No. 49 | Summer 2018

Security Control Standard Responsible Gaming Framework

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2 WLA magazine | No. 49 | Summer 2018 Responsible Gaming Framework Submission Guide

What you need to do in order to complete or renew your submission for each level

Contents

4–6 Interview with the President

7–11 Association news Selected news from the WLA, its members, and the regional associations.

12–23 Why WLA A note of thanks certification matters Over the past two decades, the WLA As this is the last WLA Magazine issue before our General Meeting to be has invested a lot of time and effort held in Buenos Aires at the end of WLS 2018, I would like to start with a big in developing a set of global best practices thank you to our outgoing president Jean-Luc Moner-Banet. for the lottery industry. In this issue of the WLA magazine, we look at the WLA’s Th roughout the whole six years of his presidency, I have had the opportunity two industry standards, the WLA to work with and learn from Jean-Luc. His commitment to the WLA is unpar- Responsible Gaming Framework and alleled. He has shown an unwavering dedication to ensuring the WLA fulfi ls the WLA Security Control Standard, its global mandate by addressing the concerns of all regions while accentuat- and why certification to these standards ing the commonality that unites us all. With the untimely passing of our past is important for your organization. Executive Director, Jean Jørgensen, Jean-Luc stepped up to the plate, not only accepting a third term as president but providing the additional support need- 24–27 in the USA ed to the WLA staff to ensure the continuity of the Association’s activities as With the repeal of the Professional and well as their further advancement. Amateur Sports Protection Act (PASPA), the door has been opened for regulated Th is issue of the magazine includes a two-part article (pages 30-35) about sports betting across the . Bet-on- and Courier Services. Th e fi rst part of the article takes a clos- er look at how they operate around the world, while the second part examines 30–35 Bet-on-Lottery and the legal landscape in various jurisdictions. When selling their products to Courier Services consumers in jurisdictions where they do not hold the authorization provided In this two-part article, we take a close look for under the relevant national legislation it is fair to presume that they are di- at Bet-on-Lottery and Courier Services verting revenues away from the good causes that authorized state lotteries, in and what is being done around the world their respective jurisdictions, work hard to support. to curb their activities. In the issue we also examine the recent U.S. Supreme Court decision to repeal 36–39 The World Lottery the Professional and Amateur Sports Protection Act (PASPA), paving the way Summit 2018 for legalized sports betting in the U.S. In the coming months, there will be a Final preparations for the World lot of details to work out for U.S. lotteries interested in off ering sports betting Lottery Summit 2018 (WLS 2018) in products. Sports betting is an important source of revenue for more than half Buenos Aires, Argentina are of all WLA members worldwide and has been for many years. Th e world lot- progressing at top speed. Find out tery community has a wealth of experience to share in this area and I would what WLS 2018 has in store encourage WLA members in the U.S. to call on us if they need any advice. for you and why you should attend the lottery event of 2018. Additional articles in this issue remind readers of the benefi ts of certifi cation to the WLA Security Control Standard (WLA-SCS) and the WLA Responsible 40–51 Corporate news Gaming Framework (WLA-RGF), and provide an update on the ongoing News from members of the WLA preparations for the World Lottery Summit 2018 (WLS 2018). If you have not Contributors Program and yet registered for WLS 2018, I urge you to do so today. Th e summit will take other WLA Associate Members. place from November 18–22, 2018 in Buenos Aires, Argentina. A comprehen- sive business program and a whole range of engaging network events await 52–55 The learning curve you in one of Latin America’s most enchanting cities. News from the WLA training and education program. We look forward to seeing you there!

Lynne Roiter WLA Secretary General

WLA magazine | No. 49 | Summer 2018 3 INTERVIEW WITH INTERVIEW WITH THE PRESIDENT PRESIDENT

The case continues

Recent months have seen landmark legal decisions in the United States and Switzerland, while the actions taken against unauthorized Bet-on-Lottery and Courier Service operators in certain jurisdictions are starting to show encouraging results. But beyond the courtrooms and legislative assemblies, says WLA President Jean-Luc Monet-Banet, state-authorized lotteries have an en during duty to the community to defend the values of integrity, solidarity, and social justice. He answered our questions about how the WLA can help its members to continue the fight.

Th e U.S. Supreme Court ruled that individu- gaming regulation. Do you see an opportu- the world lottery community. U.S. lotter- al states should have the right to regulate and nity for the Global Lottery Monitoring System ies off ering sports betting would defi nitely sports betting, and that it is unconstitu- (GLMS) to be deployed in North America? gain from joining the GLMS network. tional to ban them from doing so. What op- An adequate monitoring system, such as portunities and challenges does this off er for the GLMS, should be in place so that ev- What can U.S. lotteries learn from the world state-authorized lotteries in the U.S.? erything possible is done to maintain the lottery community in regard to sports betting? Th is is a great opportunity for U.S. lot- integrity of sports and sports betting oper- In many parts of the world, sports betting teries to bring in added revenue for good ations in the U.S. Th e GLMS certainly fi lls has a long history and tradition – espe- causes through sports betting. According this bill. As a consortium of state lotteries cially in Europe, the Asia-Pacifi c region, to the latest edition of the WLA Global that off er sports betting, GLMS members and Latin America. Many state-authorized Lottery Data Compendium (GLDC), have coordinated their eff orts to moni- lotteries around the globe have embraced sports betting sales among WLA mem- tor betting in order to detect and analyze sports betting as a viable means of raising bers reached USD 53.4 billion in 2016. any suspicious patterns that could indicate revenue for good causes. More than half Since we started collecting data for the of all WLA member lotteries off er sports GLDC in 2013, we have recorded that betting in one form or another. In Europe, sports betting sales have gone up continu- state-licensed sports betting started more ally year by year from USD 45.4 billion “Today there is a clear than 80 years ago, when Tipstjänst (the in 2014 to USD 53.4 in 2016. We expect opportunity for U.S. lot- predecessor of Svenska Spel) began of- this upward trend to continue as sports teries to benefit from fering pools services in . Since betting continues to grow in popularity that time, sports betting products have throughout the world. global experience in evolved, and modern technology has im- sports betting moni tor- proved delivery methods. As WLA mem- Th e integrity of sports will be a challenge ing and make the GLMS ber lotteries that off er sports betting have for sports betting operators in the U.S. matured, they have already faced many of Match fi xing is a global problem, one that even more effective by the challenges that the U.S. lotteries in- takes the cooperation of the entire world expanding its reach.” tending to off er sports betting will soon lottery community to combat. In order to Jean-Luc Moner-Banet face, especially in the area of integrity. Th e win this fi ght, information sharing is of GLMS was born in Europe as the natu- the utmost signifi cance. It will be impor- ral outgrowth of the European Lotteries tant for U.S. sports betting operators to Monitoring System (ELMS), which was develop a cohesive system of collabora- criminal intent. Now in its third year of operational from 2009 until 2015 when the tion with national and international law operation, the GLMS continues to grow GLMS superseded it. Today there is a clear enforcement and federations of profes- internationally, with 29 member lotteries opportunity for U.S. lotteries to benefi t sional and amateur sports. Sports betting across the globe. It currently has two op- from this experience and make the GLMS patterns will also need to be eff ectively erational hubs, one in Europe and one in even more eff ective by expanding its reach. monitored in order to ensure that the in- Asia. Th e European hub is hosted on the tegrity of sports betting, and ultimately premises of Danske Spil, in Copenhagen, Parallel to the founding of the GLMS, the integrity of sports, remains intact. Denmark, and the Asian hub, which just the Council of Europe established the recently opened, is based in Hong Kong Convention on the Manipulation of Sports In the U.S., both legislators and high-ranking at the Hong Kong Jockey Club. A further Competitions. Th e Convention has been offi cials of the major sports leagues have ex- expansion to North America would cer- open for signature since September 2014, pressed concerns for the integrity of sports in tainly benefi t the GLMS as a monitoring and has been signed by more than 30 sov- the wake of this monumental change to U.S. system, and in turn would be benefi cial for ereign nations to date. Th e Convention

4 WLA magazine | No. 49 | Summer 2018 INTERVIEW WITH INTERVIEW WITH THE PRESIDENT PRESIDENT

lays out the legislative, policy, and other measures needed to address the problem of match fi xing and cor- ruption in sports. Signature and rati- fi cation of the Convention is open to all nations, regardless of membership of the Council of Europe. I would encourage U.S. legislators to con- sider signing and ratifying the con- vention. In so doing, they will adopt a comprehensive legal framework for countering corruption in sports, which is of course a global problem.

In the past two to three years, opera- tions of unauthorized Bet-on-Lottery and Courier Services, have expanded dramatically. Why is this of concern to the world lottery community? Th e core mission of our member lotteries is to raise money for good causes. Th ese private online lotto- betting operations – many of which are operating illegally without the authorisation of the majority of the jurisdictions they are selling in – ex- ist only for profi t. Th rough aggres- sive and sometimes questionable marketing practices, they can create confusion in the marketplace and compete for the patronage of our players. Not only is this damaging the brand identity of our member lotteries, it is logical to conclude that it also siphons off money that would otherwise go toward good causes. Th e whole system of “lot- teries for the benefi t of society” has taken decades to build up, and now these unauthorized operators are trying to cash in on our success for their own profi t. It needs to stop.

What is being done around the world to curb erators have managed to secure a license, the passing of this bill, we have modern- the activities of parasitical lottery services? they have been successfully challenged in ized Swiss gaming legislation, ushering it Many of our member countries have the courts for trademark infringement. into the digital age. Th e new legislation started to mobilize against the onslaught So I am pleased to see that many of our introduces strict new measures to elimi- of these unauthorized private operations. members are not sitting idly by but are re- nate illegal gaming in Switzerland by al- Some countries are passing new laws, and sisting the continued expansion of these lowing the IP addresses of foreign online others are enforcing existing laws more illegal operators. operations to be blocked. With rigorously. In the past it has proved dif- this measure we have helped to put a stop fi cult to litigate against these organiza- On June 10, Swiss voters went to the polls to to illegal online gaming operations in tions as they operate online from off shore decide on a signifi cant revision to Swiss gam- the country and eff ectively secured the companies and have no physical pres- ing legislation. Why was this decision impor- CHF 650 million that Swiss lotteries raise ence in the countries where they sell their tant for the gaming industry in Switzerland, each year for good causes. Additionally, games. But thankfully we are starting to and what can the world lottery community the new gaming legislation will protect see countries implementing IP-blocking learn from it? Swiss consumers by introducing obligato- of the websites of illegal operations. In Th is was a landmark decision for the ry responsible gaming measures for gam- a few countries where these private op- gaming industry in Switzerland. Th rough ing operators. It also strengthens existing

WLA magazine | No. 49 | Summer 2018 5 INTERVIEW WITH INTERVIEW WITH THE PRESIDENT PRESIDENT

ence of my time as President will have been the World Lottery Summits, which “We must never forget what distinguishes us are really a unique opportunity for every- from operators who do not adhere to the values one to meet, compare experiences, and of our community.” Jean-Luc Moner-Banet take stock of the WLA’s achievements over the previous two years.

I will have experienced three of these measures to combat tory acceptance, increase brand loyalty, summits as President. Th e summits in and will step up the fi ght against match and improve their organizational perfor- Rome in 2014 and Singapore in 2016 fi xing in Switzerland. We have worked mance, certifi cation will give them the were memorable, with some important hard for this outcome and are pleased edge they need to win and to win consis- decisions taken by the General Assembly about the result. I truly hope that the tently. Th e principles of security, integ- that have since been implemented, such positive result of this vote will encourage rity, and social responsibility go hand in as the creation of GLMS (Global Lottery other countries to do all that they can to hand with economic performance. Monitoring System) and the evolution of work within their own legal frameworks the security and risk management stan- to block illegal gaming operators in their With the World Lottery Summit 2018 just dards. In Buenos Aires in November this respective jurisdictions. around the corner, lottery professionals from year, I hope to witness further important around the globe will soon be descending on decisions, in particular about the evolu- Certifi cation has featured prominently in this Argentina. Why was Buenos Aires chosen for tion of our by-laws. issue of the magazine. What are the benefi ts the summit? of certifi cation, and why is it important for In order to take advantage of the cultural Each of the Executive Committee meet- WLA member lotteries to certify to both the richness that a global organization such ings during my six-year term of offi ce WLA Responsible Gaming Framework and as the WLA has to off er, it is our policy to has been an opportunity to compare and the WLA Security Control Standard? hold our fl agship convention, the World contrast the points of view of some of the Our member lotteries have a duty to en- Lottery Summit, in a diff erent region of world’s most outstanding lottery profes- sure not only that revenue streams are the world every two years. Aft er being sionals, whom I wish to thank warmly for sustained for the public good but also in Asia with WLS 2016 in Singapore, it their contribution and their availability. that our players are protected. To achieve was decided to hold WLS 2018 in Latin these objectives, it is essential that the se- America. Buenos Aires is one of Latin In which areas do you think lottery leader- curity and integrity of their assets remain America’s main cultural hubs. Among the ship should focus their eff orts in the next fi ve intact, and that they operate in a safe and many reasons it was chosen as host city to ten years? responsible manner. Th e well-being of for WLS 2018 is the fact that it is distinct- I think that the world of lotteries and our players is essential to the integrity ly Latin American yet strikingly cosmo- sports betting that the WLA brings to- and reputation of our organizations, and politan. Preparations for the convention gether must never forget what distinguish- ultimately it is the key to our members’ are well under way. Together with ALEA, es us from operators who do not adhere to ability to secure revenue for good causes. our host organization for WLS 2018, we the values of our community. WLA mem- have been working to ensure that this will bers are fortunate to be able to off er both One of the cornerstones of the WLA’s be the most important lottery event of the modern and attractive lottery and sports mission is to help member organiza- year. Registration for the convention has betting games for their customers, while tions ensure a high level of information been open since May. I would encourage putting social responsibility at the center security management and to build and all those who have not yet registered, to of their business and generating consider- maintain a viable responsible gaming do so today. We hope to see as many of able profi ts for public budgets and all the program. Th rough our two internation- our members as possible in Buenos Aires good causes we support. Whatever the fu- ally recognized standards for the lot- for the convention. ture holds in store for our association and tery industry, the WLA Security Control our industry, this must always remain at Standard (WLA SCS) and the WLA Th e WLA’s biennial General Meeting will also the center of our decisions and actions. Responsible Gaming Framework (WLA take place in Buenos Aires, and with it a RGF), we help our member lotteries off er changing of the guard as you hand over the What advice would you give to young pro- a reliable and sustainable source of fund- presidency to your successor. You have served fessionals who have just entered the lottery ing for good causes. an unprecedented six years as WLA Pres i- world? dent. What will remain the most lasting Always be curious. Listen actively to the Certifi cation to the WLA SCS and the memory of your time as President? experiences of other WLA members in WLA RGF enables member lotteries to It has been a busy period and I have order to develop our industry in keeping provide material proof of their commit- learned a lot. Th e life of the WLA is made with our values and goals. Recognize that ment to public order and player protec- up of many activities, punctuated by com- you are fortunate to be working in an in- tion. Above and beyond that, certifi cation mittee meetings and a fair amount of trav- dustry that upholds such a strong set of just makes good business sense. By help- el involved in the mission of President. values and is fl ourishing because it serves ing individual lotteries to gain regula- But I think the most memorable experi- the public good.

6 WLA magazine | No. 49 | Summer 2018 ASSOCIATION ASSOCIATION NEWSNEWS

The Singapore Pools 50th anniversary celebration was attended by former and present leaders of the lottery, and Singapore's Minister for Finance, Mr. Heng Swee Keat (back row, center). Golden Jubilee celebrations in Singapore

Singapore Pools recently marked 50 years of service to the community with a series of charity events and a big celebration at the city's JW Marriot South Beach hotel. As the lottery’s role has grown over the years, its development has mirrored – and in some ways driven – the emergence of the high-tech hub we know today.

Back in 1968, Singapore was a very diff er- a safe place for Singaporeans to play games the nation. Several of the city’s landmarks ent place. Exploring the historic streets of of chance and channel the large sums gen- – including the fi rst National Stadium, the Tanjong Pagar today, it’s hard to imagine erated by these illegal games into uses that Indoor Stadium and the Esplanade – owe that this fashionable district, just steps from could benefi t society. their very existence to lottery funds. Since the tall glass towers of Raffl es Place, was 2004, Singapore Pools has channeled more once a hotbed of crime and back-alley gam- Now the country’s sole legal lottery operator, than $5.8 billion of these surpluses to support bling operations. Th at was before Singapore Singapore Pools has become an important six key sectors – charity, community develop- Pools was set up by the government to create source of revenue for the community and ment, education, health, sports, and the arts.

WLA magazine | No. 49 | Summer 2018 7 ASSOCIATION ASSOCIATION NEWSNEWS

At the Golden Jubilee event on May 21, Fi- cel lence for the next 50 years, doing even more nance Minister Mr. Heng Swee Keat paid for community benefi t as well as enhancing its Digital services platform tribute to the lottery’s 50 years of service role as a responsible gaming operator. for charities and applauded its ability to adapt as gam- ing preferences change. “Th e digital revolu- In particular, he mentioned the iShine pro- In recent years, Singapore has emerged tion is changing business models,” he said. gram, which is an opportunity for lottery as a magnet for high-tech activity “Singapore Pools is doing well to build capa- staff to give their time to support worthy across the entire Asia Pacific region, bilities that keep it relevant, while sustaining charities and community causes directly. In and Singapore Pools is also ahead of its philanthropic eff orts.” many ways, this unique staff volunteering the technology curve when it comes program epitomizes the sense of solidarity to charitable giving. Its latest venture, Mr. Koh Choon Hui, Chairman of Singapore that Singapore Pools has sought to foster for announced during the Golden Jubilee Pools, also spoke to the 250 guests attending half a century now. “For it is in giving that celebrations, provides charity organiza- the celebrations, promising that the organiza- we receive – may we never waver from this tions with an affordable, integrated tion would continue to strive ahead with ex- spirit!” said Mr. Koh. suite of IT services and solutions via a secure cloud-based platform. Developed in partnership with the National Council for Social Services, the platform uses the same IT infrastructure and resources as Singapore Pools itself. Affordably priced, subscription-based iShine Cloud services will enable charities to improve their back-end operations so they can focus on better serving their beneficiaries.

Hassle-free IT iShine Cloud services include an inte- grated suite of business and productiv- ity solutions, a secure virtual desktop environment where users can access the solutions from their own devices, secure cloud storage at Singapore Pools’ data centers, and enterprise-grade data backup, disaster recovery and cyber-se- curity monitoring. The program will also include user training and professional development opportunities, as well as a remote helpdesk and IT helpline to troubleshoot problems. Singapore Pools expects many local charity organizations to sign up to the new platform. With IT management operations outsourced to iShine Cloud, they will no longer have to manage their own IT contracts, maintenance, troubleshooting, and cyber protection. They will have better oversight and control of their data, with information readily available and easily retrievable for reporting and decision- making. And by reducing the time and manpower required for their back-office processes, the platform will improve cost and operational efficiency, bring- ing about an increase in productivity and optimal leverage of resources. This way, charities not only level up their digital capabilities, they are also better At the 50th Anniversary celebrations in May 2018, Finance Minister Mr. Heng Swee Keat equipped to channel their focus on the met some of the benefi ciaries of lottery funding and members of the Singapore Pools team core that matter – their beneficiaries. who work hard to keep the lottery relevant to players and the community at large.

