a publication of the Issue no. 25, Winter 2007 World Lottery Association

Dedication to Good Causes is one of the Chilean national lottery’s Polla Chilena’s core values. Pictured here is lottery chief Verónica Montellano with Rodolfo Valdés, President of the Children’s Village that now benefits extended family from lottery funding. Page 22 XPDF0-

Building excellence, supporting good causes

Contents This issue of the WLA Magazine continues to underline the tremendous value of the material and emotional support that 5 Letter from the President most of our members contribute to the societies around them. Polla Chilena’s support for projects on the ground is making A Manifesto for Excellence Chilean society a better place – and our Good Causes theme 6 Hans Savonije outlines the challenges and opportunities continues with their story. of Building Sustainable Excellence. What leads us to underscore these contributions? Why is this Association business so important? As technology races ahead, people risk losing 8 Continued partnership with sports federations and news the sense for the simple things. The human values of sharing from the Regional lottery associations. and teaching, warmth and trust.

Retail security What we can learn from these questions as lottery operators is 10 Canadian lotteries have been swift to act on vulnerabilities that they provide huge opportunities for our future. Connecting in the retail process. with consumers as a “trusted friend” is key to our success. Our ability to build a brand with a personality, a brand that # WLA Responsible Gaming Framework is warm, respected and trusted, determines whether or not 16 A unique tool to leverage worldwide best practice. consumers prefer our products over others. -

9 Global RFP Best Practice So our job is to leverage tools such as our unique Responsible

#- 18 The WLA standard helps to streamline a technology Gaming Framework and learn from others to build excellent procurement in the Netherlands. lottery operations and brands. Everything communicates, -9 our products, our distributors and our interactions with our #9 Security consumers and stakeholders. It’s all part of our joint mission of

#-9 19 Ed Stefan reports on the continuing need for public Building Sustainable Gaming Excellence. awareness in the fight against lottery scams. + This issue reports on a fantastically organized World Meet, for Special series: Lottery beneficiaries which we thank NASPL and the Kentucky Lottery team, and 22 The Chilean national lottery takes a hands-on approach to includes coverage of the legal situation and analysis of our key community projects. tools as well as news about our contributor partners. A draft agenda of the 2008 WLA Academy program will also give you World Meet 2007 a flavor of how we plan to link in with the different parts of the 26 Louisville, Kentucky: a report from the global lottery world. community’s landmark event of 2007 Yes, 2007 was a good year – and 2008 will be even better! The The case continues WLA team wishes all of you a constructive and healthy 2008, 30 Lynne Roiter, Philippe Vlaemminck and Annick Hubert assess and a year of Excellence in all we do... together! the legal and regulatory situation around the world

People 34 Nichelle Anthony, Minority and Community Affairs Coordinator, Kentucky Lottery Corporation Hans Savonije, Executive Director, WLA The learning curve 36 Short reports from recent WLA seminars and an outline of the WLA MAGAZINE is published by the Publication Director: Hans Savonije, WLA Academy program for the first part of 2008. World Lottery Association, WLA Executive Director Lange Gasse 20, P.O. Box, Editor, layout and ­coordination: ­ Corporate news CH-4002 Basel, Switzerland Paul Peinado, 40 Selected news highlights from members of the WLA phone: +41 61 284 1111 WLA Communications Coordinator Contributors Program fax: +41 61 284 1350 Contributing Editor: John Smellie e-mail: [email protected] Printed by: Werner Druck AG, www.world-lotteries.org Basel, Switzerland

2 Winter 2007 3 SAGjeux_210X297_GB 25/10/07 13:47 Page 1

Letter from the Gaming industry is a serious thing. President

Once again, fall has been an extremely ence addressing Building Sustainable ordinated and attended the Uruguay sem- active time for the WLA and the region- Excellence in Times of Change & the WLA’s inar. Reports of these seminars are also al associations. It kicked off with a joint Security Standards, and Funding for Good included in this issue. Congratulations NASPL/WLA World Meet ’07 conference Causes & the WLA’s Responsible Gaming and thanks to the National Lottery of Togo in Louisville. My Kentucky Lottery staff, Framework, respectively. Further details and La Banca de Quinielas de Montevideo the NASPL and WLA staffs, and I greatly regarding the conferences are featured (Lottery) for serving as hosts for these appreciated the opportunity and honor of in this issue. Congratulations to Carlos seminars. hosting nearly 1,400 of our lottery mem- Borges, outgoing CIBELAE President and ber and vendor community associates. Jose Manuel Avilés Morales, incoming Another manifestation of the change we Entitled Racing for Excellence, Winning CIBELAE President, and CEO of Lotería constantly deal with is the career chang- for Good Cause, this was NASPL’s third Nacional de Beneficencia, as well as es of key WLA leaders. Within the last World Meet Conference, the previous two Henry Chan, APLA Chairman and Endoh two months, Reidar Nordby, Jr., Basile having been held in Vancouver, British Yasuhiko, President of the Japan Lottery Neiadas, and John Branscombe resigned Columbia in 1996 and in Albuquerque, Association for their roles in leading and their positions with Norsk Tipping, OPAP New Mexico in 2001. hosting these highly successful confer- and Camelot Group. Consequently, Reidar ences. and Basile will be vacating their positions * During the last week of October, Lotería on the Executive Committee and John will Nacional de Beneficencia, the National Hans has done an excellent job outlining be stepping down as Chair of the Security Lottery of El Salvador, hosted the 11th some of the challenges that lie ahead of & Risk Management Committee. I’m sure CIBELAE Congress in San Salvador, us in this ever-changing world through his you join me in thanking all of them for which was themed “Safe Guarding the Manifesto for Excellence. He touches on their service and leadership to the WLA Common Good”. The Japan Lottery the lightning fast advances in technology, and our common lottery business over the Association hosted the third regional APLA changes in consumer preferences, buy- last several years. We wish them every A V2) Conference in Tokyo, during the last week ing patterns and channels, our members’ success in their future endeavors. Thanks of November. The conference’s title and and sponsoring governments’ struggles to also to Carlos Borges for his service as central theme was Synergy, Sustainability, adapt to these changes, the need for us to CIBELAE President and its representative and Social Value. The central themes of strive for excellence in our lottery opera- on the WLA Executive Committee over the all three conferences were consistent with tions, and the underpinnings of our public last two years. Carlos continues in his role the WLA’s vision of Building Sustainable acceptance – the integrity with which we with Caixa, but will be replaced on the Gaming Excellence and featured presen- conduct our business, and ultimately the Executive Committee by the new CIBELAE tations of our core emphasis programs trust and confidence our public and play- President Jose Manuel Avilés Morales. CSR/Responsible Gaming Framework and ers place in us. Security Control Standards, as well as Clearly, 2007 was a year of change, a high

Photo : Daniel Podva. - * Photo : Française des Jeux. (11 V touching on the best practices in market- Successful and meaningful WLA Academy level of activity, significant progress, and ing, advertising, and retail channel dis- seminars were held in Lomé, Togo on the accomplishment. We look forward to an

singulier - tribution. Hans attended the CIBELAE subject of Lottery Business from A to Z even more exciting and successful year conference and presented our Responsible during the last week of August and on in 2008. Gaming Framework. Both he and I were Excellence in the Sports Betting Arena, featured speakers at the APLA confer- held in Punta Del Este, Uruguay during With 100 000 lottery terminals put into service worldwide in the last 10 years, Sagem Sécurité the last week of November. Hans conduct- is a leading manufacturer offering a wide range of terminals. But what our clients appreciate ed the Togo seminar, presenting it himself Arch Gleason most about Sagem Sécurité, even more than our technology, is our ability to innovate and find in French. Paul Peinado and Mélissa Azam WLA President solutions for all their needs. So, if you need cost-efficient terminals that meet your unique demands, don’t forget to of the WLA Basel and Montréal offices co- call Sagem Sécurité ! [email protected] - www.sagem-securite.com 4 Winter 2007 5 The WLA: A Manifesto for Excellence

Following the successful and greatly environmental factors and basic operating sentation, most of our members enjoy a Most of our members have shared their principles are shared, or should be. significant lead in terms of reputation over “Consumers deserve experiences and learned from each oth- appreciated World Meet ‘07 in the wilder offshore and other competitors, our best efforts er for many years. One of the latest tools Kentucky, and at the end of a year Allow me to outline the most important many of which have hastily put together that will help them to do this is the on- ones for your thought and reflection: an operation but without the trust fun- and they deserve going revision and realignment of the of challenges and change, it is an damentals needed to build solid and sus- transparency.” WLA Academy. Another is the upcom- ­appropriate time to draw some con- The world is changing so fast that none tainable brands. And it is this treasure of ing Best Practices for Retail and Online of us – if we aim to play an important brand excellence that supports most of our Distribution, which aims to share best clusions on behalf of our members on role in the life of consumers – can afford members, that the WLA, as the world’s practice from around the world as a ba- the ­current status of our sector and to simply stay in the here and now. leading lottery platform, needs to protect, sis for distribution excellence. All of this As our players develop new impulses, and nourish, build and leverage to stay at the is possible because members have formed our future together. are constantly faced with new choices forefront of the consumers’ minds, at the a unique global forum of best-in-class lot- and technological opportunities, our mem- top of their long list of choices tery operators, a forum that helps them to Key questions to be answered, bers’ ability to deliver relevant choices to have confidence in their ability to provide regularly coming from consumers is the only guarantee for our Everything communicates, consumer choice and protection and con- our membership are: stakeholders that we will remain at the especially our actions. tribute to society around the world in an forefront of player protection and ser- Whilst the WLA membership devotes sig- Hans Savonije unmatched way • Where is our lottery world heading? vice to society. The stronger our lotteries nificant resources and funds to its written WLA Executive Director

