No. 48 | Winter 2017 / 2018

The World Lottery Summit 2018 Imagine the lottery event of the year, in an enchanting southern land, hosted by one of the most important lottery organizations in Latin America. Preparations are well underway for the World Lottery Summit 2018 (WLS 2018) to be held in Buenos Aires, Argentina, from November 18–22. In this issue, we introduce convention host ALEA, provide a glimpse of alluring Buenos Aires, and present selected WLS 2018 keynote speakers. Save the date – we look forward to seeing you there! 2 WLA magazine | No. 48 | Winter 2017 / 2018 Contents

4–5 Interview with the President

6–9 Association news Selected news from the WLA, its members, and the regional associations.

11–21 The World Lottery Summit 2018 (WLS 2018) Preparations for the WLS 2018 are well underway. In this issue, we bring you Buenos AAires,i hhere we come!! a brief preview of the convention and introduce our host for WLS 2018, ALEA. At the top of my agenda this year is preparation for the World Lottery Summit 2018 (WLS 2018), to be held in Buenos Aires, Argentina, 18–22 November. 22–23 Thierry Pujol Clear your agendas and join us for the WLA’s most important biennial event. The WLA pays tribute to former Meeting in Latin America amid Buenos Aires’ historic charms provides an ex- Security and Risk Management traordinary opportunity to celebrate our industry and exchange best practices, Committee Chair, Thierry Pujol. but most of all to prepare for the future: “Gaining the edge in the new world. It takes YOU to tango.” 24–25 The new Mega Millions The US block-game giant Preparing for the future is about more than slogans. I oft en hear that our in- Mega Millions has a new matrix dustry’s challenges are the same as they have always been: Navigating regula- and more prize opportunities. tory constraints and containing the threat of illegal operators; making games ever more appealing, and addressing new audiences; becoming masters of big 26–28 Lottoland challenged data while demonstrating an ability to innovate like start-ups. Th rough the Judicial moves to rein in Lottoland have WLA’s ongoing eff orts to enhance cooperation among the regional lottery as- been made in Australia and the UK. sociations, to develop impactful joint seminars, and to invest in responsibility and integrity, I am reminded daily that we can’t remain complacent. Th e sum- 29–31 CIBELAE XVI mit only comes every two years, but fi ts into a continuous process of exchange CIBELAE’s 16th biennial congress that reminds us of the urgency with which we must serve our communities. was held from October 10 – 13, 2017 in Panama City, Panama. We look back To inspire us to meet our challenges with urgency and determination, the WLS at some of the highlights of CIBELAE’s 2018 program will feature keynote presentations from Nando Parrado, who fa- flagship event. mously survived a plane crash high in the frozen Andes, and Tyler Hamilton, an unlikely champion of integrity, who braved a code of silence in professional 32–34 NASPL 2017 cycling. Th e program will also feature other topics such as cybersecurity and Shift your game: Remaining relevant in the illegal gaming, and have numerous panels for a variety of experiences. North American market was the dominant theme for NASPL’s annual convention, which Th e Argentine government and the city of Buenos Aires, recognizing the global was held from September 13–16, 2017 importance of the lottery industry, have conferred offi cial recognition on WLS in Portland, Oregon. 2018, and local host ALEA is working with the entire national lottery commu- nity to make this a memorable event. Th ere is no better time than November 36–43 Corporate news to see Buenos Aires, when in late spring the antique markets will be bustling News from members of the with activity in historic districts such as San Telmo, La Boca, or Recoleta. A full WLA Contributors Program and other social and accompanying persons program will off er delegates, volunteers, and WLA Associate Members. families plenty of opportunities to delight in the city’s architecture, its football heritage, and tango! Th e location of the WLS 2018 venue, Puerto Madero, is a 44–49 The learning curve modern redesign of the old docking quarter, with restaurants and bars that will News from the WLA training surely bring out the tango dancing gauchos of our community! and education program. For the latest in convention details, updates to the program, and the upcoming registration go to www.worldlotterysummit.org.

Philip A. Springuel WLA Executive Director

WLA magazine | No. 48 | Winter 2017 / 2018 3 INTERVIEW WITH INTERVIEW WITH THE PRESIDENT PRESIDENT

Finding common ground

As we step up to the challenges of an increasingly competitive market, it is more important than ever for State lotteries to develop a collaborative mindset with their stakeholders. Raising awareness of issues such as cybersecurity and illegal online gaming among players and fellow professionals is a critical first step. Going forward, the future success of our industry hinges on finding common ground – the ability to work together constructively with regulators, lawmakers, and each other. WLA President Jean-Luc Moner-Banet looks back on a busy year and puts the latest developments in context as 2018 begins.

Th e WLA is categorically opposed to illegal by WLA members. Th e WLA’s view is Th e latest measures underscore the role gaming. What is the Association doing to get that illegal gaming operators cannot be of regulators in keeping gaming safe. the word out? allowed to evade taxes in jurisdictions In a separate development in the UK, In 2017 the WLA published a position where their products are used by players. the Gambling Commission and the paper on illegal gaming, which is avail- Advertising Standards Authority (ASA) able for anybody to download from the Th ese operators are undermining the recently joined forces to stop online op- WLA website. I encourage members to ability of State lotteries to channel gaming erators encouraging a gambling culture refer to this document whenever they demand into safe, secure environments. among young people by using cartoons need to, and to remind their contacts in and language that appeals in particular the media and the regulatory commu- Th e situation with lottery betting opera- to children. Th e move ties in quite neatly nity that the global trade association of tors is particularly worrisome, as their with the 2017 Lottery Holiday Campaign, State lotteries has a fi rm stance on this practices are clearly fraudulent and erode endorsed by the WLA, which has promot- issue. We have an unwavering commit- the brand value of our members. ed responsible gift giving of lottery games ment to socially responsible gaming that every holiday season for the last 10 years. has helped to shape gaming regulations Is the government crackdown on Lottoland in in the past and hopefully will continue to Australia the start of a broader movement to Above all, the crackdown on sales to chil- inspire policymakers in the future. stamp out lottery betting? dren in the UK shows what can be done Time will tell. Pursuing illegal lottery bet- when regulators work together. Gaming Inside the WLA, we have also set up a ting operators in the courts is one way to laws are being revised in Switzerland too, working group to tackle certain specifi c fi ght the problem but there are others. and I have seen for myself how vital it is aspects of illegal gaming, and in particu- Several countries have already blocked to fi nd common ground between the dif- lar the threat posed by freeloaders off er- their websites. Last year the Swiss parlia- ferent regulatory bodies and interests. It’s ing lottery betting products. ment voted to introduce blocking mea- a long and complicated process. Lotteries sures on foreign online gaming providers, themselves have an important role to play Why is fi ghting illegal gaming important for and other jurisdictions are considering and need to manage their relationships the WLA? similar action. with regulators carefully. Input from the Th e most obvious reason is that illegal regional trade associations, and of course gaming undermines the eff orts of State But one of the most important ways we from the WLA, can help to reinforce the lotteries to regulate the market and raise can fi ght the particular scourge of ille- lotteries’ positions in consultations and funds for good causes. Th ey sell their gal lottery betting is by raising awareness negotiations. products in jurisdictions where they have among the playing public. It is actually no legitimate authority to do so, and have quite easy to be misled: these sites go out One of the WLA’s key achievements has been little regard for the safety and security of of their way to suggest to users that they to set global standards of security and respon- players. Moreover, illegal gaming can be are actually taking part in the offi cial sible gaming. Is your job fi nished now? used as a source of funds for organized games. Th ey sometimes claim to off er Far from it. It is heartening to see that the crime or as a means for laundering money. even better prizes and odds of winning number of WLA-Security Control Standard than the games they are feeding off , but and WLA-Responsible Gaming Frame work In 2016, WLA member lotteries raised they naturally cannot off er the same safe- certifi ed members is growing all the time. over USD 76.1 billion for good causes guards to players and not a penny of their Members have really come to recog nize the worldwide, most of which goes directly profi ts goes to good causes. value of these programs, not just as a PR ex- to education, sport, culture and other ercise but in practical terms as well and as a social causes. Th e rest goes directly to Is this a role for regulators or must lotteries way to sustain their credibility in an evolv- State treasuries in the form of taxes paid themselves take the lead? ing regulatory environment.

4 WLA magazine | No. 48 | Winter 2017 / 2018 INTERVIEW WITH INTERVIEW WITH THE PRESIDENT PRESIDENT

We have developed a framework for con- ic to lotteries. Th e standards in place today on Big Data, Big Communities, and Big tinuous improvement in responsible are the result of a huge investment of time Jackpots, which are three of the most criti- gaming. Working within that framework and eff ort by the members of the Security cal customer-facing issues in our industry and taking regional and cultural diff er- and Risk Management committee. In par- today. We also held a security seminar in ences into account, lottery members need ticular, I would like to acknowledge the Buenos Aires in association with Cibalae to constantly keep up the pressure in all invaluable contribution of Th ierry Pujol, and a joint APLA/WLA seminar about the of their business processes to progress who has stepped down as Chair of the digital transformation in Chengdu, China. from level to level. Even lotteries certi- Committee aft er 10 years in the position, Th e sheer diversity of approaches to these fi ed to the highest level need to repeat- and thank him for his dedication, effi cien- questions in diff erent regions is phenom- edly review their processes to ensure that cy and unshakable good humor! enal, but at the same time, seminar par- changes in the external environment are ticipants invariably fi nd common ground fully refl ected in their responsible gam- Looking back on 2017, what were some of the on the underlying issues. ing practices and processes. We can only WLA’s most important achievements? retain the trust and loyal support of the Members consistently point to the semi- In November, the WLA will be holding its bi- playing public and the regulatory author- nar program as one of the key benefi ts ennial World Lottery Summit (WLS 2018) in ities if we have material ev- Buenos Aires? How are the idence that these practices preparations advancing? and processes are superior Members of the Executive to any other. Committee have made sev- eral trips to Buenos Aires Th e need for continuous to review venues with our improvement and constant hosts ALEA (Asociación de vigilance is just as critical Loterías Estatales Argentinas) is in the fi eld of security. and to move the business pro- Cybersecurity in particu- gram and trade show forward. lar is a never-ending game Buenos Aires is a fascinating of cat and mouse. Cyber city and the line-up of speak- threats evolve constantly ers is particularly inspiring and lottery operators need and diverse. to stay one step ahead at all times. It’s a particular Some of the keynotes have concern for the lottery sec- already confi rmed their par- tor because (a) money is ticipation – including Nando involved (b) some lotteries Parrado, co-author of Miracle may hold personal details in the Andes, and cycling leg- of players in their loyalty end Tyler Hamilton – and I or online registration pro- am sure the WLA will once grams. We should never again deliver on its promise underestimate the grow- of staging the world’s biggest ing sophistication of cyber and best lottery industry me- threats or the determina- ga event! tion of the cyber attack- ers. Th e new release of the Further details will be avail- WLA-SCS includes spe- able on the event website at cifi c provisions on cyber- www.worldlotterysummit. security. Now more than org as they become available. ever before, lottery secu- Registration will open in the rity and IT departments fi rst quarter of 2018, and I need to raise awareness among lottery of WLA membership for their staff . Th e would encourage WLA members to book staff , constantly hone their skills and seminar program is important for a num- early. Don’t miss this unique opportu- work with outside experts to protect ber of reasons. It embodies the commit- nity to share your views and experienc- themselves and their players from online ment to professional development and es, learn about the latest innovations, criminals and troublemakers. knowledge sharing that is one of the hall- meet old friends and new, and support marks of the Association, and in practical the global lottery community as it em- Th e WLA has always been a pioneer in the terms it reinforces the bonds between the braces the challenges and opportunities area of security standards. Building on a WLA and the regional lottery associa- of the digital era. Remember the tagline globally recognized set of IT security stan- tions. Th e marketing seminar in London, for WLS 2018 in Buenos Aires: Gaining dards, we have consistently updated a set organized jointly with EL, really set the the edge in the new world, it takes YOU of measures and provisions that are specif- tone for the whole year with its focus to tango!

WLA magazine | No. 48 | Winter 2017 / 2018 5 ASSOCIATION ASSOCIATION NEWSNEWS

Latest Executive Committee line-up

With Andy Duncan leaving Camelot and Marion Caspers-Merk retiring from Lotto Baden-Württem- berg, two seats on the WLA Executive Committee became vacant last year. Once again, the WLA is proud to announce that they have been filled by senior lottery executives with impressive credentials.

he served as a Board Director of Uthingo, with particular responsibility for health and a position he held until 2005. social security. From 2010 to 2012 she was a national and international policy consultant Having played a key role in Camelot’s suc- to the World Health Organization before be- cessful bid to operate the UK National ing appointed CEO of Staatliche Toto-Lotto Lottery in the third license period, Nigel GmbH Baden-Württermberg and Chair of became Finance and Operations Director the International Committee of the German in 2007. In 2008, working alongside then Toto-Lotto Association in 2013. She became Group CEO Dianne Th ompson, Nigel took a Member of the WLA Executive Committee responsibility for developing Camelot’s over- in 2015. Th e WLA thanks her for the com- all strategy for both the UK and internation- mitment she has shown to the Association Andy Duncan served as the head of the al markets, and drove the sale of Camelot and the worldwide lottery community over UK National Lottery operator for six years to OTPP in 2010. He then became Group the past three years. and was a member of both the WLA and EL CFO and Strategy Director, securing a four- Executive Committees from 2014 to 2017. year extension to Camelot’s current license, Aft er 15 years in the food industry, Andy which now runs until 2023. joined the BBC in 2001 as director of mar- keting and communications, during which During his time at Camelot Global, Nigel time he supervised the launches of BBC was integral in securing the ten-year pri- Th ree and BBC Four, before joining Channel vate management agreement to run the 4 in July 2004. Andy was also President of Illinois Lottery and in the successful bid to Th e UK Advertising Association, a Trustee operate the Irish National Lottery. Th is was of the Media Trust, which he chaired for in addition to negotiating a fi ve-year con- eight years, and a Trustee of Oasis Trust. tract to work with the Arkansas Scholarship For the WLA, it has been a privilege and a Lottery to help it improve its lottery sales, pleasure to work with Andy over the past six as well as launching a new online gaming Andreas Kötter will fi ll the vacancy created years, and his insight on strategic issues has platform for Swiss lottery operator Loterie by the departure of Marion Caspers-Merk. been much appreciated. Romande. As CEO of the leading German lottery op- erator, WestLotto, Andreas Kötter oversees sales and marketing, retail distribution and online/mobile operations, as well as product innovation and responsible gaming. He is also Chairman of Eurojackpot, a pan-Euro- pean lottery that brings together 33 opera- tors from 18 nations.

Born in Münster, Andreas Kötter has pur- sued a career encompassing diff erent in- stitutions such as Stadtsparkasse Münster, WestLB AG and NRW.BANK. Before join- Andy Duncan’s place on the Committee has Marion Caspers-Merk stepped down as ing WestLotto, he was head of division now been fi lled by Nigel Railton, who was CEO of Staatliche Toto-Lotto GmbH Baden- for central product management at NRW. formerly CEO of Camelot Global and was Württemberg this past December, and there- BANK and has more than 25 years of ex- offi cially appointed CEO of both Camelot fore has left the WLA Executive Committee. pertise in the banking sector. He is also a Global and Camelot UK Lotteries in June member of the Initiativkreis Ruhr, one of 2017. Nigel joined Camelot Group plc in A long-standing member of the German par- the leading economic alliances in Germany, 1998 as Financial Controller and in 2003 he liament (from 1990 to 2009), Marion served and the Chamber of Commerce of Northern became Finance Director. At the same time, as Parliamentary Secretary for many years, Westphalia.