8 WLA magazine | No. 49 | Summer 2018 ASSOCIATION ASSOCIATION NEWSNEWS

Sweden submitted the draft of its new gam- Svenska Spel prepares bling legislation to the European Com- mission in December 2017 and formally introduced legislation to parliament in April for competition this year, and was passed on June 7. Th e draft proposal has attracted some criticism from the private sector, which is unhappy about 2011. He has watched unlicensed Swedish op- the new structure of Svenska Spel. erators such as Betsson, Unibet, Mr Green and LeoVegas expand rapidly on the back of on- An independent investigation will among oth- line games, which Svenska Spel was not er things evaluate Svenska Spel’s adaption to allowed to off er under the terms of its license. the new legislation. Th e new market is going live in January 2019. Th e path of the legis- For Käll, the arrival of the new market rep- lation might be disrupted by the September resents a good time to leave with his mission general election, but there seems to be politi- Swedish state lottery operator accomplished. cal agreement about the need for re-regula- tion, if not the exact content of the legislation. Svenska Spel is restructuring “Work on adapting the organization for the and rolling out new products new gaming market is proceeding according Th e licensing process is to open in August as it prepares for the opening to plan. We are well prepared and look for- and Svenska Spel will need to get regula- ward to competing on equal terms. Th is is a tory approval before it can launch its SG- of a fully regulated online gam- good opportunity for a new CEO to handle powered casino. bling market in January 2019. and continue developing Svenska Spel,” said Käll to the delegates of Svenska Spel’s annual SG Digital will supply an account manage- During Q2, Svenska Spel announced a deal general meeting. ment system via its Open Platform System, with Scientifi c Games’ interactive division SG Digital to provide the platform and con- tent for its new . Patrik Hofbauer new CEO for Svenska Spel

As Sweden liberalizes its gaming market and On June 26, Svenska Spel’s Board of gambling legis- introduces a licensing scheme for online op- Directors named Patrik Hofbauer as lation enters erators, Svenska Spel is changing. Th e orga- the company’s new CEO. Patrik suc- into force in nization is being split in two. One division ceeds Lennart Käll who previously the new year. will operate in the newly-created competi- announced that he was resigning to I am convinced tive sports betting and online casino gam- pursue his own business interests that Patrik ing market; and the other will continue with and directorships. Patrik Hofbauer is Hofbauer “monopoly” operations such as the lottery, 49 years old and is currently CEO of is the right Vegas video lottery terminals and Casino Telenor Sweden. He will be taking person to lead the company into this Cosmopol, operator of four land-based ca- up the position as President and CEO new gambling market,” comment ed Erik sinos in Sweden. of Svenska Spel no later than mid- Strand, chairman of Svenska Spel. December 2018. In addition to the structural reorganization, “Svenska Spel occupies a strong posi- Svenska Spel is looking for a new chief exec- Patrik Hofbauer has extensive senior tion, enjoys a strong brand and is facing utive offi cer aft er Lennart Käll submitted his management experience and, in addi- exciting challenges as a result of the resignation more than six years aft er taking tion to his current role as CEO of Telenor new gambling legislation. I enjoy the charge. On June 26, Svenska Spel announced Sweden, he has previously been CEO of connection between business and sport, the appointment of Patrik Hofb auer, replac- Telenor Broadcast, Canal Digital, NEC something that is very close to my heart. ing Käll as CEO (see the corresponding ar- Scandinavia and Clear Channel. Patrik’s I am now very much looking forward ticle on page XX for further details). CV also includes a 10-year career as a to leading the company into the next professional ice hockey goalkeeper with phase together with the employees of During his last annual general meeting as Örebro, Björklöven and Djurgården. Svenska Spel,” added Patrik Hofbauer. chief executive offi cer, Käll said the opera- tor could look forward to 2019 and the op- “I’m delighted to welcome Patrik Svenska Spel’s current CEO Lennart portunities off ered by re-regulation, which Hofbauer to Svenska Spel. The expe rience Käll departs on July 19. The Board of might include e-sports, horseracing or fan- he brings with him both from commerce Directors has appointed Svenska Spel’s tasy sports leagues. and the world of sports will be invaluable, current CFO and deputy CEO Marie especially given the ex citing prospects Loob as acting CEO for the interim pe- Käll has lobbied for a widening of the op- facing Svenska Spel as the new Swedish riod until Patrik Hofbauer’s arrival. erator’s product range since taking charge in

WLA magazine | No. 49 | Summer 2018 9 ASSOCIATION ASSOCIATION NEWSNEWS

which will provide a one-wallet access for It represents a new era for Svenska Spel, online for more than ten years and registered customers and a range of loy- which has been the exclusive operator of became the world’s fi rst government-owned alty programs. Svenska Spel will integrate lotteries and gaming in Sweden since 1997, and licensed online poker site in March 2006 the platform into its existing line of game following the merger of the two state com- when it launched with Boss Media (now part products such as sports betting, and panies Penninglotteriet (lotteries) and of IGT). Its wait for the full portfolio of on- poker. Tipstjänst (pool games). It has been off ering line products will soon be over.

Sports betting integrity management goes global with GLMS

Over the last few years, sports betting has been in the international spotlight, due to high-profile cases of unscrupulous activity. As a result, lotteries and sports betting operators have been work- ing hard to combat this scourge and operate with transparent integrity. Fortunately, organizations like the Global Lottery Monitoring System (GLMS) are at the forefront of bringing credibility and integrity back to sports betting. GLMS has been rapidly developing over the past few months, and plans to remain on a course of continuous improvement.

Th e last several months have seen consider- Th e next GLMS Extraordinary General Concluding new partnerships able development within GLMS, including Meeting is scheduled for November 20, and and leading policy discussions rapid development and strong delivery in all will be held in Buenos Aires, during the Being a trusted and credible stakeholder in areas, from operations to policy and com- World Lottery Summit 2018. the domain, GLMS also concluded a num- munications. GLMS has gradually become ber of new cooperation agreements over one of the most credible, visible and authen- Welcoming new members the past months. With corruption in tennis’ tic players world-wide in the fi eld of sports and enhancing services lower leagues at stake, GLMS concluded an integrity. We have also had the opportunity In the period before June 17, 2018, GLMS agreement with the Tennis Integrity Unit. to further strengthen our “glocal” character, was pleased to welcome among its mem- Noting the rise of eSports and the associated with the addition of new members who will bership two new members – Islensk Getspa risks, GLMS also joined forces with the eS- further contribute their local information from Iceland and STOLOTO from Russia – ports Integrity Coalition (EsiC) to safeguard and knowledge to enhance the global reach who joined GLMS’s global lottery alliance to the integrity of eSports. GLMS also recently of GLMS. combat sport competition manipulations. signed agreements with the Lithuanian and We will shortly announce additional new Norwegian regulatory authorities, in order Updating the membership members, who will have the chance to ben- to support them with keeping sport safe in On 15 May 2018, just before the EL/WLA efi t from our enhanced services which, be- their countries. Sports Betting Seminar, GLMS held its sides the new, enhanced alert and messaging Extraordinary General Meeting, during platform, include education and prevention While remaining a strong partner of Council which the GLMS membership received key tools, a sports integrity certifi cation program, of Europe’s Keep Crime out of Sport – updates on GLMS’s activities. One of the main as well as a complete information network. KCOOS+ project, together with the WLA outcomes of the meeting was that, following and EL, GLMS also signed an informal the approval of the proposed modifi cations agreement with the Council of Europe re- to the Statutes, collective GLMS member- garding the cooperation between GLMS ship was opened up to the following regional and the Group of Copenhagen (GoC), the lottery associations: APLA, CIBELAE, ALA, network of national platforms created by the and NASPL. EL and the WLA remain, of Council of Europe, as per article 13 of the course, the founding collective members of Convention on the Manipulation of Sport GLMS. At the same time, a new membership Competitions. Th e cooperation mainly con- category was created: Associate Members will cerns the contribution of GLMS to the ex- include sport organizations, law enforcement perimental phase of the GoC’s LogBook. agencies with an interest in safeguarding the GLMS President, Ludovico Calvi, shaking integrity of their operations, and suppliers hands with Education & Training Manager In addition, GLMS has been represented in and service providers. of Tennis Integrity Unit, Matthew Perry key fora, notably the European Parliament’s

10 WLA magazine | No. 49 | Summer 2018 ASSOCIATION ASSOCIATION NEWSNEWS

high-level panel debate on the Council of erational level as well, regularly engaging with NASPL to contribute to our cause and join Europe Convention on the Manipulation its key stakeholders and reporting matches this unique lottery alliance. Suppliers and of Sport Competitions. In this debate, that cause concern, whenever applicable. A service providers are also welcome board. GLMS President, Ludovico Calvi, joined key complete monitoring update is shared with Lotteries or service providers are always wel- stakeholders in urging states to ratify the GLMS members at the beginning of each come to contact us at [email protected] to Convention. month, where key facts and fi gures about fi nd out more about our services and mem- GLMS’s monitoring work can be found. bership benefi ts! Strengthening operations Th anks to the intensive work of our two hubs Join our efforts! We also welcome you to visit our website in Hong Kong and Copenhagen, and the in- GLMS welcomes Lotter ies that off er sports www.glms-sport.org and follow us on social teractive exchanges with GLMS Members, betting and that are mem bers of any of the media (@GLMS_Sport) to stay up to date GLMS has been delivering strongly at an op- WLA, EL, APLA, ALA, CIBELAE, and/or with our activities.

Camelot announces new appoint- ments to strengthen its Board

Camelot UK Lotteries Limited (‘Camelot’), He continued: “I would also like to thank Sir & Mid Kent in 2001. From 2010 to 2013, as operator of the UK National Lottery, today Patrick Brown and Tony Illsley, who are stand- Minister for Sport and the Olympics, he was announced that Sir Hugh Robertson has been ing down from their roles as Independent responsible for the successful rebuilding of appointed Chairman, with immediate eff ect. Non-Executive Directors, for their expertise Stratford’s dated infrastructure and the con- Sir Hugh is currently Chair of the British and wise counsel over the past few years.” struction of a 560-acre Olympic Park, as well Olympic Association (BOA), having previous- the delivery of London 2012 – and is cred- ly served as Olympics Minister during London Sir Hugh commented: “I am delighted to be ited with securing the most ambitious ever 2012 before becoming the Minister of State at joining as Camelot’s Chairman. I have been programme of major sports events for this the Foreign Offi ce responsible for the Middle privileged to see fi rst-hand the enormous dif- country, and delivering the best ever fund- East, North Africa and Counter Terrorism. ference Th e National Lottery makes to the ing package for Olympic sport through to Rio fabric of the UK, not least through its funding 2016 and beyond. Th e company also announced the appoint- of the 2012 London Olympic and Paralympic ment of Robert Walker as Deputy Chairman Games as well as the 2016 Games in Rio, and Robert Walker has been Chairman of Ei Group and Senior Independent Director, also its ongoing support for our elite athletes. since 2012. He started his career at Procter & with immediate eff ect. Robert is currently When I heard that Camelot was seeking a new Gamble before moving to McKinsey & Com- Chairman of Ei Group (formerly Enterprise Chairman, I actively sought the role – and am pa ny. Robert then went on to spend more than Inns), the largest portfolio manager of pubs in delighted to be joining a business that plays 20 years at PepsiCo, where he was responsible the UK, and has an extensive track record of such an important role in today’s society. for the company’s beverage businesses in Eu- chair positions at large public companies, with rope, the Middle East, Africa and Asia, before recent appointments including Chairman of “However, Camelot’s role in running a nation- moving to Severn Trent from 1999 to 2005 – Travis Perkins, WHSmith, BCA Europe and al institution can never be taken for granted. holding the position of Group CEO from 2000 Williams Lea. I look forward to working with the current to 2005. Robert has also held a number of management team, as well as my fellow Board non-executive roles at a wide range of compa- Th ese appointments further strengthen the colleagues, to further build on the company’s nies. Th ese have included Wolseley, BAA, Tate governance of Camelot’s Board in accordance long tradition of commercial innovation – & Lyle, Signet Group and Th omson Travel. with the Board Governance Review process growing National Lottery sales in a socially- that the company is currently undertaking. responsible way – while looking to ensure In addition to Jo Taylor, Camelot’s current there is an appropriate policy and regula- Non-Executive Directors are Jane Rowe, Camelot’s outgoing Chairman Jo Taylor said: tory environment which allows Th e National David Kelly and Rob Rowley. A further Non- “It’s been a pleasure and a privilege to serve as Lottery to fl ourish.” Executive Director will be appointed in the Camelot’s Chairman for the past two years. In coming months. Chief Executive Nigel Railton Sir Hugh and Robert, we have appointed two Sir Hugh became Chair of the British Olympic also sits on the Board. individuals of exceptional calibre who will Association in 2016 and has chaired the

bring extensive commercial and stakeholder Canterbury Cathedral Appeal since 2015. He *As with all senior Camelot appointments, Sir Hugh’s experience to further strengthen Camelot’s worked for Schroder Investment Management and Robert’s appointments have received Gambling Board. before he was elected as MP for Faversham Commission consent and are subject to vetting.

WLA magazine | No. 49 | Summer 2018 11 SETTING SETTINGSTANDARDS STANDARDS

Why certifi cation matters

In our open, connected and commercialized world, it sometimes seems as though the barriers to market entry have disappeared. Newcomers can reach huge numbers of potential consumers via the Internet, and it can be difficult to tell exactly who they are, where they are located, and above all whether they can be trusted. Certification to the WLA’s standards of security control and responsible gaming can make all the difference.

Despite strict regulation and the monopoly such as information system security and age status that many operators enjoy in their verifi cation. In today’s world, im- respective jurisdictions, the lottery market is no diff erent from any other market in Before, during and after plicit trust no longer this respect. Faced with an explosion on the certifi cation really exists. The rea- supply side of the equation, lotteries have Choosing WLA certifi cation is an invest- sons people trust each increasingly recognized the need to diff er- ment in the future. Th e process begins entiate themselves from the rest of the fi eld. with an in-depth review of the lottery’s other nowadays need Th ey want to make it clear to their players, governance and organizational processes to be made very explicit and to their other stakeholders, that they as well as the more technical aspects of – and this is where stand out from the crowd and can be trusted security control or gaming responsibil- implicitly. ity. Independent certifi cation bodies then certification comes in. work with the lotteries to guide them But implicit trust really no longer exists today. Th e reasons people trust each other nowadays need to be made very explicit – and this is where certifi cation comes in.

Over the last 19 years, the WLA has invested a lot of time and eff ort in developing a set of global best practices specifi cally for the lottery industry, and, crucially, an indepen- dent certifi cation process that provides the world with material proof that a lottery ap- plies those best practices in its day-to-day operations.

Rather than seeking to replace existing stan- dards, the idea behind the WLA Security Control Standard (WLA-SCS) and the WLA Responsible Gaming Framework (WLA- RGF) has always been to build on legacy standards and regulatory frameworks and to propose a specifi c set of measures focus- ing on aspects of our activities that are par- ticular to the lottery sector. By adopting the WLA standards, lottery organizations have an opportunity to go beyond compliance and gain a competitive edge over the for- profi t gaming industry.

Large numbers of lottery organizations around the world have chosen the path to WLA certifi cation in addition to applying existing standards and regulations in areas

12 WLA magazine | No. 49 | Summer 2018 SETTING SETTINGSTANDARDS STANDARDS

through the diff erent steps, provide the zation can be trusted. But the benefi ts of support they need, and make their recom- certifi cation are not only external. Th e real “Culture is how people mendations to the WLA. Th e WLA offi - measure of success of a certifi cation pro- behave when nobody’s cially awards the certifi cation and makes gram lies in its ability to drive cultural a public announcement to that eff ect. change within the organization. When the looking.” Perhaps most importantly, the decision lottery’s internal stakeholders – its em- Herb Kelleher, Founder, to seek certifi cation sets in motion a pro- ployees – are engaged in this process of Southwest Airlines cess of continuous improvement that is continuous improvement, the benefi ts of the key to achieving sustainable gaming certifi cation extend far beyond the satisfac- excellence. tion of achieving compliance with a set of the initial investment in preparing and com- external standards. pleting the paperwork! For lotteries of all sizes, this investment in the future pays off in various ways. It takes time to make a cultural shift within Th e following pages off er a brief description In terms of external benefi ts, certifi cation an organization, so the full eff ects of certi- of the two key WLA standards – the WLA provides independent proof to external fi cation may not be immediately evident. Responsible Gaming Framework and the stakeholders – players, regulators, share- However, feedback from WLA-certifi ed lot- WLA Security Control Standard – and how holders, benefi ciaries, the media and other teries overwhelmingly suggest that the long- your lottery can set the certifi cation process public interest groups – that the organi- term benefi ts of certifi cation far outweigh in motion.

WLA-RGF: A step-by-step guide

Achieving the two core objectives of lotteries – to maximize funds for good causes and to provide a safe environment for players – is a delicate balancing act. But with a world-class responsible gaming program in place, they can be achieved at the same time. When a lottery demonstrates that its products are only sold in socially responsible ways, it creates a virtuous circle: beneficiaries are proud to be associated with the endeavor, players are proud to play, and the community at large reaps the benefits.

As a condition of WLA membership, lot- teries are required to commit to develop- ing and improving their responsible gaming programs. Th e WLA started to develop a Responsible Gaming Framework almost 15 years ago to help member lotteries to meet this requirement and provide an indepen- dent, globally recognized baseline and seal of approval for a lottery’s responsible gam- doing well and where they may be able to im- ing performance. Today, certifi cation to prove. Th e current members of the IAP are the A virtuous circle the WLA Responsible Gaming Framework sustainability expert Anne Pattberg (chair), (WLA-RGF) provides a lottery’s stakehold- Robert Ladouceur of Canada, an acclaimed re- “For any business, putting the interests ers with an independent assurance that its re- searcher into problem gaming prevention and of customers at the heart of everything sponsible gaming program applies tried and treatment, and lottery veteran Henry Chan, they do is clearly a key success factor,” trusted principles and industry best practice. formerly of the Hong Kong Jockey Club. says Alison Gardner, head of corporate responsibility at Camelot UK and chair When an organization is ready to apply for A total of 85 lotteries are certifi ed to Level 2 of the WLA Responsible Gaming work- certifi cation, an Independent Assessment or higher, which represents nearly two-thirds ing group. “For lotteries, making sure Panel (IAP) reviews all the documents for of the WLA member lotteries. customers are enjoying their products the various levels of the standard (Level 2 and responsibly and playing in a safe way is above) and provides practical feedback. Th is Certifi cation of Associate Members is a nat- absolutely the right thing to do for the feedback can be particularly helpful because ural extension of the WLA-RGF program. business in the long term.” it helps lotteries to understand what they are Although submissions are not reviewed by

WLA magazine | No. 49 | Summer 2018 13 SETTING SETTINGSTANDARDS STANDARDS

the IAP, WLA Associate Members must every three years to maintain their certifi ed unique opportunity for responsible gaming score at least 75% on eight key criteria, and status. Currently four lottery suppliers are companies to diff erentiate themselves from are required to undergo a full assessment certifi ed and there is growing interest in this their competitors around the world.

WLA-RGF: Four levels of certifi cation

If your lottery is interested in benchmarking Achieving Level 1 is very straightforward, Level 3 involves drawing up – and starting its responsible gaming program against the because when your lottery joined the WLA, to implement – a clearly defi ned plan of ac- best in the industry, the WLA Responsible it automatically made a commitment to up- tion, with timelines, to close the gaps you Gaming Framework is an ideal way to get hold the WLA’s seven Responsible Gaming identifi ed at Level 2. started. It helps lotteries to check that ef- principles. All WLA members are therefore fective responsible gaming measures are in certifi ed to Level 1 of the Framework when To achieve Level 4, your lottery needs to place, have been approved at the proper lev- their application for membership is ratifi ed demonstrate continuous improvement. More el, and are being applied in practice. by the Gener al Meeting. established lotteries that have been working on Responsible Gaming for some time will Th e Responsible Gaming Framework is de- Level 2 is when you compare your existing have metrics in place to measure the eff ec- signed around four levels. Lotteries start at Responsible Gaming program with the ele- tiveness of their programs. To achieve Level Level 1 and progressively move up to Level 4: ments of the WLA Framework. Th is lets you 4, you need to provide evidence of the met- see whether what you do now is in line with rics and evaluation methods that you use, 1. Commitment what the framework suggests is appropriate and state how you plan to improve your per- 2. Self-assessment and gap analysis at Level 2. formance going forward. 3. Planning and implementation 4. Continuous improvement

14 WLA magazine | No. 49 | Summer 2018 SETTING SETTINGSTANDARDS STANDARDS

The WLA Responsible Gaming Framework in 10 questions

The WLA Responsible Gaming Framework includes 10 program elements. Put simply, your lottery will need to answer the following questions and provide documents and material evidence to prove that the answers are accurate.