• Will we be interesting to the new and are, the more we can responsibly lead our and brand communication, we do at times Westerman © Barry Photo: Diversity builds cohesive excellence. younger generations of players? consumers along the road of trust and have problems in communicating what it is All of the above translates into action in a • Will our vendor/supplier continue to transparency. Your Association has devel- we stand for. As confirmed in the most re- is what most of our members strive for as cellence in gaming practices. Most of our world that is still very diverse, with differ- consolidate in their sectors? oped some key instruments that help you cent meeting of our Strategic Development a way to fulfill their ultimate mission: to members demonstrate excellence in their ent consumer needs, political constella- • Will the drive ­towards more choice for to run your business better and change Committee meeting, our WLA platform contribute to society by supporting Good responsible approach to restraining prod- tions and financial constraints. The ability consumers continue? more swiftly, leveraging experiences from must continuously nurture and build its Causes and responsible gaming practices uct innovation, for example. But is this re- for local lottery operators to understand • Will the core of our business continue colleagues all over the world. The WLA reputation as the world’s most trusted so we can offer consumers an informed ally in the interest of the consumer? What the subtleties of local execution, while at to be based on good causes and player Responsible Gaming Framework, the WLA gaming brands and lottery operators. But choice. if younger, more technologically oriented the same time using what they learn by protection? Security Control Standard ©, and the WLA just saying this is not enough. To build our consumers want newer forms of gaming drawing parallels with other regions and • Will the ongoing globalization of gam- Marketing Best Practices that are now be- reputations and consolidate the trust we It seems so simple, but the reality is more that we do not provide? What if our distri- peers – this is what makes our platform ing offers, mainly driven by technology, ing developed, are just three examples of enjoy, it is our actions and our person- complicated. This year has been a tur- bution channels underperform in an ever- so unique and so strong. Global learnings render our current portfolios obsolete? the tools available to all members to en- alities, not just our words, that determine bulent one for a number of members, growing global gaming sector? The quest and initiatives such as the Powerball and • Will the current structure of predomi- sure that their operations are run with consumers’ understanding of what it is with issues ranging from retail security for fun, excitement and adventure is deep- EuroMillions megabrands excite consum- nantly state/jurisdiction controlled lot- unmatched excellence. we stand for. What builds our brands, for concerns around the globe to continu- ly engrained in the human psyche. It is our ers around the world and bring lottery op- tery regions and segments resist the example, is our contribution to society, as ing attempts by lotteries to clarify their responsibility to provide consumers with erations together. pressures from hard-lobbying, third- The three pillars of success illustrated by Polla Chilena in this issue’s stakeholders’ perceptions of fair gaming exciting games consistent with our juris- party, tax-optimized gaming operators? are trust, trust and trust. section on Good Causes. What builds our and competition. All these developments dictions public policy limitations and an It is great to be on a mission towards Consumers around the world are buy- brands are product innovations, our rela- illustrate the need for our WLA commu- informed choice, to make sure we do not excellence and in the meantime build Depending on where you are in this rap- ing our products because they trust that tions with our retail partners and our sup- nity to share their knowledge, leverage let them wander off into a distant world of sustainable cohesion among people and idly evolving world, the answer to any of they have a fair chance to win and that we pliers, and our contacts with politicians, each other’s experiences and strive for ex- uncontrolled, profit-driven gambling. consumers. Don’t you think? the above vital questions will be different. make a difference to society by contribut- the press and our peers and colleagues Some of our members seek to operate a ing a significant portion of our surpluses. – and of course the quality of our coopera- larger, younger and more technology-fed In return for this trust, consumers deserve tion and ability to share our knowledge. game portfolio, while others will rely on our best efforts, and they deserve trans- Our prime driver today must be the de- their current strengths in distribution and parency. They and our other stakeholders termination to be the best and to display government-protected operational the- specifically demand that we demonstrate excellence in every dimension of our op- atres. No single answer is correct or in- excellence in our day-to-day operations, erations and our day-to-day life. correct. However, there are a number of in the way we communicate with our au- key parameters that all of us in our unique diences, our communities and our employ- Sustainable, trust-based relationships global membership share. Independent of ees. All of this is vital for our reputation, with our consumers and societies call where you operate your business, whether for our brand value. for sharing and learning excellence. you are a state-controlled operator or a Trust is built on our brands and our ability private one, whether you operate in Asia, As Peter Dart, the global apostle of brand- to reach our consumers and players with a North America or Europe, a number of key ing, pointed out in his Kentucky pre- fun and exciting gaming portfolio, and this

- the best bet a Betware company 6 Winter 2007 7 Association Regional business associations

New members Nebraska Lottery, United States Incoming NASPL Congress, themed on “Safeguarding the Applications for membership by a num- Established in 1993, the Nebraska Lottery Committee news President Ernie Common Good”. The business program ber of lottery organizations were accepted sells scratch tickets and a range of lotto Passailaigue featured presentations and discussions of subject to the approval of the membership games including Powerball. Sales for fiscal John Branscombe topics including responsible gaming, play- at the next General Meeting. 2007 totaled more than $114 million, with is standing down er protection and CSR. At its general as- the majority of the surplus going to envi- as Chair of the sembly, the regional association approved Security & Risk Korea Lottery Association, South Korea ronmental projects and education. Lottery the CIBELAE Code of Conduct, which cov- Korea Lottery Association was established profits also help to finance the state’s com- Management ers the key areas of ethical and legal com- in February 2006 under the control of pulsive gamblers assistance efforts. Committee. Current pliance, transparency, consumer rights the national Lottery Commission. The Deputy Chair and underage play. In addition, it elected Ed Stefan has been designated interim Association is a combination of 10 differ- Maltco Lotteries Ltd, Malta El Salvador’s José Manuel Avilés Morales, ent lotteries and is responsible for plan- Maltco Lotteries has an exclusive license Chair until a new appointment is made. formerly one of the association’s Vice ning, producing, selling and managing to operate all national lottery games in Evangelos Cosmidis from OPAP has been Presidents, to the position of President. instant tickets and draw games. Malta, including the Super 5 lottery, Lotto, appointed as a member of the Committee. Manuel Avilés previously served as El

scratch games and the recently launched Westerman © Barry Photo: Salvador’s Minister of Tourism and in a Reidar Nordby, Jr. Nanum Lotto, South Korea fixed odds betting U*BET. Maltco was set number of other trade promotion and has resigned as The Nanum Lotto consortium was award- up in 2004 and is 73% owned by Intralot. New President for NASPL… former owner of the Charleston Royals and cultural bodies before being appointed to ed the license to operate South Korea’s The remaining 27% is owned by other pri- President and Chief The North American regional lottery Rainbows Professional Baseball Team. In head Lotería Nacional de Beneficencia, national lottery games until 2012. The lot- vate interests. Executive Officer association elected a new President 1988, he was elected to the South Carolina the national lottery of El Salvador. tery has a turnover of approximately $2.5 of Norsk Tipping. at its general meeting in Louisville in Senate and served for thirteen years un- He will continue as billion annually. Intralot will be its main Palm Commerce Holdings Co. Ltd, China October – Ernie Passailaigue, a native til August 2001, when he resigned to run Tokyo hosts APLA Conference technology provider. Palm Commerce Holdings has also joined a special advisor South Carolinian and Executive Director the lottery. He has served on a number of Under the title “Synergy, Sustainability the WLA as an associate member. The to the Norwegian lottery, with particular of the South Carolina Education Lottery. boards and committees, and has been the and Social Value”, Asia Pacific lottery in- responsibilities in the area of international Latvijas Loto, Latvia company provides lottery software, hard- Licensed as a Certified Pubic Accountant in recipient of numerous legislative and pub- dustry leaders and key suppliers met in Set up in 1972 as a subsidiary of Latvia ware and technical services to China relations. Reidar will also be leaving the 1971, Passailaigue served as an Associate lic service awards. Japan in late November for the Third Sportloto, Latvijas Loto became a separate Welfare Lottery Issuance Centres as well WLA Executive Committee, which he has Professor of Business Administration at APLA Conference. Under the leadership of served since 1999, most recently in his company in 1993 and was reorganized as as lottery information and subscription the Charleston Southern University from …and for CIBELAE APLA Chairman Henry Chan and Endoh a joint stock company. The state is its sole services through mobile phones, and elec- ­capacity as the Association’s immediate 1973 to 1988. At the same time, he was State lotteries from more than 20 coun- Yasuhiko, President of the Japan Lottery shareholder. Its biggest products are Keno tronic self-service kiosks selling lottery past elected President. managing partner of his own accounting tries came together in San Salvador Association, the regional association staged and Superbingo. and other products. firm in Charleston. Passailaigue is also the in October for the Eleventh CIBELAE a highly professional and impeccably or- Basile Neiadas has ganized event. A total of 152 delegates resigned as Chief came to Tokyo from around the region to Executive Officer FIFA extends Early Warning System UEFA moves to control manipulation take part in a focused business program of the Greek lottery with presentations ranging from Toyota’s operator OPAP. As FIFA’s early warning system is set to become to assist investigation of suspicious betting European football’s governing body, UEFA, of betting opportunities facilitates attempts CSR strategy to an enthusiastic review of a result, he will no an increasingly powerful weapon in the patterns such as unusually high betting reached a cooperation agreement with to rig matches,” said EL President Winfried the WLA Security Control Standard © and longer be serving battle against criminal activity in the sport turnover in a match, an unusual distribution European Lotteries (EL) and the European Wortmann. “EL members operate in the pub- the WLA Responsible Gaming Framework. on the WLA Executive Committee. and sports betting industry. WLA member of bets on the outcome of a match, valid Football Pool (EFP) in 2005. The partners are lic interest and are placed under strict gov- One of the key conclusions is that the organizations that offer sports betting took rumors questioning the credibility of a match working together to establish an information ernment control. They are the most reliable fast growth of the world economy and The members of the Communications part in the pilot project for the 2006 FIFA or any other relevant information which system highlighting irregular betting patterns partners for sport when it comes to keeping of the lottery world is largely driven by Committee are Jan Stewart, Arch Gleason, World Cup™, under an agreement signed by could be useful for other lotteries in regards for UEFA competition matches. sporting competitions free of any improper the advances in Asia, where both sophis- Risto Nieminen, Dianne Thompson and WLA in late 2005. Based on the success of to such match-fixing speculation. influence associated with betting.” ticated as well as emerging lottery op- Hans Savonije. Lynne Roiter is also an that project, FIFA decided this year to for- In December this year, EL called on the erations show continued acceleration of ­ex-officio member. The key objectives of mally set up and operate an Early Warning Zurich-based Early Warning System GmbH European Union to take action against bet- EL members strictly monitor the volume of growth through innovation and a continu- this Committee are linked to the work of System to monitor bets on the 2010 FIFA is seeking agreements with as many betting ting manipulations in football and other stakes and closely cooperate with each ous drive for excellence. WLA President the Strategic Development Committee, World Cup™ qualifiers and the finals in operators as possible around the world. sports, supporting the recent call for EU ac- other and with UEFA and the authorities. EL Arch Gleason and WLA Executive director which also met in Louisville and is South Africa. For further details contact the organization tion made by UEFA President Michel Platini. is firmly committed to intensifying its long- Hans Savonije made presentations on CSR ­continuing to examine the future strategic on [email protected] or visit its website at The European police network Europol is standing cooperation with UEFA and offering and security. A more detailed overview of priorities of the Association and its diverse Working through Early Warning System www.fifa-ews.com. currently looking into 26 UEFA matches its full support for the EU institutions’ efforts the program and key presentations are membership. GmbH, a majority-owned subsidiary of FIFA, which were possibly rigged by betting ma- to keep sport fair and free of any improper available from the APLA website www. member lotteries will provide information nipulations. “The uncontrolled expansion influence and criminal activities asiapacific-lotteries.org.