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Ukrainian National Lottery – New WLA members Ukraine

Two new Lottery Members have been provisionally admitted to the WLA subject to approval by the WLA General Meeting in Buenos Aires: Th e Ukrainian National Lottery (UNL) is a Ukrainian state-licensed lottery opera- tor conducting lotteries under the super- National Lottery JSC – Bulgaria portunities for the young generation by vision of the Ministry of Finance and the supporting and developing the Bulgarian State Treasury. UNL is a full-range lottery education system. operator issuing all types of lottery games: draw-based, electronic instants, sports- Specifi cally, the projects and programs to based, quick-draw games, and scratch be funded by the National Lottery are re- tickets. lated to ensuring equal access to education, qualifi cation and scholarship programs for Th e primary mission of the company is to Bulgaria’s national lottery operator has a disadvantaged people, sports and physi- raise funds for the State Treasury and for customer base of over two million and pro- cal development of students, and modern- good causes based on the following core vides lottery tickets, lotto games, sports bet- izing the building and technical facilities lottery values: responsible gaming, integ- ting and other games of chance through its of kindergartens, schools and universities. rity, security, and support for society. UNL website, 7777.bg, and through retail outlets Particular emphasis is laid on information started lottery operations in 1997 and since across the country. Th e largest regulated technologies and promoting innovation in the very beginning has established itself as gaming operator in Bulgaria, the national education, as well as international partner- an innovation-driven company. UNL off ers lottery is dedicated to creating new op- ships and staff exchanges. the most popular lotto games in Ukraine.

The Executive Committee has also approved applications for Philippine Gaming associate membership from the following lottery suppliers: Management Corporation

Boldt Gaming S.A. Argentina China Sports Lottery Th e Philippine Gam ing Printing Co. – China Management Corpo- Boldt Gaming is the ration (PGMC) is pres- Argentinian leader Established in 2003, ently involved in the in betting system China Sports Lottery business of leasing on- technology for state Printing (CSLP) is a line lottery equip ment lotteries, including stated-owned enter- and providing soft ware data capture, com- prise committed to support. PGMC is a wholly owned subsid- munication, valida- providing high-quality iary of Berjaya Philippines, Inc., which has tion and processing products and services been listed on the Philippine stock exchange for both online and offl ine operations. Th e to lottery customers. since 1948. company is also an expert in logistics and CSLP is a professional lottery supplier fo- control systems for equipment and oth- cused on full-service printing of instant Beijing ZCSS Culture er supplies, and provides marketing assis- ticket and lottery thermal papers, includ- Diffusion Co., Ltd – China tance and training programs for lottery ing instant game design, manufacturing agents. Boldt Gaming off ers turnkey ser- of instant ticket and thermal papers, ware- vices includ ing data centers, communication housing, distribution, system maintenance, equipment, antennas, online and mobile market operation support and marketing terminals, printers and supply chain man- consultancy. CSLP is committed to social agement. Th e company also provides ad- responsibility and sustainability. Its cer- Based in the Chinese capital, Beijing ZCSS visory services to the Offi cial Institutes of tifi cations include ISO27001, ISO14001, Culture Diff usion has joined the WLA to Provincial Lotteries as well as remote IT ISO18001 and ISO9001 as well as CNAS support its continuing focus on the needs of maintenance and system administration so- accreditation from the China National lottery operators and develop new business lutions. Boldt Gaming was founded in 2007 Accreditation Service for Conformity opportunities in the state-regulated gaming and is based in Buenos Aires. Assessment. entertainment sector.

WLA magazine | No. 48 | Winter 2017 / 2018 7 ASSOCIATION ASSOCIATION NEWSNEWS

New leadership for the WLA Security and Risk Management Committee

Th ierry Pujol stepped down as Chairman he served as Director of Sport Integrity and count on the full support of the Executive of the WLA Security and Risk Management special advisor to the President. Th e WLA Committee in this crucially important role. Committee (SRMC) in October 2017 aft er Executive Committee and the other mem- Driss Hamdoune, General Secretary of La nearly 10 years in the role (see article on bers of the SRMC are sorry to see Th ierry Marocaine des Jeux et des Sports, Morocco, page 22). Th e decision coincides with his go, and wish him all the best for the future. has been appointed the new Vice Chair of retirement from Française des Jeux, where the Committee. Taking his place as Chair of the SRMC will be Carlos Bachmaier, Head of Risk, Continuity and Personal Data Protection Management of SELAE, Spain. Carlos has been serving in his current position at the Spanish lottery for the last 19 years and has been Vice Chair of the SRMC since 2010. He has also been a member of the Security and Integrity Working Group since 2008 and chaired the group since 2015.

His valuable contributions to the SRMC, his long-standing engagement with WLA matters, and above all his extensive profes- sional experience of the various dimen- Thierry Pujol has stepped down after sions of security make Carlos an excellent Spain’s Carlos Bachmaier has been appoint- 10 years at the helm. and worthy successor to Th ierry. He can ed as the new Chair of the SRMC.

The kidnapping of Lennart Käll, Svenska Spel CEO

Svenska Spel CEO Lennart Käll relates the tale of his 2016 security systems and under the constant watch of bodyguards. abduction by disgruntled punters in his new book, Bakbunden. In order to work through the lingering On the morning of April 13, 2016, CEO of manding a ransom of EUR 300,000, alleg- trauma of the attack, Käll set out to write a Svenska Spel Lennart Käll left his home out- edly to cover money lost playing Svenska book on the incident. Th e book, Bakbunden side of Stockholm, Sweden, to go to work. Spel VLTs. If the money was not paid, they “Hands bound behind your back”, recently Aft er driving a very short distance he was were threatening harm to both Käll and made its premiere in Sweden. suddenly stopped by a man pointing a gun his family. straight at him. Th e man approached the Bakbunden portrays the risks of being the car, smashed the driver-side window, and For some unknown reason the kidnappers top manager of a public company, but it dragged Käll from his vehicle. Th e criminal left and with the help of a neighbor, Käll goes much further. Käll also refl ects on bound Käll’s hands behind his back, and could notify the police. Th e culprits were the priorities of being a CEO, on safety threw him on the fl oor of Käll’s car. Th e kid- apprehended shortly thereaft er, but it took precautions, on responsible gaming and nappers – who had planned the abduction more than a year for the perpetrators to be marketing, on the current state of Swedish for some time, thoroughly mapping out the tried, convicted, and put in jail. Th roughout gaming legislation, and on the increasing daily routines of the Käll family – were de- this year, the Käll family lived in fear with incidence of match fi xing. Although the

8 WLA magazine | No. 48 | Winter 2017 / 2018 ASSOCIATION ASSOCIATION NEWSNEWS

book is presently only available in Swedish, very much looking forward to January 2019 Government are approved by the parlia- it covers themes of common interest to when we will see a complete new situation in ment, new gaming legislation will come into WLA members. our business,” Lennart Käll concludes. If the eff ect in Sweden at the beginning of 2019 proposals being presented by the Swedish (see article below). Since Lennart Käll began at Svenska Spel in 2011, responsible gaming has been his top priority. According to Käll, responsible gaming will be even more important in the future, and Svenska Spel wants to stay on top in this respect. “What other operators may look upon as the ceiling, we regard as the fl oor,” said Käll. “We want to have our players registered so we can contact them if something seems to go wrong. We should not off er any bonuses and our marketing should be restricted and responsible,” he continued.

As a former football player, Käll under- stands the temptations that lower-division players face for accepting bribes to rig the outcome of a match. For this reason, Käll believes, bets on such lower-division games should not be allowed. Nor should betting on single events be allowed, such as betting on corners, penalties, and tackling. “I am In his new book, Lennart Käll refl ects on risk and responsibility.

Sweden moves to enact cohesive gaming legislation

With the growing encroachment of illegal Internet gaming operators on the Swedish gaming mar- ket, the government moves to bolster Svenska Spel’s position.

Since the end of the 1990s the gaming mar- Th e new Swedish gaming legislation will be sports betting, but for the moment it seems ket in Sweden has been in a kind of wild very much in line with current Danish and that the lottery will remain in control. With west situation, with a steadily increasing French gaming legislation. Th ere will be a new gaming legislation in place as of January number of illegal Internet operators from license system for selected private operators, 2019, Svenska Spel will be in a better posi- outside the country taking an ever-bigger while casinos, VLTs, and lotteries will remain tion to compete with private operators than share of the turnover. In 2017, it was es- under state control. Foreign sports betting it is today. timated that illegal operators have taken and horse race betting operators may apply around 25% of total sales. Svenska Spel now for a Swedish gaming license, but will be re- Under the proposal, a new Swedish gaming holds only a 42% net market share of the quired to pay a tax of around 18%. All opera- authority, Lotterimyndigheten, will replace Swedish gaming market, ticking down from tors will have to comply with state guidelines the present gaming board. Th ere will be a 43% net market share in 2015. A number on marketing regulations and responsible heavy penalties for illegal gambling and for of parliamentary reports have been issued gaming. All players must be registered and match fi xing, which has increasingly become with ideas on how to remedy this situation age restrictions will need to be in place. problematic. but nothing has happened until now. Finally, the Swedish Government has decided to During preliminary discussions, some par- Lennart Käll, the CEO of Svenska Spel, says present a proposal for new gaming legisla- ties have hinted that Sweden’s state lottery, that he is very happy that something will hap- tion some time this spring. If the proposal Svenska Spel, should be sold. Th e Swedish pen at last. Hopefully the new authority will is accepted the new gaming legislation will football association had earlier expressed control more than 90% of the market when take eff ect as of January 1, 2019. interest in running Svenska Spel’s pools and the new legislation takes eff ect next year.

WLA magazine | No. 48 | Winter 2017 / 2018 9 ASSOCIATION ASSOCIATION BUSINESSBUSINESS

WORLD LOTTERY SUMMIT 2018 GAINING THE EDGE IN THE NEW WORLD. IT TAKES YOU TO TANGO.

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

For the latest convention updates, please go to the official website at: www.worldlotterysummit.org 10 WLA magazine | No. 48 | Winter 2017 / 2018 ASSOCIATION ASSOCIATION BUSINESSBUSINESS

World Lottery Summit 2018 in Buenos Aires Gaining the edge in the new world November 18 – 22, 2018 Photo: istockphoto.com, uschools

Online registration is about to open for November’s World Lottery Summit 2018 (WLS 2018) in beautiful Buenos Aires, Argentina. Organized by the WLA every two years and hosted each time by a member lottery from a different region, the week-long convention and trade show is the high point in the global lot- tery industry calendar.

Gaining the edge in the new world – that’s In the following pages, we off er you a the theme for the next WLA World Lottery chance to meet our hosts and discover or Summit. It will be a fantastic opportunity rediscover the enchanting city of Buenos for lottery professionals to gain fresh per- Aires. ALEA President Alfredo Monaco spectives, share experiences and pitch new speaks about the signifi cance of this ideas, learn about the latest developments world-class event for lotteries in Argentina, and technologies, and connect with thought Latin America and beyond. And we intro- leaders and decision-makers from all over duce some of the personalities in the out- the world. standing line-up of keynote speakers.

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Spotlight on Argentina and Buenos Aires It takes YOU to tango! Photo: istockphoto.com, dolphinphoto

From the moment delegates and guests land in Argentina, they will discover a country unlike any other – a nation immortalized in modern music and one of the powerhouses of South America’s economy. The country is one of the most stable economies in Latin America, and a founding member of inter na tional organiza- tions including the United Nations, the World Trade Organiza tion, and the World Bank. The capital Buenos Aires is home to three million people and one of Latin America’s leading cultural centers. From world-class restaurants to a vibrant music scene, Buenos Aires has something for everybody – and all on a human scale.

12 WLA magazine | No. 48 | Winter 2017 / 2018 ASSOCIATION ASSOCIATION BUSINESSBUSINESS Photo: istockphoto.com, SamyStClair

Th e second-largest country in South Amer- i ca, Argentina shares its entire western border with Chile, and, along with this neighbor, lays claim to Tierra del Fuego, one of the world’s best-known and south- ernmost tourist destinations. With a history that stretches back to the Paleolithic era, Argentina off ers visitors the opportunity to experience the breadth of human history, all in one country.

Quality of life Buenos Aires, the capital of Argentina, is a dynamic, multicultural city set on the southeast coast of the Río de la Plata – so wide that many travelers mistake it for the ocean. Buenos Aires has a mild climate and it will be mid-spring at the time of the con- gress. Th e green and wet natural landscape can be enjoyed either within the city and its surroundings in the many parks, or in the very large Costanera Sur Ecological Reserve located fi ve minutes away from downtown. However, many tourists visit Buenos Aires for other attractions. Th e city, with three million inhabitants, has 48 neighborhoods to visit. In each one there are bars, public squares, football and other sport stadiums, temples, milongas (organized events where people dance tango) and theaters, but the areas most visited by national and foreign tourists are Abasto, Puerto Madero, San

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Telmo, Recoleta, Palermo, La Boca, and lunch and dinner: from typical local dishes Corrientes Avenue in the heart of like asado (barbecue), to pizza, Buenos Aires’ the city. food culture refl ects centuries of European immigration. Football is a passion for Argen- According to a 2016 survey tines and many fans plan their trips to coin- conducted by Mercer Human cide with the national classic match between Resource Consult ing, Buenos Boca Juniors and River Plate. Aires is the second-ranking city in Latin America, af- Locals and visitors alike are attracted to ter Uruguay’s capital Monte- Buenos Aires’ shopping scene, with fairs, video, for quality of life. As one of open-sky commercial circuits and malls. the main cultural centers of the South Th e independent scene – alternative the- American continent, the city is consid- ater performances and movies but also ered fourth in the world theater scene, musicians and designers – is also a setting having more theaters than New York City. for international meetings and festivals. Buenos Aires’ traditional and modern mu- In Buenos Aires, there are fairs and cul- seums are famous. Tango music and dance tural events all year round. To get around can be found at the most sophisticated the city, there are multiple transportation tango houses or the most popular neigh- choices: six subway lines, more than 100 borhood milongas. colectivos (buses) lines, and railways. Taxis and remises are a common means of trans- With more than 3,000 res tau- port, being safe and aff ordable compared to rants, eating in Buenos other cities. Aires is simply a question about Travelers can take a walk around the city on choosing where their own, or with specialized guides; they and what can enjoy Buenos Aires over months or to have they can discover its most important places for and amenities in a few days. But beware, once being bitten by the Buenos Aires bug, many visitors go home with a strong desire to return.

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Introducing ALEA Meet the hosts

Behind the scenes, the WLA and ALEA (Asociación de Loterías, Quinielas y Casinos Estatales de Argentina), have been working hard to ensure that WLS 2018 lives up to the expectations of the world lottery community and meets the standards of excellence set by previous World Lottery Summits. WLA officers and staff have visited the venues and met with ALEA’s organizing team on several occasions, and are continuing to provide hands-on support to ensure the success of this flagship event. But who exactly is ALEA?

