS President Ludovico Calvi, a panel titled Lotteries Are No Longer Just Lotteries on day three of the SBC Summit Barcelona – Digital, saw industry professionals come together to discuss the ever changing lottery landscape and predict its role in the future of the industry.
Opening up the panel, Jari Vahanen, Sportsbook Director, Veikkaus Oy, discussed the areas in which he believes traditional lotteries have made changes in recent years: “Lotteries have made big changes in three areas. Firstly they have expanded the product portfolio into other areas not just lotteries. European lotteries for example are selling other products such as Veikkaus that now sell all gambling products. Lotteries who have expanded their product range have managed quite well, better than those who have stayed solely in the lottery business. It is important however that companies remember products and customer service remains at a high level.
“Secondly is that some lotteries have expanded their operations to other business areas such as technology. Personally I don’t know if this is good. And third is that I’ve noticed lotteries have traditionally operated as a monopoly in one country. But now they are expanding into other countries. This might make sense if they can utilise scalability in the business.”
Regarding international expansions into other countries, Camilla Folladori, Head of Lotteries Concession Renewals, SISAL, described her organisation’s own experience with internationalisation and discussed the factors which brought about the decision.
She added: “We have a 70 year old heritage and we’ve stayed in italy until 2017. We decided to internationalise in 2017 and in the last two and a half years we have entered Spain and Morocco as well as Turkey.
“Firstly there are a number of factors driving our change. The two most important drivers that we took into account are an acknowledgement of the market potential outside Italy and second we assessed our internal capabilities to see whether this path was successful or not. These to me were the two most important drivers.”
Folladori also touched upon the process of internationalising and spoke of the necessary factors required for an organisation to make a success of the process, saying: “If you want to start a path of internationalisation you need to have the best structure possible but you also need to be brave and start it.
“Every time you move from the status quo to a new move there will be a number of factors that you can see as hindering your success and make you decide it’s better not to move. What you do need is a leadership/management team that is brave enough to overcome that challenge and infuse optimism in the company and commit deeply to this path.
“If you don’t have this prerequisite then it’s too hard to be brave enough to start it. To me that is the most important part in transiting from domestic to international. Good to have structure, but you need to be brave.”
Internationalisation across the globe has no doubt brought about competition for local operators. One such operator is Danish incumbent Danske Spil, whose Sportsbook Director Jens Nielsen informed the panel as to how his organisation was approaching these challenges.
He stated: “We are lottery but our company is based on sports betting from day one. Danish people associate us with sports betting as well as lottery. We now have a licensed market and I would say that the competition began 20 years ago with the emergence of online sports betting.
“What changed from 2012 is a more level playing field. License holders all have the conditions now in terms of regulations, player control, taxes etc. Rather than looking at them as challenges I’d say we always try to turn it into opportunities. We try to be a safe, user friendly opportunity for Danish players, and we want to be competitive within the responsible boundaries.
“One big challenge though is that in the global picture, we aren’t as big as most of our competitors. Some of the big licensed operators have licenses in Denmark, it’s a fact we have to face and that’s why we try to engage with good suppliers to fit our strategy.
“We focus on the areas where we believe we are experts. We match our in-house resources with solutions we can find from the outside and constantly review the mix we have in place.”
Nielsen also discussed the importance of digitisation and modernisation in regards to the future of Danske Spil: “Retail business is still very relevant and quite popular in Denmark. What we have done over the last few years is modernise the user experience in the shops. We still have the old fashioned betting coupons but it’s clear that our clients are happy with digital and updated solutions. This has been a successful journey so far and that’s the way we will go forward. I’m sure it will be the most popular road ahead in retail, omni-channel digital solutions.”
The panel was also joined by PinProjekt COO Vedran Katic, who likened the industry digitisation to that of everyday life: “Keeping the player in mind is ? because we are aware that their habits change due to changes in the entire world. We can see instances in having on demand TV making standard TV redundant for example. This means that consumers are taking advantage of instant communication and information where they are connected to one system where they have the ability to access content at any time and they are bombarded from all sides.
“This is beginning to influence gaming. We have always known that everything will switch to online and mobile. The reason is that the system we live in is instant communication, we have a desire for instant gratification. Our games we developed are based on live content which means we brought up the frequency of lottery to an incredible standard.
“We keep part of the operations mechanical and live but we brought up the speed a lot. We found that as we create a new demographic we also get more engagement from existing players because when they enter the lottery game that has one flow after the other they keep more engaged. Without understanding the world we live in it would be impossible to create a game such as this.”
Katic also revealed that his organisation benefitted from the COVID-19 pandemic due to the sudden demand for content. “Coming into COVID-19 it was all unclear,” he said. “In reality we received a lot of requests and closed many deals with operators looking for additional content when there was lack of, especially live content. Our product is live and we received a huge number of requests and lots of integrations, more than we expected under current circumstances. Some reasons were because of lack of content and because lotteries have started exploring additional verticals.
“I would say it positively impacts our business and in the long run the operators of lotteries will start to value additional site content more and more and it’s not only lotteries but all operators. They all want to bridge the gap and secure themselves if another situation like this would arise. I would stress the importance of new games which can be available as live content and I feel bad about profiting from COVID-19 but it was the case.”
Similarly to Katic, Vahanen also provided his opinion based on data gathered throughout COVID-19 period which depicts a bleak future for lotto operators who are yet to begin the digitisation process: “What we noticed during COVID is that lotteries who have digital business in the last years have survived with less damage than others. I wonder why there are still so many lotteries who have a fear of making necessary changes.
“Lotteries should do things in a totally new way or they won’t have a way to manage in the future. Too many lotteries trust the monopoly position.They can’t do that anymore. Although they have monopolies in their own jurisdictions in principle, but, in practice they all face competition and need to find a modern way to run business which should be based on data.
“If you want to utilise data you have to digitise business. It might already be too late to start this digitisation process but lotteries who have not done this yet should at least try as I predict their future being bad if not.”
SBC Summit Barcelona – Digital takes place over four days this week (8 – 11 September) and features four main zones – Sports Betting, Casino & Gaming, Payments & Compliance, and Affiliate & Marketing – each of which have their own conference tracks, networking roundtables and interactive expo halls.
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