1. Research 5. Remote gaming channels 8. Treatment referral How do you contribute to the body of What kind of tools and safeguards are in- Do you make sure that customers know evidence and academic research around cluded to keep your players safe when using where to get help if they experience prob- Respon si ble Gaming? online platforms (e.g. limit-setting tools and lems? Th is may involve measures like print- the ability to self-exclude)? ing the help line contact details on the back 2. Employee program of the lottery tickets. How do you make sure that all your employ- 6. Advertising and marketing ees understand the lottery’s responsibility communications 9. Stakeholder engagement toward its customers? Do you sell your products responsibly? As Are you actively building strong, two-way well as adhering to local advertising stan- relationships with opinion formers, infl u- 3. Retailer program dards and regulations, for example, do you encers, and direct business contacts? Do you What do you do to make sure all retailers take additional measures such as not includ- talk to the stakeholders about responsible and front-line staff are knowledgeable about ing children in your advertising? gaming? Do you listen to what they say and Responsible Gaming? Do they understand embed their thinking into your program? how to apply the Responsible Gaming prin- 7. Player education ciples in practice? Do your players themselves understand 10. Reporting and measurement what is meant by responsible play? For ex- Can you provide material evidence of your 4. ample, do you print the odds of winning responsible gaming performance? Do you Are the principles of Responsible Gaming on the tickets so they know how the game have metrics and KPIs in place to measure it? fac tored into the development of new games works? And do you communicate this information to make sure they are embedded within any eff ectively both internally and externally? new games?

The WLA Responsible Gaming Working Group

This group of responsible gaming The members of the WLA Responsible European Representatives practitioners from lotteries around the Gaming Working Group are: · Raymond Bovero, world meets every three months La Française des Jeux, France to talk about the standard and make Chair · Stefania Colombo, sure the guidance notes are clear · Emilia Mazur, Lottomatica S.p.A., Italy and helpful to lotteries. They also Lotto New Zealand ensure that the standards are applied · Alison Gardner, Central and South American Representative consistently. Camelot UK Lotteries Ltd. (Currently on maternity leave) · Sandra Conde Gomez de Freitas, Members of the Working Group are Quinielas de Montevideo, Uruguay Asia Pacific Representative happy to help any lotteries that may · Tay Boon Khai, North American Representatives have questions about the standard. · Chip Polston, Members are available to talk on the Singapore Pools Kentucky Lottery Corporation, USA phone or by email if any lottery has African Representative any questions about how to get started, · Sanaa Kabbaj, WLA Project Coordinator or if they're stuck in the process, or La Marocaine des Jeux et des Sports, · Mélissa Azam, want any advice about how to progress Morocco WLA Montreal Office, Canada through the levels.

WLA magazine | No. 49 | Summer 2018 15 SETTING SETTINGSTANDARDS STANDARDS

The WLA Responsible Gaming Framework Submission Guide

Th e WLA Responsible Gaming Framework Framework. Th is third edition of the guide completed for submission at each level. Th is Submission Guide 2016 is a brochure that can be downloaded from the WLA website. latest edition of the guide also includes a de- provides you with everything you need It will help you determine which level your scription of the recertifi cation process for to know to complete your submission for lottery organization is qualifi ed to apply for, lotteries that have already been certifi ed for each level of the WLA Responsible Gaming and lists all the action items that need to be three years.

Submission process

Read the submission guide for the relevant RG Certification level and supporting materials to help you 1 prepare your submission.

Send in electronic format, to the attention of Mélissa Azam at [email protected]. 2 There are 2 deadlines throughout the year: May 1st and October 1st.

Entries will be screened for completeness and to ensure they fulfill the content requirements for 3 the RG certification level. If the requirements have been met, the submission will be presented to the IAP for qualitative review and evaluation of the lottery’s RG program.

The IAP will complete their evaluation within 6 weeks and issue an evaluation report pointing out the 4 strengths and improvement opportunities (the IAP will contact the lottery if further information is required). The IAP will make a recommendation to the WLA as to whether the submitting lottery meets the RGF criteria. This is sent along with the evaluation report to the WLA and the submitting lottery. The lottery has 15 working days to review the IAP’s evaluation report. If clarification on any points 5 is needed lotteries should contact the WLA Montreal office.

If no questions are received within 15 working days certification will automatically be issued by the WLA 6 in accordance with the recommendation of the IAP.

Certification is valid for three years from the date it is issued by the WLA office.

APPENDIX A RGF Certified Organizations

At the time of printing, in September, 2016, the following lottery organizations have been granted accreditation by the LEVEL FOUR (cont’d) World Lottery Association for the WLA RGF. Each organization has received certification for the framework level as per the recommendation of the IAP. For the sake of promoting the sharing of information and experience among the EUROPE (cont’d) MIDDLE EAST membership we have included the contact information of those in charge of responsible gaming at each of the certified Hungary Norway Israel lottery organizations. Szerencsejáték Zrt. Norsk Tipping AS Israel Sports Betting Board – ISBB Contact: Dr. Beatrix Zelei Contact: Linda Eng Strand Responsible However, since there are two certification periods per year, the list is subject to modification. For the most current status on [email protected] [email protected] Mifal Hapais the RG certified organizations, you can review this list by visiting the WLA website at www.world-lotteries.org Contact: Saul Sotnik Iceland Poland [email protected] LEVEL FOUR Getspá/Getraunir Totalizator Sportowy Sp. z o.o. Gaming Framework (formerly Íslensk Getspá) Contact: Martyna Strupczewska AFRICA EUROPE Germany Contact: Pétur H. Sigurðsson [email protected] NORTH AMERICA Morocco Deutsche Klassenlotterie [email protected] Canada La Marocaine des Jeux et des Sports Österreichische Lotterien GmbH Berlin (DKLB) Slovenia Atlantic Lottery Submission Guide Contact: Sanaa Kabbaj Contact: Herbert Beck Contact: Hansjörg Höltkemeier University of Iceland Lottery Športna loterija d.d. Contact: Kim S. Wilson [email protected] herbert.beck@.at [email protected] (Happdrætti Háskóla Íslands) Contact: Tina Steblaj [email protected] [email protected] Loterie Nationale Belgium Land Brandenburg Lotto Ireland British Columbia Lottery What you need to do in order to complete or renew your submission for each level of the WLA RGF. Contact: Ezzoubeir Aguida Loterie Nationale Contact: Manuel Pfeufer Premier Lotteries Ireland Spain Corporation (BCLC) [email protected] Contact: Audrey Bettens [email protected] Contact: Harry Cooke Organización Nacional de Ciegos Contact: Susan Dolinski [email protected] [email protected] Españoles ONCE [email protected] LOTTO GmbH Contact: Oscar Castro Villar ASIA PACIFIC Croatia Contact: Birte Engelken Italy [email protected] Loto-Québec Hong Kong Hrvatska Lutrija d.o.o. [email protected] Lottomatica SpA Contact: Lynne Roiter TABLE OF CONTENTS The Hong Kong Jockey Club Contact: Sandra Šesto Contact: Stefania Colombo Sociedad Estatal Loterías y [email protected] Contact: Albert Chan [email protected] Lotto-Toto GmbH Sachsen-Anhalt [email protected] Apuestas del Estado (SELAE) [email protected] Contact: Yves Kopmann Contact: Elena Peñalva López Manitoba Lotteries Corporation Overview ...... 1 Estland [email protected] Sisal SpA [email protected] Contact: Bev Mehmel New Zealand AS Eesti Loto Contact: Gianmario Trovò [email protected] The WLA Responsible Gaming Independent Assessment Panel ...... 4 Lotto New Zealand Contact: Marit Jõekäära Lotto Rheinland-Pfalz GmbH [email protected] Sweden Contact: Emilia Mazur [email protected] AB Svenska Spel Ontario Lottery and The Responsible Gaming Working Group ...... 6 [email protected] NordwestLotto Schleswig-Holstein Contact: Monica Medvall Gaming Corporation Finland GmbH & Co. KG VAS Latvijas Loto [email protected] Contact: Catherine Jarmain The 7 Responsible Gaming Principles ...... 7 Singapore Veikkaus Oy Contact: Svetlana Orlova [email protected] Singapore Pools (Private) Limited Contact: Johanna Lipponen Staatliche Toto-Lotto GmbH [email protected] Switzerland The 10 Program Elements ...... 8 Contact: Lee How Shen johanna.lipponen@veikkaus.fi Baden-Württemberg Société de la Loterie United States of America [email protected] Toto-Lotto Haus Luxembourg de la Suisse Romande California Lottery France Loterie Nationale Level 1: Commitment ...... 9 Contact: Stefan Wandres Contact: Danielle Perrette Contact: Paula Negrete South Korea Française des Jeux [email protected] Contact: Léon Losch [email protected] [email protected] Korea Sports Promotion Fundation Contact: Raymond Bovero [email protected] Level 2: Self-Assessment and Gap Analysis ...... 10 Contact: Juri Ri Yu [email protected] Toto-Lotto Niedersachen GmbH United Kingdom Hoosier Lottery [email protected] Contact: Herbert John Malta Camelot Group plc Contact: Katie Carlson Level 3: Planning and Implementation ...... 12 [email protected] Maltco Lotteries Limited Contact: Alison Gardner [email protected] [email protected] Level 4: Continuous Improvement ...... 14 Westdeutsche Lotterie Netherlands GmbH & Co. OHG De AMERICA Appendix A Contact: Konrad Supper Contact: Willemijn Jansen Uruguay Banca de Quinielas de Montevideo RGF Certified Organizations ...... 16 [email protected] [email protected] Contact: Sandra Conde Appendix B Nederlandse Staatsloterij [email protected] Contact: Arjan van’t Veer External Independent Assessor Qualification Guide ...... 20 [email protected]

the wla responsible gaming framework submission guide – 2016 edition 16 the wla responsible gaming framework submission guide – 2016 edition the wla responsible gaming framework submission guide – 2016 edition 17

16 WLA magazine | No. 49 | Summer 2018 SETTING SETTINGSTANDARDS STANDARDS

Interview with Anne Pattberg, Chair of the Independent Assessment Panel

Sustainability expert Anne Pattberg is the Chair of the Independent Assessment Panel (IAP) that reviews the paperwork submitted by lotteries applying for certification to the WLA Responsible Gaming Framework. We asked her how lotteries can benefit from being WLA-certified for their responsible gaming programs.

that describe how lotteries have imple- mented predictive modelling and data analytics to better understand player behavior.

Is this something that you think will become mainstream for lotteries? I am absolutely certain that within fi ve years’ time this will be mainstream, and I believe it also needs to become main- stream because we know that many op- erators outside the lottery industry use these models to better understand their players, market their games and intro- duce effi cient prevention strategies. For lotteries in many markets this is a “must- have” to stay competitive and have effi - cient prevention strategies. You have now been Chair of the IAP for Do you think the RGF is recognized beyond almost three years. What are your general the lottery sector? How do you work together in the panel? observations? I certainly believe so. Over the last years I am very grateful that I have the oppor- When I joined the Independent Assess- I have been asked a number of times to tunity to work with Robert Ladouceur ment Panel as chair I was very familiar present the WLA certifi cation approach and Henry Chan. We all bring diff er- with the lottery sector due to my previ- as a good example for a Responsible ent cultural backgrounds and diff erent ous work in Camelot and as assurance Gaming certifi cation program in a va- skills to the table. Th is diversity is what provider for lotteries in my role at PwC. riety of diff erent jurisdictions. I think is most benefi cial for our work because It was great to see how many lotteries though that it is equally important that we all complement each other in the have worked towards certifi cation from those lotteries that are already certifi ed way we review and discuss submissions. many diff erent parts of the world since explain the certifi cation requirements I think this is not only a very rewarding the introduction of the framework. I to their local stakeholders to ensure that experience for all three of us, but also a sense a high commitment to responsible they are understood in their local juris- benefi t for the lottery that receives their gaming from many lotteries around the diction. evaluation report because they get a world which is refl ected in the quality very holistic feedback on their RG pro- and quantity of submissions we receive. How does digitalization impact responsible gram. gaming? Which regions have made particular progress Digitalization and the use of new tech- What is your advice to a lottery that is con- over the last few years? nology has a huge impact on the amount sidering certifi cation? Historically, lotteries in Europe and of information lotteries are now able to I think any lottery that is considering North America have been at the forefront gather and evaluate and the way in which certifi cation and unsure as to how to ap- of Responsible Gaming. Th ese days we they can interact with their custom- proach it should get in touch with Mélissa see real progress in the Asia Pacifi c and ers. More and more lotteries introduce Azam in the WLA offi ce. Th ey should al- also the South American region. Lots of data analytics with regards to respon- so liaise with colleagues from lotteries in lotteries in those regions have worked sible gaming as a sound method for their region that have already been certi- hard on their RG programs which is great understanding which prevention strat- fi ed. Th ere is a lot of willingness amongst to see as it demonstrates the ability of the egies work. Over the last year we have members to share information and lots of framework to be adapted globally. reviewed quite a number of submissions opportunity to learn.

WLA magazine | No. 49 | Summer 2018 17 SETTING SETTINGSTANDARDS STANDARDS

WLA-SCS: The importance of trust

The digital age has brought an added sense of urgency to the need to protect the integrity of lottery systems. But managing security threats effectively is more than a game of high-tech cat and mouse – it’s a core strategic process that encompasses every aspect of the lottery’s organization and constantly refines its underlying security, integrity and data protection posture.

Total security is not achievable. But in a con- Standard (WLA-SCS) was specifi cally de- Up until the mid-1990s, when the Intertoto stantly changing threat environment, it is signed for the lottery industry to provide a Security Standard was established, there was important for lotteries to stay protected and framework within which organizations not no generally accepted international stan- to demonstrate to their stakeholders – and only can stay protected, but can demon- dard for the operational security of lotter- to their players and regulators in particular – strate to their stakeholders that the systems ies. When the WLA was founded in 1999 that everything possible is being done secure they operate are intrinsically secure and through the merger of Intertoto and AILE, their data and their interests. Technology trustworthy. the Intertoto Security Control standard was can help, of course. But fi rst they need to grandfathered into the newly formed as- have appropriate measures and procedures Th e WLA-SCS was launched in 2000 and sociation, and renamed the WLA Security in place to address every aspect of opera- is now in its sixth iteration. Th e lottery Control Standard (WLA-SCS) in 2000. tional security at all times. sector has developed a lot in the last 18 years, and both the standard itself and the Milestones on a An eff ective security and integrity manage- corresponding certifi cation process have continuing journey ment system calls for a structured, methodi- constantly evolved to stay abreast of these Since its earliest days, the WLA Security cal approach. Th e WLA Security Control changes. and Risk Management Committee (SRMC)

What is Organizational Resilience?

In order to survive and prosper over reputational harm – are directly relevant tency and flexibility, and that pervades the long term, organizations need to to lotteries, according to Tony Reilly, BSI every level of the organization, not just be able to systematically anticipate, Group Marketing Director, who spoke at top management. prepare for, respond and adapt to in- the annual WLA/EL security seminar in cremental change and sudden disrup- Oslo in October 2017. BSI has developed an extensive library of tions. A full 88% of executives surveyed resources around OR, including a recent by the Economist Intelligence Unit in “Organizational Resilience involves study published with Cranfield School 2015 considered this ability essential to changing before the cost of not chang- of Management in the UK, which distils long-term growth. Today it is known as ing becomes too great,” says Tony, “and 50 years of thinking on Organizational Organizational Resilience (OR) and there the most resilient organizations are those Resilience and offers today’s business is a growing army of management con- that learn from their mistakes, and the leaders a clear framework to help them sultants working alongside senior execu- mistakes of others, to create strategies manage risk, adapt to change and ensure tives to help their businesses become of continuous improvement.” Resilience their survival and future success. Further more resilient. The three key drivers calls for a new mindset, he continued, details can be found on the BSI website at of this quest for resilience – economic one that maintains a balance between www.bsigroup.com/ uncertainty, disruptive competitors, and innovation and control, between consis- organizational-resilience

18 WLA magazine | No. 49 | Summer 2018 SETTING SETTINGSTANDARDS STANDARDS

has worked to keep the standard on a path of continuous improvement. Th e original The inevitability of cyber attacks standard (WLA-SCS:2000) contained 93 general information security controls and The dangers of cybercrime are some- Gidani (Pty) Ltd, at a session dedicated was modelled to some extent on BS 7799, times underestimated by top manage- to lottery security at the 2016 World the precursor to ISO 27001. In 2002, the ment, leaving organizations vulnerable to Lottery Summit in Singapore. “But with SRMC made the fi rst major revision to attack. The WLA-SCS can help a lottery WLA-SCS certification, a lottery can be the standard, adding 12 lottery-specifi c formalize the processes in place to pre- sure it has best practices in place to controls on top of the existing 93 gener- pare for an attack and mitigate damage. prepare for the inevitability of a cyber- al information security controls. Th e new But importantly, the entire organization, attack.” lottery-specifi c controls covered instant from top management down, needs tickets, lottery draw management, retail- to recognize that that cyber defense is Last year the SRMC also set up a dedi- er security, and unclaimed prize money. an ongoing process that does not end cated cybersecurity working group led by WLA-SCS:2003, released the following with certification. In fact one of the key David Boda, head of information security year, was not a major upgrade, but saw fur- aspects of cyber preparedness today at Camelot, and comprising security pro- ther refi nement of the general information involves raising threat awareness among fessionals from eight lotteries around the security controls. staff themselves and managing the risks globe. The group aims to share informa- of human error. tion with WLA members on cyber threats Th e fi rst major update of the standard came and countermeasures, and ultimately with WLA-SCS:2006. From this version of “The future is totally unpredictable,” establish a dedicated platform to help the standard forward, operating an infor- said SRMC member Dawid Muller, Chief state lotteries protect themselves from mation security management system that Executive Legal and Compliance at cyberattacks. complies with ISO 27001 and covers the entire organization was made a core re- quirement of the WLA-SCS and became a time, taking the total to 72. WLA-SCS:2012 makes a total of 137 controls in all, covering prerequisite for certifi cation. Most general saw the addition of another 18 controls every aspect of a lottery's operations, from information security controls were covered for sports betting. Th e latest version of its security policy to the physical security by that requirement, so the general infor- the standard, WLA-SCS:2016, signifi cantly systems and measures in place to protect mation security controls of the WLA-SCS expanded these controls for sports bet- VLTs, digital sales channels and interactive could be reduced to a few key enhanced ting and Internet gaming, and for the fi rst services, online gaming, sports betting and controls, mainly related to security policy time also encompassed the integrity of electronic draws. and the organization of the security func- operations. WLA-SCS:2016 has increased tion and the management system itself. the number of lottery and gaming-specifi c Independent auditors controls to 114. At the same time, owing to When the standard was created, work be- Th e lottery-specifi c controls in WLA- the ISO 27001 conformance requirement, gan to develop a certifi cation process to SCS:2006 were expanded to cover Internet- the number of general information secu- complete the framework, and to defi ne based games, which were very new at the rity controls has been reduced to 23. Th is procedures to perform the audits and a set

WLA-SCS:2000

WLA-SCS:2002

2006: Introduction of ISO 27001 requirement

WLA-SCS:2016

0 150

■ General information security controls ■ Lottery-specific controls

Through successive iterations, the WLA Security Control Standard has progressively become more focused on controls that are relevant exclusively to lottery operators.

