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Public Gaming International Magazine July/August 2019

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Public Gaming International Magazine July/August 2019 PUBLIC GAMING INTERVIEW UPDATE on MSL Lottery in Ukraine A study in overcoming adversity in a market disrupted by politicalPUBLIC & economic GAMING INTERVIEWSturmoil. By Evgeniy Vlasenko Vice President,Evgeniy MSL, LLC, Ukraine PGRI Introduction: Paul Jason visited with Mr. Vlasenko at the EL CongressVlasenko in Antwerp to get an update on Vice President, MSL LLC, Ukraine the progress made over the last three years since our last discussion. Paul Jason: How have things Ukraine is the largest country in Europe by land mass, and has a population of 43 mil- changed since our last interview lion. UPDATE MSL is the state onlottery MSLoperator in Lottery Ukraine. It was in launched Ukraine: in 1970 to raise A studyof September in overcoming 2016? funds for the development of sports in the Soviet Union. That mission changed when the Evgeniy Vlasenko: We live in a challenging Ukraine became independent in 1991. MSL was originally an abbreviation for “Molod adversity in a market disrupted by politicaland dynamic& economic world. European markets turmoil. of Sportloto”, but is now the brand name. traditional lotteries are under pressure from AfterPGRI Ukraine Introduction: gained independence in 1991, there was a period of time when govern- non-licensed operators, especially in the ment regulatoryPaul Jason structures visited werewith not Mr. fully Vlasenko intact. There at the ELwere Congressno regulations in Antwerp and private to get an onlineupdate world. on the Specifically progress made to the over Ukraine the lastis operators were free to start lotteries, sell tickets and take in money, then close without three years since our last discussion. that in addition to unlicensed operators on paying out prizes. Public trust in lotteries was destroyed. In the year 2000, a regulatory Ukraine is the largest country in Europe by land mass, and has a population ofthe 43 internet, million. non-licensed MSL is the outlets state lotterythat offer system was implemented. Even so, and even though MSL always operated with integrity, VLT-like games are mushrooming in brick operator in Ukraine. It was launched in 1970 to raise funds for the development of sports in the Soviet Union. That the entire industry was tainted and it was very difficult for MSL to reestablish public and mortar venues. They may not be clas- trust andmission confidence. changed But when they succeeded,the Ukraine step becameby step, inindependent re-establishing in consumer 1991. MSL confi- was originallysified as slotan abbreviationmachines, but forthey “Molod deliver all dence Sportloto”,that its operations but is are now totally the transparentbrand name. and prize monies are paid out promptly the same functionality and player experience and theAfter games Ukraine always operatedgained independencewith integrity. Thein 1991, business there of lotterywas a reliesperiod not of just time on when government– so, in reality regulatory they are slot structures machines, were which not the confidencefully intact. of the There consumer. were Retail no regulations and advertising and partners private also operators need to bewere confident free to startare lotteries, illegal. And sell becausetickets theand lotterytake in market money, then that theclose time without and resources paying allocated out prizes. to lottery Public will generatetrust in a lotteries positive ROIwas fordestroyed. them, and In the hasyear been 2000, contracting a regulatory over the system last 5 was years imple in - that themented. lottery operator Even so, will and be aeven good though business MSL partner always in every operated way. with integrity, the entireUkraine industry under wasthe pressuretainted ofand non-licensed it was very Beforedifficult the political for andMSL militaryto reestablish turbulence public which trust began and in confidence.2014, when Russia But they succeeded,gambling, step bywe step, have into spendre-establishing more and moreconsumer annexed Crimea and turned eastern Ukraine into a war zone, the market was growing of our limited resources, and time and confidence that its operations are totally transparent and prize monies are paideffort, out promptlynot for development and the games of the always market considerably.operated MSL with sales integrity. were increasing The atbusiness an annual of lottery rate of 50-80%relies not between just on 2010 the confidence of the consumer. Retail and advertising and 2013. Total revenue in 2013 was over 2.5 billion UAH (approx. $150 million but to protect the business and defend the partners also need to be confident that the time and resources allocated to lottery will generate a positive ROI for them, and euro today but twice that before the devaluation of the Ukrainian currency in 2015). principles which the WLA and EL member Amongthat classic the lotteries, bingo lottery operator ranks will first be at a 30%good ofbusiness revenues, partner scratch cardsin every second way. at 24% lotteries stand for. and growingBefore fast,the andpolitical Lotto andthird military at 6%. Sports-betting