8 Winter 2007 9 Retail security The new Canadian model

The last issue of the WLA Magazine outlined some initial considerations as a tomer-focused service standards based on honesty, respect and social responsibility. starting point for new Retail and Online Distribution Committee as it develops a framework for best practice recommendations. Here, we feature an overview of Training and support All 30,000 BCLC retailers will be trained the substantive measures taken by all the Canadian lotteries in the last year. All and tested within the next year to ensure of them aim to strengthen the procedures in place to ensure that lottery prize- all retailers and their employees demon- strate knowledge and understanding of money ends up in the hands of the rightful winners, and to rebuild the playing the retailer code of conduct. The new sys- public’s confidence in the integrity of their lotteries. tem will also allow BCLC to identify all re- tailer clerks who operate lottery systems and alert the lottery when a retailer is The story first hit the headlines in late Caveat emptor claiming a prize. 2006 when Canadian television, based BCLC recommends that players sign the on data available through the Freedom back of the lottery ticket to identify them Retailers are no longer able to purchase, of Information Act, reported statistical as the rightful ticket holder. It the ticket play or validate their own lottery tickets at anomalies in the number of large prizes is a winner, the validation terminal plays their place of work. If they do win a prize, claimed by retailers and their staff at one a winning jingle, which is now louder. they will be interviewed by prize payout of Canada’s provincial lottery operators. Customer display monitors are now locked staff and security personnel, who will In the months that followed a tide of in- in position to ensure they are always fac- also investigate their prize claim to con- dignation and suspicion swept through ing the player. And players should remem- firm they are the rightful winner. BCLC’s the Canadian lottery world as players ber that retailers are now obliged to return President and CEO must now approve all sought further assurances about the in- the winning ticket along with the valida- retailer prize claims of $1,000 or more. tegrity of the retail process. Closer analy- tion slip, with the winning ticket stamped sis suggests that certain lotteries’ retailers “Paid by Lottery Retailer”. Players will also Improved support measures have been in- actually play two to three times more fre- be able to check their own tickets at self- troduced to handle customer concerns and quently than the general population – in check terminals, which were scheduled to a new mystery shopper program will help some provinces, for example, they are be installed in all lottery retail locations by assess service levels and confirm that re- obliged to purchase all unsold tickets be- November 2007. tailers are adhering to procedures. BCLC’s fore the draw takes place. Nevertheless, corporate security investigation team has official reports and independent reviews A new retailer code of conduct and direc- also been expanded, and a progressive have confirmed a number of vulnerabili- tives have also been issued to outline cus- discipline system has been introduced ties in ticket validation processes and that will result in suspensions or termina- highlighted opportunities for improving British Columbia Lottery tions of retailers who do not comply with customer care and reporting procedures. Corporation: Earning back procedures. All the Canadian lottery operators have public trust and confidence since taken further steps to mitigate a risk, Atlantic Canada perceived or real, that may have been “Although the intense scrutiny we’ve underestimated in the past and that has been under over the past year has been The Atlantic Lottery Corporation launched undoubtedly damaged the public image of a challenge, it’s also been an opportunity an internal review into retail wins in several of our members. for us to re-examine how we operate our November 2006. In March 2007, the in- business and to make sure we’re able to ternal review showed that retail-own- British Columbia assure players of the integrity of our lottery ers were winning at a higher rate than business. We now have better information would be statistically expected, based on Acting on the provincial Ombudsman’s 23 tracking, better processes and some very the retailers’ self reported rate of play. recommendations for improvements to public player protection measures. We The lottery announced a series of mea- the player protection and ticket validation are continuing to make changes so that sures under the umbrella of the Customer procedures, the British Columbia Lottery we can be confident in our business pro- Confidence Program that strengthens Corporation (BCLC) has developed the cesses. We believe we will be able to earn player protection and verification proce- “Player First” program, a comprehensive back public trust and confidence.” British Columbia’s “Player First” program is a comprehensive response to the Ombudsman’s recommendations. It includes an extensive response to the recommendations – and in Dana Hayden, President and CEO information campaign explaining what BCLC is doing to enhance retail security, how players can protect themselves from retailer fraud, many cases going even further. Continued on Page 12 and how they can contact the lottery if they have any doubts about retailer integrity.

10 Winter 2007 11 “We are determined to pay the right prize to the right customer through all of these important initiatives.” Kelly McDougald, CEO, Ontario Lottery and Gaming Corporation

Continued from page 11 checkers. Customer-facing screens on re- Ontario fore returning it. They are also obliged to tailer terminals have been installed at all make sure the customer display screen is dures. Additionally, an external review 3,000 retailers to show the customer the To strengthen the lottery system in readily visible to the customer. New win- of its policies was conducted by KPMG. amount won, as the ticket is being validat- Ontario, the Ontario Lottery and Gaming ning and non-winning jingles with voice- That report contained 23 recommenda- ed. A complete “consumer tips” strategy, Corporation (OLG) is implementing 60 over ­messages that were tested at select tions, which ALC had met or exceeded by as well as a dedicated toll-free customer recommendations made by Ontario’s locations in November will soon be rolled October 2007. complaint line, were also implemented Ombudsman and KPMG. OLG has made out to all lottery terminal locations in the early in 2007 as part of the Consumer significant strides in changing the way it province. Player awareness Confidence Program. thinks about customers and the impor- Many of those measures directly involve tance of the assurance of honesty and Checks and balances players and provide them with the tools Tracking retailers integrity in its relationship with the pub- Through in-store visits by third-party in- they need to maintain better control of The lottery has also modified procedures lic. State-of-the-art technology, including spectors, OLG has been auditing and edu- their tickets. These include continued ed- to clearly identify retailers, retail employ- 8,900 ticket checkers, as well as improved cating its retail partners with regards to ucation about the importance of treating ees and their families, to ensure all retail awareness and tighter controls are helping proper validation procedures. A database every ticket as a potential winning ticket, wins are tracked. In fact, ALC has ex­ to safeguard the integrity of Ontario’s lot- now keeps track of individuals involved and ensuring that tickets are signed. panded and revised its Non-Arms Length tery system. The Prize Integrity Program in the direct sale and redemption of lot- Party Prize Claim process to include this introduced by the OLG is designed to im- tery products. In addition, the lottery has ALC has introduced new technology and group, as well as lottery employees, their prove customer service, protect customers introduced new measures to identify and business procedures that include a new families, and certain classes of suppliers and provide them with clear and concise penalize retailers who engage in question- signature line on the front of the tick- and their families. All non-arms length information regarding the winning status able activity. et and a requirement that all tickets wins of over $10,000 are fully investigated of tickets. As part of this program, one of be signed before validation by retailers; by the lottery’s internal auditing team, as the changes made was the introduction of Ontario’s Ombudsman recommended a stamping of winning tickets as paid; and well as the security and compliance team the Terminal Freeze function. Whenever new regulatory framework for Ontario returning a redesigned validation slip with to ensure they are legitimate. There is al- a retailer validates a lottery ticket worth lotteries. The Ministry of Government the ticket to the player. As well, the pro- so a mandatory “cooling off” period of 30 $10,000 or more, all transactions at the Services and its agency, the Alcohol and gram includes an overhauled customer days before paying any non-arms length terminal are suspended and an OLG cus- Gaming Commission of Ontario, respond- claim process at head office and banking party who claims a prize of $10,000 or tomer service representative immediately ed by announcing new regulations and a outlets, and an extensive customer aware- over. calls the location to speak to the retailer structure to regulate lotteries in the prov- ness campaign. and to ask the customer some questions ince. OLG has also created a new Senior The ALC sales team has been regularly that may help determine ownership of the Vice President position for corporate com- Additionally, lottery terminals make a dif- educating retailers to remind their play- ticket. pliance. ferent sound to differentiate between win- ers to sign the back of their tickets and to Ontario’s lottery tickets have been redesigned to include a box for the player to sign ning and non-winning tickets, and players return validation slips to the player. The Changing habits OLG security and surveillance personnel their ticket. Soon it will be mandatory for customers to sign their tickets before a retailer can now determine whether they have security and compliance team receives a In an extensive public awareness program, will lead all Insider Win investigations, and can validate them. won – and how much – on self-serve ticket daily summary of potential issues from the OLG has taken a number of steps to en- starting in 2008, the Alcohol and Gaming field, including any complaints received courage players themselves to change the Commission of Ontario will investigate all regarding retailers. Monitoring of retailer way they treat their lottery tickets. Lottery wins by retailers, retail employees and key In November, the lottery started installing be cashed by any other person. Retailers Atlantic Lottery Corporation: activity through security processes and tickets have been redesigned to include lottery suppliers, and all prize claims that customer-facing display units at every re- must return the validation slip to the cus- continuous process improvement internal audit is ongoing. The winners’ a box for the player to sign their ticket. appear suspicious. tail location, and is introducing new ticket tomer for every ticket checked as an of- database has been completely redesigned Lottery retailers are required to check terminals that play a distinctive phrase ficial record of the transaction. Training “The past year has been a transformation- to ensure real-time cross-referencing of that the ticket is signed before validating “We are determined to pay the right prize whenever a winning ticket is checked. and communication to retailers has been al one for the lottery industry worldwide. winners and retailers and we now require it, and to ask the customer to sign it if it to the right customer through all of these Additional self-service ticket checkers will strengthened to ensure the proper pro- My advice to other organizations is to con- background checks for all new retailers. is not. important initiatives,” said OLG’s new also be installed starting this fall to enable cedures are followed. The lottery is also tinuously assess your processes and pro- Chief Executive Officer, Kelly McDougald. players to electronically check their own enhancing its consumer education efforts cedures and ask a lot of fundamental ques- Key to the success of the Customer Soon it will be mandatory for custom- tickets prior to validation by the retailer. to make players more aware of the simple tions about how they can be improved. To Confidence Program has been commu- ers to sign their tickets before a retailer Western Canada steps they can take to ensure they receive quote Alfred Edward Perlman: ‘After you’ve nicating these changes to players, retail- can ­validate them. Lottery retailers must Effective August 1, 2007, a new policy in the correct prize – printing their full name done a thing the same way for two years, ers, shareholders and the general public. provide a validation receipt and return At Western Canada Lottery Corporation effect throughout the WCLC jurisdiction on the back of the ticket after purchase, look it over carefully. After five years, look As part of ALC’s ongoing commitment to ­validated tickets to customers whether (WCLC), a number of improvements have makes it mandatory for players to print checking the winning numbers themselves at it with suspicion. And after ten years, openness and transparency, an annual ac- they have won a prize or not. If a prize is been introduced or are planned in the their name on the back of their ticket be- and making sure they receive the valida- throw it away and start all over.’” countability report will be issued in July paid out, retailers must now tear through near future to protect players and help fore presenting the ticket for validation at Michelle J. Carinci, President and CEO 2008. the bar code of the winning ticket be- them play with greater confidence. retail. This ensures that the ticket cannot Continued on page 14

12 Winter 2007 13 Western Canada has also enhanced its consumer complaints process to shorten response times and ensure better follow-through.

Continued from page 13 ty with respect to the statistical norm, was 3. Retailers should return both winning validated by Deloitte & Touche, aided by a and non-winning tickets to the cus- tion slip generated by the terminal when mathematics professor from the University tomer along with the corresponding their ticket is checked. The enhancements of Québec. However, given the importance validation slip. include validation reminders on every on- that the organization places on the integ- line ticket, ticket tips on winning number rity of its operations and the trust it re- 4. Prize payment processes should be pages of the website and in the player ceives from the population, Loto-Québec managed more closely to reduce the magazine, and additional validation infor- also mandated an independent review of risk of not paying the rightful winner. mation in assorted POS materials. its prize payment processes and policies Detailed decision-support tools should in order to ascertain if the risk was being be developed to assist prize payment Process improvements correctly managed and to recommend any staff and initiate investigations when In addition, the lottery has enhanced its additional measures that should be taken. appropriate. consumer complaint process to ensure that consumer concerns are investigated This review by KPMG was released in 5. The prize payment department should upon receipt and that the player system- October 2007 and the lottery is now in the have up-to-date information about atically receives a follow-up response. All process of implementing its recommenda- complaints against individual retailers. major prize claims by retailers are now tions. KPMG identified 35 improvement Department staff should have access to reviewed to ensure there are no irregu- paths with respect to retailer manage- the names of all retailers and their em- larities. Additional questions and review ment, prize payment processes, custom- ployees, all employees of Loto-Québec procedures have been implemented for all er complaints, investigations, governance, and its subsidiaries, and all ticket current and future retailer prize claims of and ticket printing and security. agents. They should also have hotline $1,001 or more. support and details about prizes paid KPMG recommended five main improve- to retailers and cases of retailer non- Ernst & Young conducted an independent ment paths for Loto-Québec: compliance with validation and pay- review of the lottery’s internal prize pay- ment procedures. out processes, which was commissioned 1. A consumer awareness campaign before the release of the Ontario and should be conducted on a recurring Loto-Québec has undertaken to implement British Columbia Ombudsmen’s reports. basis to encourage players to sign the all of the 35 recommendations, some of In light of the findings in these reports, back of their lottery tickets, check the which had even been put into place when WCLC has commissioned a second, more customer display while the retailer is KPMG’S report was issued. For example, in-depth review including internal and validating the ticket, and listen out for wording has been added to tickets ad- external prize claim processes and pro- the jingle that sounds when a winning vising players to sign their tickets at the IS YOUR LOTTO GAME cedures, past and present retailer prize ticket is processed at the retail outlet. time of purchase. A multimedia aware- claim rates, consumer awareness and ness campaign will be launched at the education programs, customer complaint 2. Procedures should be put in place to start of 2008 to remind consumers of the handling procedures and retailer manage- ensure that retailers do not validate importance of signing their tickets, look- ment. The review will also examine the unsigned tickets. ing at the customer-facing screen during UP-TO-SPEED? lottery’s consumer protection measures. validation to see if they have won, and how This second Ernst & Young report is ex- Loto-Québec: no effort spared much, and listening out for the different pected in November 2007 and its findings win-sounds – which vary according to the will be made public. “Loto-Québec’s commitment to follow up amount of the prize. As of January 2008 on all the findings of the KPMG report as the retailer will return all validated tickets Québec rapidly as possible is a clear demonstra- to the player along with the correspond- tion of the fact that it will spare no effort to ing validation slip. And the new genera- Based on a five-year statistical analysis of maintain public confidence it has earned tion of equipment being installed in 2008 retailer wins of $5,000 and more, Loto- over the last 37 years. Everything related to at retailer locations will permit customers Québec concluded that when taking their the integrity of our operations calls for the to self-check their tickets before claiming respective estimated ticket purchase rates implementation of strict precautions and their win. into account, its retailers did not win more our constant vigilance” frequently than other lottery players. This Alain Cousineau, Lottery Dynamics Corp. | www.lotterydynamics.com | +1 214.736.9387 11551 Forest Central Drive | Suite 118 | Dallas, TX 75243 USA conclusion, on the basis of the hypotheses President and CEO, Loto-Québec. provided and the calculations of probabili-