WLA magazine | No. 49 | Summer 2018 19 SETTING SETTINGSTANDARDS STANDARDS

of rules to designate assessors. Initially all Once the paperwork is submitted, the in- since the program was opened to WLA the audits were conducted by one person dependent auditors ensure that the lot- associate members in 2008. from one company; later, lotteries could tery’s ISO 27001 certifi cation is valid and choose to work with either of the two ma- current. Th ey also check that all security Th e WLA Security Control Standard has jor players in the security risk assessment and integrity controls, including lottery- come a long way over the past 18 years, fi eld. As interest in WLA-SCS certifi cation specifi c controls, are in place, have been sharpening its focus on strictly lottery- has increased, the number of assessment approved at the proper level, and are being related issues and progressively attracting services and auditors has grown to ensure carried out as specifi ed in the documen- more and more interest. It remains the only that certifi cation is readily accessible to lot- tation. internationally recognized global security teries and suppliers in every region. Th ere and integrity standard for the lottery and are currently 23 assessment service enti- Based on the recommendations of the gaming sector with a certifi cation process in ties and more than 60 approved auditors assessment entity, the WLA then formally place, and is considered a shining example around the world, and WLA-SCS assess- awards certifi cation. A total of 70 member of how a sector of activity can leverage its ments can be carried out in more than 25 lotteries are currently certifi ed and 19 lot- collective experience and expertise to serve languages. tery suppliers have achieved certifi cation the specifi c interests of its stakeholders. Leadership starts at the top Most importantly, top management needs to be engaged in the process over the long term. Lottery leaders increasingly recognize the need to adopt a comprehensive approach to security, integrity, and risk management that permeates every level of the organization and encompasses everything from perimeter protection to cyber preparedness and reme- diation. With its ISO-ready security control standard, the WLA off ers a complete frame- work and practical support to help lottery leaders to structure the security posture of their organiza tions and tailor their existing security man agement systems to the specifi c demands of the gaming industry.

You can request copies of the WLA Security Control Standard and the Guide to Certifi cation for the WLA Security Control Standard by writing to [email protected].

World Lottery Association

WLA Security Control Standard

Information and operations security and integrity requirements for lottery and gaming organizations

WLA-SCS:2016

Edition November 2016 (rev) All rights reserved. Unless otherwise specified, no part of this publication may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying and microfilm, without permission in writing from WLA.

1/27

20 WLA magazine | No. 49 | Summer 2018 SETTING SETTINGSTANDARDS STANDARDS

SRMC: expert advice from local WLA representatives Map data © Google 2018 The members of the WLA Security and Risk Management Committee (SRMC) are available to help lotteries get started on the certifi cation journey. The SRMC is an international group of 20 top security professionals from WLA member lotteries around the globe.

The WLA Security and Risk Management Committee

Carlos Bachmaier Johanning, Trond Laupstad, Itamar de Carvalho Pereira, SELAE, Spain (chair) Norsk Tipping AS, Norway Ministério da Fazenda, Brazil

Driss Hamdoune, Dawid Muller, Don Wharton, La Marocaine des Jeux et des Sports, Gidani International (Pty) Ltd, Lotterywest, Australia Morocco (deputy chair) South Africa David Boda, Gunnar Ewald, Dong Hong Fang, Camelot UK Lotteries Ltd., UK LOTTO Hamburg GmbH, China Sports Lottery, China Hamburg, Germany Beh Swan Swan, Jan Seuri, Magnum Corporation Sdn Bhd, Jean-Jacques Riera, Veikkaus Oy, Finland La Française des Jeux, France Pascal Gervaix, Anton Stiglic, Société de la Loterie de la Suisse Erich Schuster, Loto-Québec, Canada Romande, Switzerland Österreichische Lotterien GmbH, Austria Roberto Zavala, Diego González Quinteros, Evangelos Cosmidis, , Banca de Quinielas de Montevideo, OPAP S.A., Greece U.S.A. Uruguay

WLA magazine | No. 49 | Summer 2018 21 SETTING SETTINGSTANDARDS STANDARDS

Four questions for Carlos Bachmaier

Carlos Bachmaier, head of personal data protection, ICT risk management, and business continuity at Spain’s national lottery (SELAE), has served on the WLA Security and Risk Management Committee for well over a decade and has chaired the Committee since Thierry Pujol stepped down last year. We asked him how the WLA Security Control Standard has changed over the years, and why it is still the most respected security and integrity baseline for lottery and gaming organizations worldwide.

Carlos, why is it imperative now more than ture, delivering security and integrity, Moreover, to achieve our mission, a lot- ever for WLA members to adopt and comply and that appropriate and eff ective con- tery or gaming operation’s reputation with the WLA-SCS and to become WLA-SCS tingency plans are in place. It provides must be impeccable. It’s part of our or- certifi ed? your regulators and the public with vis- ganizational responsibility to protect our Th e lottery and gaming sector is chang- ible proof that your organization protects assets and our reputation. WLA-SCS can ing constantly and rapidly, particularly in players, winners, and the public fi nances help your organization ensure that the the area of technology and business in- by operating its games within a well-es- procedures needed to protect your as- novation. Technology has greatly contrib- tablished, state-of-the-art, eff ective secu- sets and the welfare of your players are uted to the improvement of our products, rity and integrity management structure, in place. One element that CEOs must brought us closer to our players, and al- and that it has a system of internal con- understand is that the ISO 27001 foun- lowed us to establish eff ective responsible trols to ensure sound risk management. dation leaves a lot of latitude and fl exibil- gaming controls. But technology ity: it is risk management-based, so and business innovation, if not han- there are ample possibilities for each dled properly, also have a downside. organization to tailor the use to their Th e pace of change is faster than ev- specifi c needs. er. And cyber-crime is on the rise. Criminals are always fi nding clever Th e “tone at the top” is tremendously new ways to attack online busi- important. As with any other element, nesses, and the lottery and gaming leaders cannot expect their organiza- sector have assets that attract crimi- tions to follow good protection prac- nals; nowadays, you need to recog- tices if guidance and inspiration is not nize that such attacks are inevitable. provided by top management. Most CEOs now realize that the security Engaging with the certifi cation and integrity of their organization be- process will help your organiza- gin with them, and permeate the com- tion to better prepare for potential pany down to the lowest levels; others cyber-attacks and ensure that you might yet need to fully recognize this have the right processes in place reality. While security and integrity to mitigate any damage they might are ultimately everyone’s responsibil- cause. It will also assure business ity, they start at the top. Establishing continuity so that your operation a culture of security and integrity can rapidly return to normal in the throughout the organization not only event of disruptions or cyber-at- provides more eff ective protection but tacks. At the same time, it will help will help your organization fulfi l its to fi ght other risks such as errors mission and its regulatory obligations. and omissions, misconduct and fraud, Why is it essential for top-level management Setting the objective of achieving WLA and generally ensure a smooth operation. to know about the standard, certifi cation, certifi cation – and at the same time com- and security in general? mitting resources and appointing respon- What are the key benefi ts of adopting the WLA members must excel in gover- sible persons to manage the framework standard and achieving certifi cation? nance. It’s one of our core values and we – sends a very strong signal and shows a While adopting the standard will help owe it to our constituencies. Embedded clear direction. you achieve a proper risk level, certifi ca- in this quest for excellence is our du- tion to the WLA-SCS demonstrates to all ty of care to our players and winners, People oft en ask me what it costs. We of your stakeholders that your operation which means that the security and in- need to distinguish protection costs, pro- has an eff ective risk management struc- tegrity of our assets must be guaranteed. tection management costs, and certifi ca-

22 WLA magazine | No. 49 | Summer 2018 SETTING SETTINGSTANDARDS STANDARDS

tion costs. Good protection is certainly won’t be available until this process is ginning of 2017 to share information not cheap. Management costs are moder- complete. on cyber-threats and look into the pos- ate, and certifi cation costs are really low. sibility of establishing an information How much budget is devoted to protect- One path under exploration is introduc- platform to help WLA members better ing your assets depends on many fac- ing further fl exibility, which would im- prepare for and defend against cyber-at- tors, and should be based on good risk ply higher needs for responsibility and tacks. Th e controls included in WLA-SCS analysis. But CEOs need to weigh up closer top management involvement. Th e will need to evolve to meet the growing protection costs in terms of revenues, be- idea would be to move away from a one- threat of cyber-crime, and the next it- cause revenues can be badly damaged by size-fi ts-all approach but to strengthen eration will most likely feature a com- breaches and disruptions. In this regard, the controls required for the needed fi t. prehensive set of controls for dealing WLA-SCS conformance and certifi cation Th is would call for greater engagement with cyber-attacks. Members wishing to just make good business sense. by CEOs, and of course there is a learn- contribute to the working group’s tasks ing curve involved. Th e WLA may not be are more than welcome to contact me or Th e lottery sector will likely continue to ready for this approach by 2020 – it could SRMC Deputy Chair Driss Hamdoune change at a rapid pace. How do you see the be 2025 – but changes are in the pipeline from La Marocaine des Jeux et des Sports WLA-SCS evolving in the coming years to and will be introduced as appropriate. to see how to get involved. Cloud/third- adapt to these changes? party computing is another unstoppable Th e SRMC is currently working with User-centric gaming platforms (Internet, trend. Developments such as blockchain the WLA leadership to defi ne its me- mobile, interactive TV, etc.) will con- technology need to be followed and un- dium to long-term plans, part of which tinue to gain signifi cance for lotteries. derstood. Security and integrity control is the “Roadmap 2020” project. Th e Th e SRMC has already recognized the frameworks must stay abreast of these de- Committee works on the basis of con- growing need for cybersecurity. It set up velopments, because in matters of security sensus and alignment, so full details a cyber-risk working group at the be- and integrity, change is the only constant.

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WLA magazine | No. 49 | Summer 2018 pollardbanknote.com 23 INSIGHT INSIGHTINSIGHT

U.S. lotteries prepare for – Fotolia.com Les Cunliffe sports betting windfall

U.S. states have been gearing up for the repeal of a federal law that prohibits sports betting in all but four states. Rhode Island, Kansas and Kentucky could be the first state lotteries to profit.

Th e U.S. Supreme Court repealed the Pro- bling in their own territories. While U.S. fessional and Amateur Sports Protection Act sports leagues would like a federal system of 1992 (PASPA) in mid-May. Th e majority of regulation rather than a patchwork of of lawyers watching ’s case against state-by-state regulations, this is seen as po- the National Collegiate Athletic Association litically unlikely. Firstly, there is a prohibi- (NCAA) had predicted the outcome well tive federal law called the Wire Act, which ahead of the announcement. Perhaps more would need amending but more important- importantly, legislators up and down the ly, state governments have always regulated country saw it coming and have introduced gambling activities and do not want federal over 40 bills in anticipation of a New Jersey involvement. victory. , New Jersey, Mississippi, Con- New Jersey has been looking to overthrow necticut, and West Virginia have passed laws PASPA since 2009, when it fi led its fi rst suit that enable them to open sports betting mar- against the U.S. attorney general claiming kets relatively quickly and at least 10 other the federal prohibition on sports betting was states are preparing legislation. unconstitutional. A long and tortuous path took the case all the way to the Supreme Of these, West Virginia is the only state Court. where the lottery operates the local casi- nos or racetracks, and these will be the only Th e Supreme Court only hears 100-150 of venues for sportsbooks under the new laws. the 7,000 cases that it is asked to review each Th e other states will grant the operation of year. Th e fact that it was prepared to listen to sports betting to privately-run casinos or New Jersey’s case was taken as a sign that it racetracks. would be likely to repeal PASPA and the po- sitioning began. Th us far, three states have proposed legis- lation that would let their lotteries operate State legislators have been acting quickly. In sportsbooks: Kansas, Kentucky and Rhode the U.S., state governments regulate gam- Island.

24 WLA magazine | No. 49 | Summer 2018 INSIGHT INSIGHTINSIGHT

Lotteries in the limelight for the state. If the racetrack-only option is the sports betting operation to a state-run Of those three markets, Kansas is poten- pursued then the report estimates annual sportsbook at the Twin Rivers Casino and a tially the biggest. Kentucky has a far bigger income at just USD 45.7 million1. planned casino at Tiverton. As such, Oxford population with 4.45 million people to 2.9 Economics estimates an income of just million in Kansas. Th e re- Kentucky lawmakers have introduced a bill USD 40–55 million. corded annual net sales of USD 258 million that would allow the lottery to off er bets on in 2017, compared to net operating income college and professional sports (excluding In essence, Rhode Island is not dissimilar to of USD 277.5 million in Kentucky. horse racing) via lottery retailers, horse rac- Delaware, which together with Nevada is one ing tracks and simulcast facilities. It is the of only two U.S. states to off er sports betting. Crucially though, some Kansas legislators second sports betting bill to appear in the When PASPA was passed in 1992, Nevada, are preparing a far more liberal sports bet- state. Given a high tax, Oxford Economics Delaware, Oregon, and Montana were ex- ting regime. Th ere have been fi ve sports estimate Kentucky’s income from sports bet- empted but only Nevada and Delaware cur- betting bills, ranging from a bill that would ting at USD 83.6 million. rently operate sportsbooks. allow sports betting at all lottery retail out- lets, as well as at racetracks, online and on Rhode Island also has competing bills – two However, aft er the Supreme Court deci- mobile; to a bill that would limit sports in this case – but the Rhode Island Lottery sion, a spokesperson for the Oregon to the racetracks only. Th ey are all was so confi dent of a positive Supreme said it would look at the possible ramifi ca- likely to be quite highly taxed. In a study for Court outcome and legislative progress that tions. It ran a Sports Action lottery game the American Gaming Association, Oxford it issued a request for proposals (RFP) for a between 2003 and 2007 but closed it down Economics estimated that a liberal, high-tax supplier to provide sports betting products when the NCAA said it would not allow any regime would bring in USD 157.4 million and services over a month before the Court of its events to be held in a state that allows handed down its judgment. sports betting. Th e Lottery is focusing on the launch of fantasy sports games in the com-

1 https://www.americangaming.org/sites/default/ Rhode Island is the smallest of the three ing weeks and will think about sports bet- files/AGA-Oxford%20-%20Sports%20Betting%20 states. It has a population of just over a mil- ting but it is in no hurry, according to the Economic%20Impact%20Report1.pdf lion people. Th e proposed legislation limits Lottery spokesperson. glegorly – istockphoto.com

WLA magazine | No. 49 | Summer 2018 25 INSIGHT INSIGHTINSIGHT

Rhode Island has roughly the same pop- The college sports problem and selected championship events. Genius ulation as Delaware. Like Rhode Island, Despite the Supreme Court repeal, there are Sports also distributes this type of informa- Delaware runs its gaming through the state- a lot of issues to be sorted out before Kansas, tion to , in addition to providing run lottery with the games branded and Kentucky, Rhode Island, or any other state integrity services and other betting services. marketed through the state’s three casinos. can begin to accept bets on sporting events. Perhaps the NCAA was better prepared for In 2016, revenue from its sports lottery was this decision than was previously thought. USD 39.4 million. First of all, there is the issue of which sport- ing events they will be able to accept bets on. At a hearing in front of Kansas lawmakers, However, Rhode Island means business. While Major League Baseball (MLB) and the MLB vice-president Bryan Seeley said the Governor Gina Raimondo’s budget proposal National Basketball Association (NBA) have league would want a share of the profi ts and for 2019 includes USD 23.5 million in new slowly warmed to the inevitability of sports betting available on mobile devices. It also state revenue from the Twin River Casino betting in the U.S., the National Football would want casinos to share sports betting and the planned venue in Tiverton, and an League (NFL) and college sports’ NCAA data with the league to help identify suspi- additional USD 4.1 million from new types have been bitterly opposed to it. cious trends where illegal activity could be of games such as “stadium gaming” at Twin occurring. River. Th e likelihood is that the commercially savvy NFL is just waiting for its moment to “It’s not simply about whether we get a share Th e RFP asks providers to demonstrate enter the debate, but the NCAA is thought to of the profi ts, although we think that is ap- “their capability to readily adapt to any fu- favor an opt-out for amateur sports. propriate. But there are a host of provisions ture additions to authorized sports betting it is important to put into place to protect operations in the state including, but not Th at said, on the day of the Supreme Court the integrity of the game,” Seeley told the limited to, remote sports betting.” Th e win- decision it announced a 10-year deal with House Federal and State Aff airs Committee. ning bidder will be awarded a fi ve-year con- Genius Sports focusing on capturing, man- tract, which comes with the option for two aging and distributing real-time data and Th e integrity of the game is going to become fi ve-year extensions. statistics from the three NCAA divisions one of the most fi ercely fought issues, as humonia – istockphoto.com

26 WLA magazine | No. 49 | Summer 2018 INSIGHT INSIGHTINSIGHT

leagues and betting operators (lotteries, casi- of net revenue, according to the American When the court rules it’s going to be big nos, and online operators) argue with legis- Gaming Association (AGA). news for a while.” lators over who gets what share of the spoils. Following the NBA testimony, the AGA re- Th e latest Kansas bill does include a 1 per- Avoiding match-fi xing should be a fairly leased a particularly spiky statement on what cent integrity fee. It is the highest amount yet non-controversial subject. Operators need it called “the NBA proposal to skim money proposed. Another bill in Kansas demanded the sports to be clean as much as the sports from American taxpayers”. It followed that a 0.25 percent fee, while the third includ- themselves. Nobody is going to place a wa- with a number of supporting statements ed no provision for an integrity payment. ger on a game that they think is fi xed. from law enforcement offi cers, competition Neighboring Missouri is the only other state experts, and consumer protection advocates proposing a 1 percent fee in its bill. Pennsylvania Gaming Control Board head who slated the NBA’s proposal. of licensing Susan Hensel told the audience Th e leagues lobbied hard for an integrity at the ICE Totally Gaming conference in Despite the opposition, other sports bodies fee to be included in West Virginia’s sports London: “One of the biggest challenges will are following the NBA’s lead. Professional betting law and failed. However, they suc- be the integrity of the game. Th e protection golf’s organizing body the PGA Tour said ceeded in having a 0.25 percent integrity of the integrity of the game is critical to the recently that it supported a 1 percent integ- fee included in legislation proposed in their sustainability of the industry.” rity fee, while also demanding input over the home state of New York. Connecticut’s poli- type of bets off ered to customers and control ticians have also written a 0.25 percent fee However, the sports leagues’ biggest concern over data provided to operators. into their sports betting bill. An integrity fee seems to be about monetizing integrity. Th e does not feature in the proposals from any of NBA, with support from the MLB, stirred up “We’re making sure our voice is being heard,” the other states. some controversy when it told New York’s PGA Tour commissioner Jay Monahan told lawmakers that sports should receive an “in- USA TODAY in his fi rst statement on the Market potential tegrity fee” of 1 percent of all bets placed. issue. “A lot of things remain to be deter- Th e wrangling over legislation will continue Th at equates to between 20 and 29 percent mined. It’s not simply switching a switch. as all sides look to maximize the revenue

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WLA magazine | No. 49 | Summer 2018 27 INSIGHT INSIGHTINSIGHT

opportunity, while creating a robust regu- Th ese are big fi gures, but as previously not- Maryland legislators are planning a refer- latory framework that protects citizens and ed, it will not revolutionize state budgets in endum on the issue in November, as state prevents the corruption of sporting events. the way that some governors will hope. laws assert that any expansion of gambling needs to be decided by voters. Ohio is the According to the American Gaming Associ- Maryland is another jurisdiction in which other state to follow the lottery-led model. ation, Americans spend USD 150 billion the state lottery has responsibility for oper- It would also require a referendum to imple- each year on sports betting in the black ating the state’s racetrack, casinos and other ment sports betting. While its legislators are market. If all 50 states were to legalize sports gambling facilities, as opposed to the more yet to act, it was one of 20 states which fi led betting (an unlikely event but necessary to traditional regulatory structure in which an amicus brief in support of the New Jersey compare like with like), Oxford Economics gaming licensees are the owners and opera- case last September. estimates that Americans would spend be- tors of the machines. tween USD 83 billion and USD 287 billion, While legislators, regulators and operators depending on tax rates and the availability In many of these states, eff ective tax rates have been preparing for a New Jersey vic- of gambling (whether it is in casinos, retail, are higher than in states with privately- tory in the Supreme Court, there are a lot of online and/or mobile)2. run casinos. A higher tax rate would limit details to be thrashed out before any lottery gaming revenue, according to Oxford Eco- or casino will be able to accept a bet on the Th ese estimates would translate into net nomics. next Superbowl. gaming revenue of between USD 5 billion and USD 19 billion. Tax take would be be- tween USD 707 million and USD 2.6 bil- lion. In addition to all this, according to 2 https://www.americangaming.org/sites/default/files/AGA-Oxford%20-%20Sports%20Betting%20Economic%20 Nielsen Sports3, there would be an addition- Impact%20Report1.pdf al USD 3 billion in advertising, sponsorship 3 https://static1.squarespace.com/static/5696d0f14bf118aff8f1d23e/t/5a70dbb2c83025604e853189/1517345716998/ and product fees. Nielsen+Sports+-+AGA+-+Estimating+US+Market+5.18.17.pdf

Michigan blazes trail with virtual sports rollout

The other sports-related development to feature in the U.S. lottery market is the introduction of virtual sports games.