Th e Republic of Argentina is a federation arate organization that off ers lottery games Structurally, ALEA comprises six advisory of 23 provinces plus the autonomous city of on a nationwide basis. (source: WLA Global commissions that deal with legal matters, Buenos Aires. Each of these jurisdictions has Lottery Data Compendium). administrative aff airs, marketing, train- a body that regulates, administers, and con- ing, IT, and international relations. It has trols games of chance within its respective A non-profi t organization founded in 1970, two coordinating groups that work on the territory. ALEA brings these organizations ALEA has provided its members with training prevention of money laundering and so- together under one roof. Based on the com- and advice on a broad range of subjects for cial responsibility, and two further work- bined revenues of its members, ALEA is one 47 years now. Focusing on the control, over- ing groups that concentrate on statistics of the world’s larger lottery organizations, sight, modernization, and optimization of and communication. Th e biannual ALEA with total sales on a par with the California gaming resources, ALEA is positioned as the Magazine has been distributed to members State Lottery or CAIXA Economica Federal country’s premier advisory and training entity since 2011. in Brazil. In 2017, for example, gaming rev- and is supported in its role by the cooperation enues totaled USD 5.1 billion, of which USD and data sharing that it promotes among its One of the core initiatives of the associa- 810 million came from the national lottery members. Th e association aims to integrate all tion is the preparation of the Gaming Map Loteria Nacional Sociedad del Estado, a sep- regulators nationally under principles of so- of Argentina. Th is not only quantifi es the cial responsibility, driven industry’s impact on games of chance both by the common denomi- in every jurisdiction and nationally, but also nator of raising funds for provides statistical data on the redistribution good causes. As well as of money intended for welfare to help pro- its 24 regular members, vide a stronger basis for determining how 26 suppliers to the gam- this activity should be disseminated within ing industry are current- the entire society. ly associate members of ALEA. Headquartered in the city of Córdoba, the association has had a second offi ce in Then and now: the ALEA Buenos Aires since 2010. CIBELAE opened Assembly in the 1970s a sub-offi ce at ALEA’s Buenos Aires prem- (left) and today (below). ises in 2013.

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Interview with Alfredo Monaco Welcome to Argentina!

Alfredo Monaco is the President of ALEA, the host organization for the next World Lottery Summit. We asked him what he hopes the event will achieve and where Argentina fits into the world lottery picture.

As the president of ALEA, what is your vision with the WLA to make Buenos Aires WLS 2018 will undoubtedly be a world- and your goal for this important event? shine in the spotlight this November. Th e class event. Th is will provide an unparal- As I told WLA President Jean-Luc government of Argentina will soon issue leled opportunity to learn about the latest Moner-Banet on his most recent visit to a declaration claiming WLS 2018 as an trends, to network with international Argentina, it is a great honor for ALEA to event of interest, and ALEA is proud to peers, and enjoy four unforgettable days have been selected by the WLA to host be a part of the experience. With lottery in Buenos Aires. WLS 2018. Th e event will bring prestige professionals from around the globe, the to our association and to Argentina. I most important international suppliers to Why do you believe that Argentina is the right would like to thank Jean-Luc and the the lottery industry, and experts from venue for WLS 2018? WLA for making this possible. We are other areas that are relevant to the gam- For two reasons: tradition and diversity. looking forward to working together ing sector converging on Buenos Aires, Th e government of Argentina has a long tradition of gaming regulation dating back to 1893. Since its inception in 1970, ALEA and its members have encouraged the nation to protect the integrity of our games of chance as a source of revenue for funding good causes. Th e decision to stage WLS 2018 in Buenos Aires is a source of pride for the Argentinian lot- tery community because it honors that tradition and endorses a long-standing commitment to the values of continuous improvement, progress, and integrity.

Second, Argentina’s rich cultural diversity and its wealth of tourist attractions make it an enchanting place to visit. Th e conven- tion will provide delegates the opportunity to see Argentina in all its splendor. As the promotional video for WLS 2018 says, “Th ose who visit Iguazu Falls, Valle de la Luna, Perito Moreno Glacier, and Bariloche, will remember Argentina forever.”

How do you view ALEA’s role in the world lot- tery community? ALEA has been a member of the WLA since 1999 and was a member of AILE

ALEA President Alfredo Monaco has been a member of the WLA Executive Committee since 2016.

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“Since ALEA members signed the Bariloche Declaration, lawmakers have classified illegal gaming as a criminal offence in Argentina, showing just how important it is for our industry to project a strong, unified position on critical issues.” Alfredo Monaco

(Association Internationale des Loteries Looking forward, working to achieve the that classifi es illegal gaming as a criminal d’État) before the WLA was founded. I objectives of CIBELAE’s strategic plan off ence – showing just how important it is am currently a member of the WLA will be intense. ALEA is involved in prac- for our industry to project a strong, uni- Executive Committee. tically all of CIBELAE’s working groups fi ed position on critical issues. supporting the fundamental guidelines of Being part of the world lottery commu- the corporation. Legislation on online gaming is still pend- nity has been very enriching for ALEA, ing in Argentina. Under the Argen tini an especially to share knowledge on new At home, we collect extensive data, not constitution, gaming legislation is enacted technologies, gaming regulation, respon- only on lottery products, but across the at the provincial level and online gam- sible gaming, combating illegal gaming, full spectrum of the Argentinian gaming bling is currently governed by the same and other issued of universal interest. market. Th is information is naturally legislation that governs land-based gam- shared with the world lottery community. ing. In view of the accessibility of online Attending a meeting of the WLA Exec- gambling and its continued proliferation, utive Committee this past March in ALEA also provides training opportuni- ALEA considers this inadequate and is Geneva, Switzerland, I participated in a ties for the 11,000 employees of lotteries continuing to work with members to en- discussion on illegal gaming. I shared throughout Argentina. We recently sure that the issue is properly addressed. ALEA’s experiences in dealing with illegal launched the fi rst course in management gaming in Argentina, and was able to off er and administration of games of chance. Th e reality is that new technologies are suggestions on how illegal gaming could Th is advanced diploma course was oft en unscrupulously exploited for profi t. be fought on a global scale. Regarding cor- launched in conjunction with the Univer- It is therefore ALEA’s obligation to work porate social responsibility, I put forth the s i dad Provincial de la Administración diligently on this front. While some juris- proposition that the WLA recognize Pública de Salta. It is provided through an dictions already have platforms in place International Responsible Gaming Day, e-learning platform and helps to establish for mobile and online gaming services, and encouraged the WLA to sign the UN a common base of knowledge for the 24 others are still in a period of testing. Global Compact on human rights, labor, lotteries of Argentina. Th ere are currently environment and anti-corruption. I also 80 individuals participating in the intro- At ALEA, we encourage and promote the emphasized the need for a common com- ductory course, and we are continuing to sharing of knowledge and experience, munication policy to strengthen the image augment this unique program with new both locally and internationally, so that of the lottery sector internationally. learning modules. each of Argentina’s 24 jurisdictions will fi nd the most appropriate way to protect At the regional level, ALEA has been an In addition to courses and seminars, players online by off ering safe, transpar- active member of CIBELAE since 1989, ALEA also holds discussion groups on ent and entertaining games that generate serving as its president or vice-president themes ranging from illegal gaming to funds for good causes. on numerous occasions. At its most recent online gaming and the prevention of convention in Panama, CIBELAE elected a gaming addiction. How are the WLA’s fl agship standards on new governing body. Luis Gama, Director Responsible Gaming and Security viewed by of the Dirección de Loterías y Quinielas, What steps has ALEA taken to combat illegal the members of ALEA? Uruguay, was unanimously re-elected gaming in Argentina? We view WLA Responsible Gaming and President, while ALEA was re-elected trea- In November 2016, the members of ALEA Security certifi cation as highly important. surer. ALEA proudly views this as a vote of authorized the Bariloche Declaration, Both certifi cations bring with them a confi dence and will continue to assume which recognizes the criminal nature of high level of international recognition. this task with dedication and professional- illegal gaming, and we met with national At the same time, they motivate member ism – especially considering the fact that elected offi cials to enlist their support in lotteries to remain on a course of contin- ALEA and CIBELAE have shared a com- this important fi ght. Legis lation has now uous improvement. We actively encour- mon offi ce in Buenos Aires since 2013. been enacted by the national government age the members of ALEA to seek

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certifi cation to both of the WLA’s fl agship Gambling Regulation (IPRA). A sixth their member organizations seeking to standards. lottery, Lotería de Córdoba, has achieved achieve certifi cation to these standards. WLA-RGF Level 3 certifi cation. By seek- Th is past August, fi ve of ALEA’s member ing WLA-RGF certifi cation, these six lot- Which other ALEA initiatives are of relevance lotteries received WLA-RGF Level 1 cer- teries have expressed their commitment to the broader world lottery community? tifi cation – Entre Rios Institute for Finan- to continuous improvement in the area of In this world of fast-changing technolo- cial Assistance (IAFAS), Formosa Welfare responsible gaming. gy, the needs of lotteries are many and Institute (IAS), Neuquen Provincial varied. Just like any other organization, Gaming Institute (IJAN), Rio Negro We believe that the regional associations lotteries need to continually update and Lottery for Social Action Work, and play a signifi cant role as facilitator – transform their processes. It is also es- Tierra del Fuego Provincial Institute of operationally as well as fi nancially – for sential that they have a team of profes- sionals that are capable of bringing forth these transformations, whether they are Having our voice heard big or small.

ALEA member lotteries are excited that their country is about to host this To address this need for professional de- world-class industry event. In particular, they see it as a unique opportunity velopment and promote best practice, to raise the profile of public gaming in Argentina, to remind policymakers ALEA promotes specialized training in that lotteries throughout the world share many of the same concerns, and the areas of human resources and applied to work together to promote the strong institutional framework needed to management and control processes, and gain the edge in the new world. we provide our members with the tools to properly implement these trainings. “Hosting WLS 2018 is a big opportunity “We wel- to heighten the visibility of the state lot- come this op- ALEA is also driving the creation of in- tery sector in Argentina and strengthen portunity to dustry-specifi c quality management stan- our institu- understand dards. In October 2017, we signed a tions, both how funds framework cooperation agreement with of which are from official gaming are used in other the Argentinian Institute of Standard- critical fac- regions. We are looking forward to this ization and Certifi cation (IRAM) to de- tors in an unique chance to share experiences, re- velop a manual that establishes quality industry that still has plenty of opponents flect on common issues, challenges, and management benchmarks for gaming in our country. WLS 2018 will open up guidelines in order to improve the whole processes for the provincial lotteries and Argentina to the world and provide a industry’s outlook for the future.” casinos who are members of ALEA. Th e unique opportunity to share international Miguel Travella, technical teams of IRAM and ALEA re- experiences on the issues we all face.” President, cently initiated this collaborative eff ort, Instituto Silvio O. Vivas, which is expected to last around fi ve de Seguridad President, Social de months. At their fi rst meeting, the initial Instituto de La Pampa-Dafas scope of the new quality standard was es- Ayuda Financiera a La Acción Social tablished. Th e prevention of money laun- de Entre Ríos dering, responsible gaming measures, “Sharing experiences betting, drawings, prize payout, and cus- with lotteries from tomer service were among the items in- “This will be a unique opportunity to re- all over the world cluded in the scope. Th is initiative aims mind policymakers and the playing public will help us to es- to strengthen the professional knowledge that the whole tablish the firm prin- of ALEA’s offi cials in the areas outlined in world shares ciples needed to solve the big problems the standard and prepare their individual our commit- faced by our industry, such as illegal op- organizations for certifi cation to the stan- ment to safe, erators, gambling addiction, and the lack dard, which will apply to both govern- reliable, high- of regulation in online gaming. We also ment entities and to private companies in quality gaming opportunities and the live in a beautiful country – and we hope the gaming sector. responsibility of nation states in gaming visitors will have happy memories of their control and regulation.” stay in Argentina and our hospitality!” Ultimately, we aim to off er gaming regu- Roberto A. Lopez, Luis Ayestaran, lators in our country the necessary tools President, President, to enhance their performance, helping Lotería para Obras Lotería de member organizations to off er their de Acción Social Río Negro, games effi ciently and transparently with- de la Provincia and Treasurer de Santa Cruz of ALEA in a safe and healthy framework and in turn to guarantee the provision of funds to support good causes in Argentina.

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Furthermore, in addition to our tra- learning experience, in the form of itin- ditional training schedule, this year we erant on-site workshops combining are off ering advanced studies through theoret ical and hands-on components, the e-learning system I mentioned and we provided three courses in the previously. We are also coordinating a fi rst year, organized by diff erent lottery second program aimed at offi cers and orga nizations around the country. Th ese employees of lottery institutes and other included a workshop on results-based/ provincial bodies. Th is joint initiative process-based management, another on with the National Institute of Public strategic human resources management Adminis tration is being conducted un- in government organizations, and a der the federal public policy program. third on communications and network It provides an extremely enriching strategy.

Looking for inspiration?

One of the highlights of the WLA’s biennial convention is its business program and its list of exciting and inspirational plenary speakers. Here, we introduce some of the keynote speakers that have been selected for WLS 2018, with a brief biography of each and a taste of the topics they intend to cover.

Nando and teammate Roberto Canessa walked for Am Alive: Surviving the Andes Plane Crash, Parrado 10 days to fi nd their salvation. Th eir story which continues to air around the globe. of courage, teamwork, determination and Author, leadership, experienced at a level few have Since this experience, Nando has become CEO, known, will leave you with a heightened a successful businessman and television television awareness of the value of human life. producer. He is CEO of four companies presenter in Uruguay. He also hosts several popular and survivor Soon aft er the rescue of the 16 survivors, television programs in Uruguay, including Nando worked with Piers Paul Read, the shows on nature, public aff airs, autos, and author chosen by the survivors, to pen the travel. He is also a highly sought-aft er speak- best-selling book Alive. Twenty years later, er on the international lecture circuit. Nando served as technical advisor to the His is a story that many will recognize, but Frank Marshall/Kathleen Kennedy produc- In his spare time, Nando enjoys racing mo- few have an opportunity to hear fi rst-hand. tion of the fi lm of the same name starring torcycles, sports cars, stock cars, and water- Nando Parrado recounts the extraordinary Ethan Hawke as Nando. Th e success of the craft . He has many awards, including the tale of how he and 15 of his teammates sur- fi lm quickly prompted requests for Nando to European Team Cup for stock car racing vived for 72 brutal days aft er their plane speak around the world about the “miracle and the Open Watercraft Championship in crashed into the frozen Andes Mountains in the Andes” and he began doing so on a Punta Del Este, Uruguay. In 1991, Nando more than 40 years ago. It remains one of the very limited basis in 1995. Requests for pre- was part of a team of drivers who raced paramount survival stories of all time. sentations continue to exceed the number across the Sahara in stock model Peugeots. that he is able to accept due to business and Th e trip, from Morocco to Tunisia, covered From the time the plane crashed on Octo- family obligations. 8,500 km and took 28 days. ber 13, 1972 until their rescue on December 22, Nando and his fellow Uruguayan rugby Nando is the author of the New York Times A native of Montevideo, Uruguay, Nando teammates were forced to cross both physi- bestseller Miracle in the Andes: 72 Days on the graduated from Stella Maris College run by cal and mental boundaries. Aft er waking Mountain and My Long Trek Home, a major the Irish Christian Brothers. He also partici- from a concussion, only to learn that his release from Crown books, which tells the pated in a study abroad in the United States mother had died on impact and his sister story of the Andes ordeal from an intensely that allowed him to attend high school in was near death, Nando became obsessed personal perspective. In 2010, Nando was fea- Ann Arbor, Michigan. Nando speaks fi ve with surviving and emerged a hero aft er he tured in the History Channel documentary I languages and travels extensively.