14 Winter 2007 15 WLA Responsible Gaming Framework A unique tool to leverage worldwide best practice in your lottery

Research topics are determined by the Responsible Gaming Framework, and also Responsible Gaming universities. Camelot has recently joined The Responsible Gaming to prepare for Level 2, 3 and 4 applica- the International Responsible Gaming Framework is a unique tions. The first workshop will be held In As many lotteries have announced At World Meet, Michelle Carinci, deputy us to better tell our CSR story,” Margaret Organisation (IRGO), an independent in- Canada in the last week in February 2008 chair of the WLA CSR Committee and remarked. “It helped us to populate our ternational research platform which aims opportunity for members and is expected to build on the experi- their intent to join the newly launched President and CEO of the Atlantic Lottery CSR report and it helped us plan for future to provide up-to-date information in order to gain significant ence from the very successful first event WLA Responsible Gaming Framework Corporation, provided an overview of the CSR activities.” to allow gaming operators to develop and in Brisbane in 2007. WLA Responsible Gaming Framework. maintain the most effective responsible experience in this vital entry deadlines have been extended Following her presentation, moderator Who will be on the Assessment Panel and gaming strategies. aspect of Sustainable The full program will be available shortly as a result of requests from members Don Feeney, Research & Planning Director how will they address jurisdictional re- on the WLA website and registration is at the Minnesota State Lottery, opened quirements? Once you achieve Level 4 in the Framework, Excellence. still open. The number of participants will and the need to review certain as- the floor to questions for Michelle and are you at Level 4 forever? be limited. pects of the program. This decision Dianne Thompson, chair of the WLA CSR “To have credibility,” Michelle stated, “an Committee and CEO of Camelot plc in the assessment panel needs to be indepen- Organizations have to re-qualify every Call for action was made during the recent World United Kingdom. Here is a sample of the dent.” three years if they do not qualify for the Taking part in the Responsible Gaming Meet in Kentucky. questions that were asked. next level within that timeframe. At Level ies and suppliers make significant time Framework is a chance for every to every To ensure this independence and knowl- 4, organizations are still required to qual- savings by applying a specially developed lottery to build a sustainable, responsible Isn’t the Framework a lot of work? edge of Regional differences driving flex- ify every three years. toolbox that makes Responsible Gaming operation. All lotteries that have not yet ibility in demand three-person regional a practical activity with the consumer entered Level 1 are encouraged to send These requirements should not be oner- Assessment Panels will be established. An evolving Framework placed firmly at the center of our mem- in their Letter of Commitment to the Basel ous especially for organizations that have Each panel will have an independent CSR In addition to the feedback received from bers’ actions. business office. The membership voted integrated Corporate Social Responsibility expert. The remaining two positions will members, important insights have al- In view of the interest expressed by leg- unanimously to support the Responsible (CSR) throughout their organization. At be the chair and a peer reviewer. so been gained in the year since the islators and gaming boards around the Gaming Framework in Singapore in 2006 Level 1, all that is required is a letter of Framework was approved. world, it has been decided that these bod- and a Letter of Commitment is an easy commitment by the organization’s CEO. A The benefits of having different panels in ies can apply through their respective way to show that your organization sup- self-assessment needs to be completed at different regions was highlighted when a As the WLA has held workshops with WLA member organizations to take part in ports Responsible Gaming and the WLA Level 2, and a planning document must be question on how the framework would ad- key lottery experts in order to secure the WLA Framework initiative alongside Responsible Gaming Principles. Above all, produced to achieve Level 3. At Level 4, a dress different jurisdictional requirements a sound operational applicability of the their lotteries. Adjusted application fees entering this program is a great way to le- report is published, external stakeholders was asked. Framework, some of its tools have been for Level 3 and Level 4 have been agreed verage a unique set of dedicated tools and are engaged and third-party assurance modified. The Framework offers a unique for these applications. to benefit directly from world-class exper- providers have conducted an independent “Regional representation will ensure that opportunity for members to gain sig- tise and global experience. review. the Assessment Panel understands any nificant experience in this vital aspect of Workshops to build on practical experience regional differences that exist,” explained Sustainable Excellence without making During 2008 a number of workshops will Using her lottery as an example, Dianne Michelle. “Because organizations only expensive mistakes when recruiting staff be organized to help members get to grips Thompson explained that “it is not extra need to achieve 75% of Action Items, this or working with third-party consultants. with the different aspects of implement- work for Camelot because we are already provides the Framework with the flexibil- The WLA Framework also allows lotter- ing a lottery operation focused on the doing it as part of our CSR program. It’s at ity to accommodate these regional differ- the heart of what we do – it’s the way we ences.” do business.” My organization doesn’t conduct research A delegate from Canada also shared her but funds it. Will this contribute towards experience in preparing her organization the Framework? for entry into the Framework. Margaret McGee, Vice President of Business The answer is yes. Again, Dianne Innovation at the Nova Scotia Gaming Thompson used Camelot as an example, Corporation, explained the hidden bene- explaining how the lottery funds organiza- fits that the Corporation discovered when tions that study gambling. it completed the Self-Assessment as part of its plan to achieve Level 4. Camelot helps to fund two leading ac- ademic centers specializing in the “It was the information that we had gath- study of gambling – Nottingham Trent ered for our Self Assessment that allowed University and the University of Salford.

16 Winter 2007 17 Global RFP Best Practice Security WLA standard streamlines Lottery scams: the fight continues

Dutch procurement While it is easy to think that most people would not fall for lottery scams, the names getting into the wrong hands. This typically occurs when a web page’s regis- sad reality is that many still do. Scammers are persistent, and they are increas- tered name is allowed to unintentionally One of the main technology procurements in the Netherlands at the moment is the apparent successful bidder is expected ingly tech-savvy in their approach. Warning the public how they operate is part expire and the cyber-squatter picks it up. early 2008 and startup of the new system This can easily result in the email scam- for the supply and operation of a new online capability. In an innovative move, in 2009. of our “duty of care” with respect to our player base, says Ed Stefan, Deputy mers having a more authentic web pres- the two Dutch lotteries Staatsloterij and De Lotto have joined forces to share Chairman of the WLA’s Security and Risk Management Committee. ence to share with their victims. Crystal clear criteria the technological infrastructure, while continuing to compete in the Dutch mar- All three bidders concur that formally re- To combat these and other similar issues, ketplace, where they offer different products and services to their respective sponding to the RFP was easier than ever “We have to face the fact that lottery scams the following are some techniques to con- before. They particularly appreciated the will remain part of our social landscape Scammers are persistent, sider: customers. They chose to build this complex Request For Proposals around the clear distinction that is made between until people stop believing they have a and they are increasingly • awareness campaigns at the point of Global Best Practice package developed by the WLA. mandatory and non-mandatory sections, chance of winning a prize in a lottery they sale, through local radio and other me- and the explanations of the type of re- never played. Official statistics on fraud tech-savvy in their dia outlets sponse expected by the lotteries. Another complaints suggest that this is far from the approach. The key to • prominent display of fraud notification “We see the joint procurement as a natural plus point for suppliers is that bid evalua- case, and that the prevalence of lottery-re- on your lottery’s web site and clever way of decreasing operational By using the standard, tion principles and procedures are clearly lated scams is still high,” says Ed Stefan. preventing them is • enhanced retailer training cost while enhancing customer service,” lotteries and bidders stipulated, providing appropriate insight to raise public awareness • ownership of multiple, similar sounding says Jaap Stavast, Director Technology into the entire process so they can under- Lotteries around the world receive liter- web site names with redirects back to & Development for De Lotto. “It makes alike can focus directly stand what the lotteries are really looking ally thousands of emails every week from of the dangers. the “official” home page perfect sense to both lotteries to share on the content of the RFP for in a completely transparent way. members of the public hoping to confirm • establishment of a monitored player the infrastructure, but not the data and the legitimacy of an email or letter that reporting form or “abuse” type email applications.” Frank Vogt, his counter- instead of spending time At SENS and De Lotto, the evaluation pro- they have received stating that they have account part at Stichting Exploitatie Nederlandse on administrative tasks or cess itself was simplified by the clear rules won. Far worse, of course, are the inqui- Fighting phishing • web page links to common “malware” Staatsloterij (SENS), adds: “All we have to and procedures set up in the RFP. In par- ries about the status of prizes when the re- Much like in the banking sector, scam art- scanners do is to ensure each lottery has the ability figuring out procurement ticular, the lotteries have a firm guideline quired “processing fee” has already been ists have in some cases put up a fake ver- • prevent unintentional expiration of to control its own products, customer data processes. on how to address issues that might have paid out. sion of a lottery website with very similar owned domain names and consider and service levels. We believe this is fully caused problems in a traditional procure- sounding names or ones with common ownership of domain names similar to feasible and that our project will actually ment. With fewer ambiguities, the evalua- Prevention better than cure misspellings (e.g. thepowerball.com in- those already registered break new ground in the lottery industry.” tion process is faster, simpler and, above In many jurisdictions the only thing that stead of powerball.com), directing users • bolstered relationship with local au- all, fairer. can be done when a member of the public to fill out their “online claim form” in the thorities promoting activities to prevent Common ground files a complaint is to refer them to their scam email that they receive. Other scam and fight fraud Commencing the procurement project, itself was not much of an issue, as the RFP Although the Dutch lotteries are still to local law enforcement agency for action artists have used actual names of a lot- both lotteries had their respective ideas, template structured the whole process and make their selection in this large-scale after the fraud has been perpetrated or to tery’s Chief Executive or even one of the “While none of these techniques will like- plans and methods for conducting the pro- saved a huge amount of time. technology procurement, Frank Vogt has provide guidance on ways to regain their lottery’s drawing officials to help their ly result in the elimination of the chal- curement. After analyzing the Global RFP already reached one important conclu- lost assets. There are steps we can take, postal mail or email claims appear legiti- lenge, they will certainly help to reduce Best Practice package developed for the Says Jaap Stavast: “Using the RFP tem- sion: “We are very happy we chose to use however, to minimize a fraud ever gaining mate. the number of successful scam attempts,” WLA by QLot Consulting, they decided to plate proved to be a great move for us. We the Global RFP Best Practice,” he says. this level of success. says Ed Stefan. The WLA’s Security and use the RFP template to establish common could now focus directly on our specific “Compared with the ‘old style’ RFP we An entire business has been built around Risk Management Committee will soon be ground for the RFP. requirements, and did not have to spend used to prepare only a short while ago, we “The first thing to recognize is that these a similar type of common mishap – that publishing a guideline providing a more in time on figuring out the procurement pro- have saved ourselves enormous amounts scams are getting more complex all the involving authorized Internet web page depth review of this issue. The lotteries had prepared their respec- cess, the structure of the RFP and other of time and headache.” Jaap Stavast time, but that the simple scamming tech- tive procurement for quite some time, and time-consuming administrative tasks.” agrees: “We clearly see the simplification niques remain,” says Ed Stefan. “The key had already to some extent prepared their and streamlining the RFP template has to prevention is increased public aware- Bio: Ed Stefan respective foundations for an RFP. Once “Our requirements are very specific,” brought. A technology procurement is dif- ness.” the decision to go for a joint RFP was Frank Vogt adds. “We have a complex ficult enough as it is, and we have finally Ed Stefan is Chief tion technology and security at the MUSL made, QLot helped to merge the require- technical situation and our requirements found a way to significantly reduce the Many WLA member organizations now Information Officer of office, and acts as information and physical ments and develop the joint RFP around are quite unique. We were concerned at time and effort involved.” feature a fraud warning on their websites, the Multi-State Lottery security consultant for the member lotteries, the standard template. first that using the RFP template might re- and the WLA’s home page has a link that Association, the orga- as well as helping to evaluate the technical strict us in some ways. It turned out that advises players and warns them: nization that adminis- infrastructure and security of third-party lot- Within this structured framework, the this was not at all the case.” ters Powerball ® and tery service organizations. He has served on working group led by QLot could focus on • not to respond other multi-jurisdiction- the WLA’s Security and Risk Management requirement specification (i.e. the actual The RFP was released early summer 2007 • not to pay any money in advance. al games on behalf of Committee since 2002 and is currently its content of the technical requirements sec- and proposals from Scientific Games, • always to protect their bank account some 30 state lotteries in the United States. Deputy Chairman. tions of the RFP), and conducting internal Intralot and GTECH were received by the numbers and other financial data. Ed is responsible for all facets of informa- and external reviews. Developing the RFP due date of September 15. The selection of