In February, Inspired Entertainment an- nounced a deal with Michigan Lottery and its platform provider Pollard Banknote to provide it with virtual sports games.

For the uninitiated, virtual sports games con sist of watching a computer-generated foot ball game or a horse race and betting on the outcome. The advantage they have over real world sports is that a new match can be generated immediately after the spxChrome – istockphoto.com spxChrome last one has finished. They have proved immensely popular in the UK, Greece, and allows parlay wagers at retail locations said retailers would receive a 5 percent in Italy. throughout the state if a bill proposed last commission from virtual sports. year comes to pass. Michigan has been one of the most pro- Inspired Entertainment has been the most gressive lotteries in the U.S., having gone Pennsylvania Governor Tom Wolf has also successful supplier of virtual sports games online as early as 2014. It has optimized its authorized the state lottery to offer virtual in Europe. During 2018, it was acquired online games for mobile, with a constantly games, which are expected to be on offer by former Scientific Games chief execu- evolving portfolio of e-instants, games in retail stores from June this year. Wolf tive officer Lorne Weil who has stated his and interactive draw-based games. It will be predicted this could bring in as much as ambition to target the U.S. lottery sec- the first U.S. lottery to feature virtual sports. USD 75 million to state coffers. However, tor with Inspired. The company recently politicians’ revenue projections should be recruited former managing director of The Michigan Lottery might also get the taken with a pinch of salt. They are prone Aristocrat Technology’s Americas Group opportunity to develop a system that to exaggeration for political effect. He Brooks Pierce to further that ambition.

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Bet-on-Lottery and Courier Services: A global overview

Modern technology and the advent of the Internet have provided fertile ground for the expansion of Bet-on-Lottery and Courier Service operators. In the following article, we provide an overview of the two main forms of these business models and examine how they function in different parts of the world.

For more than 25 years, foreign lotteries have tronic commerce services unless it has re- called EU Lotto Ltd (EU Lotto). been off ered without specifi c authorization ceived the necessary permission to do so by Players place bets through its website on the in various countries by operations seeking the government or authorities competent outcome of offi cial state-lottery draws tak- to capitalize on the popularity of state autho- to grant such authorization for the territory ing place around the world. takes rized lottery games. Initially, these operators where the gaming services are made avail- these bets as instructions from the client to had to rely on traditional mail services to able.” Th e code of conduct further states place wagers on their behalf with EU Lotto. promote their products, which minimized that, “members shall only off er a gaming ser- To protect itself against the possibility of a their impact in the jurisdictions where they vice to or accept bets from residents of the large payout due to a high-jackpot win, it did not have specifi c authorization to oper- jurisdiction(s) whose government or com- takes out using the capital market. ate. Th e advent of the Internet, with its wide petent authority has granted an authoriza- Hence the name, “the insurance model”. reach and instantaneous transaction comple- tion to off er the gaming services concerned”. tion, has greatly expanded the capabilities of Lottoland was founded in May 2013 in these operations. Th is potentially increases A brief look at Bet-on-Lottery Services and Gibraltar and began taking bets on the the impact on the authorized lottery orga- Courier Services clearly demonstrates that European block game Jackpot one nizations, which, in the jurisdictions where by their nature, they are illegal operations. month later. Since then Lottoland has expand- they off er their products, follow their respec- Th e information that follows has been ob- ed rapidly, and is currently active across four tive national or state legislations as well as tained from public services. continents in some 30 countries. It claimed in their eff orts to raise funds for good causes in May 2017 to have more than six million play- their respective jurisdictions. Bet-on-Lottery Services ers worldwide, to have accrued revenues in For the past few years, private online gam- 2016 of USD 350 million, and to have paid out Illegal gambling ing fi rms have been off ering what is known USD 1.25 billion in winnings to date. Although what constitutes illegal gaming as “Bet-on-Lottery Services”. Bet-on-Lottery has long been a point of contention, there Services see players bet on the outcomes Legal authorization is now a pertinent frame of reference. Th e of state-regulated lotteries without actu- Lottoland is licensed to operate in Australia’s Council of Europe draft ed a Convention on ally taking part in those games. In these Northern Territory, the UK, Ireland, and the Manipulation of Sports Competitions, schemes, a private operator receives a re- Gibraltar. However, all of these licenses do which defi nes “Illegal sports betting” as be- mote gambling license oft en from a low- not necessarily cover all forms of gaming in ing “any sports betting activity whose type tax domicile such as Gibraltar, then off ers those markets. or operator is not allowed under the appli- fi xed-odds betting on state-authorized lot- cable law of the jurisdiction where the con- tery products across jurisdictional lines. Th e Th rough its Racing Commission, Australia’s sumer is located.” business model is simple: these operators of- Northern Territory issued an online betting fer players the chance to bet on the outcomes license to Lottoland in December 2015, to of- With minimal adaptation, this defi nition of regulated lotteries, with the chance to win fer online betting on the outcomes of national can be used to characterize all non-regulated at least the same prizes as the lotteries they lotteries and international lotteries. However, gambling in a jurisdiction as “Any gambling are exploiting. Th eir websites typically have in November 2017 amendments were made activity whose type or operator is not al- the look and feel of the platforms tradition- to the license removing the ability of players lowed under the applicable law of the juris- ally off ered by authorized providers, and the to bet on the outcome of national lotteries. diction where the consumer is located.” player could oft en not even realize that they are betting through a private operator. In the United Kingdom, Lottoland is licensed In accordance with this defi nition, and fur- by the UK under ther underlining its signifi cance, Article 2 A well-known provider of Bet-on-Lottery the Remote General Betting (standard) (re- of the WLA Code of Conduct states, “No Services is Lottoland. Th ey are not a lottery al events) Operating License [sic] and the member shall off er gaming services via elec- operator but instead act as an agent for a Remote Casino Operating License.

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The websites of the most prominent Bet-on-Lottery operator Lottoland (left) and the most well known Courier Service provider TheLotter (right).

Th e Remote General Betting (standard) (real erators from accepting bets on EuroMillions tion involves the buying of a lottery ticket in events) Operating License allows the licens- draws taking place outside the UK. Th is a given jurisdiction by a courier on behalf of ee to provide facilities for remote (online) followed a public consultation launched in a player in another country. An example of gambling to consumers in Britain. It autho- March 2017 by the UK’s Department for such a service is theLotter. rizes the provision of facilities for betting on Digital, Culture, Media and Sport (DCMS). real events (but not virtual events) by means Th e ban will be introduced through a new Th eLotter was founded in 2002 and claims of remote communication (for example, a license condition that will prohibit consum- to be the world’s premier lottery ticket mes- website). ers in Great Britain from placing bets on senger service. Th e company is registered EuroMillions games that take place outside in Belize as theLotter Enterprise Ltd. and Th e Remote Casino Operating License al- the UK. operates its websites out of the UK. It has lows operators to off er casino games to cus- 53 diff erent lottery products from various tomers in the UK via a website, mobile In the Republic of Ireland, Lottoland re- countries for sale on its sites, and off ers vari- phone, TV, or other online service, regardless ceived a Remote Gambling License from ous payment methods. of where the operator is based in the world. the Excise License Offi ce. With this license, Lottoland can off er the placement of bets on Th e operation works as follows. Aft er regis- Section 95 of the UK Gambling Act sets out its websites to players in Ireland. tering on theLotter’s website, players select a clear prohibition on licensees for the of- their desired games and play them as they fering of bets on National Lottery draws. Although Lottoland is operating under lim- would on the website of the offi cial lotteries. Indeed, under the terms of the Lottoland’s ited licenses in the above-mentioned coun- A corresponding lottery ticket is then pur- UK License, it is blocked from off ering tries, its websites are easily accessible in chased by a courier located in the jurisdic- odds on any National Lottery draws, includ- other countries, where it does not hold a li- tion of the offi cial lottery and scanned into ing EuroMillions, in the UK. However, un- cense to off er its services. the players’ accounts. For winnings of more til now it has been able to circumvent this than USD 2,500, players must travel to the by off ering players odds on the Spanish- Courier services jurisdiction where the ticket was bought and language version of the draw, Euromilliones. An older form of unauthorized lottery ser- personally collect the prize from the lottery. In November 2017, the UK government an- vices is known as the Courier Service or Prizes of less than USD 2,500 are collected by nounced plans to stop all lottery betting op- Concierge Service. In principle, this opera- theLotter on behalf of the players and trans-

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ferred to the players’ accounts. Unlike some the borders of specifi c jurisdiction such as Other operations off ering courier ser- operations that off er similar services, it does New Jersey, where the courier services can vices are: Lotto365.com; IceLotto and not take a commission from lottery winnings. register their activities with authorities and LotteryMaster. theLotter generates its revenue through a enter into agreements with retailers located once-off service fee for each purchase. in the jurisdiction, they do not have au- In the next segment, we will examine the thorization to sell issued by the pertinent legal landscape around the globe in regard While courier services might be authorized authorities of the other jurisdictions they to these services and what measures various to off er their messenger services within are selling to. jurisdictions have taken in their regard.

Bet-on-Lottery and Courier Services: effective responses

Countries around the globe have taken measures in regard to the expansion of Bet-on-Lottery and Courier Services. Legislative moves have been made in several jurisdictions; in other countries, regulators have taken action within the existing laws.

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In addition to legislative moves, aware- synthetic lotteries (Bet-on-Lottery Services) censed companies off ering ness campaigns have also been launched by in their territories. South Australia’s legisla- and Bet-on-Lottery Services to players in state lotteries and other stakeholders to in- tive framework had pre-existing conditions Austria. In addition to the political discus- form the public on the nature of these ser- that prohibited betting on the outcomes of sion on IP-blocking in Austria, the jurisdic- vices and of how they can divert revenues lotteries within its jurisdiction. tion had to deal with the activities of illegal from the State that would otherwise go to operators. Th e Austrian Supreme Court, support good causes. Below you will fi nd Th e Federal Government also began to pay in its latest decision regarding games of a summary of some of the measures that close attention to Lottoland’s operations, chance, held that players are entitled to re- have been taken by legislators, regulators, and in September, federal Communications claim gambling losses suff ered from illegal and non-governmental stakeholders in 13 Minister Mitch Fifi eld wrote to the gov- online operators (4Ob124/17i). diff erent jurisdictions. ernment of the Northern Territory (where Lottoland and other synthetic lottery bet- ting operators in Australia are licensed) to relay concerns from federal parliamentar- ians about Lottoland’s business model and Belgium Australia requested that the Northern Territory gov- Belgium’s penal code states that organizers In March 2016, Tatts Group fi led a com- ernment justify why it issued Lottoland with of prohibited lotteries, if caught, can be fi ned plaint with the World Intellectual Property a wagering license. or imprisoned. Players can also receive sub- Organization (WIPO) Arbitration and stantial fi nes if caught participating in pro- Mediation Center in relation to the dis- As a result, the Northern Territory govern- hibited lotteries. puted ownership of domain names. Two ment announced in November 2017 that it months later WIPO ordered that the dis- would move to prevent lottery betting com- In July 2017, the Belgian Gaming Com mis- puted domain names ozlotto.co, . panies from taking bets on the outcomes of sion (Commission des Jeux de Hasard) de- org and setforlifelottery.org be transferred offi cial Australian lotteries. cided to block Lottoland’s website and put to Tatts Group. it on its black list of illegal gaming organi- However, this move did little to assuage the zations. Th e decision was taken following In 2016 Tatts Group also initiated civil pro- concerns of the federal government, which police reports that Lottoland was off ering ceedings against Lottoland in the Australian in March 2018 confi rmed that it would leg- bets on international lotteries in Belgium Federal Court alleging trade mark infringe- islate to ban betting in Australia on the out- without having obtained a proper gambling ments, and misleading and deceptive con- come of lotteries and keno. license. duct. As a result of the proceedings, a confi dential settlement was reached and Th e resulting amendment to the Interactive court orders issued pertaining to future ad- Gambling Act to achieve the ban was passed vertising conduct and use of Tatts’ intellec- unanimously by federal Parliament’s House tual property. Lottoland also agreed to post of Representatives (lower house) on 9 May Canada a corrective statement on their Australian this year. Upon passing the Senate (upper Canada’s criminal code strictly prohibits website and in national newspapers. house), currently expected to be considered gambling in all forms unless specifi cally in June, synthetic lottery operators would authorized by one of its provisions. Section Separately, non-legislative actions have then have a six-month transition period 207 of the criminal code establishes that been taken by the Australian Lottery and to cease taking bets on offi cial lottery and only the provinces, through their agent cor- Newsagents Association (ALNA) and oth- keno draws. porations, can conduct and manage lottery er lotteries and newsagents associations in schemes in accordance with their provin- conjunction with lottery operators such Th e federal government, during the parlia- cial legislation. An exception is made for as the Tatts Group (now part of Tabcorp) mentary debate on the ban, said it would charitable organizations, which may off er and Lotterywest. Together, the “Lottoland’s help protect 4,000 retailers in Australia, limited lotteries if they are licensed by the Gotta Go!” campaign was launched which who rely on lottery sales to sustain their regulator. focused on prosecuting a ban on “fake lot- businesses, and would assist to preserve the to betting.” Th e campaign included point AUD 1.1 billion in tax revenue from lotter- A “game-of-chance”, as defi ned by Canadian of sale material within lottery retail ven- ies that fl ows to state governments. law, must have these three elements: consid- ues identifying the diff erences between the eration, hope of winning a prize of greater business model of traditional lottery provid- value than the consideration, and an out- ers and synthetic lotteries as well as video come based on chance or a mix of chance spots featuring lottery retailers discussing and skill. Games-of-chance are considered the value they provide to the community. Austria gambling in Canada and must be regu- Th ere is an ongoing discussion in Austria lated. It is illegal for a game-of-chance to During 2017, governments in the Australian concerning the implementation of IP- be off ered to the residents of a Canadian states of Victoria, New South Wales, blocking procedures for illegal online province if it is not explicitly authorized by Tasmania, and Western Australia announced gambling websites. Th is discussion has aris- the relevant provincial lottery corporation. plans to legislate to ban or restrict betting on en especially aft er the discovery of unli- Regarding Internet gaming, the Criminal

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Code explicitly reserves this activity for the On its website, Sazka has also published Bet-on-Lottery Services, moved to ban all provincial lottery corporation. a warning to its players not to play Euro operations of this kind. Jackpot on Lottoland’s website as it does It is not just the selling of lottery tickets by not have permission to off er lotteries in the German state lotteries have also included non-authorized entities that is prohibited Czech Republic. It added that a pay-out can- notices on their websites warning their play- under the Canadian Criminal Code. Section not be guaranteed. Czech players were also ers about the inherent risks of playing games 206 of the Criminal Code establishes that warned that they could face charges for par- off ered by illegitimate operators. Players are it is a criminal off ense to print, advertise, ticipating in illegal gaming. further informed as to how secondary lot- or publicize any proposal, scheme, or plan tery operations undermine the eff orts of involving lottery tickets or any game-of- state lotteries to raise funds for good causes. chance whatsoever, or to assist in the sale of lottery tickets or games-of-chance whatso- ever, or to transmit, mail, or ship an article France used in carrying out any of the above-listed Betting is only authorized in France when activities. organized for sports events and horse Ireland racing. Th e French authority for online In Ireland, there are currently 15 off -shore, competitive games, ARJEL, sent a letter Bet-on-Lottery operators off ering bets on of formal notice to Lottoland for off er- lotteries, including Irish National Lottery ing diff erent online gambling products to games, using a remote bookmakers license Czech Republic French residents. Lottoland was informed secured from the Revenue Commissioners. Sazka – the Czech Republic’s most promi- that off ering such gambling products was Th is number is expected to grow. nent lottery operator – was in discussion an infringement of both the prohibition on with state regulators to make changes to non-sports betting and the exclusive rights Th ese operators are marketing aggressively new online gaming regulation, namely the granted to Français des Jeux to off er online causing confusion amongst players. Th ey Czech Gambling Act (2016). Th e new gam- scratch games in France. In January 2017, are undercutting National Lottery games ing legislation, which came into eff ect on Lottoland respected the formal notice and by charging less per line and doing special January 1, 2017, forbids customers from since then has blocked all its commercial off ers. Whilst they have a remote book- playing lottery games abroad, prohibits op- websites (.com, .uk, .de) for French resi- makers license they are not regulated. On erators from selling foreign lottery games, dents. If it had not respected the formal no- the other hand, the National Lottery has and specifi es that lottery licenses can only tice, Lottoland would have been subject to a dedicated responsible play program and be issued to operators that have legal exis- blocking measures – provided for by French is independently regulated by the Offi ce tence in the country. Amendments to the legislation – of its website and its fi nancial of the Regulator of the National Lottery. Czech Gambling Act (2016) aimed to com- transactions, and would have faced penal Th e Regulator continually monitors the pletely close the door on foreign Bet-on- sanctions and criminal fi nes. National Lottery’s adherence to various Lottery Services in the Czech Republic and codes of practices governing sales, vetting introduced the blocking of the IP addresses procedures, participation and advertising of illegal operators. and marketing.