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In his keynote address with the same title as book, Jane makes the case that the gamer Tyler Hamilton was once one of the world’s his best-selling book, Miracle in the Andes, spirit – an attitude of fun, dedicated, collec- top-ranked cyclists – a fi erce competitor re- Nando will retell his harrowing experience tive problem-solving – is our greatest asset nowned among his peers for his uncanny on the Andes 46 years ago. as we face the social, economic, and envi- endurance and epic tolerance for pain. He ronmental problems of the 21st century. started his career with the US Postal Service team in the 1990s, and quickly rose to be- Jane herself is a specialist in this fi eld, a de- come Lance Armstrong’s most trusted lieu- Jane signer of alternate reality games, where a re- tenant, and a member of his inner circle. For McGonigal al-life activity is re-framed as a game. Players the fi rst three of Armstrong’s record seven of Jane’s games face challenges as serious as Tour de France victories, Hamilton was by World-renowned surviving peak oil or establishing local sus- Armstrong’s side, clearing his way. But just game designer, tainable businesses. And they face them weeks aft er Hamilton reached his own per- Inventor of Super- with courage and creativity, inspired by their sonal pinnacle – winning the gold medal Better. Author gameful state of mind. Persistence, energy, at the 2004 Olympics – his career came to a of the New York collaborative creativity, a sense of purpose in sudden end: he was found guilty of doping Times bestsellers, hard work – games unlock all of these pow- and exiled from the sport. SuperBetter and erful attitudes. And, most importantly of all, Reality Is Broken. they restore to contemporary life the kind of Denying the use of performance-enhancing heroism and communal striving that most of drugs in the years that followed, Hamilton Jane McGonigal is today’s leading speaker us struggle so hard to fi nd. was forced to come to terms with his past on the engage ment economy and the appli- in 2010 when the Federal Government cation of game design to the real world, ref- launched an investigation into systemat- erencing lessons learned through her work “We can use the same ic doping on the US Postal Service team. creating games for organizations such as Hamilton was subpoenaed to testify before a strengths we display the World Bank, the Olympic Games, the grand jury and, for the fi rst time, broke the American Heart Association, the New York playing games to code of silence that had protected the sport’s Public Library, and many more. overcome business and hard truth for so long. His testimony chron- icled a shocking culture of performance-en- individual challenges.” Jane is notable for bringing gaming to the hancing drug use encouraged and aided by healthcare space. Her best-known project Jane McGonigal team doctors, managers and coaches, and a is SuperBetter, a mobile app and web-based dark world in which the sport’s top perform- game that helps individuals challenge per- ers lived. sonal health challenges (depression, anxi- She serves as the Director of Game Research ety, chronic pain, stress reduction), and & Development with the Institute for the In 2012, Hamilton released his memoir, get support from their “allies” – real-life Future in Palo Alto, California. Her recent Th e Secret Race: Inside the Hidden World of friends and family. With more than 400,000 projects include a Games for Healthcare the Tour de France: Doping, Cover-ups, and players, it is currently under study at OSU initiative with IFTF and the White House, Winning at All Costs, a riveting journey in- Medical Center and the University of as well as Paths Out of Poverty, a crowd- to the heart of a never-before-seen world, Pennsylvania. Jane’s other healthcare games sourcing game by IFTF for the Rockefeller the stark choices that went along with his include collaborations with the American Foundation. decision to compete at a world-class level, Heart Association and the Myelin Repair and his complicated relationship with Lance Foundation. Aft er Jane’s acclaimed keynote address at Armstrong. Th e book became an instant WLS 2014 in Rome, Italy, she has been invit- New York Times bestseller and was the re- Her book, SuperBetter: A Revolutionary ed back to give us an update on the state of cipient of the prestigious William Hill Sports Approach to Getting Stronger, Happier, Braver game design and gamifi cation in 2018. Book of the Year Award. and More Resilient, which debuted at #7 on the New York Times Advice bestseller list, Freed from the burden of hiding the truth reveals a decade’s worth of scientifi c research and being able to tell a story that, only a into the ways all games change how we re- Tyler few short years ago, would have seemed spond to stress, challenge, and pain. She Hamilton unimaginable, his story is the example of shares stories and data from players who how culture can drive behavior – not just in have followed the SuperBetter rules to get Former sports, but in business and in life – and how stronger, happier, and braver in the face of professional values can be easily compromised as a con- depression, anxiety, illness, and injury. cyclist and sequence. He is also a testament to the trans- New York Times formational power of the truth. Her previous book, Reality Is Broken: How best-selling Games Make Us Better and How Th ey Can author Hamilton raced professionally from 1995 Change the World, is a New York Times best- to 2008 and now runs his own training seller. In this engaging, forward-thinking business for cyclists of all levels, Tyler

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Hamilton Training LLC. He currently lives the position of Head of the then newly cre- ations, national Olympic committees, ath- in Missoula, Montana. ated Integrity Betting Intelligence System letes, and their entourages. (IBIS) in 2013. IBIS establishes a link be- Tyler will address WLS 2018 participants tween the Olympic movement, players in Prior to joining the International Olympic about the scourge of competition manipu- the sports betting world, and various law Committee, Friedrich had already been lation and what can be done to prevent it. enforcement entities. Th rough its prag- drawn to the fi eld of sports and betting, matic approach, IBIS enables communica- working both for sports organizations (two tion between all stakeholders in a lean and years as manager of competition analy- direct way, with the aim of identifying and sis at FIFA’s Early Warning System, which Friedrich therefore safeguarding sports events from aims to spot patterns suggesting match fi x- Martens match manipulation connected to sports ing) and the sports betting industry (for betting. a German gaming company and, more Head of Integrity specifi cally, their sports betting company, Betting Intelligence Friedrich was appointed as Head of the Cashpoint). System (IBIS), Olympic Movement Unit on the Prevention International of the Manipulation of Competitions in In his keynote address, Friedrich will pres- Olympic early 2017, strengthening and streamlining ent the IOC’s concept for ensuring ethical Committee all IOC initiatives under the Th ree Pillar conduct and preventing manipulation dur- Strategy (regulations and legislation, edu- ing Olympic competitions. cation and awareness raising, intelligence Following various initiatives taken by the and investigations), including IBIS, and For further details and the latest developments IOC to combat illegal and irregular bet- further engaging all Olympic Movement on WLS 2018, please visit the offi cial conven- ting, Friedrich Martens was appointed to stakeholders, including international feder- tion website at www.worldlotterysummit.org.

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To protect and to serve: thank you, Thierry Pujol!

Thierry Pujol’s decision to stand down as Chair of the Security and Risk Management Committee marks a decade of steady progress for the lottery industry’s global security control standard and also a palpable change in lotteries’ approach to the underlying issues. Increasing numbers of lotteries and suppliers have adopted the standard, but during his 10 years at the helm, Thierry has above all been part of a fundamental shift in attitudes as lotteries recognize the mission-critical nature of security and integrity in gaming markets today.

Hardly a day goes by without the threat of a the standard, compared with just 1 in rity that brings the strategic importance security breach aff ecting our organizations, 2008. And with 22 assessment service en- of these issues into sharp perspective and institutions and the private lives of ordinary tities and more than 60 approved auditors repositions State lotteries as champions of citizens. In our increasingly connected and around the world, the WLA certifi cation safe, secure, responsible gaming entertain- open world, it has become almost mundane procedure is readily accessible to lotteries ment. to advocate a rigorous approach to secu- in every region. rity and risk management. But this has not The importance of trust always been the case. When Th ierry Pujol Crown jewels Th anks to Th ierry’s expertise, leadership, took over as Chair of the WLA’s Security As guardians of what many people consider and gentle powers of persuasion, more and and Risk Management Committee (SRMC) the crown jewels of the WLA, Th ierry Pujol more lotteries around the world have come exactly 10 years ago, the association al- and his fellow committee members have in to recognize the operational benefi ts of em- ready had developed a set of lottery-specifi c some ways rebranded the Security Control bedding security and integrity within their security controls refl ecting industry best Standards to refocus attention on their un- processes and corporate culture. Th ey have practice. However, fewer than 30 member derlying value proposition. Today, a grow- come to view security compliance as an op- lotteries had incorporated these measures ing number of lotteries have bought into the portunity to excel, rather than merely an into their business processes, and some re- standard, no longer simply checking boxes obligation or a regulatory constraint. More gions of the world were not represented at as part of a regulatory compliance exercise than ever before, lotteries have come to all. Aft er ten years with Th ierry Pujol as but embracing WLA certifi cation as a hall- understand that security and integrity are Chair, the SRMC has taken the world lottery mark of the professional integrity of their key to their ability to build and retain the industry to new level of maturity in terms of organizations at every level. trust of the playing public – and therefore security and risk management. critical components of their brand equity. Holding the committee together for nearly Th ierry’s legacy to the lottery community Th e number of certifi ed lotteries has more 10 years, Th ierry has worked tirelessly to lies here. It is no coincidence that State lot- than doubled since 2008. Over the same steer the industry in this new direction. As tery organizations, by demonstrating mea- period, certifi cation has been opened up well as coordinating the latest release of the surable performance on matters of security to associate members, with 18 provid- security control standard (WLA-SCS:2016), and integrity, are successfully consolidat- ers now certifi ed to the latest release of he promoted a vision of security and integ- ing their thought leadership role within

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their own jurisdictions and at a regional or global level.

Working collegially with members of the SRMC from lotteries all over the world, Th ierry has been the WLA’s greatest am- bassador on security, risk management and integrity. His remarkable knowledge and professionalism have been invaluable assets for the lottery community, and his person- al style – a combination of modesty, good humor and attention to detail – has been warmly appreciated. Th e WLA thanks him for his unfl agging enthusiasm, his kindness, and a career-long dedication to service that has made us all stronger.

Bio Th ierry Pujol graduated as an engineer from France’s prestigious Saint-Cyr military acad- emy and served the national defense and intelligence community for many years. Returning to corporate life, he received an MBA from HEC Paris in 2000 and joined La Française des Jeux in 2005 as Director of Risk Management and Security and a member of the managing board. In 2015, the French lottery appointed him Director of Sport Integrity and Special Advisor to the President.

He served as chairman of the EL’s Public Order and Security Working Group from 2010 until 2015, Chair of the WLA’s Security and Risk Management Committee (SRMC) from 2008 to 2017, and Vice-President of the Global Lottery Monitoring System from 2015 to 2017. In 2015, he was inducted into the PGRI Lottery Industry Hall of Fame.

Th ierry Pujol retired from La Française des Jeux in October 2017 and stood down as Chair of the SRMC at the same time. He Thierry Pujol, who has stood down as Chair of the WLA Security and Risk Management continues to serve the international lottery Committee after 10 years of loyal service. community in a consultative capacity.

WLA magazine | No. 48 | Winter 2017 / 2018 23 INSIGHT INSIGHTINSIGHT

Mega Millions ups the ante

Mega Millions, one of two big national jackpot games in the United States, relaunched as a USD 2 game with a new matrix at the end of October, adding an industry-first option called “Just the Jackpot”.

Lotto games are their own worst enemy. Gordon Medenica, the Director of the Th e bigger the jackpots get, the harder it is Mary land Lottery and Gaming Control to generate interest in the games at lower Agency who was named lead director of prize levels. In the United States, Powerball the Mega Millions consortium in early raised the bar with a world record USD 1.58 December, talked about the changes. “Part billion jackpot in January 2016; consumer of the challenge in product development is expectations for jackpots have never been timing: when is the right time to introduce the same. changes that can drive revenue growth? Powerball clearly benefi tted from changes Mega Millions, a game managed by a consor- made several years ago, and all of us, the tium of 11 lotteries and sold by all American Mega Millions states included, enjoyed that lotteries, had set the previous record jackpot success. Th e timing was right to tweak of USD 656 million in March 2012. Since Mega Millions to get players excited about then, it had only surpassed USD 500 million our game again.” twice, despite a matrix change in October 2013 designed to build bigger jackpots. As Th erefore, a new game matrix went into ef- a result, the 15-year-old game was ready for fect beginning October 28, 2017, and the another refresh in 2017. fi rst drawing under the new rules was held

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October 31. Th e changes are designed to inforce the notion that the issue of jackpot weeks with the new game matrix, four sec- create bigger average jackpots – and faster fatigue among players is, in essence, “media ond prizes included the Megaplier, result- growing jackpots – with the bonus of better fatigue.” In fact, jackpots that once garnered ing in two prizes of USD 4 million and two odds of winning the USD 1 million second media interest at much lower levels no lon- of USD 2 million. Th at compares quite fa- prize. In addition, most of the game’s other ger appeal to the media, and as a result, we vorably to the previous 10 months of 2017, prize levels have been increased from pre- receive less free publicity for higher jackpots when a total of eight second prizes included vious levels, and the starting jackpot is now than we once enjoyed.” the Megaplier. USD 40 million, up from USD 15 million. Good causes benefi t A brand-new option off ered with the new Th e new Mega Millions is a 5-of-70 plus Of course, all lottery games are designed Mega Millions is a unique “Just the Jackpot” 1-of-25 matrix, which means that the odds to raise money for good causes, and the wager type. For USD 3, a player will receive of winning the jackpot will lengthen to changes to Mega Millions designed to in- two sets of numbers for two chances to win 1 in 302,575,350. Th at’s up from the 1 in crease sales will necessarily increase net the jackpot. Th ese Just the Jackpot tickets 258,890,850 odds of the previous game, revenues as well. Lotto games typically are not eligible for any other prize levels. which off ered a 5-of-75 plus 1-of-15 matrix. produce more net revenue as a percent- Th is industry-fi rst option is designed to ap- Th e USD 1 million second prize odds, how- age of sales than other lottery products, so peal to players who are only interested in ever, improve to 1 in 12,607,306, so the new it’s critically important that these games the jackpot prize, especially the occasional game should live up to the promise of more remain healthy. And with bigger jackpots or infrequent players who come in during millionaires. Th e overall chance of winning expected, more casual and infrequent play- times of high jackpots. any prize is 1 in 24. ers will participate as well. As a result, these revenues will come from an ever-expand- Each participating lottery chooses whether To support these new value propositions, ing pool of players attracted by the size of or not to off er the “Just the Jackpot” op- the price of the game has increased to the jackpots. tion – 18 lotteries off ered the option to start USD 2, matching the price of Powerball. with. Th ey include the District of Columbia, Although the two national American games Game options Georgia, Idaho, Indiana, Kansas, Kentucky, are now the same price, the overall goal is to In most states, Mega Millions also off ers Nebraska, New Jersey, New Mexico, New have each game capable of developing the a multiplier option called the Megaplier, York, Rhode Island, South Carolina, South exciting big jackpots that players want. added at the time of purchase for an addi- Dakota, Texas, Virginia, Wisconsin, West tional USD 1 per play. Before each drawing, Virginia, and Wyoming. “Matching the USD 2 price point that was a Megaplier value is drawn, from 2x to 5x, so successful for Powerball was the key stra- and that Megaplier is applied to all non- “Just the Jackpot is an interesting and cre- tegic driver for Mega Millions,” explained jackpot prizes, including the second prize ative product idea,” said Medenica. “Th ere’s Medenica. “Jackpot fatigue is very real but of USD 1 million. Mega Millions is the only no better test of a new concept than actually fades somewhat over time. Given that it’s jackpot game where the second prize can launching it in the marketplace. However, been two years since the USD 1.58 billion reach USD 5 million with the multiplier we won’t really have a sense of its success Powerball jackpot hit, we think our play- option. until we live through a few high jackpots ers are ready for another one. Interestingly, since the game is intended to appeal to we were intrigued by the media attention Th e Megaplier has long been an option on those players who only dream really big! generated by the ‘dual rolling jackpots’ back Mega Millions, but with better odds on But the experience will provide invaluable in August when both Mega Millions and the Match 5 second prize category, it is ex- data for the entire industry to use in de- Powerball went over USD 300 million. Th e pected that there will be more multi-mil- signing the next wave of national game in- increased media attention only served to re- lionaires as well. And sure enough, in six novations.”