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Date: Oper: Job #: Round: RDW9257.indd 1 10.25.07 Andy RDW9257 10/25/071 4:11:02 PM Notes: Type info here GOOD CAUSES:getting the message across

Lottery beneficiaries: part of the family

One of the responsibilities of a business like Polla Chilena de Beneficencia, the Chilean National Lottery, is to keep alive the belief that anyone who plays the lottery can win a prize. Another is to bring citizens together at the national level and encourage more people to put their trust in the lottery as an expression of solidarity with the most needy members of the community. So Polla Chilena works hard not only to sustain the excitement of playing and the hope of win- ning, but to keep Chileans informed about the lottery’s work for charity and en- gaged with the system of values it shares with its beneficiaries.

The good news for Polla Chilena and its Amid the poverty, unemployment and beneficiaries is that things are going well. homelessness that ensued, a small ray of “Sales have doubled in the last six years,” hope emerged: Chilean President Arturo says Verónica Montellano, President of Alessandri Palma passed a law authoriz- Polla Chilena’s Board of Directors, “and ing what is now Polla Chilena to conduct that means that grants to our beneficia- four raffles per year and to organize a ries have also doubled.” Polla Chilena rec- series of horseraces at authorized race- ognizes that what is good for the lottery tracks. Under that law, 50% of the profits is good for the country, and Montellano from these gaming activities were to be is quick to point to the paramount impor- used to finance the construction and main- tance of good management in a state run tenance of the Casas de Socorro, while the organization: “A well-run lottery is good rest was for improvement of hospital ser- for the country in terms of fiscal support. vices throughout the country. But management excellence is even more critical in a heavily regulated industry Much more than a law like gaming. If Polla Chilena does well in Philanthropy offers human beings a The Aldea de Niños this kind of environment, it speaks well of chance to give meaning to some of their (Children’s Village) cares Chile,” she adds. simplest acts, and Polla Chilena has fully for at-risk children and understood this principle. “Although our young people and has Chilean President Michelle Bachellet has role in supporting charities is determined been a beneficiary of Polla placed a strong emphasis on the social by law, the meaning of our actions goes far Chilena since June 2006. protection of the nation’s children, un- beyond that,” says Montellano. “A game of derscoring the importance of the continu- chance is much more meaningful for the ing efforts of Polla Chilena, which has a player if ticket sales help different social long history of helping minors through causes. It makes us all aware, both inside its charity work. The lottery was es- the lottery organization and in the playing tablished in 1934, during a devastating public at large, that what we are doing is global economic depression that was fur- making a concrete contribution to society ther compounded by a rapid decline in and helping our fellow humans to improve the world market value of saltpeter, then their lives,” she says. “This commitment to one of Chile’s major commodity exports. protecting the vulnerable and improving

22 Winter 2007 23 and dancing that their “uncles” from Polla “Although our Chilena had prepared for them. They al- role in supporting ready felt like family. charities is determined by law, Committed for the long haul the meaning of Back in 1947, large numbers of Chilean our actions goes children were struck down by poliomy- far beyond that.” elitis and Pott’s disease, a type of tuber- culosis that affects the spine. A group of Verónica doctors, educators and parents formed Montellano, the Sociedad Pro Ayuda al Niño Lisiado, President of Where the money goes… government appointed committees oversee a foundation for disabled children now Polla Chilena and how it gets there the grant process, and set policies for this better known as the Teletón Foundation. specific distribution of the money. Usually, “We have been lottery beneficiaries since Historically, state lotteries have often been these grant making bodies have a range a new law was passed more than 50 years introduced to fund a particular cause or of representatives from the community, as ago,” says Ximena Casarejos, Executive event. In more modern times, however, well as senior bureaucrats and government Director of the Teletón Foundation. “We governments have developed very differ- representatives. While the link between lot- only obtained the funding after long nego- ent models for the way they channel lottery tery revenue and good causes is more overt tiations led by the foundation’s president, profits into good causes. In some parts of than in the hypothecated model, some lot- Inés Tonkin, and Salvador Allende, who the world, the link with good causes has teries have been the brunt of criticism over was a member of the Chilean Senate at already been lost, with lottery profits simply controversial decisions by the grant making the time,” says Casarejos. In 1955, as the directed to consolidated revenue for the bodies – decisions over which the lottery polio epidemic intensified, Polla Chilena government of the day to use together with has no control. people’s everyday lives is the core value “Thanks to the support of Polla Chilena we inspired him 29 years ago was the need donated a residence in the downtown ar- money raised through any other form of underpinning our family – an extended can pay the salaries of psychologists and for love and protection of the most vulner- ea of Santiago in order to continue caring taxation. Accountability family that includes Polla Chilena as well social workers at both establishments.” able children in the country, and the same for the growing number of young disabled The final model is a much rarer one, and as its beneficiaries and is held together by spirit and dedication drives its staff and people. “Those were difficult times and In other parts of the world, lottery revenue is involves the operator itself managing a trust real bonds of affection and commitment.” “The foundation has other sources of benefactors today. lottery funding was one of the most sig- hypothecated, or earmarked for a particular or grant making function and distributing funding,” says Villablanca, “but with this nificant resources enabling the institution good cause. But the money goes through all or part of the profits as well as running The Consejo de Defensa del Niño (Codeni) ability to allocate lottery money to the Lobbying for lottery funds to carry out a large portion of its medical state or national coffers where it becomes the lottery. Examples of this include Santa is one of these beneficiaries. Also estab- projects that need it most at any particular Finding the necessary economic resourc- activities.” difficult to determine whether it constitutes Casa in Portugal, Lotterywest in Western lished in 1934 as a direct result of the time, Polla Chilena grants play a crucially es to keep the Cardinal’s vision alive has additional funds for that good cause or sim- Australia, and the Hong Kong Jockey Club. depression, Codeni still pursues its mis- important role. Polla Chilena represents a never been easy, but after the founder’s Today a total of ten rehabilitation cen- ply a substitute for other forms of revenue. Lotterywest, for example, has direct control sion to support the children of the un- relatively small proportion of our overall death in 1999 the task became even more ters in ten different regions of the country This is the subject of debate in several US over the way that approximately 40% of its employed and other young people whose income, but if all these funds were direct- difficult. Reimundo Sapag lived through serve 25,000 patients, all under the age states which direct lottery money to educa- profits are distributed to various community family or socio-economic conditions pre- ed systematically into the projects with those moments of crisis. In the early days of 20 and all suffering from neurological, tion. and charitable groups in Western Australia. vent them from accessing basic opportu- the lowest income, they would represent of Chile’s new democracy, he and the muscular and skeletal disabilities. “Polla This model has some distinct advantages: nities for physical and intellectual growth. almost 50% of the annual budget.” foundation’s Executive Secretary, Pablo Chilena needs to be certain that this mon- In some jurisdictions, including South the lottery is fully accountable for any con- Currently Codeni operates 47 programs, Huaracán, wrote letters to each of the ey is being invested well,” says Ximena Australia and Queensland, the money is troversial decisions, and also has direct and 15 of them in Santiago and 32 in other Leaders of other beneficiary organiza- Chilean legislators in an effort to have Casarejos, “and in our case we can show directed to the state health services. Other personal relationships with beneficiaries regions, providing food, recreation, edu- tions agree with this analysis. Reimundo the foundation included in the list of ben- them the tangible results of our medical places channel it into sports, as is commonly who in turn become the strongest advocates cation and medical, social, spiritual and Sapag, Executive Vice President of the eficiaries of Polla Chilena. “We knew that and therapeutic activities. Even though the case in Europe, or into the arts through for the lottery. Making that very direct link psychological assistance for approximate- children’s charity Fundación Aldea de a change in the law was necessary to our patients are all young people, the care relevant government departments. between lottery products and benefit to the ly 4,000 minors. The 2006 amendment to Niños Cardenal Raúl Silva Henríquez, achieve our objective, but we never imag- they require is of a long-term nature. Polla community can be a very powerful market- the lottery legislation increased Codeni’s says that one big advantage of the lot- ined just how much work it would take,” Chilena has sustained their support to us Government oversight ing tool. And lottery employees and retailers share of Polla Chilena’s funding from 2.5% tery’s support is flexibility. “Polla Chilena says Sapag. Their drive and determina- over the years without having to redirect Another model adopted by some govern- are highly motivated to take part in raising to 6%, making a major difference to the doesn’t demand that the money be used tion paid off in the end, and last year they funding to other activities. They were vi- ments is to set up a special government funds for good causes in which they feel organization. to build infrastructure or renovate build- received the news that they would receive sionaries of their time, and they have body with responsibility for distributing lot- personally involved. ings, for example, and this is a huge plus. 15% of the lottery’s funding of good causes stayed the course. That speaks well of the tery profits to the beneficiaries determined Reliability and flexibility Obtaining money for capital projects is of- under the 2006 amendment to the Chilean institution.” by government legislation. The UK and New Clearly, each government must make its Polla Chilena’s grants to Codeni are not ten easier than financing operating costs. law governing the national lottery. Zealand national lotteries are examples of own decisions about how lottery funds are earmarked for a specific purpose, but are So Polla’s support helps to cover the costs Other beneficiaries of Polla Chilena funds that model. In those jurisdictions, legisla- distributed to good causes, and it is equally added to the organization’s general bud- of our operations – mainly food, clothing, The day the symbolic first check was include elder care and child development tion specifies that certain proportion of clear that the choices made in different get, which then allocates the funding ac- schooling and recreational activities for handed over to the foundation by Polla organizations, the Chilean Red Cross, the the lottery revenue is used for charitable parts of the world – in terms of beneficiaries cording to the needs of each project. “In the children.” Chilena is remembered with happiness by national firefighters guild, health funds, purposes, for sporting purposes, for the arts, as well as distribution models – reflect long- two of our family residences, our fiscal both parties. The children themselves may agricultural education funds and other for conservation and heritage, and in the standing historical, ideological and political subsidy cannot cover the costs of social The man behind this foundation, Cardinal not have understood the significance of foundations supporting a range of chari- case of New Zealand, to support the New differences. and psychological support,” says Codeni Raúl Silva Henríquez, has a special place the event for a simple reason – they were table operations. Zealand film industry. In these examples, Secretary General Santiago Villablanca. in the heart of the Chilean people. What too busy with the hugs, affection, chatting