In November 2014, Sazka fi led charges Germany Premier Lotteries Ireland (PLI), operator against Lottoland with the Public Prosecutor German authorities have a whitelist of li- of the Irish National Lottery, has raised it and notifi ed the Czech Ministry of Finance. censed operators that is maintained by the concerns as to impact of these operators to A complaint was also fi led with the govern- State of Hessen’s Ministry of the Interior its sales, and in turn to the contribution to ment authorities that deal with economic and Sports. Th e list only includes pro- good causes, which was EUR 226 million crimes. Two years later, criminal proceed- viders that have a valid license issued in last year. PLI is lobbying the government ings were suspended, as Lottoland does not Germany. Illegal operators are blocked, re- to introduce an amendment to legislation possess any property in the Czech Republic, gardless of the types of services they pro- to ban these operators and to protect vital nor do any of its representatives have a vide. Operators that are currently active good cause funds. physical presence there. legally under EU law in Germany are not included on this whitelist. Hence, Lottoland Administrative proceedings against Lotto- is not included on this whitelist. Repeated land followed in 2017 by the Czech Ministry attempts by Lottoland to obtain a German of Finance with a view to blacklisting the op- gaming license have been consistently re- South Africa erator and blocking its website. Th e proceed- fused. Court proceedings have been introduced ings followed letters sent to Lottoland asking against a licensed bookmaker. Although them to suspend their off erings in the Czech Of recent regulatory actions against second- online Bet-on-Lottery services are consid- Republic. Apart from being blacklisted and ary lotteries in Germany, there have been ered illegal in South Africa, the bookmaker seeing its website and fi nancial transactions two notable cases in the federal states of currently off ers bets on the outcome of blocked, Lottoland potentially faces a fi ne of Saarland and Bavaria. Th e courts of both National Lottery draws, as well as bets on up to CZK 50,000,000 (ca. USD 2,230,000). states, critical of the parasitical nature of the following international lotteries: Italy’s

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SuperEnalotto; the Spanish Daily; Euro websites together with restricting the regis- ency in the gaming industry; strengthen Millions; the Greek lotto games Kino 15, tration of domain names for such sites. laws against money laundering; and step Kino 12, and Kino 9. All the cash prizes (in- up the fi ght against match fi xing. One key cluding jackpots) are fi xed amounts. tenet of the new legislation calls for strict new measures to eliminate illegal gaming Th ere are other forms of illegal lottery oper- Spain in the country by blocking the IP addresses ators off ering bets on results of the National In Spain, the websites of illegal gambling of foreign online gambling operations. Th is Lottery and lotteries from other countries. operators can be blocked, regardless of the vital update modernizes Swiss gaming leg- Th ese are gaining momentum as advertis- type of services that they off er. Spain has two islation, ushering it into the Internet era. ing is done through major publications. legal national lottery operators, SELAE and Th e new gaming regulations will take eff ect Other operators are advertising services ONCE. In 2013, ONCE reported Lottoland at the beginning of 2019. wherein they act as agents to place bets on to the Spanish gaming regulator for off er- behalf of South Africans in UK and Euro ing bets on Euro Jackpot to players in Spain Million lotteries, stating that winnings and through its website in the Spanish language. all legal requirements will be handled by an Consequently, Lottoland stopped off ering agent in that jurisdiction to transfer win- bets to Spanish residents on that particular United Kingdom nings to players’ South African bank ac- website but other international Lottoland In November, the UK government an- counts. Th e National Lotteries Commission websites were reachable from Spain, albeit nounced plans to stop all lottery betting op- (NLC), responsible for regulating lotteries none in the Spanish language. Recently, erators from accepting bets on EuroMillions in South Africa, is continuing to conduct Spanish gaming regulators blocked access to draws taking place outside the UK. Th is education and awareness interventions to some of Lottoland’s international webpages followed a public consultation launched in inform the public of the illegal nature of under the Lottoland domains for players March 2017 by the UK’s Department for these operators and that there is no guar- within Spanish territory, but some of their Digital, Culture, Media and Sport (DCMS). antee that winnings will be paid to players. websites are still accessible, both under the Th e ban will be introduced through a new lottoland and lotoland domains. license condition that will prohibit consum- Other smaller lotteries operated strictly by ers in Great Britain from placing bets on non-profi t-organizations to raise funds for EuroMillions games that take place outside their entities are known as society lotter- the UK. Th e change closes a loophole that ies and are authorized by the NLC, with barred betting operators from accepting restrictions placed on the ticket cost and Sweden bets on EuroMillions in the UK but allowed the maximum amount of funds that can be Hakan Hallstedt, Director General of them to place bets on EuroMillions in one of raised in a society scheme. Lotteri inspektionen, Sweden’s national the other eight participating countries. Th is gam bling regulator, introduced proposals will ensure that funds raised for good causes Ithuba Holdings (RF) Proprietary Limited – last year to better regulate the iGaming mar- through EuroMillions draws will receive a private company licensed to operate the ket by implementing a new gambling act, to the same level of protection as funds raised South African National Lottery – has also take eff ect in January 2019. Th e new gam- through UK National Lottery draws. In a raised concerns on the proliferation of il- bling legislation will introduce an explicit statement, the DCMS declared that adding legal lotteries that are in direct competition prohibition on Bet-on-Lottery Services and a ban on off ering bets on the outcome of with the National Lottery, thus reducing po- establish payment blocking measures to be EuroMillions draws to the existing ban on tential revenue generation for good causes. put in place for any company attempting to National Lottery draws was “justifi able on circumvent the rules. both a principled and a precautionary basis”. Th e National Gambling Amendment Bill of 2016 aims to restrict bets on the National Th e new restriction came into eff ect in early Lottery and Sports Pools together with April 2018 despite four lottery betting op- results thereof, to operators licensed by erators – Annexio, Lottoland, Lottomatrix, the NLC, with a contribution to be made Switzerland and Multilotto – teaming up as the newly- to good causes. Currently bookmaker li- On June 10, 2018, Swiss citizens voted a created Lotto Betting Group to launch censes are issued by Provincial Gambling new gaming bill into law that was passed legal action against the ban. Th e group ar- Regulators with no requirement to contrib- by the Swiss Parliament last year. As a di- gues that prohibiting betting on non-UK ute to good causes. rect democracy, all legislation passed by EuroMillions draws amounts to a “restric- the Swiss parliament is subject to plebiscite tion” under Article 56 of the European NLC, and ITHUBA, have made further before it becomes law. Th e new gaming Union Treaty, and describes the restriction comments on the Bill to restrict operators bill replaces legislation from 1998 govern- as both “irrational” and “unreasonable”. from off ering bets on international lotter- ing the operation of gambling and casinos ies as this negatively impacts on revenue as well as antiquated legislation from 1923 Further actions can be taken generation for good causes and competes governing lotteries and sports betting. Th e Learning from the experiences in these ju- directly with the National Lottery. NLC new legislation will, inter alia: introduce risdictions, others jurisdictions can deter- is also engaging with policy makers to in- obligatory responsible gaming measures mine what the pertinent actions to take for troduce IP blocking of illegal gambling for gaming operators; promote transpar- them are.

WLA magazine | No. 49 | Summer 2018 35 ASSOCIATION ASSOCIATION BUSINESSBUSINESS

World Lottery Summit 2018 in Buenos Aires Gaining the edge in the new world Photo: istockphoto.com, dolphinphoto

The World Lottery Summit 2018 (WLS 2018) is just around the corner! As delegates have come to expect, the 2018 Summit will be an opportunity to hear and learn from some of the world’s leading experts, while interacting with lottery colleagues from around the globe. WLS 2018 will take place in exciting and beautiful Buenos Aires, Argentina, from November 18 – 22, 2018. To find out more about the event, the city, and some of our keynote speakers read on below.

Welcome to Buenos Aires! Uniquely, Buenos Aires is an autonomous the Mediterranean, Northern and Eastern Regular attendees at the biennial World city within Argentina, which also has twen- Europe, as well as a growing population of Lottery Summit may be used to the idea of ty-three provinces in its federation. With Mestizo people. visiting exotic, exciting locations around over three million inhabitants – an aver- the world, during early-to-mid-autumn age number that has remained consistent Th anks to its location, Buenos Aires expe- months. As WLS 2018 will take place this for over seventy years – this vibrant and riences a relatively temperate climate year- year in the southern hemisphere, visitors bustling city is known for its diversity and round, with temperatures dropping to a will enjoy a springtime summit in the vi- its cultural identity like no other. Today’s daily mean of 11°C (52°F) during winter, and brant, culturally diverse city of Buenos Buenos Aires population is primarily de- climbing to a daily mean of 25°C (77°F) dur- Aires, Argentina. scended from European settlers from across ing the summer months. Summit visitors can

36 WLA magazine | No. 49 | Summer 2018 ASSOCIATION ASSOCIATION BUSINESSBUSINESS

expect a pleasant combination of sunny days heart of the city; the Sheraton Libertador sightful keynote addresses given by our and moderate temperatures during mid-No- Hotel, a luxury hotel situated 600 mts. eight invited speakers, covering a wide vember, but should note that it does fall with- (1,968 ft .) from Teatro Colón; and the Faena range of topics, from Jeff Fromm’s Attract- in the rainy season, and that Buenos Aires is Buenos Aires Hotel, a 5-star design hotel ing Millennials, to Don Tapscott’s insights well known for its spectacular rain and light- off ering plush accommodation in upscale on Blockchain, and Jane McGonigal’s pre- ning storms during spring and summer. Puerto Madero. sentation on Gamifi cation, as well as several others. For more details on the program, Buenos Aires is colloquially known as the Details on WLS 2018 hotel options can be visit worldlotterysummit.org and click on Th eatre Capital of the World, and delegates found on the offi cial summit website at: Business Program. are encouraged to take some time out to enjoy www.worldlotterysummit.org the incredible variety of cultural, sporting and Parallel sessions musical entertainment the city has to off er. The business program As in previous years, between the keynote Registration for the World Lottery Summit addresses, visitors will have the opportunity WLS 2018 venue and 2018 begins at 14:00 on Saturday, November to choose from a considerable range of par- accommodations 17, and continues from 09:00 on the morning allel sessions, covering numerous relevant Visitors to this year’s World Lottery Summit of Sunday, November 18. On Sunday morn- and interesting topics that will help inter- in Buenos Aires will have the pleasure of en- ing, delegates can enjoy a pre-event tour of national lottery operators and contributors joying the facilities at the Hilton in Buenos Buenos Aires and spend the aft ernoon taking gain the edge in the new world. Topics that Aires. Th e hotel is situated in a prime loca- in the sights and sounds of the city before the will be covered include corporate social re- tion in the city’s Puerto Madero district, and summit kicks off at 16:00 with a short wel- sponsibility, blockchain technology, sports is within walking distance of many of Buenos come, followed by the fi rst keynote speaker of betting integrity, gamifi cation, industry dis- Aires’ best-known attractions and entertain- the event, Nando Parrado. Th e fi rst evening ruptors, and many more. ment. Serving as venue for WLS2018, the also marks the opening of the trade show as Hilton Buenos Aires also off ers the largest well as the Opening Gala event – an informal Several of these sessions will run concur- convention facilities in Latin America. gaucho evening in true Argentinian style. rently each day and we encourage delegates to spend some time familiarizing themselves Other available hotel options include: the Over the course of the next three days, with the options on off er and selecting those Sheraton Buenos Aires Hotel, located in the delegates can attend the exciting and in- that are of greatest interest and relevance.

WLA Awards

No World Lottery Summit ber 2008. In recognition of his contribution, Deadline for submission for the WLA Adver- would be complete without we introduce the Jean Jorgensen Merit Award, tising Awards is Friday, September 14, 2018. which encourages the development of future For details please visit the offi cial convention our unique series of awards. lottery leaders by recognizing their contribu- website at: www.worldlotterysummit.org This year, in addition to the tion to the introduction of innovative solu- WLA Advertising Awards and tions that address their lottery’s needs. WLA 2018 Responsible Gaming Awards the WLA Responsible Gaming Th e deadline for submission for the Jean Since implementation of the WLA Responsi- Awards, we introduce the Jorgensen Merit Award for Innovation is ble Gaming Framework in 2009, it has served inaugural Jean Jorgensen Friday, September 14, 2018. For details as an excellent guide on the path to your please visit the offi cial convention website at: lottery’s and business’ success in attaining Merit Award for Innovation. www.worldlotterysummit.org the highest industry standards of responsible gaming and sustainable lottery business de- Jean Jorgensen Merit Award WLA Advertising Awards velopment. Th is year, we will once again be for Innovation Th e WLA Advertising Awards are a tradi- recognizing those WLA members across RGF Before his passing in tional component of the WLA Convention, Level 4, RGF Level 3 and RGF Level 2 with the February 2016, Jean designed to acknowledge and promote best Flagship Awards, as well as the Best Overall Jorgensen was a fi rm practice in lottery industry advertising. Th ese Responsible Gaming Program Award. fi xture in the lottery awards provide an ideal platform for you to industry, starting at gain industry exposure for the promotional Th e deadline for submission for the WLA Danske Spil in 1991, material produced by your lottery in the past 2018 Responsible Gaming Awards is Fri- and serving as WLA two years. Th is year, there will be awards pre- day, September 14, 2018. For details please Executive Director for sented in three categories, covering TV/cin- visit the offi cial convention website at: eight years from Octo- ema, new media, and corporate advertising. www.worldlotterysummit.org

WLA magazine | No. 49 | Summer 2018 37 ASSOCIATION ASSOCIATION BUSINESSBUSINESS

Keynote speakers

As regular attendees at our annual World Lottery Summits will know, the highlight of the conven- tion is hearing from our keynote speakers. In our previous issue, we introduced Nando Parrado, Jane McGonigal, Tyler Hamilton, and Friedrich Martens. In this edition, we are delighted, as always, to introduce several more of the speakers that delegates can expect to hear from.

Jeff Fromm research and real client profi t growth. A identify the most impactful ways of lever- President of FutureCast, partial list of FutureCast clients include: aging AI solutions that fi t into Element AI’s a marketing consultancy that Amazon, Dairy Queen, Hershey, Marriot roadmap and research goals. specializes in millennial trends and the Missouri Lottery. Prior to her position at Element AI, Naomi Jeff Fromm is a sub- Jeff has more than 25 years of brand mar- was the VP of Business Development and ject matter expert and keting consulting experience. He serves on COO of Nexalogy Environics, a startup professional speak er the Board of Directors at Th ree Dog Bakery, that specialized in semantic clustering al- on consumer trends, and Tickets for Less. Jeff graduated from gorithms. She led the company to work on marketing and inno- Th e Wharton School of the University of meaningful problems with the government vation. He has key- Pennsylvania and attended Th e London in security, health, and environment sectors. noted over 500 times School of Economics. all over the world – Naomi’s experience was gained through well, not Antarctica. business and technology consulting for IBM. She worked in Latin America on various He is a contribut ing writer for Forbes and Naomi Goldapple technology projects, and also held the posi- co-author of three books: Marketing to Director of Industry Solutions tion of Director e-business for Royal LePage Millennials, Millen nials with Kids as well as at Element AI Commercial Inc., one of Canada’s largest Marketing to Gen Z. commercial real estate companies. Naomi Naomi Goldapple is has been a mentor with Founder Fuel for the Jeff is president of FutureCast, a consumer currently the Director past six years, where she uses her expertise trends consultancy that is a division of the of Industry Solutions to help technology entrepreneurs with strat- advertising agency, Barkley. While others at Element AI, one of egy and fi nancing. She has an International simply talk about trends, Jeff and his part- the largest applied re- MBA, specializing in developing markets in ners are applying those trends to create search laboratories in Latin America, from the Schulich School of marketing and innovation best practices. the world. Her role is Business, as well as a Bachelor of Commerce His humorous stories and provocative new to work with clients from McGill University. strategy paradigms are supported by hard and organizations to

Don Tapscott C.M., BA, BSc, MEd, LLD/CEO, The Tapscott Group Inc./Chancellor, Trent University/Founder and Executive Chairman, Blockchain Research Institute

Don Tapscott, CEO of Th e Tapscott Group, is one of the world’s leading authorities on the impact of tech- nolo gy on business and society. He has au- thored over 15 books, including Wiki nomics: HHow MassM CollaborationC ll b t Changes Everything, which has been translated into over 25 lan-

Photo: istockphoto.com, uschools guages.

38 WLA magazine | No. 49 | Summer 2018 ASSOCIATION ASSOCIATION BUSINESSBUSINESS Photo: istockphoto.com, SamyStClair

Don has been advancing groundbreaking el Crecimiento), as well as Advisory Board concepts for more than three decades. His Member for Hawksbill Group, and In- 1992 bestseller, Paradigm Shift , helped coin Isela Costantini house Consultant and General Manager for this seminal management concept, and Th e Former CEO of Aerolineas Argentinas, GST Grupo ST. Digital Economy, written in 1995, changed author of Un Líder en Vos (A Leader business thinking about the transforma- in You) Ms. Costantini is a proponent of and ad- tional nature of the Internet. Two years vocate for employee engagement and cus- later he helped popularize the terms “Net In January 2016, Isela tomer-focused development in business, Generation” and “the Digital Divide” in Costantini took over and she is viewed as a change and restruc- Growing Up Digital. as CEO of Argen ti- turing expert. She has been widely rec- na’s national carrier, ognized as a strong leader, having won Don’s most recent and ambitious book was Aerolineas Argenti- the CEO of the Year award several times, co-authored with his son, startup CEO and nas, to oversee Presi- and having been included among Fortune bitcoin governance expert Alex Tapscott. dent Mauricio Macri’s Magazine’s 50 Most Powerful Women in the Blockchain Revolution: How the Technology mandate to make the Business World in 2013. In 2017, she pub-

Underlying Bitcoin is Changing Business, Photo: Mariana Vianna airline profi t able. Dur - lished the book Un líder en Money and the World was published in May iing herh tenure at theh airline, they success- vos: Descubriendo opor- 2016 and is, according to Harvard Business fully reduced their defi cit by a staggering tuni da des de desarrol- School’s Clay Christensen, “the book, liter- fi ft y percent, before Ms Costantini’s res- lo y transforma ción ally, on how to survive and thrive in this next ignation for personal reasons in 2017. (A leader in you: wave of technology-driven disruption.” Discov er ing oppor- Isela Costantini has had a prolifi c tunities for devel- In 2017, Don and Alex co-founded the and high-profi le career, serving as opment and Blockchain Research Institute, whose 70+ the CEO of General Motors trans for- projects are the defi nitive investigation into Argentina, Urugay and mation). blockchain strategy, use-cases, implementa- Para guay – making history tion challenges and organizational transfor- as the fi rst woman to run mations. an automotive manufac- tur er in Argentina – and Don is a member of the Order of Canada as the head of ADEFA, and is ranked the second most infl uen- the Argentine Automo- tial management thinker in the world by bile Builders Associa- Th inkers50. He is an Adjunct Professor at tion. Today, she serves as the Rotman School of Management, and Member of the Coun cil Chancellor of Trent University in Ontario. for both Banco de Ali men- It is hard to imagine anyone who has been tos de Buenos Aires and more prolifi c, profound, and infl uential in CIPPEC (Centro de Im- elucidating today’s technological revolutions ple men ta ción de Políticas and their impact on the world. Públicas para la Equidad y

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Boosting VLT Appeal with Optimized Return-to-Player Metrics

Video Lottery Terminals (VLTs) are an important contributor to lottery modernization and growth. Here’s how to help ensure the best experience for your players.

By René LeBlanc A comprehensive VLT off ering is typically win back, on average, over the complete Senior Director, Content Management, IGT considered to be a mix of three components: cycle of a game (i.e., if all possible combi- Th e physical gaming-machine cabinet, suit- nations were played). Th is theoretical met- At a time when lotteries are looking for ways ed to the retail distribution style; the game ric is calculated using formulas based on to attract a more diverse audience, grow content, relevant to the market, delivering mathematical probabilities, and can be set sales, and return more funds to good causes, a world-class player experience in the con- on a game-by-game basis. As with any game Video Lottery Terminals (VLTs) are an ap- text of the distribution outlet; and the cen- component, the right RTP is essential to bal- pealing new face of the game. With more tral system that operates and manages VLT ancing the enjoyment of the player experi- audiences around the globe encountering machines and networks. With all of these ence with the returns to the lottery and to and embracing this play style, operators who components in place, the end-to-end play- good causes – making the selection of the are considering expansion into the world er experience must also take into account optimum RTP a key decision for operators. of electronic gaming machines are learn- the value that players gain from the time And while the RTP metric is one of the most ing how to manage the components of their and money they invest in their entertain- powerful elements of both player experience VLT off ering to optimize and balance the ment. Th is is precisely where the RTP metric and game performance, the nature of its player experience. Among the many factors comes into play. power is oft en misunderstood. that impact the experience, one of the most important is the Return-to-Player (RTP) Th e RTP of a game is simply the propor- Low vs. High RTP – element of a game. tion of a player’s wager that he or she should Where is the Sweet Spot? When thinking about Return-to-Player metrics, it’s important to consider that the What is a VLT? play experience of VLTs is quite diff erent to traditional lottery games such as draw A , or VLT, is a casino slots, defines a unique play experi- games or instant tickets. In the case of the gaming machine that allows players ence for VLTs that is different than tradi- latter games, the purchase of single or mul- to wager on the outcome of a video tional slot products. tiple products is made in a single trans- game. The outcome of any single VLT action, and the enjoyment of the experience spin (win or loss) is either controlled lo- What does the central system do? lies in the anticipation of the outcome, ei- cally by the VLT using a Random Number A VLT central system comprises the op- ther the draw event itself or the revealing Generator (RNG) or from a central server, erating software and management tools of the outcome of the instant ticket. Th e which randomly selects the winning used by lotteries or operators to control outcome of the game is oft en revealed some outcome using the centralized RNG and their VLT networks. Essential to manag- time aft er the transaction takes place, and sends the results back to the specific ing one machine or thousands, the cen- oft en in an altogether diff erent location. VLT machine. VLT cabinets can look tral system typically includes core features Th ese traditional games are characterized very much like traditional slot machines, like event and game tracking, account- by the extended period that exists between but the customer preferences and the ing, system security, network diagnostics, purchase and outcome, and the reward, in market regulations, such as lower maxi- and operator interfaces for easy man- terms of a cash prize, that is claimed, of- mum bet and lower maximum win than agement. ten in a physical location, at a future point in time.