Nine ways to win in Mega Millions Odds and prize values for the Mega Millions Megaplier feature Match ● Match ● Prize USD Chances Match ● Match ● Your prize (USD) if the Megaplier number is: 5 + 1 Jackpot 1 in 302,575,350 2 (1 in 3) 3 (1 in 2.5) 4 (1 in 5) 5 (1 in 15) 5 + 0 1,000,000 1 in 12,607,306 5 + 0 2,000,000 3,000,000 4,000,000 5,000,000 4 + 1 10,000 1 in 931,001 4 + 1 20,000 30,000 40,000 50,000 4 + 0 500 1 in 38,792 4 + 0 1,000 1,500 2,000 2,500 3 + 1 200 1 in 14,547 3 + 1 400 600 800 1,000 3 + 0 10 1 in 606 3+0 20 30 40 50 2 + 1 10 1 in 693 2+1 20 30 40 50 1 + 1 4 1 in 89 1 + 1 8 12 16 20 0 + 1 2 1 in 37 0+1 4 6 8 10 Overall chances to winning any prize: 1 in 24 From a pool of 15 balls, five are marked with 2X, six with 3X, three with 4X and one with 5X.

WLA magazine | No. 48 | Winter 2017 / 2018 25 INSIGHT INSIGHTINSIGHT

Australia makes moves to ban Lottoland

In October 2017, the government of Tasmania became the sixth Australian state of six to make moves to – or noises about – banning lottery betting operator Lottoland. The company is pleading for legitimacy but will the politicians and regulators listen?

Australian politicians have been getting more lottery betting not being a betting contingen- voiced quite as vigorously as in Australia. and more vociferous in their denunciations of cy approved by the Independent Gambling In part, this is due to the operator’s success what some are branding “fake lotteries”, “pre- Authority of South Australia, it is an off ence Down Under. tend lotteries”, or even “synthetic lotteries”. for Lottoland to sell this product to South Australian residents. Accordingly, Lottoland Lottoland’s emergence Tasmania’s Parliamentary Secretary for Small will not permit South Australian residents to Lottoland’s short history in Australia can be Business, Trade, and Red Tape Reduction register or play at lottoland.com.au.” traced back to January 2016, when it became Roger Jaensch echoed the views of his the fi rst business of its kind to be awarded counterparts in New South Wales, South It is understood that Tasmania’s lawmak- a license to operate in Australia. Th e fi ve- Australia, Victoria and Western Australia ers have started asking the South Australia year license was awarded by the Northern when he urged the state’s residents to boy- government’s advice on the best way to draft Territory’s Racing Commission. It is the cott Lottoland in support of the newsagents, legislation. only regional government to hand Lottoland pharmacies, small supermarkets, corner a license. stores, and dedicated lottery outlets where In September, the state of Victoria an- state lottery tickets are sold. nounced plans to restrict betting on lot- Th e regulatory picture is slightly con- teries in its new Gambling Regulation fused by the makeup of regional and fed- “We would urge all Tasmanians who want Amendment Bill 2017. eral (Commonwealth) governments in to have a punt in a lottery to support local Australia. Th e country has six states (New businesses, which in turn creates jobs and New South Wales quickly followed suit. Th e South Wales, Queensland, South Australia, generates taxes for community services,” state's Deputy Premier and Minister for Tasmania, Western Australia, and Victoria) said Jaensch. Small Business John Barilaro said the NSW and two self-governing mainland territories government was looking at ways to stop the (the Northern Territory and the Australian Western Australia’s Premier Mark McGowan practice of betting on lotteries. Capital Territory). In practice, the two self- was particularly strident: "All that Lottoland governing mainland territories are oft en does and those sorts of organizations, is suck Th e politicians’ have voiced three main treated like states, owing to their relative size money out of here, send it elsewhere and not concerns: protecting local businesses that and importance. In principle, however, there give anything back." sell genuine lottery tickets; protecting the are important diff erences between the states money returned to good causes by state- and the territories. Th e attacks have not been limited to state authorized lotteries; and the confusion that level. Right-wing politicians such as One Lottoland creates among customers. States have rights recognized by the consti- Nation leader Pauline Hanson has lobbied tution, most notably the power to pass laws for a federal ban, while former centrist “Th e Tasmanian Government believes that in their own right. If the laws of a state ever Senator for South Australia Nick Xenophon lottery outcome wagering products are confl ict with the laws of the Commonwealth has also backed a ban. potentially confusing to the public” said of Australia, the Constitution says that Jaensch. “It is not suffi ciently clear to con- Commonwealth law is to be followed. Tasmania and Western Australia are plan- sumers that the product being off ered is Territories, on the other hand, are directly ning on legislating against Lottoland. If they not a genuine ticket in a given lottery, but is subject to the Commonwealth Government. did so, they would be following in the foot- rather a wager on the outcome, and it does While the self-governing internal territo- steps of South Australia, which is the only not have the same levels of consumer protec- ries can make their own laws, the Federal state in which the Gibraltar-based operator tion as regulated lotteries.” Government retains full power to legislate. does not operate. Th ere has been opposition towards bet- Th e diff ering regulatory frameworks for Th e Frequently Asked Questions section of ting operators such as Lottoland across the the states and territories have enabled the the Lottoland website acknowledges: “Due to world but nowhere has the opposition been Northern Territory to carve out a niche for

26 WLA magazine | No. 48 | Winter 2017 / 2018 INSIGHT INSIGHTINSIGHT

Lottoland's Australian website

itselfitself as one ooff AustraAustralia’slia’s most lliberaliberal bbet-et- ActingActing Commissioner fforor Consumer Pro- toto its memmembers.bers. "W"Whilsthilst yoyouu are restricterestrictedd ting regimes. WithWith a favorablefavorable tax rate andand tection David Hillyard said: “Lotto“Lotto SpringSpring inin thethe way you conconductduct your llotteryottery bbusi-usi- welcomingwelcoming attituattitudede towardstowards new products,products, doesdoes not hhaveave tthehe requirerequiredd AustraAustralianlian li-li- ness anandd bboundound to a rarangenge ooff state rregula-egula- it hhasas mamadede itseitselflf a hhomeome fforor bbettingetting operaopera-- cense for this sort of gambling. Th e commu- tions,tions, thethe fakefake lotterylottery wagering modelmodel hashas tors in a similarsimilar manner to European ggam-am- nitynity needsneeds to bbee aware tthathat witwithh Lotto SprinSpringg freedomsfreedoms andand marginsmargins thatthat are unavailableunavailable bling hubs such as Gibraltar or Malta. Th is you aren’t off ered the same protection oorr toto you so it can out-advertise regulated state hhasas not aalwayslways mamadede it popupopularlar witwithh neneigh-igh- guaranteesguarantees ofof payoutspayouts as yyouou are wwhenhen pplay-lay- lotteries."lotteries." boring states, which claim the Northern ing with lawful Australian lotteries and therethere Territory ddepriveseprives themthem ofof gamblinggambling tax may bbee issues in rerelationlation to taxation as pay- It vowedvowed to lobbylobby state anandd ffederalederal govern- iincome.ncome. outs will be coming from overseas.overseas.”” ment to legislate against Lottoland. Th e poli-poli- ticians have been queueing up to voice their Just one month aft er winning its license, Th e same complaints would later be made concerns ever since. Lottoland signed up 250,000 Australian cus- about Lottoland. Th e company’s success has tomers in 48 hours as it mushroomed off the emboldened other more established opera- Recently, the Northern Territory govern- back of a snowballing USD 1.5 billion US tors to follow suit. One of Australia’s most ment has moved in concert with the other Powerball jackpot. It advertised on televi- successful casino operators, Crown Resorts, Australian governments. In November, its sion networks such as Sunrise, 7 News and has launched its own lottery betting service attorney general announced that Lottoland Channel 9, while receiving national newspa- and UK bookmaker William Hill has entered would be banned from allowing customers per and radio coverage. It was an astonish- into a partnership with Lottoland to launch to bet on the outcome of Australian lotter- ing launch. its Planet Lottery product in Australia. ies. Th e operator would still be able to accept bets on international lotteries, which form The backlash begins Th e backlash really began to take hold during the bulk of its business. At fi rst, Lottoland’s Northern Territory Autumn 2017, when Australia’s leading lot- license gave it some form of legitimacy. tery operator Tatts Group backed a campaign Ban them or tax them? As early as May 2016, the Western Australia by the Australian Lottery and Newsagents Lottoland’s response has been to go on the government started voicing its concerns Association titled ‘Lottoland’s Gotta Go’. off ensive. Th e company off ered newsagents about lottery betting operators. However, the chance to advertise Lottoland’s servic- it was not Lottoland that was its target, "Th e very existence of these fake lotteries in es in-store. Each new Lottoland customer but a separate operator, the unlicensed our opinion creates an uneven playing fi eld would be asked to name their local news- Lotto Spring. for your business," said ALNA in a statement agent upon signing up. When they select a

WLA magazine | No. 48 | Winter 2017 / 2018 27 INSIGHT INSIGHTINSIGHT

in line with new legislation. But outside the Northern Territory there are no gambling taxes applicable to lottery betting.

All that might be about to change. South Australia recently introduced a 15 percent NORTHERN "point-of-consumption tax" and Western TERRITORY Australia is planning on doing the same. Federal lawmakers are planning a similar QUEENSLAND scheme, based on the South Australia mod- WESTERN AUSTRALIA el. Th e Australian government said that all

SOUTH states supported a national tax except the AUSTRALIA Northern Territory. In fact, even Lottoland

NEW SOUTH has supported these plans. WALES AUSTRALIAN However, the government’s proposal is for CAPITAL TERRITORY a tax on horse, harness, and greyhound VIKTORIA racing, as well as sports and general bet- ting (such as betting on election results or Map showing Australia’s the Academy Awards). Th is is the South six states and two territories. TASMANIA Australia model that the federal government is seeking to copy and, of course, lottery bet- ting is not a legitimate category of gaming in participating retailer, that store will receive usually does not involve a party that is ag- South Australia. a 10 percent cut of any bets placed by the gressively trying to detract from the other player on the site. party's livelihood. Th ey have repeatedly said Th e federal government said the point of that they are not targeting the customers of consumption tax would be accompanied Lottoland’s suggested advertising, in the newsagents, yet this idea does exactly that." by new rules for online gambling and pro- form of posters and fl ags, would be limited tections for those betting online. Th us far, to betting on international lotteries. In addition to the somewhat bizarre partner- nobody has mentioned licensing for lot- ship off er, Lottoland has ramped up its “don’t tery betting operators. However, Lottoland Th e scheme was immediately dismissed by ban us, tax us” plea. It claims to pay corpo- has its claws embedded deeply into the ALNA chief executive Adam Joy: “Lottoland rate and income tax “just like everybody else Australian market and will not give it up has spent 18 months denigrating news- in Australia". As of July 1, 2017, Lottoland without a fi ght. You can expect this debate agents, and a partnership requires trust and also began to pay goods and services taxes, to run and run.

UK government adds to Lottoland’s woes

The Australian authorities are not the only changes will be made to ensure that Gambling Act, which seeks to maintain ones taking a action against Lottoland’s EuroMillions draws receive the same the clear blue water between the National business model. In November, the UK level of protection in relation to funds Lottery and commercial gambling prod- government announced plans to stop all for good causes as those received by ucts, thereby protecting returns to good lottery betting operators from accepting The National Lottery. causes.” bets on EuroMillions draws taking place outside the UK. The changes have been made because of Lottoland chief executive Nigel Birrell a loophole, which barred betting opera- commented: “We believe that today’s de- The ban will be introduced through a new tors from accepting bets on EuroMillions cision is unjustified, and sets a dangerous license condition, which aims to bring draws in the UK but allowed them to precedent for policy-making on the basis non-UK EuroMillions draws in line with place bets on the draws in the eight other of no evidence.” the UK draw. However, Lottoland and its countries taking part in EuroMillions. ilk will still be allowed to accept bets on Although each country’s game relates The DCMS anticipated this criticism, the outcome of other international lotter- back to a single draw held in Paris, the stating that it realized there was little ies such as the Irish Lottery or New York nine games are technically separate. evidence that betting on the outcome State Lottery. harmed the income from EuroMillions. A DCMS spokesperson said: “Our view However, it recommended that action The UK’s Department for Digital, Culture, is that this practice runs counter to the be taken on a precautionary basis before Media & Sport (DCMS) said that the spirit and intention of section 95 of the the market is able to grow.

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Digital innovation strategy: A key resource for CIBELAE’s future

CIBELAE’s 16th biennial congress began on a positive note with a warm welcome from their president Luis Gama. The two-day event featured a business program with enlightening presentations by speak- ers from both Latin America and around the globe. Thanks to the impeccable organization of the CIBELAE staff, and host Lotería Nacional de Beneficiencia de Panama, delegates were provided with an experience that was educational and inspirational in a cordial and enchanting environment.

From October 10–13, 2017, CIBELAE wel- which was graciously hosted by Lotería Th is international blend of speakers and comed more than 125 international par- Nacional de Benefi ciencia de Panamá. participants provided a broad view of the ticipants at its 16th congress, which carried Delegates and speakers came from Latin ways that lotteries have evolved throughout the apt tagline “Gaming without borders”. America, Spain, Portugal, Switzerland, the the world, in the face of ever changing tech- Panama City was the venue for this event, United States, and from as far away as India. nologies.