24 Winter 2007 25 Jockeying for position PGRI’s Lottery Hall of Fame: three new members inducted in Kentucky On Wednesday, October 3, 2007 at 5:30 p.m. sharp, World Meet 2007 opened its The US based Public Gaming Research Institute (PGRI) inducted three new members into doors for the first time with the inaugura- their Lottery Hall of Fame during the opening of the World Meet 2007 trade show. PGRI tion of the trade show, kicking off an event established the Hall of Fame in 2005 in recognition of those individuals who have made an which had been months in the making. outstanding contribution to the global lottery industry. The three new inductees join a select Rewarding the tireless efforts of an in- group of distinguished lottery industry leaders from around the world. The group now com- ternational team of organizers, a colossal prises of 26 members. happening came to life. Jan Stewart, CEO of Lotterywest in Australia, was recognized for her On the two days which followed, lot- leadership in the lottery industry. She has made countless presenta- tery professionals from around the globe tions and moderated panel discussions at every WLA conference came together for an impressive line-up since its inception in 1999. Her service to the WLA membership is of speakers, a vast trade show featuring widely respected. Jan has held numerous positions with the WLA around 60 of the most innovative vendors and is ­presently Senior Vice President and serves on the Executive in the lottery business today, and breakout Committee. presentations on the burning issues cur- rently affecting the industry. Reidar Nordby, Jr., president and CEO of Norsk Tipping since 1999, is recognized internationally as one of the lottery industry’s leading World Meet 2007 left a lasting impres- statesmen. Reidar served as President of the WLA from 2000 to 2006 sion on participants, strengthening their and is still a member of the Executive Committee. As WLA President, he resolve to strengthen our lottery brands helped to make the Association a world-class organization. Reidar was and better communicate to the consumer instrumental in strengthening the international lottery community and about who we are and what we stand for reinforcing relations between regional lottery associations. In recogni- if we are to stay ahead in this race for ex- tion of his international perspective, he has been appointed member of the strategic advi- cellence. sory board of the China Center for Lottery Studies at Peking University.

A common thread Constantinos (Costas) Antonopoulos, has been CEO of Intralot since The keynote addresses were delivered by 1999 and is one of the global lottery supplier’s founding members and World Meet 2007: Dr. Robert Ballard, a world-famous deep- shareholders. Costas has been honored for his dedication to helping sea explorer, global marketing guru Peter lotteries raise significant amounts of revenue for good causes around Dart, Target’s trend master Robyn Waters the world. His hard work, vision and dedication to the customers and Unleashing the spirit and Bill Samuels, a rocket scientist turned communities that Intralot serves has led to the establishment of a glob- master of the art of marketing. All four al presence in over 40 countries with over 3,600 employees. Costas has come from vastly different backgrounds, always striven to provide a beneficial presence in all of the communities which he serves of excellence and all four are vastly different in char- through support, social responsibility and good corporate citizenship. Outgoing NASPL acter, yet there was a common thread Three incredible days in Louisville, a city full of southern charm and ethnic and President Clint Harris running through their presentations: the need to innovate, to think outside the box cultural diversity on the winding Ohio river – this was the setting for World and to muster the courage to do some- Meet 2007, the top event in this year’s lottery industry calendar. More than 1,300 thing different. As we move further into the new millennium we will need to break delegates from around the globe came together to meet, mingle and share their old patterns and adapt to the needs of the knowledge of a business that is as fascinating as it is challenging. consumer in a rapidly changing market- place. Strong, solid branding and a new approach to the younger demographic are “Racing for Excellence, Winning for Good Causes” was the theme for the WLA President increasingly becoming the keys to success in the lottery business. event, the third-ever World Meet staged by the global lottery community. Arch Gleason This theme was reflected in the whole range of topics, from Corporate Social At the same time, we need to nurture the trust of our players and remain relevant to Responsibility, branding and marketing innovation, to the need to take the lot- the consumer by winning for good causes tery industry to the next level. The rules of the game are rapidly changing all and maintaining our high level of social responsibility. This is the “difference that around us, causing us to reassess our strategies and search for new ways to makes the difference”, according to Peter reach and protect our players and serve our beneficiaries. In the true sense of Dart. This is the pillar of our industry we must continue to strengthen. This is what Constantinos Antonopoulos making his acceptance speech after being inducted into the word we are running a race – and winning that race will require us, as an NASPL Executive Director David Gale PGRI’s Lottery Hall of Fame. industry, to demonstrate Sustainable Excellence. Continued on page 28

26 Winter 2007 27 Continued from page 27 The power of brands: of the world’s most recognized brands. At Competition: The lotteries are running a Moments to remember: competing in a global market World Meet 2007, Peter made a convincing head-to-head race with the private gambling sets us apart from the private operators argument for the lotteries to embrace stron- sector for a share of the consumer’s time snapshots from World Meet 2007 who have built their businesses without The lotteries are ger branding in order to win the battle for the and money. Constant innovation is essential. the underlying trust needed to build solid, increasingly fac- hearts and minds of the consumer. Fun, excitement and adventure are core sustainable brands. ing competition drivers of innovation. This must be tempered from the private The difference that makes the difference though, with strong links to good causes and Breakout bonanza gambling sec- In order to stay ahead of the pack, it is be- charities. Socially responsible marketing is The breakout sessions covered a variety tor. Online poker coming ever more apparent in the global becoming increasingly relevant. of topics, with presentations by lottery col- rooms and the lottery community that the strength of the leagues from around the world outlining private sports bet- lotteries’ brands will be the key differentiator Beat the upstarts the latest developments in the lottery in- ting industry have in maintaining the loyalty of their customers. Also of crucial importance for the lotteries dustry from their own respective angles. begun to make Dart considers that the lottery industry is is the need to embrace the media metamor- The sessions were set informally and Peter Dart: “There has full use of the in- investing far too little in strengthening and phosis which is rapidly transforming commu- the discussions were lively, passionate at never been a more ternet and mobile sustaining their brands. nication and the transaction landscape. The times but always fruitful. Topics ranged ­important time for communication player can now be reached 24/7 and has the from responsible gaming to retailer rela- strong brands.” devices. In order to sustain branding excellence in ability to make small transaction online with tions, and included such sensitive issues the future the lotteries will have to consider ease. It is here where we need to “beat the as privatization in the United States and Their impact on the market is no longer the following: upstarts”, said Dart, but lotteries are invest- the wave of retailer security concerns regional; they have taken it global. And, ing in this area “well behind the curve”. which have plagued a number of lotteries according to Peter Dart, an international Trust: this is probably one of the greatest in different parts of the world this year. marketing and branding expert with over 30 assets that the states lotteries own. This As global brands increasingly set the pace, years’ experience, “there has never been a is what holds them apart from the private the ability for the lotteries to innovate, com- World-class trade show more important time for strong brands”. gambling sector. The trust of the player must municate and sustain relevance will deter- The giants of the industry as well as be nurtured and protected. Relevance and mine their success as they move into the Churchill Downs bugler sounds off the start of the World Meet 2007. some innovative new players came to As a strategic advisor for WPP based in social responsibility are two binding factors future. Kentucky to promote their capabilities. All London, Peter Dart has worked on some in maintaining the trust of the player. in all, some 60 exhibitors filled the 68,000 square foot exhibit hall. Prominent among them were WLA Platinum Contributors GTECH, Scientific Games, Intralot and Ace Interactive. Underscoring the impor- tance of engaging the consumer in order to remain relevant, a number of new game concepts illustrated the supplier industry’s focus on product innovation in the lottery #PTT
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28 Winter 2007 !LLYOUNEEDFORASUCCESSFUL)NTERNETGAMINGOPERATIONWWWBOSSMEDIACOM 29 ).34!.44)#+%43").'/3/&4'!-%30/+%2#!3)./'!-).'-!.!'%-%.43934%-0!9-%.43 The case continues Pondering the next steps

Lynne Roiter, facilitator of the Global Legal Network, is head of the WLA Montréal office and VP Corporate Affairs and Corporate Secretary at Loto-Québec.