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“In one trial, decreasing the RTP of a game too drastically resulted in an unsatisfactory play experience, a decrease of 14% in cash played per machine per day, and a 20% decrease in play.”

– René LeBlanc, Senior Director, Content Management, IGT –

Compare this to the VLT experience, where nents of the experience unchanged) signifi - a player inserts an amount of money into a cantly impacted performance. Customers VLT machine and plays his or her fi rst game. complained about an unsatisfactory player Th e game outcome is known instantly, and experience, the amount of cash played per any win is paid immediately. Th e player then machine per day decreased by over 14%, plays another game, and another, until he or and games played per machine per day de- she cashes out. creased by over 20%. In this example, while the operator might have expected to net Th is playing (or session) time, is the value greater revenues from the decreased RTP, exchange for VLTs: the time players can en- the result was the opposite: Th e disappoint- joy playing before they cash-out or their bal- ing experience discouraged play, ultimately ance is spent. Here’s where the RTP comes resulting in lower net revenues – and more into play. If that time is too short, then play- unsatisfi ed players. ers will feel they have lost their money too quickly and have had insuffi cient enjoy- ment in return for the money they invested. In other words, the RTP is too low, and the experience doesn’t feel like a good value. If, however, the RTP is too high, then the player will have all the enjoyment of an extended play experience, with frequent prizes being paid back for reinvestment, but the lottery risks a lower level of return. So, where is the sweet spot? The Great Debate A commonly debated topic among lottery VLT operators centers on the economic benefi t (an increase in revenues) from de- creasing the RTP of a game. Th e less a game pays back to the player, the more the lottery will earn – in theory. However, IGT’s expe- rience and empirical data suggest caution in making this assumption. We recommend testing and due diligence in order to identify a sweet spot that benefi ts all parties, rather than make radical shift s in this direction.

Since VLTs are entertainment devices, the time that players spend on the device is their measure of value. Increasing time spent ulti- mately increases lottery revenue, so return- ing a suffi ciently high share of the player’s initial stake is essential.

Decreasing the theoretical RTP of a VLT game too drastically, without testing, could negatively impact the player experience. In one trial, reducing the RTP from 95.9% to State-of-the-art VLT cabinets from IGT are designed to meet the needs and requirements just 93.3% (while leaving all other compo- of any player or lottery. (Left: Crystal Dual 27 Cabinet; Right: Quasar Cabinet)

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A series of IGT simulations shows that, in general, a higher theoretical RTP provides a How to Calculate RTP more enjoyable player experience, since for the same cash inserted, a player will experi- The theoretical RTP of a game is a calcu- cash Inserted into the VLT. The Cashout ence a longer play session, a higher Cashout lation that considers the entire life cycle Percentage is calculated by the following Percentage, and have more money left aft er of a game, which can be composed of equation: a play session, contributing to the feeling of hundreds of millions of outcomes. The Cash Out value and satisfaction. actual RTP of a game will vary a lot when Cashout Percentage = x 100 there are only a low number of games Cash In In short, we believe that going through played (e.g. 10,000 plays). As the num- the exercise of determining a compelling ber of plays increases, the RTP will start For example, if a game has a Cashout RTP for your players will provide a more to approach the theoretical RTP (at about Percentage of 65%, it means that if enjoyable experience for them and re- 10,000,000 plays or greater). $100 was put in the terminal, $65 was sult in a higher likelihood that they will taken out. The Cashout Percentage play again. A compelling RTP also allows This means that if the theoretical RTP of can’t be calculated theoretically and can a lottery operator to maintain player in- a game is 92%, the actual return will not only be calculated with actual play on a terest and offer the ability and fl exibility be $0.92 for every $1 wagered during a machine, making this metric extremely to attract new players to the program. play session, but it does mean that, over useful for monitoring specific real-time time, the amount won on average will performance. Th e table below shows that reducing the get ever closer to this figure. theoretical RTP of a VLT game from 90% to Typically, the higher the theoretical RTP 88% decreases the average games played and To calculate the actual RTP of any game, of a game, the higher the Cashout cash played by 8.6%, the cash won by 10.7% divide the total amount of money won Percentage. This metric is extremely im- and the Cashout Percentage by 3.1%. Over by the player by the total amount of portant as it provides a direct line of sight time, this decrease would be felt by players money wagered: to the monetary result a player sees and as both the time played and money left over walks away with when they conclude Total Cash Won aft er a session has decreased. Actual RTP = x 100 their gameplay. Total Cash Played Ensuring a Better Note that if a VLT has a multi-game suite, Player Experience Now, let us consider the Cashout the Cashout Percentage can only be cal- Th e theoretical RTPs that are typically used Percentage and how it differs from the culated for the entire machine and not across various VLT programs globally range actual RTP: The Cashout Percentage for any one individual game. The only from 88%-95%, where the minimum re- represents the percentage of cash time the Cashout Percentage of a specific quired theoretical RTP by law ranges from that is taken out of the VLT terminal game can be calculated is when there is 80%-85%. Yet, as the previous example dem- by the players compared to the total a single game installed. onstrated, the higher the theoretical RTP, the better the game play experience for the player. Prior to the launch of a VLT program, it’s market. Th is, together with more than 25 For this reason, we recommend consider- advisable to conduct a careful analysis to global market valuations, including in-depth ing a higher theoretical RTP, in the range of ensure that the program has a competitive sales analysis, on-site face-to-face discus- 92%-94%, as case studies have shown that a theoretical RTP that can drive long-term sions with players, and global consumer higher theoretical RTP will: growth in a responsible manner. In the marketing studies, puts IGT’s VLT team in course of more than 25 years of consulting a position to support lotteries in determin- • Drive play away from illegal machines and managing game portfolios on behalf of ing the right RTP metric and optimizing the to VLTs customers, IGT has gathered tremendous VLT experience for players while optimizing • Provide a more reliable entertainment amounts of data and insights on the behav- revenues and returns in a socially respon- experience iors, preferences, and motivators of VLT sible manner. • Provide a higher Time on Device and players, which contributed to the develop- Cashout Percentage to the player ment of IGT’s portfolio of VLT cabinets, For more detailed information on calculat- • Generate greater repeat play games, and the Intelligen VLT central sys- ing RTP and optimizing the VLT experi- • Provide a higher net revenue for tem – today representing the largest num- ence, please contact your local IGT Account the program ber of VLT central systems deployed in the Manager or sales representative.

Theoretical Cash Wager Per Average Total Cash Total Cash Replay Cashout Net Cashout RTP In Game Games Played Played Won Ratio Amount Reveue Percentage 90% $40 $1.20 81 $97.20 $87.48 2.43 $30.28 $9.72 75.70% 88% $40 $1.20 74 $88.80 $78.14 2.22 $29.34 $10.66 73.36%

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DO YOU KNOW YOUR PLAYERS?

Do you know their emotions? Their needs? What drives them? They’re key to growing your lottery business. Find new player insights as well as research on how to modernize the lottery experience and other growth-driving ideas posted regularly on IGT’s Lottery Blog.

Visit www.IGT.com/LotteryBlog

© 2018 IGT Global Solutions Corporation. The trademarks used herein are owned by IGT or its affiliates, may not be used without permission, and where indicated with a ®, are registered in the U.S. IGT is committed to socially responsible gaming. Our business solutions empower customers to choose parameters and practices that become the foundation of their Responsible Gaming programs.

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The Past Provides Perspective on the Present

At Novomatic Lottery Solutions, we try to focus on the present and look to the future. In a fast-moving technology company, attempting to revolutionize an industry under siege from outside competition, this attitude is crucial. Neither NLS nor the lottery industry can hope to thrive in the future on past glories. Nevertheless, this article will start with a short look into the past, which can provide an excellent perspective on the present.

Samuel Langhorne Clemens was born on to Arthurian England. Of course, if you know November 30, 1835, in Florida, Missouri. your fi ction, you will likely have worked out He was an American writer, humorist, en- that Samuel Langhorne Clemens wrote un- trepreneur, publisher, inventor and lecturer. der the penname Mark Twain. A Connecticut Clemens was fascinated with science and Yankee in King Arthur’s Court was published scientifi c inquiry and he had a close and four years aft er Mark Twain’s most notable lasting friendship with Nikola Tesla. Th e work: Adventures of Huckleberry Finn. two reportedly spent much time together in Tesla’s laboratory. While science is not what Between his self-pasting scrap book, Twain’s he was famous for, Clemens patented three love of technology, his investments in tech- inventions in his life. One of these inven- nology, and the fact that he wrote a book tions was a self-pasting scrapbook, which focused around the introduction of modern could be considered the spiritual ancestor of technology, there really is a lot to like about the Post-It Notes that today are inseparable Mark Twain. For NLS, the most immediate- from modern soft ware development. ly relevant Mark Twain connection comes from a quote he gave following the untimely However, today Clemens is best known news of his death. A newspaper had mistak- for his writing. He wrote books with a enly run an obituary for Twain; when he was wide range of themes, including one called asked for comment, he reportedly said, “Th e A Connecticut Yankee in King Arthur’s reports of my death have been greatly exag- Court, which was published in 1889 and gerated”. Th ere are, of course, many versions features a time traveler from contempo- of this story and Mark Twain’s quote, but By Pall Palsson, Director of raneous U.S.A., using his knowledge of the essence of the story remains the same – Product Management at NLS science to introduce modern technology contrary to reports, Mark Twain was alive

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and well – in fact, he would go on to live, ology kicking and screaming out of the write and invent for a further 13 years. past!”, Norway’s newly formed Department of Archaeology & Miscellaneous Endeavors But what does this have to do with NLS? (DAME) has opted to crowdsource the ar- Th rough a series of unrelated events, NLS chaeological excavation to amateur archae- now fi nds an unexpected kinship to Mark ologists. In addition to a humorous premise, Twain. We are very much alive, even though Th e Excavation on Helgøya Island is a mas- the rumor mill is hard at work writing our sively multiplayer cooperative treasure hunt obituary. We accept this in good humor, game. Th is is a unique game concept for a as we, in turn, are hard at work delivering lottery game, and the result of NLS’ invest- projects, developing products and winning ment in its original content development. business. NLS has weathered a storm and Th is particular investment has been ongo- In addition to the investment in original our newly appointed Executive Management ing for the last few years and has resulted content, NLS continues to invest in its omni- Team will continue to oversee the execution in NLS building up a portfolio of over 30 channel solution. Since 2012, when NLS of our mission to transform and disrupt the high-quality e-Instant Win games, includ- decided to expand from an Internet-only lottery industry; the coming months and ing two other games that enjoyed success in supplier into a full, standalone omni-channel years will show the depth of our commit- the same mini-competition: Hangman and lottery solutions provider, we have built what ment to this mission. Clairvoyant. is probably the most modern lottery system on the market. As a product-focused compa- Coming back to the present, NLS signed a ny, we know that our work is never complete, contract with Norsk Tipping in March 2017 and we remain committed to improving and to support the growth and diversity of the expanding our product portfolio to meet the lottery’s e-Instant portfolio. In a connected constantly evolving needs of lotteries. mini-competition issued earlier this year, NLS, together with its partner Gamevy, was Taking our journey into account, it seems chosen to supply more than half of the “New appropriate to tie the past, present and fu- Innovative Games” Norsk Tipping selected ture together. At NLS, we believe the lottery through this mini-competition. Th e award industry has a bright future ahead, and we occurred on March 26 and the fi rst games see ourselves as a prominent part of that fu- will be available to Norsk Tipping players ture. Over the last year, NLS has taken steps later this year. to streamline the organization aft er going through a period of rapid growth. Th is was Out of the six games Norsk Tipping selected necessary so that we could continue to satisfy from NLS’ submission, arguably the most the industry’s need for a true alternative sup- innovative game was “Th e Excavation on plier focused on harnessing modern technol- Helgøya Island”. Th e premise of this game ogy for the good of lotteries. Just like Mark is that the ruins of a previously unknown Samuel Langhorne Clemens (1835 – 1910), Twain, who is still satisfying and acquiring Viking settlement have been discovered on better known by his pen name Mark Twain, new readers today, we plan to continue satis- Helgøya Island – Norway’s largest fresh- was an American writer, humorist, entre- fying the needs of lotteries and winning new water island. In an eff ort to “bring archae- preneur, publisher, and lecturer. contracts now, and in the future.

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Sports Betting for Lotteries: a look into the future

In a rapidly changing world that is seeing massive technological advances almost daily, the demands of lottery and sports betting players are becoming increasingly personal. Coupled with the recent Supreme Court ruling that overturns the USA’s PASPA legislation, the industry is due for a massive shake-up.

Faced with slowing growth and – to some erator, the environment is actually shaping ered by speed, simplicity, and ease of use. extent – lack of innovation, state lotteries your future. Let’s take a look at it. One area where change must come sooner, and sports betting operators fi nd them- rather than later, is personalization where, selves urgently needing new ideas to pre- The age of the customer largely speaking, sportsbooks have fallen pare for the player-fi rst world. Th e changing We are operating in an environment where behind the rest of the ecommerce world. environment that we are operating in can, the player is king, being better informed, Technology can certainly help and, as an however, show us notable trends and help better connected and, therefore, more de- example, INTRALOT’s new sports betting us understand what we can expect in both manding in all areas of engagement. Players platform already incorporates a number of sport betting and lottery, allowing lotteries expect instant access to options, as well as personalization options and capabilities in to be better prepared for the future by select- personalized off erings. Th ey push for speed, its product and player-facing modules, as ing a technology and services partner that simplicity, and ease of use at all touchpoints, well as in risk management. can lead them in this new world that’s taking thereby eff ectively creating an unavoidable shape around us. omni-business mandate. Other trends include retail-online conver- gence, digitization of the retail environ- US Lotteries, the quiet giants But how do you move towards being a play- ment, player interactivity powered by the While some lotteries have been engaged in er-fi rst omni-business? It may seem straight- bring-your-own-device concept, and the sports betting for several years, not all lot- forward at fi rst glance, but it can be quite overall need for modernization of a rather teries, of course, are at the same stage of complex. It is about much more than simple traditional sales network currently used by maturity in this sector. For example, most channel harmonization; it’s about building lotteries. In addition, younger demograph- recently, we have the USA preparing for the an architecture of fundamental capabili- ics bring their needs for fast-settling bet post-PASPA world. For these lotteries, the ties across the entire enterprise value chain, types and the socialization of their activity fi rst step would need to be understanding spanning the product base, the supply chain, to the table; they share everything, which the regulatory burden and how individual partnerships, and core technology enable- means they are already sharing their bets states may approach legalized betting going ment, including tech architecture, innova- in private conversations, or even posting forward. It is anticipated that many states tion, and data analytics. them online. Lastly, crowd wisdom has al- will introduce their own, unique, regulations ready been used by operators, to a certain until such time as – and indeed if – federal Get personal and extent, ensuring that every participant po- intervention occurs. listen to the crowd tentially benefi ts. All these trends are ex- Lotteries’ product teams must create and pected to become mainstream in the near Th e most pressing policy issues that we be- boost an engaging player experience, pow- future. lieve will infl uence the development of what could easily become the world’s largest regu- lated Sports Betting market are tax – includ- ing any federal wagering excise or other – the royalty fees that could potentially be sought by the US sports leagues, the fa- cilities and channels where sports betting will be off ered, the brands/skins allowed, and the treatment of the Wire Act – a 1961 federal law which prohibits the transmission of sports bets across state lines.

No matter which stage you are in, however, as a WLA state lottery or sports betting op-

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robotics: manual, transactional, repeatable, error-prone, high-volume, pattern behavior, complex, massive intelligence. If we think of these task types on a straight line, as we move towards the right, we are much closer to the intelligence augmentation type of ro- botics, whereas if we stay to the left , we are closer to simple, basic process automation.

At INTRALOT, our sports betting product and technology development teams have already empowered our new sports bet- ting platform with automation in its trading tools, including algorithmic pricing mod- els, customer profi ling, real-time alerts and safety nets around risk management, there- by further advancing our robotics journey by enhancing our platform’s personalization capability.

How far will we travel on the robotics con- tinuum for trading operations? I believe we will be seeing signifi cant growth in process automation within the next 18 months, and machine learning-empowered applications in our industry within the next two to four years.

Get ready for the robots where technology enables the use of some Bill Demakakos Operationally, automations – potentially structured and some unstructured data to powered by machine learning and artifi cial support elements of self-learning; and (c) Bill Demakakos, Group Betting intelligence – are expected to greatly af- intelligence augmentation, where we have Director at INTRALOT Group, leads the fect trading. Nowadays, trading rooms are decision support and advanced algorithms betting product design and commer- already very diff erent to what they were as that allow for automation of processes that cial drive, as well as managed trading recently as 15 years ago; the gut instinct of are more cognitive in nature. Th e benefi ts services. With over 24 years of product an odds compiler has been replaced by al- of robotics, as they have started to show in strategy, technology and business con- gorithms and third-party feeds. In the short other industries, largely include improved sulting experience, Bill leads a team term, automation and fl exibility will con- quality, accuracy, error-free routine task ex- that ensures INTRALOT’s betting prod- tinue to be critical, while the need for ev- ecution, and speed. uct portfolio and services enhance the erything to be in real time will prevail. In value delivered to players, lotteries and the longer term, we can expect robotics and Privacy and compliance, including aspects operators. cognitive automation to shape our opera- of responsible gaming, can also be better Bill holds tional future. automated and powered using robotics, as a BEng, the machine can follow regulatory-devised MSc, and Th e continuum of automation classes, col- rules better and without errors, compared to MBA from lectively dubbed robotics, consists of (a) a more manual approach. Michigan what I refer to as the “Piano Player” – State that is, a basic process automation where Trading operations throughout the life-cycle University, routine tasks get powered by the machine of a pre-match or in-play event include some USA. and volume counts; (b) machine learning, or all of the task types that are better suited

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Leading in a digital world

Our centuries-old but always innovative industry is in the midst of dramatic change. While games have been popular since before the Great Wall of China was built, never before have lotteries faced such a seismic shift in consumer behavior. From social interaction, to banking, booking travel, shopping, learning, and multi-media entertainment, the world has gone digital.