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Th e opening keynote address was deliv- where the retail activity is focused primar- providing help for the disabled of Spain,” ered by famed boxing champion Roberto ily on selling other products. Lotto sales said Alfonso Galiano, Executive Director Durán, whose presentation “Focus and are made through both distribution chan- of ONCE. perse verance: the way of success” was en- nels, while passive lotteries depend almost gaging and entertaining. During his speech, totally on sales generated by the dedicated Advantages of innovation Durán told of the challenges he had to face retail system. Players are becoming more Innovation has allowed CIBELAE member along the path to glory, and how through fo- inclined to buy lottery products in a mixed lotteries to increase sales while optimizing cus and perseverance he ultimately achieved retail environment, which is leading SELAE their resources, expanding their customer success. Although he has always had an im- to assess an eventual convergence of both bases, and improving the eff ectiveness of mense desire to win, Durán maintains a retail modalities. Mr. Bravo commented their logistics. Technological development positive perspective toward winning and that in the face of such a convergence it is has helped them not only to extend their has invariably remained mindful of his essential that the identity of both games be product portfolio, but also to reduce the humble origin. maintained. costs of ticket printing and thwart internal and external fraud. It has also allowed for Passive lotteries vs. Lotto Product innovation better methods of tracking their products. During Wednesday's plenary session, Martín Adapting to the new technological age and Th e latter has allowed for a greater control Moreno Bravo, department head for the co- changing consumer behavior, CIBELAE over the management of their stock. ordination of games and lotteries at SELAE, members have been focusing heavily on Spain, gave a comprehensive comparison product innovation. For the last 20 years, Effi cient communication between ONCE of passive lotteries (productos pre impresos this development has been growing expo- and its sellers has benefi ted the organiza- bancados) and Lotto (juegos de pozo). Mr. nentially, seeing CIBELAE's members of- tion greatly. Sales declarations, which in the Bravo underlined the main characteristics fering more interactive, personalized, and past had to be physically delivered, can now of each modality highlighting such aspects exciting products. One striking example is be made by mobile device. Th is has allowed as the history of both games, price develop- ALEA's Quini 6, which was born out of a ONCE to extend its sales hours. ment, sales, and prize structure. desire to off er a product that distinguishes itself from traditional lottery games. Marketing campaigns Historically, Lotto arrived in Spain in the With an ever demanding public, lotteries eighteenth century when the Lotería Real Other lotteries have innovated in distribu- must develop marketing campaigns that was created as a means of supporting the tion, opening up more points of sale (POS) are based on tactical strategies in order poor. From its beginning until today, Lotto by increasing the number of lottery termi- to increase the number of customers and has been characterized by its low prices and nals at each outlet. Players also have a wider strengthen brand positioning. In Brazil, high jackpots, which attributes to its lasting choice of payment methods today, paying Caixa occasionally holds its drawings from popularity. with either with cash, credit card, bank a truck that moves from town to town, to transfer, or prepaid cards. be closer to its public and so maintain their Th e passive lottery was introduced in Spain trust. In Argentina, ALEA's commercial in the fourteenth century to fi nance the war Spain's ONCE (Organización Nacional de strategy is based on a continuous evolution against France and remains highly popular Ciegos Españoles), which was founded on of their brand identity. Recently, ALEA be- today. A limited number of tickets are print- the principle of helping people with dis- gan linking actors and well-known person- ed in passive lotteries, and the price per tick- abilities help themselves, has innovated alities with its communication campaigns, et is relatively high compared to the price of technologically to help its sellers, many of in order to strengthen brand identity and a Lotto ticket. whom are disabled. Innovations include customer loyalty. Meanwhile, Loterías y the management of online sales, as well Quinielas of Uruguay launched the mar- SELAE's dedicated retail system – retailers as an internal communications system to keting campaign “Lotería Uruguaya vuelve that sell lottery games exclusively – shows inform sellers about new campaigns and a vos” (Uruguayan lottery comes back to the highest sales compared to games that product launches. “For our business, lot- you), promoting the campaign with an are sold in a mixed retail environment, teries are the way we fulfi ll our mission of extensive tour throughout the country.

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ONCE, on the other hand, focuses its ac- tivities on enhancing customer loyalty by Roberto Durán – An example of focus and perseverance studying the sociodemographic character- istics of their player base in order to cre- Famed Panamanian boxer, Roberto He is a four-weight world champion, ate individual client profi les and thus off er Durán, also known as “Mano de Piedra” having held titles at lightweight (1972– their players personalized gift s. (Hand of Stone), has been recognized by 1979), welterweight (1980), light middle- Sports Illustrated as the best lightweight weight (1983–1984), and middleweight Challenges and plans of all time. He is also listed as the great- (1989). He is also the second boxer Although innovation has benefi ted lotter- est boxer of Latin America and one of to have competed over a span of five ies greatly, they still encounter obstacles, the top-five, pound per pound, in the decades, the first being Jack Johnson. such as rejection of new technologies from whole history of boxing. Durán retired in January 2002 at age 50, both older vendors and older players. As with a professional record of 119 fights, such reactions from the older generation Durán was born in 1951 in Guarare, 103 wins, and 70 knockouts. impede the market, it is essential to develop Panama, and raised in the slums of El strategies that target younger players. Other Chorrillo, a humble township in the challenges that lotteries face include mod- district of Panama City. Before becom- ernizing traditional gaming systems and ing the great boxer that we now know, fi ghting the scourge of illegal gaming. he worked at various jobs to make ends meet. He was a shrimp peeler, an under- CIBELAE member lotteries plan to focus on wear peddler, as well as a lottery sales as- the implementation of business intelligence sistant. To this day, Durán has maintained systems to leverage data that would allow an affinity for playing the lottery. them to better understand the market and establish strategies that address changes that have occurred in each period. Montevideo, Uruguay, holds WLA-RGF level 4 certifi cation, and is the only lottery WLA members b to share h their h i experiences i How to innovate within a tightly regulat- in Latin America that has achieved this in dealing with this issue. With that, WLA ed framework can be a challenge for state high level of certifi cation. During her pre- Senior Vice President Rebecca Hargrove lotteries. In her presentation "Th e impact sentation, Sandra Conde, General Manager underlined the importance of information of regulation on the regulated entity", Dr. of La Banca, shared La Banca’s experience sharing and spoke of measures that the Lea Meyer of Polaris Strategic Foresight, leading to WLA-RGF level 4 certifi cation, WLA has taken in the fi ght against illegal Switzerland, spoke on the delicate balance what they learned along the way, and how gaming. To this end, the WLA published between regulation and operational perfor- certifi cation has helped them improve their a position paper delineating the WLA’s mance. Although the tendency is to view business. stand on illegal gaming early in 2017. Ms. regulation as a necessary evil, Lea pointed Hargrove also encouraged member lotter- out that regulation can also be viewed as a Each year, CIBELAE’s member lotteries ies to work closely with their regulators to blessing in disguise in that it can serve as a give between 15% and 20% of their in- bring illegal gaming under control in their basis for optimizing the operational perfor- come to social causes, supporting educa- respective jurisdictions. mance of your organization. tion, health care, public works, and various foundations in their particular communi- Closing addresses were delivered by Responsible gaming ties. However, lotteries' contributions to CIBELAE President Luis Gama and ALEA and good causes good causes depends largely on sales, which President Alfredo Mónaco, who with great Th e World Lottery Association encourages were in decline last year owing partly to the enthusiasm encouraged delegates to attend its member to certify their organizations to spread of illegal gaming in the region. As il- the World Lottery Summit 2018 that will the WLA Responsible Gaming Framework legal gaming is a global problem, the mem- be held from November 18–22, 2018 in (WLA-RGF). La Banca de Quinielas de bers of CIBELAE expressed the need for Buenos Aires, Argentina.

WLA magazine | No. 48 | Winter 2017 / 2018 31 INSIGHT INSIGHTINSIGHT Photos by Domagalski Photography, www.domagalskiphotography.com Photos by Domagalski Photography,

NASPL 2017 – Shifting ideas

The annual conference and trade show of the North American Association of State and Provincial Lotteries (NASPL) was held in Portland, Oregon, in September, and the theme resonating through- out was the need for lotteries to shift their thinking in order to stay relevant.

Many of the challenges faced by American show, and NASPL welcomed 37 exhibi- lutions, all designed to help lotteries shift lotteries are challenges that are unique to tors this year, including the World Lottery their business to meet today’s consumer the regulatory and operational environment Association. A few companies were fi rst- expectations. It’s more challenging to do so in which they operate. Th ings that are now time exhibitors, looking to break into the when the regulatory environment isn’t coop- routine business for lotteries in other parts industry with new mobile solutions, signage, erative, but vendors continue to look for so- of the world – like online sales – are still in and retail point of sale items. Th roughout lutions that will allow lotteries to venture in their infancy in the United States. And those the trade show fl oor, the hottest properties the right direction, one step at a time. are the things that need to change in order to included self-service, online and mobile so- keep lottery products top of mind for today’s Keynote Speakers consumers. Th e educational program was headlined by fi ve keynote speakers, three in the area of Just how to eff ect that change was the com- technology and two covering marketing and mon thread at the 2017 NASPL annual con- branding strategies. All were experts in their ference – the theme of “SHIFT! Your Game” fi elds who off ered insights into ways lotter- refl ected the need for shift ing the way lotter- ies need to shift their thinking in order to ies do business in a rapidly changing mar- secure their future. ketplace. Th e keynote sessions featured fresh perspectives from outside the industry, and Futurist Steve Brown talked about the special Insights sessions focused on lottery- rapid evolution of technology and how specifi c topics. Top-level associate members consumer expectations are changing as a also had their say in a special session. result. Smart objects will become common- Incoming NASPL President Charles McIntyre, place, and new business models will de- Along with these educational opportuni- Executive Director of the New Hampshire velop to take advantage of those objects. ties, the annual conference includes a trade Lottery, addresses the NASPL 2017 delegates. Sophisticated voice controls, sensors and ad-

32 WLA magazine | No. 48 | Winter 2017 / 2018 INSIGHT INSIGHTINSIGHT

vanced artifi cial intelligence will allow smart vices. It’s all about improving the consumer sion made by your organization. Can you robots to interact with people – and lotteries experience using technology. describe all your consumers and know what could potentially rethink lottery ticket de- they value? What changes do you need to livery strategies. Evolving digital technolo- Cyber-security expert John Sileo talked make to maximize consumer satisfaction? gies will provide more data than ever before, about the dark side of technology – the Ringold emphasized that the best strategy data that will help businesses learn more hackers that utilize all this digital technol- for any organization is to fi nd people in the about their customers. And because auto- ogy to wreak havoc on the world. He sum- marketplace who love what that organiza- mation continues to put jobs at risk, Brown marized the top threats to data security, and tion does best – so you have to know what explained that people have to work harder warned lotteries that their lack of the little you do well. to fi nd ways to add value to society. He ad- data breaches experienced in other indus- vised lotteries to optimize business around tries is actually a danger sign. “Th ere’s noth- Th e fi nal keynote speaker of the confer- human/machine partnerships. “You need to ing to get you keyed up for when the ‘big ence was marketing and strategy consultant reimagine everything!”, he said. “Every part one’ happens,” he said, and lotteries have a Gerry O’Brion. He emphasized that because of our lives can be done better. Th e challenge lot to lose because their business depends on things that are outside of your control – like is to throw away what you’ve always done their reputations. technology, consumer preferences, demo- and do something amazing” with all these graphics, and laws – are always changing, new technologies. Debra Ringold, Dean and JELD-WEN it’s important to look beyond what you can Professor of Free Enterprise at Willamette do today. Tomorrow won’t be like today, Fashion designer Christopher Bevans is University, gave a presentation on consumer so “look at what is possible” in the future. doing just that with the sportswear created satisfaction and relationship marketing. She And because companies need to diff eren- by his company DYNE. His clothing line explained that the successful businesses of tiate their products in a competitive mar- uses near fi eld communication technology today are those that focus on customer sat- ketplace, brands help companies defi ne the (NFC) to share information about the prod- isfaction for long-term sustainability and values that infl uence purchase decisions. He ucts with customers, communicating with profi tability. She suggested asking yourself helps CEOs focus their brand and their busi- those customers through their mobile de- if customer satisfaction drives every deci- ness by looking at three areas: Insights about

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WLA magazine | No. 48 | Winter 2017 / 2018 pollardbanknote.com 33 INSIGHT INSIGHTINSIGHT

Hargrove, President and Chief Executive Offi cer of the Tennessee Lottery, the partici- pants were Frank Cecchini, Chief Executive Offi cer and Managing Director, Novomatic Lottery Solutions; John Donahue, President and Chief Executive Offi cer, INTRALOT USA; Jay Gendron, Senior Vice President, WLA North America Lottery, IGT; Doug Pollard, Co-Chief Executive Offi cer, Pollard Banknote; and Jennifer Welshons, Senior Vice President Marketing, Lottery Group, Scientifi c Games.

Th ey chatted about ways to drive growth, Corporate social responsibility was one of four special Insights sessions at the conference, the regulatory environment, the current in- each drawing strong speakers who explored their topics in depth. dustry eff ort to establish a NASPL standard API, expanding the retailer base, expanding customers, which gives you power; demon- ing stakeholders, missions and expectations, the player base, and innovation in the lot- strable outcomes, which is easy for lotteries and their average tenure is just three to four tery industry. because of all the winner presentations; and years. Policymakers oft en disdain gambling fi nding the ‘because’ in your message that in public, while privately they rely on gam- Th e obvious consensus was that the indus- helps consumers fi lter out all the messages bling revenues to fund their programs. Th e try needs to expand into new sales channels that bombard them every day. bottom line is that lottery directors need to – that would lead to many of the desirable stay in alignment with their governing au- outcomes discussed. To reach new retail out- Industry Insights thority. lets, and hopefully new players as a result, In addition to the keynote speakers, there the API eff ort is critically important, but that were four special Insights sessions during Th e fi nal Insights session examined the in- work will also allow easier and less costly the conference, each examining shift s that dustry’s use of research and analytics, and paths to innovative new games, including are occurring in topics critical to lottery panelists agreed that data-driven decision ideas from innovative third-party game de- operations – corporate social responsibil- making is critical for lotteries. All too of- velopers. To reach new customers through ity, multicultural outreach and marketing, ten they collect the data, but don’t use it in online channels, which oft en requires regu- working in a political environment, and re- a signifi cant way. Business has evolved from latory approval, it’s important to make sure search and analytics. big data to small data and smart data – iden- regulators are well-informed – arguments tifying the little things that will drive the against using these new channels are oft en In a session looking at corporate social re- industry forward. By understanding what based on erroneous information. sponsibility, participants from both lotter- consumers want, lotteries can off er the prod- ies and vendors discussed the importance ucts that will satisfy them. All in all, the conference lived up to its of embedding CSR into every aspect of the theme, providing numerous opportunities organization. All emphasized that transpar- Associate Member Discussion for lotteries to understand the technology ency is critical, and that you need to be au- Top-level NASPL associate members took and marketplace changes that are aff ecting thentic when it comes to CSR – it can’t just the stage for a discussion of key topics fac- their ability to keep growing revenues to be window dressing. You do that by aligning ing the industry today. Led by Rebecca good causes. CSR with your business goals and building it into the business culture.

A discussion on multicultural outreach and marketing covered the changes in de- mographics throughout North America, and how lottery communications eff orts need to be all inclusive to reach diverse audiences. Going beyond pure demographics, using in- sights about background and heritage helps unite consumers and connect them with brands.

Another session examined the pitfalls of working in a political environment. In the United States in particular, lottery CEOs Top-level NASPL Associate Members were represented in a session that explored the must balance a wide variety of compet- lottery-vendor partnership and how today's key issues are being addressed.

34 WLA magazine | No. 48 | Winter 2017 / 2018 INSIGHT INSIGHTINSIGHT

NOVOMATIC LOTTERY SOLUTIONS GROWTH COMES FROM INNOVATION

Companies that do not change or who do not innovate do not survive – ask a formally famous maker of mobile phones. Innovation does not only mean survival, it helps us to thrive. Innovation always brings value; innovation delivers an improvement on an existing condition. That value is a key component of sustainable growth. Perpetuating invigorated, sustained growth is the purpose of NOVOMATIC Lottery Solutions (NLS). Let us show you.