turbulence which and toto began is 40% in and2014, is the when fast- RussiaHave annexed Russian Crimea intrusions and turned and eastern est growingUkraine category. into a Only war 18% zone, of the the marketpopulation was in growingUkraine playsconsiderably. the lottery atMSL least sales wereinterference increasing at with an annual Ukraine rate dimin- of 50-80% once abetween year. That 2010 compares and 2013. to 70% Total in the revenue UK. Illegal in 2013 online was gambling over 2.5 is billionvast. There UAH (approx.ished $150 over million the last euro three today years? but twice that are morebefore than the 270 devaluation sites accessible of to the the Ukrainian Ukrainian customers. currency inThey 2015). are not Among properly classic lotteries, bingo ranks first at 30% of revenues, E. Vlasenko: The Crimea peninsula was regulatedscratch or taxed. cards second at 24% and growing fast, and Lotto third at 6%. Sports-bettingannexed and by and toto is is still 40% occupied and is by the Russia, fastest 95%growing of MSL’s category. sales are at Only land-based 18% of stores. the populationTransitioning in from Ukraine a state-owned plays the econ- lottery at andleast some once Eastern a year. Ukraine That comparesterritories toare 70% in omy tothe a capitalist UK. Illegal system onlineis a big gamblingtransition. isIt vast.is not Therejust a matter are moreof installing than 270 modern sites accessiblestill occupied.to the Ukrainian There is customers.no active warfare They are businessnot practices properly and regulated models. The or taxed. cultural adaptation as well as economic and logistical that is reported in the international press, transformation95% of MSL’s is not so sales easily are accomplished. at land-based Of course,stores. UkraineTransitioning is over twenty from afive state-owned years buteconomy people to continue a capitalist to die system on the is front a big into thetransition. process. The It iscultural not just transformation a matter of hasinstalling largely been modern accomplished business and practices so now and models.line. So, Theunfortunately, cultural veryadaptation little has as well as it is largely a matter of executing on fundamental business plans to develop new games, economic and logistical transformation is not so easily accomplished. Of course,changed. Ukraine In isaddition, over twenty trade fivewars continueyears into categories and distribution channels. which create new economic challenges the process. The cultural transformation has largely been accomplished and so now it is largely a matter of executing on Evgeniy Vlasenko has led MSL since 2011. for everyone. The additional risks posed fundamental business plans to develop new games, categories and distribution bychannels. trade wars and unrest interfere with NASPL 2019 Evgeniy Vlasenko has led MSL since 2011. investment into the economy including the lottery sector. Continued on page 45 Paul Jason: How have things changed pressure from non-licensed operators, machines, but they deliver all the same SEPTEMBER 17-21 since our last interview of September especially in the online world. Specifically 20 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2019 functionality and player experience – so, Hosted by the Arkansas Scholarship Lottery 2016? to the Ukraine is that in addition to in reality they are slot machines, which unlicensed operators on the internet, non- are illegal. And because the lottery market Evgeniy Vlasenko: We live in a licensed outlets that offer VLT-like games has been contracting over the last 5 years challenging and dynamic world. European are mushrooming in brick and mortar in Ukraine under the pressure of non- markets of traditional lotteries are under venues. They may not be classified as slot Continued on page 44 REGISTRATION NOW OPEN! 20 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2019 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2019 21 Lynne Roiter from page 18 It is already an international industry, Evgeniy Vlasenko from page 20 E. Vlasenko: If our new government pays attention to lotteries and takes the right government forwith global reach reiterating and a strong their professional confidence MSL will become 50 years old. It is a Group of the EL. Describe the mission, During the past year, several initiatives E.What Vlasenko: do you Membership think the infuture a multi- holds steps to effectively regulate the market, all ininfrastructure renewing my mandate to facilitate communicationslast February. good time to reflect on our history, our purpose, and agenda of this working group. were launched to support information and and initiatives across governmental jurisdic- jurisdictionwith respect lottery to isRussia on our respectingagenda. In game categoriesexperiences will start to and grow progress, quickly analyze the last awareness-raising activities, including a I take this opportunity to welcome the fact,the sovereigntyit is one of the ofpriorities. Ukraine? It would be within the next few years. Sports betting E. Vlasenko: The International lottery two newtions and Boardcultures. members who joined the half a century and build the bridges that campaign to promote the importance of easierE.
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