Th e disruption has happened, impacting planning, and execution with a lottery tech- ly completed projects that included digi- gaming entertainment beyond what anyone nology provider that is experienced in digi- tal programs for lotteries in Pennsylvania, ever imagined. Although not a fi rst adopter, tal gaming – and knows how to navigate this Maryland, Delaware, North Dakota and the USD 300 billion retail-based global lot- highly regulated industry, and customize Arizona, and a billion-dollar national linked tery business is accepting the new world and solutions that fi t each unique jurisdiction’s game leveraging Scientifi c Games’ digital thriving – albeit with regulatory restrictions requirements. promotions featuring the WILLY WONKA™ creating signifi cant diff erences in adoption licensed brand in the U.S.A. Additionally, rates and market approaches in jurisdictions It’s a whole new era of his teams completed systems technology around the globe. capabilities for lottery projects for the Atlantic Lottery Corporation products and technology in Canada, Szerencsejáték Zrt. in Hungary, Not surprisingly, digital has not proven to be “Most lotteries understand that an omni- Swisslos in Switzerland, and Danske Spil in a threat to lotteries’ traditional retail chan- channel system is the ticket to providing Denmark. nels or their ability to drive funds for ben- players with a great experience across mul- efi ciaries and good causes. Instead, it has tiple channels, particularly leveraging digi- McHugh, who was internationally recog- become another marketing tool for lotteries, tal to connect across product verticals,” says nized as a 2018 “Hot50” industry execu- and an additional purchasing channel for Pat McHugh, SVP, Global Lottery Systems tive at the Gaming Intelligence Awards in consumers, off ering players the same kind of for Scientifi c Games. London for his advocacy of integrated lot- convenience they fi nd in nearly every other tery systems technology, continues to edu- aspect of their lives. Th e 25-year lottery systems veteran’s cate lotteries about the secure integration of cross-functional technology teams recent- new distribution channels and new content, Digital keeps people connected and collab- includingg third-party content. Th e com- orative, gives them the information and in- pany’spany’s recent projectsp have featured a new spiration they seek every day, off ers endless gaming systesystemm that integrates digital plat- entertainment, and undoubtedly broadens forms to supportsupp new iLottery online/mo- opportunity. Like their favorite neighbor- bile games, didigital promotional programs, hood place to buy lottery games, digital is retail aaffiffi liate programs,p and sports betting perhaps the perfect empowerment for a di- products.products. verse generation of players and the personal- ized, individualized experiences they demand “It’s“It’s really a veryv exciting time right now. from the products and brands they love. Our ability to launchl new channels and con- tentt for lotteries has expanded Digital is signifi cant and it’s infl uential. So our product off ering,” says how do lotteries – whether they have ful- McHugh. “And these projects ly embraced digital, are not all the way have allowed our customers there yet, or not there at all – maximize digi- to leverage digital to engage tal engagement with their players? How do with their players to respon- they meet players where they are and off er sibly off er new digital prod- them opportunities to play and win on the ucts like iLottery and sports, go? How do they protect the very substantial, and to grow sales of existing land-based lottery retail ecosystem? product categories at retail, like instant and draw games.” Lottery leaders are under pressure to not only change, but to be ahead of the change. Games sold in shops, stores Th e digital mindset begins with understand- With the blockbuster linked instant game, WILLY WONKA and major retail chains con- ing how technology is shaping culture and GOLDEN TICKET™, lotteries could choose to integrate an tinue to be the foundation consumer behavior. Next comes strategy, engaging digital game. of the lottery business, but

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Scientifi c Games recently powered the ’s launch of iLottery online/mobile games with systems technologies and a portfolio of digital lottery games.

there is plenty of innovation happening Th e project represented the fi rst launch “Th e combination of Scientifi c Games and around digital sales channels to off er play- combining Scientifi c Games’ leading lottery NYX created a global digital leader across ers more convenience and more ways to digital products with those from the com- iLottery, iGaming and sports betting that play. Th is includes retail affi liate programs pany’s recent acquisition of NYX Gaming off ers a breadth of technology, content and that provide lottery retailers incentives to Group, a leader in digital platforms, games, managed services to lotteries worldwide,” get their customers signed up to play iL- and services. says McHugh. “As an integrated company, ottery games online and on their mobile phones. iLottery online/mobile games While lotteries elsewhere in the world have off ered their games in digital chan- nels since the early 2000s where regulation permitted, U.S. lotteries have been slower to adapt. Most recently, in eff ort to meet play- ers where they are and help generate new funds to benefi t older Pennsylvanians, the Pennsylvania Lottery became the seventh U.S. state to sell lottery games online to complement retail sales. Th e lottery is rec- ognized as one of the highest-performing in the industry.

As the Pennsylvania Lottery’s longtime sys- tems provider, Scientifi c Games powered the lottery’s launch of iLottery online/mo- bile games with systems technologies and a portfolio of entertaining digital lottery games from the company, as well as a third- party provider. Th e new iLottery program also featured Scientifi c Games responsible With 25+ lottery sports betting customers word-wide, Scientifi c Games was ready to support gaming controls, and unique retailer affi li- the Delaware Lottery’s launch of full-scale sports betting – the fi rst in the U.S. following the ate program. PASPA ruling.

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we are very excited to support our custom- tegrated sports betting program that serves All of the above support the tradition- ers in launching new, expanded gaming en- both casinos and lottery retailers across the ally land-based retail business of lot tery – tertainment in digital channels.” state,” says McHugh. leaving lots of room for creativity with pro- motions designed to boost sales for very Sports betting He says lotteries regulate 70 percent of le- specifi c products, like USD 1 and USD 2 With the NYX acquisition, Scientifi c Games gal sports betting in the world. Of the more games or holiday games. Some even fea- scored one of the world’s best sports betting than 60 countries that allow legal sports bet- ture exciting tie-ins to events that invite platforms, OpenBet™. Although the compa- ting, nine of the Top 10 sell wagers through winners for the experience of a lifetime, ny already has more than 25 lottery sports the lotteries. like the Warehouse Dash, Jackpot Party® betting customers globally, the expansion Winners Event and the blockbuster Billion of its sports technology and services off er- “Lotteries are naturally positioned to re- Dollar Challenge™ event tied to the multi- ing and the outstanding reputation of the sponsibly regulate the sports betting channel state WILLY WONKA GOLDEN TICKET™ OpenBet platform has created a power- and maximize profi ts and returns to benefi - linked instant lottery game. ful package for lotteries looking to launch ciaries,” McHugh explains. “Th e infrastruc- sports betting or bring the next generation ture is already there with the lottery’s retailer “Since regulations fi rst allowed our lottery of sports betting to their players. network, product distribution, brand integ- customers to interact digitally with their rity, and responsible gaming controls.” players in the early 2000s, we have been In the U.S. the timing was right. Scientifi c innovating new ways to help them build games supported its customer, the Delaware Loyalty rewards that digital connection through both our Lottery, in the nation’s fi rst full-scale sports and second-chance technology and innovative content,” shares betting expansion aft er the Supreme Court’s For many lotteries, the path to digital has been McHugh. “Moving to digital promotion of May 2018 ruling on the Professional and well planned and is fi rmly in place. Depending retail sales, and to selling game entertain- Amateur Sports Pro tec tion Act (PASPA). on regulations, digitally based players clubs, ment online to the consumer, is just a natu- loyalty rewards programs, and second-chance ral progression for lotteries – this is where “We are proud to support the Delaware promotions have created a connection be- today’s players are, they’ve led us to online/ Lottery’s long history of industry fi rsts, and tween the consumer and the lottery’s brand, mobile themselves. And we are following thrilled to be their trusted provider of an in- games, prizes, and responsible gaming. their lead.”

Exciting digital second-chance games featuring events like the WILLY WONKA™ Billion Dollar Challenge™ in Las Vegas offer lottery winners the experience of a lifetime.

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OUT OF OF THE TOP PERFORMING LOTTERIES

That’s right – of the 25 top performing lotteries in the world for instant game sales,* Scientific Games provides games to 24. That’s not coincidence, that’s cause and effect. When you’re the best at something, as these lotteries are, you look for partners who will not only maintain your success but help you achieve the next level of success. Real performance based on real partnerships – that’s Scientific Games.

Because Real Counts

*Based on instant game per capita sales.

© 2018 Scientific Games Corporation. All Rights Reserved.

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Going Small – How marketing’s focus is getting smaller every day

From Big to Small – that’s the trend in today’s marketing world, and that was the focus of this year’s Marketing Seminar, held in London from February 7–9, 2018. The world of marketing in general, and lottery marketing in particular, is becoming smaller, more focused, and more individualized. What does this mean for those involved in the business? It means understand- ing your customer and how they interact with advertising, and how this is very different from what came before.

February 7–9, 2018 In 2017, the annual London Marketing Veer, EL Secretary General. During their Marketing seminar Seminar presented delegates with an in- welcome addresses, delegates were intro- Joint seminar with the teresting program concentrating on the duced to the exciting new challenges facing European Lotteries hosted by “3 Bs” of lottery marketing: Big Jackpots, Big the lottery industry and the marketing world Camelot UK Lotteries Ltd. Communities, and Big Data. In contrast, this – most pressing among them the need to de- London, United Kingdom year’s program spoke to a new trend in mar- velop a greater ability to evolve and be more keting – the trend of going small. adaptable. Challenges present opportuni- ties, and as an industry, we must continu- Seminar delegates were warmly welcomed ally think of ways to use these opportunities by Jean-Luc Moner-Banet, WLA president; to push the lottery sector forward. Latest Richard Bateson, Commercial Director of trends show that the way forward is to Camelot UK Lotteries Ltd.; and Arjan Van’t think small.

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When did small start to get big? Moderator, Karen Connel, opened the sem- inar with the presentation “Th e biggest trend in marketing is SMALL!” Today’s consumers are rapidly losing interest in big brands, feel- ing that these are losing relevance, because customers want to feel unique, special, and meaningful. Th ey want personalized prod- ucts, and they have a tendency to approach brands individually, rather than en masse. Th eir campaign to print Coca Cola labels Th ese use stories specifi cally to create empa- “Th e inconvenient truth for big companies with people’s names on has the best of thy. Companies, on the other hand, gener- is that the models built to manage their size both worlds – global reach with individual ally use stories to sell, because they help to have become the models for missing oppor- appeal. create links between the audience and the tunities”, says Connel. Companies should company itself. think about their story, the hope they can Th e essence of marketing is “understand- create, the devastation they could cause; ing why”. Consumer needs are changing at a According to Duschinsky, attention is the they must transform their brand story into constantly accelerating rate, primarily driv- only thing that counts while telling a story. a more personal story targeting each con- en by technology. Successful companies are To attract the attention of your audience, sumer. Fortunately, social media tools are changing the traditional model and giving you must create emotions. For example, you helping companies achieve this goal. Th ey consumers a detailed, individualized service could use a poor little child to express com- are making a signifi cant and relevant impact or product. With its revolutionary shopper passion, a delicious pizza to make people by targeting the right people, with the right experience model, Amazon has become the hungry, or a dark character to show fear. message, at the right moment. biggest retailer in the world; Uber is wining But whatever the case, you must tell the in the market of personal public ser- story with honesty, a story based on facts. vice;vi AirBnB gives people the oppor- It should also be transparent, containing tutunity to travel while feeling safe and a clear and relevant statement, maximiz- aat home. Th ese companies are off ering ing its content to reach the target audience nnot just a service, but trust, built on a you want. ffoundation of credibility and intimacy. Another prevalent issue that has arisen, es- Social innovator, Jon Duschinsky, pecially with the growth of social media, is was up next, showing how companies “fake news”. It is quite common at present to are winning trust through stories. fi nd both advertisements and news on the Stories are vital to branding and mar- Internet with fake content. For example, it keting, because these are what cre- can be diffi cult to know right away if news ate empathy between companies and shared on Facebook is real or not, because their audience. Duschinsky spoke the source is oft en not clear at fi rst glance. about the heart-head-wallet con- Unfortunately, many people are too busy, cept: Th e fi rst step in attracting too lazy or actually not interested enough people’s attention is through to investigate more closely and verify if the the heart, creating empathyhy by spespeaking to their emotions. Next,t, Th e biggest challenge facing companies in you approach the head, answeringg today’s market is to adapt their business to the question “why should I buy thiss an audience that is free and unbound by product?” It is common for market-- geography, knowledge or experience, and ers to assume that consumers makee is changing the shape of every industry. their purchase decisions in a rational Th ese “small mighty” reject mass marketing way. Th e fi nal phase is the wallet, the and demand individualization and person- action you wa people to take – mak- alization from the companies they wish to ing the purchase. engage with. As an example, Connel pre- sented Coca Cola. Th e company has always With stories, companies have a relied heavily on mass marketing, engaging powerful tool to communicate their in global or other large-scale campaigns; products and therefore achieve however, in recent years, and because they a signifi cant volume of sales. are a smart company, they understand how However, stories are not only used important personalization strategies have by marketers; they are also used by become during the twenty-fi rst century. journalists, parents, even doctors.

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story is coming from a legitimate source or way we share and communicate as mo- are enhancing not; instead, they simply decide to accept bile has been.” Indeed, according to the the consumer the message and believe it. Cisco Marketing Research 2016 report, experience by it is estimated that 80% of all Internet focusing on Advertising online is not as simple as hav- traffi c will be video by as early as 2019. the ease with ing an advertiser, a publisher, and users. which one can Th e mechanisms and development involved Today, all social networks include or manage, buy is considerably more complex, involving are comprised of video platforms. and sell tick- a large network of people, such as media Companies are changing the focus of ets,e focusing on agencies, ad networks, data suppliers, and their communication campaigns be- speeds of service many more. What is interesting about this cause, fi rstly, social networks are the chan- anddfiti frictionless l purchase. h Th e future of re- system is that there isn’t a standard chain. nels the audience is using the most, and tail is based on creating confi dence, elimi- Th e process varies widely, depending on videos are the tools they are interacting with nating obstacles and leveraging technology. the client’s needs, the target, time, budget, the most. Th ere are, however, several rea- Consumers want innovations to improve and the expected results. Today, there are sons why video is creating this eff ect. With their shopping experience, so companies are around 130 million people online who sim- video, it is possible to grab the audience’s focusing on creating ways to alert custom- ply do not see regular ads any longer; this attention much more easily than with other ers about promotions or exclusivities in real means that advertisers must be conscious tools; videos explain a product, a company, time, developing purchases on Internet with while choosing the best path and elements a story – they involve feelings, they are ap- retail in store and providing customers with to reach the audience correctly. proachable, they show authenticity so they personalized services on mobile. are mostly reliable. Not just that; videos are Yan Ketlers, Head of Video Strategy and also a great tool to understand consumer At the same time, they are also thinking Jordan Hagen, Video Strategy Educator behavior, because you have the ability to about what retailers want. Retailers also for the company known as StoryMe, spoke extract data, including number of views, want innovation, but their satisfaction is about how their company helps diff erent percentage of engagement, play rate, social driven by a higher rate of transactions; that kinds of businesses approach the right au- actions and a whole host more. is why suppliers approach them with ad- dience and win in the market with stories vanced cash register or mobile POS. Amy through videos. Currently, video as a tool is As was mentioned before, the buyer’s jour- Hill, Vice President Digital Content Studio booming, and as Mark Zuckerberg, CEO of ney starts with awareness. It is currently for Scientifi c Games Lottery, for example, Facebook, said “Video is a mega trend. In a estimated that companies have a mere six introduced SCiQ, a player experience and decade, video will look as big a shift in the seconds to capture the client’s attention retail solution, giving the retailer the op- and explain the message, the story, and the portunity to get real-time data through a product. Th e second stage in the journey is monitor designed to capture the sale at the consideration, where customers need to un- eff ective moment. Th is tool is providing an derstand the message more deeply and get operational effi ciency, fi nancial reliability, involved in the story – a great tactic for this speed of service, and increased traffi c, and it is to use testimonials. Finally, they evaluate, is frictionless. It is giving retailers the oppor- make a decision, hopefully to be followed tunity to see their data, regardless of loca- by delight. tion, the same way, in real time, with greater visibility and control. Th at said, there are a multitude of diff erent kinds of videos, and it is important to select With real-time data and real-time engage- the most appropriate one. Cousteau Studio ment tools, companies have the opportunity Founder, Kevin Alderweireldt, mentioned to identify customers who have registered in that a 360˚ video is diff erent to virtual re- the last 24 hours, the channel that brought ality, as the former shows you the world them there, their deposits and even incomes around us as it is now, while virtual real- related to the games of chance. Playtech ity provides a greater degree of freedom; PLC’s Government Markets Director, Robin you can see a new world, create new Bowler, and their Head of Engagement, things, imagine and live in a fantastic Shelly Harding-Ban, related this topic to world. Today, the gambling industry and the casino industry, where these tools are horse-race betting are using virtual reality commonly used to know when someone has to attract more customers, giving them the played specifi c games, if they have had a dis- opportunity to live a virtual experience and appointing experience, or are about to place enjoy the pleasure of playing. their last bet.

LotteryL suppliers are also trying to make Big Data, interestingly, leads to personal- thet sale of the small lottery ticket a big ex- ization by providing information on cus- periencep for the customer. For example, they tomer preferences and behaviors. In this

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constantly changing world, customers are President of Marketing Operations and spending less time on traditional media Strategic Planning, WLA International for like TV, radio or print, and are moving to IGT, we are rapidly becoming a cashless so- new media like digital video, streaming ra- ciety, due to technological changes that are dio and mobile. Consumers now tend to transforming traditional payment methods. use their mobiles Five years ago, mobiles were used as their preferred by consumers mostly for banking device for many transactions, but not for making pay- activities, partic- ments. Nowadays, consumers prefer ularly for social to fi nd any alternative way to make media apps. Th ey payment without using cash; either spend much of with or debit cards, digital their time engaged wallets, social peer payment, con- with their screens, tactless payment accessories, and In fewer than fi ve years, our personal de- all the while being various other payment apps. As a re- vices will be bombarded with thousands bombarded with sult, companies are developing ways of ads and purchase buttons, exposing our information and notifi cations, but also ex- to communicate with their clients while vision to a shoppable universe. Barriers to pecting continuous optimizations from their they are interacting with their apps or web- purchase will be eliminated, the home will favorite websites. sites. Conversational commerce is a per- become a key retail space, and improved sonalized, chat-based interaction designed metrics will allow companies to personalize Mobiles are thus becoming a necessary to remove friction on the path to pur- interactions with their clients. Lotteries and tool for many activities, particularly for chase. Th is allows companies to provide rec- lottery suppliers must be prepared for this social networking, banking and fi nance ommendations to consumers and arrange and continue improving methods to keep apps. According to Sharon Duncalf, Vice peer-to-peer payments. their customers happy and spending.

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[email protected] www.jumbointeractive.com WLA Associate member and licensed Lottery Re-seller WLA magazine | No. 49 | Summer 2018 55 OUR CONTRIBUTORS OUR CONTRIBUTORSOUR CONTRIBUTORS

Many thanks to our PLATINUM Contributors

Many thanks to our GOLD Contributors

WLA MAGAZINE is published by: The World Lottery Association Lange Gasse 20 P.O. Box CH-4002 Basel, Switzerland www.world-lotteries.org

Editor: Paul Peinado, WLA Communications Coordinator Contributing Editors: Bronwen Bartlett, Isabella Stadlin, John Smellie, and Steve Hoare. Print: Werner Druck & Medien AG, Basel, Switzerland Layout: 3satz GmbH, Rüschlikon, Switzerland

56 WLA magazine | No. 49 | Summer 2018 CORPORATE NEWS CORPORATECORPORATE NEWS NEWS

WLA magazine | No. 49 | Summer 2018 57 WORLD LOTTERY SUMMIT 2018 GAINING THE EDGE IN THE NEW WORLD. IT TAKES YOU TO TANGO.

SAVE THE DATE! The WLA is honored and proud to organize the next World Lottery Summit together with ALEA (Asociación de Loterías, Quinielas y Casinos Estatales de Argentina), the Argentinian association of state lotteries. WLA President Jean-Luc Moner-Banet, together with ALEA President CP Alfredo Mónaco, look forward to welcoming you from November 18–22, 2018 in Buenos Aires, Argentina, to the World Lottery Summit 2018.

For the latest convention updates, please go to the official website at: www.worldlotterysummit.org

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