As the year draws to a close, ­several by Sportingbet which announced that it Japan and Canada, appear to have been Even a federal licensing would take it from 5-10 years to make up settled; however, no settlement has been developments are expected in the system would not solve the profit shortfall resulting from its with- reached with the EU. The deadline for Opening the debate, Internet gambling situation in the drawal from the US market. reaching these settlements, after several the WTO situation because postponements, has also been fixed for United States in connection with each state would retain Recent data from the Annenberg December 14. Failing agreement a WTO not the market! the Unlawful Internet Gambling Public Policy Center at the University panel will decide on the proper compensa- the right to determine of Pennsylvania indicates that weekly tion. It has been reported that European By Philippe Vlaemminck & Annick Hubert Two billion euro question Enforcement Act of 2006 and the whether Internet gambling Internet gambling among college students gambling firms are seeking $100bn in Vlaemminck & Partners In related developments, the White Paper ­ongoing dispute with Antigua declined from 5.8% to 1.5% in the year compensation. on Sport raises some important questions is permitted in its since UIGEA was signed into law. It is too The infringement cases initiated by EU about the future financing of sport in the & Barbuda at the World Trade jurisdiction. soon to determine whether this is a per- EU Trade Commissioner Peter Mandelson internal market commissioner Charlie EU, and more time will be needed to reflect Organization, reports Lynne Roiter. manent drop in Internet gambling among was in Washington in November and he McCreevy against nine EU Member States on these issues. As recently as November, 18 to 22 year olds. However, the same did according to the press issue several are quite controversial, in that they hinge at a conference on EU law and sport orga- study found that other types of student statements dealing with the matter con- on factual interpretations of the behav- nized by the French Olympic Committee, Signed into law in October 2006, the gambling had not declined in the same firming that compensation should be paid. ior and gambling policies of the Member a representative of the EU Commission in Unlawful Internet Gambling Enforcement way, suggesting that reduced availability There is also mention that the dispute is States involved. As Norway’s experience charge of sport declared that liberaliza- Act (UIGEA) is designed to ban illegal final decision is taken. These should be clearly has had an impact. being used to garner support for changes has shown, the authorities that ques- tion of gambling was to a certain extent Internet gambling by requiring US finan- filed by December 12, 2007. to US legislation that bars Internet gam- tion State policy in this way are not “inevitable”. We therefore need to think cial institutions to have procedures in place Day of reckoning bling. always on solid legal ground. So why about the future of sport financing, he that block payment to these sites (see issue It is not surprising to note that the Poker December 14 is the day that the result of did Commissioner McCreevy choose this said, probably not realizing that he had 22 of the WLA Magazine for a more com- Players Alliance as well as pro-Internet the arbitration proceedings in the Antigua States’ rights route? One suggested explanation is that just put a 2 billion euro question on the plete description of UIGEA’s terms). The gambling groups based in Europe did not & Barbuda vs. United States at the World In this regard, the bill introduced by he felt frustrated after both the European table. Funding of sport by Lotteries is not legislation required the Federal Reserve wait, but immediately issued statements Trade Organization (WTO) case should be Democratic congressman Barney Frank Parliament and the Council of Ministers only the most stable form of sport financ- Board and the Department of the Treasury criticizing the regulations as unworkable known. The arbitration decision was to is getting the most attention. His Internet had excluded gambling from the Services ing, but also the most ethical. to enact regulations for implementing the and an intrusion on personal freedoms. have been rendered in November but was Regulation and Enforcement Act aims to Directive and rejected a regulatory ap- ban. There might well be cause for concern postponed until mid-December. Antigua is introduce a federal licensing system for proach based on country of origin. Various measures have been taken by from these groups since the UIGEA ap- claiming US$ 3.4 billion, which is nearly online gambling in the United States, and sports federations and the sports betting The proposed regulation was released for proach either has been or is being consid- four times greater than the country’s en- has 41 co-sponsors in Congress at the Recognizing specificity industry itself to ensure that strict rules consultation on October 1 this year. It re- ered for implementation in several other tire economy; the United States for its part present time. Even if it passes Congress, Whether or not this explanation is true, of ethical conduct are applied. State lot- quires financial service companies subject jurisdictions, such as France, Norway, the has offered compensation of US$500,000. however, the proposed legislation would the Commissioner’s action should not be tery organizations throughout Europe, for to US jurisdiction and offering services Netherlands and Brazil. One difficulty in this case is to determine not solve the WTO situation. This is be- seen as an indication that the EU Member example, have adopted a strict code of in the field of automated clearing house the true economic loss for Antigua, since cause the Frank bill recognizes that a States do not want a proper solution. conduct on sports betting. Similarly, the activities, credit card payments, check Squeezing the supply side contrary to other areas of economic activ- State has the right to determine whether Quite the contrary. Such a solution is roll-out of FIFA early warning system (see collection, money transmission and wire There are indications from several quar- ity there is little reliable data. Internet gambling is permitted in its ju- badly needed as a result of the growing page 8) is a clear sign that sports and transfers to have in place polices and pro- ters that the enactment of UIGEA has had risdiction. As a result, a federally licensed involvement of organized crime in on- sports betting are committed to the high- cedures that are “reasonably designated” an impact in reducing Internet gambling Negotiations are also continuing between operator would not be permitted to offer line gambling and the absence of an ad- est standards of integrity and player pro- to prevent the processing of prohibited in the United States. A study by Casino the United States and several other WTO its services in a State where these are pro- equate regulatory approach to defend the tection. Internet gambling transactions. The regu- City showed that the number of sites al- members who have filed claims for com- hibited by law. In addition, sports betting interests of the consumers in a global, lation offers non-exclusive examples of lowing American players had dropped by pensation further to the decision by the – an area of particular interest to provid- Internet-driven world. Opening up gam- While sport financing cannot in itself be what these policies and procedures could 45%, and by 64% for online poker sites, United States to change its WTO commit- ers of Internet gambling sites – has been bling markets is simply not an acceptable a justification for a restrictive gambling entail. Companies who implement such in the year since UIGEA was adopted. ments to remove gambling. The American carved out of the draft legislation. alternative, as the United States has indi- policy, neither does it exclude the possibil- policies will be deemed to be in compli- Statistics for overall traffic to Internet position is that it could not know that cated by withdrawing its GATS commit- ity of invoking other reasons for restrict- ance with the law. gambling sites show that the share of Internet gambling could be interpreted At the time of going to press, we did not ments. But rather than quarreling about ing gambling. What is unacceptable is American users has decreased to just over as being part of its undertakings when it know how things will play out. The WLA compensation for the EU, the Europeans the “inevitable” wording used by the EU The federal agencies who drafted the 8% while that of European visitors has in- signed the GATS agreement in the mid- Global Legal Network will keep its mem- and the Americans need to take joint re- representative. There is no reason why proposed regulation have asked for com- creased significantly. The impact of UIGEA nineties as the activity did not exist. Claims bers informed of the latest developments sponsibility to stop the unregulated devel- ments from the affected parties before a is equally clear from statements made from several countries, such as Australia, as they unfold. opment of Internet gambling. Continued on page 32

30 Winter 2007 31 The case continues

Register online now at:

Philippe Vlaemminck, Annick Hubert, senior associate with www.wincor-world.com advisor to the WLA and EL on Vlaemminck & Partners, is a former state European and international attorney for the Belgian government and legal questions an expert in EU internal market law.

Continued from page 31 The role of state lotteries Opening up gambling Many questions still remain open in Europe liberalization of gambling is inevitable. On markets is not inevitable. but the signs of broader dialogue and de- the contrary, EFTA’s case against Norway bate are encouraging. Looking at the on- proved very clearly that an infringement Nor is it an acceptable line market alone may not be enough, case can lead to a consolidation of a state alternative, as the United however, and a more comprehensive solu- operator’s monopoly on gambling. tion may be more appropriate. And what States has indicated by about the Lisbon Reform Treaty, which Re-regulating from the ground up removing gambling from strengthens the role of the European The only issue that can no longer be Parliament and also designates sport as a sustained is the absence of a discussion its GATS commitments. special competence of the EU in support to find a proper regulatory framework of national policies? Surely sustaining the for gambling services in the EU. Several financing of sport through state lotteries is Member States have taken initiatives in worthy of EU support in this context. that regard, starting with Belgium. On WINCOR WORLD 2008: July 10, the representative of the Belgian What role do lotteries have in all these de- government before the European Court tive and qualitative measures, as well as velopments? Some lottery organizations EMPOWERING PROCESS INNOVATION. of Justice brought agents of the differ- ways to tax winnings or stakes to reduce are very well connected and can play a ent Member States together in Brussels the negative impact of gambling on soci- tremendously important role in the policy- for the first time to discuss the gambling ety. Discussions about this approach have making process. Others can rely on input Trade Fair & Forum for Banking and Retail cases pending before the European Court. started with the EU Commission but re- from their industry associations to provide The meeting, attended by 24 EU and EEA sults may be a long time in coming, even support to policy-makers. Both the WLA January 29- 31, 2008, Paderborn, Germany jurisdictions, was clearly a great success though the need for solutions is widely and EL are focal points for the highest Exhibition area of 7,000 m2 40 presentations/workshops and an important step towards achieving recognized. Finland has called for the for- level of expertise in the area, and their Offerings from 60 partners Forum for banking and retail a better understanding of the problems mation of an EU Council working group role in codifying best practices and setting More than 500 exhibits www.wincor-world.com and a greater awareness of the need for to address all aspects of gambling at EU standards of excellence is more important solutions. level. The advantage of this approach is than ever before. that that a more comprehensive and sus- As a result of this meeting both Finland tainable outcome could be achieved in the The associations can also play a key role and France have taken a number of steps long term. National governmental groups in conveying these messages to the institu- to establish an informal working group to have been formed in a number of Member tions and stakeholders. We know that the open up the debate on gambling. France States to reflect on gambling policy solu- role of lotteries in society is still as valid as invited a number of the Member States tions. ever, and we also know that liberalization represented at the July 10 meeting to re- is anything but “inevitable”. But a lot of flect upon a paper addressing the need Poland has also invited EU Member States hard work lies ahead of us as we continue to regulate online gambling and to find to an informal meeting of the EU Council’s to defend that vital role. Recent develop- proper solutions for pan-European taxa- working group on tax questions to discuss ments suggest that a renewed effort is tion. France is very much concerned about taxation of winnings and set up a frame- underway to open up the debate on many uncontrolled development of the e-society work for closer cooperation at finance of these issues – and to find the common and is therefore proposing a “controlled ministry level. Poland is involved in an in- ground with our peers and partners that is opening” of the online gambling mar- fringement case about this question and the prerequisite for adequate regulation of ket. This would involve both quantita- its finance ministry is working on legisla- this unique sector. tive changes in order to comply with the Treaty. However, the Polish government believes that risks connected with gam- bling services are the key reasons for the restrictive taxation policies pursued by some Member States. EXPERIENCE MEETS VISION.

32 Winter 2007 33 SPOTLIGHT People who make lotteries work

Nichelle Anthony Minority and Community Affairs Coordinator, Kentucky Lottery Corporation

The Kentucky Association, American Cancer Society, Gambling, the Kentucky Department of Lottery Cor­pora­ Muscular Dystrophy Association, Boys & Mental Health and certified compulsive tion is increas­ Girls Clubs of America, American Heart gambling counselors. The program is now ingly seen as an Association and various schools are just in its 6th year. organization that a few of the organizations that employ­ cares about the ees volunteer with and raise funds for. Diversity makes sense community be­ “Community involvement is important to Nichelle interacts with the state’s diverse yond just gener­ me individually, and I’m lucky to be able population on a daily basis, coordinating ating revenue for to combine that personal commitment event sponsorships, serving on the boards the state. Behind with my professional objectives and ca­ of a number of minority- and woman- that positive im­ reer path.” owned business councils and working as age lies a history of concrete action on the a volunteer on various community initia­ ground – and a lot of hard work by lottery Hands-on involvement tives. staff like Nichelle Anthony, whose mission Among her accomplishments with the is to bridge the gap between the lottery or­ Kentucky lottery so far, Nichelle worked At least 10% of the lottery’s overall pro­ ganization and the community. with the state’s problem gaming council curement goes to minority-owned or to re-brand and market a program devel­ woman-owned businesses. Arch Gleason As Minority and Community Affairs oped in Missouri to reach the children of and COO Margaret Gibbs have displayed Coordinator, Nichelle Anthony works on Kentucky and warn them of the dangers a commitment to having a diverse sup­ a daily basis to make sure the lottery of drugs, alcohol and gambling. She dis­ plier base for the past 10 years and the stays on course in two key aspects of covered that one of the key challenges lottery has been recognized as one of Corporate Social Responsibility. She is cur­ the top state agencies in this arena. “For rently focusing specifically on responsible supplier diversity initiatives to succeed, play and diversity, handling a variety of it takes a top-down approach starting diversity and community-related initia­ with real management commitment,” says tives. She oversees the budget for event Nichelle. The lottery’s Supplier Diversity sponsorships, serves as co-chair of the committee works to train staff and sup­ lottery’s supplier diversity program, over­ pliers and promote employee recognition sees its responsible play program and co­ in this area. Nichelle Anthony supports ordinates diversity-focused advertisement that deployment effort, networking with campaigns. various groups in the business community was getting buy-in from educators at the and helping to apply the open door policy After graduating in Communications from state and local levels, and found it took a she created to allow minority and women Oakland University in Rochester Hills, hands-on involvement and three years of businesses an opportunity to meet with Michigan, Nichelle spent seven years in hard work to turn well-intentioned mis­ department heads to share their abilities. the TV news business before joining the sion statements into real action and mea­ lottery. Her media background helped her surable results. The program in now in “We have a winning formula that extends appreciate the difference between the im­ roughly 150 schools across the state of beyond just Kentucky Lottery players,” ages people see on TV and the realities Kentucky and includes video materials she says. “My job is to make sure state­ on the ground, and today she is proud to and other tools showing children how to ments like that are not just taglines in a work for an organization that “puts its get help for themselves or loved ones in publicity campaign. Saying you’re doing money where its mouth is”. their life suffering from addiction. the right thing is important but actually doing it is what makes the difference. And “The lottery really encourages its em­ Another idea Nichelle Anthony brought for a community-focused organization like ployees to get involved as volunteers to from Missouri is Responsible Gaming us, making a difference makes great busi­ improve the well-being of all Kentucky Education Week, a large-scale public ness sense!” citizens,” says Nichelle. The Alzheimer’s awareness campaign about problem and compulsive gambling. To make it work in her new home state, she pulled to­ gether a coalition including legal gam­ ing entities in Kentucky and southern Indiana, the Kentucky Council on Problem

34 Winter 2007 35 The learning curve WLA Academy

The WLA seminar in Togo brought together the nations of Africa for three days of intense learning.