NOVOMATICLS.COM

WLA magazine | No. 48 | Winter 2017 / 2018 35 CORPORATE NEWS CORPORATECORPORATE NEWS NEWS

Beyond the Pie Chart

In everything from organizational growth to the delivery of products and innovation to customers, IGT is prioritizing diversity and inclusion.

Th e spirit of fun is something shared by leadership and better fi nancial performance people all over the world. And when you’re by an organization1. in the business of creating games for people everywhere, the more diverse you are, the For all of these reasons, IGT prioritizes di- more you can refl ect the customers and play- versity and inclusion, recognizing its im- ers you serve. pact on everything from customer buying decisions to the ability to attract and retain For IGT, diversity and inclusion are equally talent. “It goes to our mindsets, how we in- driven by the desire to create a fair, inclu- novate and create our products, and more,” sive culture in which all employees feel val- says Anthony Martinelli, a graphic designer ued, respected, and engaged. Such a culture who is among the four new voices recently supports ongoing success by strengthening appointed to IGT’s Executive Diversity and a group’s collective ability to compete. “We Inclusion Council. need the very best minds, refl ective of the broad diversity of our communities, to ad- Formed in 2016, the initial Council was dress challenges and lead our industry into composed of executive members, indica- the future,” says Rebecca Hargrove, President tive of the commitment of those who are & CEO, Tennessee Lottery, and Senior Vice involved in directing corporate policy and President, WLA. What’s more, a recent study thought-leadership. In September of this by McKinsey & Company a found a signifi - year, the Council expanded its membership cant correlation between higher diversity in to include a group of emerging leaders who

1 Vivian Hunt, Dennis Layton, and Sara Prince, “Diversity Matters.” McKinsey & Company, 2 February, 2015.

36 WLA magazine | No. 48 | Winter 2017 / 2018 CORPORATE NEWS CORPORATECORPORATE NEWS NEWS

“Th e most successful businesses look beyond basic statistics and demographics, and invest in knowing and understanding their evolving customer base at a cultural level. Businesses thrive when there is recognition that diversity is an asset, a workforce mirrors its customer base, and all views are valued equally.”

– Hugo López, Director, California State Lottery –

bring a cross-generational perspective from ally focused on numbers,” says Lee. “When Kim Barker Lee, diff erent vantage points within the compa- people ask about the diversity of the orga- Vice President ny’s business units and global footprint. nization, they typically want a pie chart, and of Diversity and that chart lists races and gender. Diversity is Inclusion at IGT. Th e Council is only one component of the so much deeper than that. organization’s larger diversity and inclu- sion initiative, which is set to expand in the “Diversity is the total mix of people. Not just Diversity and inclusion also mean look- new year as IGT welcomes Kim Barker Lee race or age, but ethnic heritage, mental and ing at every area of the business. Echoing as its fi rst Vice President of Diversity and physical ability, gender identity, religion, how Martinelli’s observation, Lee adds: “It’s im- Inclusion. Most recently, as Vice President we think, our character traits. Th ese are all portant that our eff orts aren’t limited to HR of Legal and Regulatory Compliance at a part of diversity. And inclusion is how the issues. As we know from running lotteries, Northstar Illinois, Lee created an award- organization embraces diversity. It’s having a diversity and inclusion are important to the winning supplier diversity program that far workplace and a culture that allow for an ap- business at every level, from our advertising exceeded the organization’s goals. Lee will preciation of individuality, and this blends campaigns, to how retailers are onboarded, lead IGT’s Offi ce of Diversity and Inclusion, well with the mission of the company.” to everything we do.” chair the Council, and partner with its members to enact the policies and practices “Our people diff erentiate IGT and make us One of the goals IGT has been building into to support this ongoing mission. successful,” says Mario Di Loreto, Excecutive its plan are specifi c metrics around diversity Vice President, People & Transformation, and inclusion that are linked to business A Clear Vision and member of the Council. “Th eir talents, objectives. “We’re not talking about it in a As she prepares to take on the new leader- diverse cultures, backgrounds, ideas, and vacuum,” says Lee. “It’s important to link ship role, Lee brings clarity to terms that are viewpoints drive the creativity that enables diversity and inclusion to how we grow as sometimes interpreted in diff erent ways by us to continue to deliver innovative products an organization and how we help our cus- diff erent audiences. “Diversity has tradition- and solutions to our customers.” tomers grow.”

Emerging Leaders Join IGT’s Executive Diversity and Inclusion Council

Out of more than 60 self-nominations spectives and ideas to help IGT continue for management, and the creation of from passionate and talented employees to foster diversity and inclusion through- management objectives relating to in- who want to impact the wider commu- out the company. creasing the number of underrepresented nity, four Emerging Leaders were recently candidates for job opportunities. The appointed to join the senior IGT leaders IGT’s first diversity and inclusion initiatives Council will build on that work by creat- on the company’s Executive Diversity and included hosting focus groups on women ing a global Strategic Plan for Diversity Inclusion Council. They will lend their per- in leadership, unconscious-bias training and Inclusion.

In September, 2017, the Council welcomed its newest members: Darnell Johnson, Senior Manager, Product Management; April Schmidt, External Art Coordinator for Ignite Studio; Anthony Martinelli, Graphic Designer; and Frederik Andreacchio, Recurring Revenue Manager, Commercial Gaming.

WLA magazine | No. 48 | Winter 2017 / 2018 37 CORPORATE NEWS CORPORATECORPORATE NEWS NEWS

Instant games grow in Hessen, Germany: Sales increase eightfold over the last decade

Strategic partnerships lead to a profitable instant game product category, as in the case of the relationship between Lotto Hessen and Scientific Games. With an eightfold increase in instant game sales over the last decade to EUR 55 million annually, Lotto Hessen proves that an innovative, marketing- driven partnership for instant game management is key.

In the center of Germany, instant games Changing the Game introduction of games at the EUR 1, EUR 2, drove EUR 55 million in retail sales last year “At the time, Lotto Hessen allowed Scientifi c EUR 3, EUR 5, and EUR 10 price points us- for Lotto Hessen, one of Europe’s most re- Games to make the changes we believed ing Scientifi c Games’ global best practices. spected lotteries. While the product category would re-invigorate their instant game cat- Lotto Hessen increased advertising to draw represents just nine percent of Lotto Hessen’s egory. And so the growth story of Lotto attention to the products, and for the fi rst overall revenues, instant game sales have Hessen’s instant games began,” he says. 10 years, Scientifi c Games contributed a multiplied eight times from where they be- dedicated fi eld sales team focused on revers- gan at just EUR 6.9 million aft er re-launch- Aft er eliminating the 50 cent (EUR 0.50) ing instant games’ reputation with Hessen’s ing over a decadee ago.ago. EuroEuro game, the lottery and Scientifi c Games 2,000+ retailers.retailers. tooktook a good look at the game designs, mar-mar- One of 16 states inin Germany, Hessen is home keting and game launch plan, and blend of to six million residentssidents – many of whom en- priceprice points in the instant game portfolio. joy the simple entertainmententertainment of scratchingscratching Lotto Hessen’s ggamesames to win instantly. Th e Together,Together, they made strategic adjustments, lottery attributess much of its instant game fundamentallyfundamentally changing the way the in-in- growth to a strategicategic partnership that inin-- stantstant games looked, and focusing on the cludes game portfolioortfolio management, marmar-- keting and gamee launch plans, logistics andand retail enhancements.ents.

“Before our Cooperoperative Services Pro gram (CSP) launched for Lotto Hessen’s instantinstant game manage-- ment in 2005,, the lottery wass actually discuss-s- ing the possibil-il- ity of eliminatingng the product cat-at- egory complete-te- ly,” says Matthiasias Müller, Managinging Director, Germany,any, for Scientifi c Games.mes. “But the lotterytery trusted both ourr uun-n- derstanding of the German markett and our position ass the leading supplierer ofof instant games inn the world.”

38 WLA magazinemagazine | No.No. 48 | WinWinterter 2017 / 2018 CORPORATE NEWS CORPORATECORPORATE NEWS NEWS

About six years ago, they launched what Th e journey has been an exciting one. Today, • Per capita gross gaming revenue would become Germany’s popular, multi- the company still works with Lotto Hessen in for instant products is 32% higher state game, Platin7. a close partnership on instant games through for those US lotteries using CSP CSP, which is used by several dozen lotteries “Platin7 began with Lotto Hessen. We de- worldwide for instant game management. In the US, since FY2012, per capita sales for signed the game, and it became an immedi- CSP-operated accounts have grown 31%, ate favorite with players here. It was adopted “One of the main reasons Lotto Hessen compared to 22% for the remainder of the by other German lotteries, which made it embarked upon a CSP relationship with US instant game industry. even more successful due to the better prize Scientifi c Games was the logistical exper- pool. And now, players in 10 German states tise we wanted for game distribution,” said Winning Together currently enjoy the game,” says Müller. Dr. Heinz-Georg Sundermann, Managing “We have very high expectations. Our Director for Lotto Hessen. “Th e components partnership with Scientifi c Games works In 2015, Lotto Hessen also re-launched and of the program ensure that we have the right because we share the same vision of respon- expanded their portfolio of eInstant games games, at the right retailer, at the right time. sibly growing Lotto Hessen’s instant game played online – they were actually the sales to EUR 100 million annual rev- fi rst lottery to re-launch eInstants fol- enue in the coming years,” says Dr. lowing the 2012 state treaty regarding Sundermann. “We meet regularly, we the Internet. discuss new ideas continually. It is not routine. We are growing Hessen’s Th e lottery and Scientifi c Games be- instant games business together.” gan “pooling” prizes for physical scratch-off instant games and eIn- Additionally, Lotto Hessen partici- stants by mapping an overall prize pated in the company’s SalesMaker™ structure that gave players the oppor- retail development program to im- tunity to win exciting prizes no mat- plement best practices across its re- ter which way they chose to play: at tailer network. Well known in the retail or online. Th is also allowed the lottery industry for increasing incre- lottery to advertise and promote all mental sales through retailer and lot- the prize opportunities available in a tery sales force training, and effi cient single pool. Players can easily transi- installation of in-fi eld merchandising, tion from retail purchase to online the SalesMaker program was created purchase and back again. Th is builds by Scientifi c Games and the previous brand loyalty for every game, wherev- owner of the New York Lottery’s No. 1 er a player interacts with them. retail location.

“Our unique value proposition is that Along with implementing the we off er our customers the product SalesMaker retail practices, the lot- strategy and game science to deliver exciting Th is has made a very big diff erence in our in- tery also increased the number of instant winning opportunities, whether a physical stant game sales, as you can see by the eight- games on sale in the marketplace at any or digital experience,” says Müller. fold increase in sales over the last decade.” one time to 16–19 – well beyond the tra- dition in Germany. And Scientifi c Games Currently, Hessen is rolling out this success- Th e company’s latest analytics for the US developed custom instant game retail dis- ful eInstants concept for all tickets produced marketplace – where instant games are the play dispensers, which are still produced by Scientifi c Games. As a full-service sup- No. 1 selling lottery product – indicate the for Lotto Hessen by a specialized German plier, the company provides artwork and following results for 12 of 44 US instant manufacturer. data programming for the lottery’s printed game lotteries participating in CSP: and eInstant games, as well as animation and “Th ere are diff erences in languages, and ma- sound for the eInstants. Th e company has • CSP per capita instant sales are ny diff erent cultures around the world, but supplied lottery systems and retail terminals 38% higher than US lotteries operating good games are good games,” says Müller. to Lotto Hessen for decades. under other solutions “We work with Lotto Hessen to off er their players the best portfolio of instant games Best of the Best • Average sales per US retailer are possible, and sell them in the best manner From a facility in Bielefeld, Germany, in- 40% higher for CSP customers versus possible at retail. Together, we have created stant games for Lotto Hessen – and three other solutions a very successful, profi table EUR 55 million other lotteries – are expertly managed by annual instant game product line. It’s a won- 30 Scientifi c Games CSP professionals han- • Th e above is also true for retailer derful story.” dling product design, game planning, strate- commissions in the US, assuming gic marketing, warehousing, TelSell (inside a consistent commission cashing sales), and distribution. incentive rate (i.e. 5.5%) © 2017 Scientific Games Corporation. All rights reserved.

WLA magazine | No. 48 | Winter 2017 / 2018 39 CORPORATE NEWS CORPORATECORPORATE NEWS NEWS

To Legalize or Not? – How Sports Betting can offer a paradigm shift for US State Lotteries revival

There’s no escaping the fact that sports betting is massively popular among the population of many countries, and the US is no exception. However, with sports betting not being legal in the States, this poses a dilemma for lotteries – how to eliminate illegal sports betting operators, while offering fans a viable alternative. Is legalizing sports betting the answer?

In the US, State lotteries are committed to Limited growth, or even stagnation, in rev- regulated and controlled environment. Th ere raising funds for good causes and off ering enues and profi ts pose a direct risk for State is growing concern that US sports gambling reliable levels of support to State budgets. budgets, while signifi cant hurdles hamper prohibition has created a large underground In this way, although they can be labeled as lotteries’ processes for digital transformation betting market, where billions of untaxed traditional, they are an excellent model in that are critical for sustainably addressing dollars are wagered illegally1. Th e Interstate defi ning the social dimension and purpose the next generation of players. Wire Act, the Professional and Amateur of lotteries for sustainable and responsible Sports Protection Act, and Th e Unlawful growth. However, their product portfolios Th e ongoing debate surrounding the legaliza- Internet Gambling Enforcement Act are in rely on a limited number of product off er- tion of sports betting in the US poses the op- the early stages of review, with the prospect ings whose appeal is shrinking, along with portunity to drive the millions of Americans, of extensive legalization of sports betting, the aging population that still supports them. who currently bet on sports illegally, to a that will, in theory, help to signifi cantly re-

1 “The key to sports integrity in the united states: legalized, regulated sports betting”, American Gaming Association, 2016 2 “U.S. Sports Betting Special Report Assessing the Obstacles and Opportunities”, Gambling Compliance, 2016

40 WLA magazine | No. 48 | Winter 2017 / 2018 CORPORATE NEWS CORPORATECORPORATE NEWS NEWS

duce or even eliminate these grey betting risking a possible reduction in overall lottery population, could safeguard their already activities, while simultaneously attracting sales. Th is will consequently lead to a reduc- established market share, and even grow it. several established worldwide online sports tion of the funds allocated to the educational betting operators. US sports betting market and good causes programs they support, as Nevertheless, State lotteries, bearing the im- estimations indicate its potential to be be- well as considerable erosion in their greatest age and brand of a reliable organization that tween USD 1.6bn and USD 11.9bn in GGR, current asset, their retail network. has already operated for many years in the prospectively making it one of the world’s States, should undertake a key role, possibly largest regulated sports betting markets2. Th erefore, they need to actively participate to even becoming the driver of the State licens- this new market with a sports betting prod- ing and expansion process, advising the way In considering these market projections, uct that is socially accepted, transparent, operators enter the market (i.e. how they ob- State lotteries are presented with a great op- easy to understand, reliable and, of course, tain a license, number of licenses available portunity to introduce their own sports bet- tailored to the US sports betting demand. per State, taxation issues, if a retail presence is ting off ering, following what seems to be a Capitalizing on the breadth of their already required in order to operate) and, at the same common practice for many lotteries world- established retail network, State lotteries time, setting the market standards for respon- wide, in the same successful way as they do could create and increase branding aware- sible gaming, ensuring that the sports betting with their traditional games. At the same ness of their sports betting off ering, shift ing product is secure and safe for their people. time, lotteries will be able to introduce new betting entertainment to include the retail digital tools, such as CRM, and increase their environment and making the game available In a recent conference on the subject, it presence in the online channels that will help to a wider playing audience. emerged that the key to moving forward is with attracting and retaining players in a safe, in fi nding the right balance between off er- regulated, and responsible playing environ- It is widely documented that lotteries and ing a responsible product that is both com- ment. Th is lottery revival will be driven by sports betting appeal to diff erent demo- petitive and makes sure that sports integrity revenue streams that will be recovered from graphic groups. Exploiting the cross-sales is protected. INTRALOT places signifi cant existing, reportedly signifi cant, illegal mar- eff ect, lotteries could potentially generate emphasis on a Customer Relations System kets, even if these recovery rates are modest customer fl ow from the betting sector, gen- that off ers incentives to players and retailers, in the beginning; eventually they are bound erating an additional revenue stream for the detects fraud, and maintains a safe playing to grow quickly with better regulation, adop- benefi t and support of societal good causes. environment, while introducing a personal- tion of modern technologies, and increasing As players change demographic groups over ized off ering that accommodates the needs of engagement of a growing number of relevant time, the conversion from playing one verti- the modern player. Recognizing the potential stakeholders. cal to another will be facilitated by modern of this market, INTRALOT has also invested player engagement tools. in a next-generation betting platform that, Failing to update and modernize their prod- for the fi rst time, off ers in a single betting uct off ering by staying distant from the Furthermore, State lotteries, using their platform both an online and a land-based sports betting industry (retail, online and customer and market profi ciency to their channel. INTRALOT also off ers integrated mobile), State lotteries run the risk of los- advantage, employing a more sustainable infrastructure solutions for both lottery and ing a considerable portion of overall gam- operational model that involves both online betting verticals that will be at the focus of bling market share, particularly the one that and retail off ering, and focusing on events INTRALOT’s exhibits at ICE exhibition in applies to the younger generation, thereby and markets of high interest to the State’s February 2018, in London.