Lottery Business from A to Z, were scrutinized in six smaller, multina- all discipline of the highest caliber. The Lomé, Togo tional groups. colorful opening reception, hosted by the August 28 – 31, 2007 National Lottery of Togo’s managing direc- Subjects ranged from sports betting time tor Kudjow-Kum Pekemsi with Mamata What makes lottery operations successful closures to lost tickets and PR around win- Bako Djaouga, President of the African From August 29 until September 1, 2007 ning claims, all based on real-life lottery state lottery association (AALE), was at- around 45 African senior lottery officials experiences from across the globe. The tended by Togo’s Minister of Finance. met under the excellent hosting and hos- cases, originating from Canada to South pitality of the National Lottery of Togo in Africa and from France to New Jersey The WLA thanks the AALE and Loterie Lomé, Togo’s intriguing beachside capital, were as diverse as they were energizing, Nationale Togolaise for staging three days in the colorful setting of the Lomé Holiday and passions ran high in the six groups as of solid learning and a very successful Inn Hotel. different problem solving strategies were event. We also thank Guy Simonis and proposed. Jean Jørgensen for their support on the The 45 participants originated from 8 dif- content of the course material. Given the ferent nations, from Ivory Coast to Benin, Under the balancing leadership of Hans tremendous feedback from participants, a and from Burkina Faso to Niger. The pro- Savonije, who presented and moderated further session on the same model will be gram included discussions of a wide array the seminar, the participants learned a lot programmed during 2008. of lottery business cases – 19 in all – that about lotteries and teamwork, and, above

The seminar attracted the interest of the African media. Hans Hans Savonije with Mamata Bako Djaouga, Managing Director Savonije had the privilege of delivering the vision and mission of the National Lottery of Benin and Kudjow-Kum Pekemsi, of the WLA to the African people via the television news. Managing Director of the National Lottery of Togo.

36 Winter 2007 37 The learning curve Upcoming seminars January 23 – 25, 2008 DE:CL>9:L>C Three Days of HXgViX]IVWIB\VbZh[gdbEdaaVgY7Vc`cdiZ Marketing Excellence YZa^kZgVjc^fjZeaVnZmeZg^ZcXZXdbW^c^c\i]Z London, England hVi^h[n^c\hcVed[ejaaiVWl^cYdlhl^i]i]Z Joint WLA/EL seminar ZmX^i^c\VXi^dcd[^chiVcihXgViX]"d[[VgZVh#

JC February 10 – 15, 2008 M>OB7KD9>7I9H7J9>J78 English for the Lottery Sector ?DIJ7DJ=7C;5 WLA Communications Coordinator Jean Jørgensen and Mélissa Azam Aldwark Manor, York, England  D[mfheZkYj"D[mFbWo[hi06eeZVahidZm^hi^c\ Paul Peinado speaks with La Banca of the WLA chat with La Banca Seminar conducted by eaVnZghl]^aZViigVXi^c\cZldcZh# President Roberto Palermo Suárez. ­director Jorge Stighetti. Partners in Training  BWh][ehIcWbb06kV^aVWaZ^cbVcnY^[[ZgZcih^oZh#  Fh[c_kcFheZkYj"Fh[c_kcFh_Y[0>cXgZVhZY February 24 – 27, 2008 eaVnVXi^dcbZVchZmigVkVajZ[dgi]ZeaVnZg# Excellence in the Sports strengthen our lead through marketing CSR, Responsible Gaming  Betting Arena and strong branding. and Marketing 8_]=Wc["8_]IWb[i0EgdkZc^cXgZbZciVahVaZh# Punta del Este, Uruguay Ottawa, Canada Ndjgl^cYdld[deedgijc^in^hdeZcg^\]icdl# 8dciVXindjgEdaaVgY7Vc`cdiZgZegZhZciVi^kZ November 25 – 28, 2007 At the same time the dark side of a crimi- Vi'#(&*#*-*#()()$ nal industry is starting to impinge upon March 18 – 20, 2008 A warm breeze blows in the port of Punta the integrity of sports betting. Match fix- Security, Risk Management lll#edaaVgYWVc`cdiZ#Xdb Del Este, Uruguay, making it a popular ing and money laundering are threats to and Business Continuity destination for sailing enthusiasts from the industry, and we must embrace efforts Marseilles, France around the world. There is a comfortable such as FIFA’s early warning system in our A joint WLA/EL seminar but lively energy running through this battle against criminal activity in sports town on South America’s Riviera, where and sports betting. April 2008* the WLA held its last seminar of 2007, Excellence in Lottery Operations: 210x145 16/8/07 10:47 Page 1 “Excellence in the Sports Betting Arena”. The Latin Americans are seasoned veter- Public Relations and Good Causes ans of the sports betting industry, and the Kuala Lumpur, Malaysia La Banca de Quinielas de Montevideo gra- seminar offered a close-up view of sports A joint WLA/APLA seminar ciously played host to this seminar. A total of 65 international delegates came to- May 2008* gether in Punta del Este to discuss the lat- CSR / Responsible Gaming est developments in Sports Betting world Mexico wide. A Joint WLA/CIBELAE seminar

Tricky waters A common thread running through the various presentations was that the sports betting industry is maneuvering through tricky waters. The competition being of- fered by the private sector betting indus- try is ever present and getting stronger. In order to heighten the spirit of The lotteries offering sports betting are competition, a go cart race was or- still a step ahead but the gap is closing. ganized for the participants. The time to innovate and strengthen the industry is now. Offering higher pay-outs and the added attraction of single-event betting in the region. Sport is ingrained *Exact date to be announced. betting, the private betting industry is in the Latin American spirit and culture, For more details and a complete list of moving in on territory which until now and it was fitting that the world of sports 2007 WLA seminars, please visit our has been forbidden for most state sports betting should come together on these website: www.world-lotteries.org betting organizations. New legislation is three days to share the spirit of excel- needed to leverage the advantage that the lence with our colleagues in Uruguay. We state lottery agencies have. wish to thank once again Jorge Stighetti WLA Conventions and Roberto Palermo and their team from As well as exclusive access to retail chan- Banca de Quinielas de Montevideo for October 19 – 24, 2008 nels, state lotteries enjoy advantages such their hospitality and tireless effort in help- Discover the island of Rhodes as credibility and scale which are highly ing us make this seminar an resounding 2008 WLA Convention and Trade Show coveted by the private betting sector. The success. hosted by OPAP. time has come to realize our potential and Rhodes, Greece

38 Winter 2007 39

Platinum Contributors WLA Contributors Corporate news

Leadership changes The company’s General Technical Division W. Bruce Turner, Chief Executive Officer has been awarded the “Committed to of Lottomatica S.p.A. and GTECH Excellence in Europe” distinction by Corporation, has resigned to pursue an the European Foundation for Quality opportunity to start an investment firm. Management (EFQM). The distinction re- Jaymin Patel, currently President and wards various achievements, including Chief Operating Officer of GTECH, will ISO 27001 certification of its Information become Chief Executive Officer of GTECH Security Management System. Corporation, while Lorenzo Pellicioli, Chairman of Lottomatica S.p.A., will take Blue is the color on the additional responsibilities of Chief Venezuela’s largest lottery company, Executive Officer of Lottomatica Group. Grupo Selco, has commissioned Wincor Nixdorf to deliver 1,000 Xion /Mtop termi- Ramping up capacity nals as part of the expansion of its sales Scientific Games has inaugurated its new network. Grupo Selco has worked close- high-speed printing press in Alpharetta, ly with Wincor Nixdorf’s subsidiary in Gold Contributors Georgia, expanding its instant ticket print- Venezuela since 2002. The company has ing capacity by approximately one-third even chosen the distinctive blue of Wincor to over 30 billion tickets a year. The inau- Nixdorf’s terminals for its POS branding, guration was commemorated with a rib- and now refers to its nearly 3,000 lot- bon cutting ceremony attended by Georgia tery outlets all over Venezuela as “puntos Governor Sonny Perdue and Georgia azules”. Lottery President and CEO Margaret DeFrancisco. Strong performance by Pollard Banknote The company has also acquired a 50% in- Since it went public in 2005, Canadian terest in Guard Libang, a leading provider ticket supplier Pollard Banknote has gone of instant lottery ticket cooperative ser- from strength to strength. The company vices to the China Welfare Lottery, for ap- has completed testing of a new automated proximately $28 million. finishing and packaging line, and a num- ber of key customers have been growing Scientific Games has become the first lot- their instant ticket product lines. Sales tery vendor in the industry to be certi- performance remains strong, with a nu- fied by NASPL for software development merous contract extensions, successful and quality best practices. The company re-bids and a landmark award for a new received certification for both system re- client in Poland. quirements definition and development. Third-quarter gross profit increased from Thriving on competition $9.7 million in 2006 to $10.4 million in Intralot has further expanded its presence 2007 on quarterly sales of just over $42 in the Australian market following the million. “The mix of products sold during Victorian Government’s decision to break the quarter included more higher-margin a 54-year monopoly of the public lot- items, and production volumes increased, tery license. Intralot’s local subsidiary has resulting in a positive impact on gross Silver Contributors been granted a 10-year license to oper- profit,” said Co-Chief Executive Officer ate a variety of lottery and instant games John Pollard. in Victoria. The current lottery operator

(Tatts) will continue to operate the existing - the best bet lottery games which are combined with other jurisdictions.

40 ???? 200? 41 #6 WLA ad:Layout 1 5/14/07 9:39 AM Page 1

What does it mean?

With more sales than ever coming from instant games, choosing a supplier to support and manage this critical product category has never held more promise for today’s lotteries.

Likewise, the need has never been greater for flawless synchronization and execution of the myriad integrated marketing and logistical components that drive sales of this fast-action product.

This mission-critical category requires serious suppliers willing to make serious investments and Scientific Games is doing just that.

Our latest investment in our 6th in-line press means we now have the four newest and most modern presses in the lottery industry.

But presses – while important – are but the middle link in a complex, interrelated process. Today’s instant category demands a supplier that can also contribute to the marketing on the front end and just-in-time distribution and retailer support process on the back end.

And it’s here where Scientific Games sets itself apart.

> We are now the only major producer of instant tickets in Europe. To access a special web presentation on our new Servo press, go to:

www.scientificgames.com

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