WLA magazine | No. 48 | Winter 2017 / 2018 41 CORPORATE NEWS CORPORATECORPORATE NEWS NEWS

The power of an intrapreneurial culture in an entrepreneurial company = BAMM!

Should innovation and ideas be tightly controlled, handled by the experts, and managed within just one department of a company? Or, like NOVOMATIC Lottery Solutions believes, should it be the province of any employee with a good idea and a passion for trying new things? In the true spirit of pioneership, NLS is encouraging employees to bring their best ideas forward and make a real, tangible impact on the lottery industry.

It’s true. NLS entered the lottery market with the It’s simple really: we are an entrepreneurial BAMM! is real. unique combination of extensive experience company. We value fun, creativity, increased Literally, the defi nition of the non-market- and start-up enterprise energy. As a subsidiary employee input and involvement, and a com- ed word “bam” is an exclamation “used to of gaming industry leader NOVOMATIC AG, mitment to everything innovative. Naturally, imitate the sound of a hard blow or to con- the reincarnation of Betware, a leader in we attract intrapreneurs, skilled problem vey the abruptness of an occurrence (Oxford Internet lottery, and the empowered starting solvers who enjoy taking on important tasks Dictionary).” point for industry change for many seasoned, within our company. Our intrapreneurs are knowledgeable industry experts, NLS entered the drivers of NLS, and consequently indus- In language, bam – and in marketing, the lottery vendor-partner business with ex- try, innovation. Th ey are the type of profes- BAMM! – represents the moment of infl u- perience on its side. But it is this BAMM!, sionals who thrive on conquering challenges ence, the energy exerted before and during this force for change, this mission to reset the and who value collective ownership. contact, the force of a catalyst changing a lottery paradigm for the sake of survival and static environment. to exponentially secure increased funds for In service and deference to our intrapre- good causes, that distinguishes the NLS team. neurial team members and to feed our As NOVOMATIC Lottery Solutions (NLS) innovation culture, NLS has created an envi- CEO Frank Cecchini recently explained, The essence of BAMM! ronment that empowers people to innovate. “BAMM! is an impact. BAMM! is a disrup- is the essence of NLS. One example of this is our Heavy Mental in- tion. BAMM! is a sound you make when Th is is the NLS reality, and it is critical that novation program. you break through barriers – we at NLS every stakeholder in the lottery industry be are breaking through barriers in the lot- given the tangible evidence, and understand Each year, NLS holds a company-wide inno- tery industry; we are disrupting, and we the magnitude of the industry benefi t, of this vation event called Heavy Mental. It is an open are bringing new technology to an old operating principle, of this energy that char- and collaborative competition that fosters and market.” acterizes our corporate culture. encourages creativity and innovation. It’s an

42 WLA magazine | No. 48 | Winter 2017 / 2018 CORPORATE NEWS CORPORATECORPORATE NEWS NEWS

opportunity for all team members at all loca- with 78 ideas submitted from the 2017 event tions to contribute great ideas that increase alone. In the participants’ own words: the value of our work, while enjoying time with people from all segments of the company. Olafur Gudmundsson, General Manager, Serbia – “Heavy Mental is a great opportu- NLS staff work on ideas of their own choice nity to work with new people, new ideas, and freely form teams around those ideas. new technologies, new tools, prototypes that Th e event infl uences product roadmaps, im- people are thinking about through the year, always think of as customers, but as soon as proves tooling and processes and is a great and to truly have fun with it!” we do, it seems obvious that we should be venue to have a direct impact on the com- doing more for them. Also, I think we won pany’s internal and external off erings, while Hugrun Elfa Hjaltadottir, Product because this idea really embodies our motto truly having fun with coworkers. Owner – “It is fun to work on diff erent proj- Expect Better”. ects with other people from other teams and During the event, people work on their ideas other countries.” [Th e event is simultaneously Mirka Pejanvoic, Scrum Master – “Heavy for 24 hours, creating prototypes or mock- held in Serbia, Iceland, Spain, and Austria.] Mental is a very important part of the compa- ups, and then each team or individual makes ny culture. It engages people and gives them a short presentation at the end of the fi rst 24 Kristrun Astvaldsdottir, Quality Assur- the opportunity to do something diff erent.” hours. Th e presentations are broadcast compa- ance – For me the value and enjoyment is ny-wide. Following the presentations, there is learning “from other people’s experiences.” Pall Palsson, Director Corporate Strategy a vote for the best idea and wildest (BAMM!) and Innovation – “It is just the greatest idea. Over the years, the contributions to the Finnbogi Darri Gudmundsson, Software feeling in the world to work together, take company have been signifi cant and many are Developer – “I think our idea was chosen something from the point of frustration to well on the way to becoming realities for NLS because it has real-life implementation in resolution, from a concept to the reality of internal and external stakeholders. the lottery business. Currently it takes min- an accepted improvement/innovation.” utes to get this data; with this idea we can get Here is an overview of the innovative proj- the data immediately!” Stefan Petkovic, Software Developer – ects submitted as a result of the Heavy “Th e best thing of all is that it’s fun!” Mental event alone: Of course, Heavy Mental is but one of 1. Th e “cheap development dashboard” the mechanisms NLS supports for sus- 2. A converter that converted songs in- taining the energy and excitement, and to lotto numbers sense of belonging, that motivates our 3. Several proprietary solutions intrapreneurs. Every undertaking being 4. Numerous new libraries and tech- worked on by every employee every day nologies is managed in-line with our 5. HipChat 6. “Live Lotto Shares” Company profi le: 7. And many more NOVOMATIC Lottery Solutions (NLS) is an energized, full-solution alternative Heavy Mental is a unique company technology partner for international lot- perk. It is not just a program for idea tery operators. Most importantly, NLS is generation that is remotely managed an inspired team of people, people who and impersonal; it is a rewarding, mem- share a mission to advance and invigo- ory-making, valued engagement event rate the lottery industry. Th e company’s that binds the culture of our interna- operating principles are to anticipate tional company. Some of the benefi ts: Sigurdur Skuli Sigurgersson, Software rather than react to consumer demand, em- Developer – “What I like best about Heavy brace all innovative technologies, question 1. Innovation culture Mental this year is probably the fact that we how to surpass the expected and deliver long- 2. Great useful ideas won! We won best idea and the BAMM! idea term industry resilience and success. 3. Improves how we work and also, we were working on an idea that 4. Brings people together (team spirit!) even we really believe in, an idea that we really As CEO Frank Cecchini describes, “Our across departments and countries wanted to see in the product catalogue. Just people are diff erent because our company 5. Identifi es talent (and the cursed one) seeing it all come together and working for is diff erent. For one, the advantage of the 6. Allows us to identify what our staff is the fi rst time yesterday was just the greatest equally important hubs in four major loca- most concerned or interested in feeling in the world!” tions brings the spirit and energy of new- 7. Amazing pictures and happy winners ness to the everyday work world. We are Skarphedinn Thordarson, Software De- constantly learning from our coworkers and Th is year’s theme was “Passion for Inno- veloper – “I think our idea won was be- incorporating that sense of newness into our vation” and it was a tremendous success, cause it was for a demographic that we don’t culture, and into our solutions.”

WLA magazine | No. 48 | Winter 2017 / 2018 43 LEARNING LEARNING CURVECURVE

Expert insights and practical solutions

In a big room on the ground floor of NH Hotel in Madrid, 113 participants came together from September 20 – 23, 2017 for the European Lotteries and World Lottery Association seminar on Responsible Gaming. Hosted by ONCE, the seminar included a mix of presentations and round-table discussions addressing the challenging issue of responsible gaming and corporate social respon- sibility (CSR). The business program consisted of three parts: developments in responsible gaming, research by experts in the field, and testimonials by lotteries that are working hard to make responsible gaming a reality.

EL/ WLA CSR – Responsible on economic and environmental factors. He Age enforcement Gaming Seminar explained that 76% of CEOs now say busi- Opening the discussions on the latest re- September 20 – 22, 2017 ness success is about more than just fi nancial search in the fi eld of corporate responsibil- Madrid, Spain profi t. Nowadays, all over the world, there is ity, Joris Van Hoof, assistant professor at the Hosted by ONCE an attitude towards corporate responsibility University of Twente in the Netherlands, that is motivated by factors like the compa- gave a very interesting and engaged presen- Angel Sánchez Cánovas, ONCE’s General ny’s external image or reputation, the grow- tation about harm minimization, age limits, Manager, Rebecca Paul Hargrove, WLA ing demands of institutional investors, and compliance and sales protocols. He present- Vice-President and Edmundo Martinho, also by competitive and regulatory pressures. ed a number of recommendations, includ- Chair of the EL CSR/Responsible Gaming ing the unifi cation of age limits policies in Committee, were the personalities in charge Tomas Sercovich explained that both in- Europe and the introduction by the lottery of giving the welcome speech to the seminar. vestment trends and consumer trends are industry of ID verifi cation in all stores where changing. He said that now lotteries play a lotteries sell their products. Moreover, he Th e review of the latest developments in re- new role in society and that taking action stressed the need for closer monitoring and sponsible gaming included presentations by is essential. Th e risks of inaction are costly, stricter enforcement strategies for age limit Sylvain Lambert, Strategy Group Associate he stressed, and explained that businesses legislation, and urged operators to build on at PricewaterhouseCoopers (PwC) in need to capture opportunities, align busi- the fi ndings of independent experts’ analy- France, and Tomas Sercovich, Director of ness strategies with sustainable development ses and fi eld experiments. External Relations at Foretica (Spain). goals and encourage collaboration, because these goals are beyond the reach of any sin- Superbowl advertising The costs of inaction gle company. Mr. Sercovich also indicated unfi t for children? Sylvain Lambert talked about CSR and re- that we may be approaching the end of vol- Th e next presentation was by Ana Estévez, silience. He stressed the importance of sus- untary CSR, as new legislation like a new EU Senior Lecturer in Psychology at the tainable development and how vital it is to Directive is starting to make CSR an obliga- Department of Personality, Psychological focus not just on social dimensions but also tion for all corporations. Assessment and Treatment at the University

44 WLA magazine | No. 48 | Winter 2017 / 2018 LEARNING LEARNING CURVECURVE

of Deusto (Spain) and winner of ONCE’s advertising during sports broadcastings is Personalities in the making 3rd International Contest on Responsible more positively valued by consumers than Did you know that people’s personalities Gambling Research in 2017. She spoke advertising that does not occur during these are not completely formed until about age about the impacts of gambling advertising events. Th is is of special signifi cance, she 25? Th is is one of the interesting facts that on young people. She explained that adult argued, because sports betting and sport Professor Ken C. Winters, Senior Scientist problems typically begin at adolescence and betting advertising are naturally associated at Oregon Research Institute and Adjunct that a major source of preoccupation nowa- with sports, which are largely considered Faculty at the University of Minnesota, days concerns the impact of betting ad- harmless merit-based activities that can be pointed out during his presentation about vertising upon vulnerable age groups like actively performed or passively consumed “Youth, brain development and vulner- children. She also mentioned that gambling by children. ability to problem gambling”. He explained

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WLA magazine | No. 48 | Winter 2017 / 2018 45 LEARNING LEARNING CURVECURVE

that adolescence is a development peri- 45% to 55% (compared with 40–60% today). She explained that Atlantic Lottery had od oft en characterized by risk-taking and In March 2018, Svenska Spel is also planning launched a CSR Employee Certifi cation Pro- poor decision-making. He mentioned that to launch a digital awareness and training gram to boost employee engagement and most adult gamblers begin to gamble in module on LGBT issues to promote inclu- their understanding of CSR. Th is certifi ca- their youth, so prevention strategies and sion, increase knowledge about the LGBT tion program is designed to elicit a change in sound public health policies in the gam- community and stop discrimination and in- behavior when it comes to CSR and Atlantic bling fi eld are of vital importance for this tolerant behaviors. Lottery is playing a leading role in sup- age group. porting it within the gaming industry. She Stefania Colombo from Lottomatica de- encouraged everyone to take action in this News from the coal face scribed the Italian lottery’s work on the fi eld and once again stressed the overarch- Rounding out the seminar program, sev er al support and care of cultural heritage ing importance of CSR in establishing and lotteries gave presentations about their own and cultural projects, explaining that maintaining a company’s reputation. eff orts to make responsible gaming a reality. Lottomatica has been a long-time supporter of cultural programs in Italy. One example An exemplary host Zenita Strandanger from Svenska Spel out- of Lottomatica’s Italian heritage restoration Event hosts ONCE – themselves a pioneer in lined the Swedish lottery’s eff orts to promote initiatives is the 2016 project to restore the the fi eld of responsible gaming – did a great diversity and gender equality and the targets Tomb of Pope Julius II with its famed sculp- job hosting this event. Th e seminar was very that it is pursuing in this area. Th e propor- ture of Moses by Michelangelo. interesting, helpful and there was an engaged tion of employees with a foreign background audience. Th e speakers not only exposed the should be at least 28% (they have achieved Kim Wilson, CSR Manager at Atlantic problems but also off ered solutions, showing already 27.5%) and gender distribution Lottery in Canada, mentioned the impor- a genuine commitment to positive change in among managers should be in the range of tance of training employees on CSR issues. the fi eld of responsible gaming.

Award-winning research

In a separate talk with Ana Estévez, the psychologist from the University of Deusto in Bilbao, Spain explained the major findings of the study on the in fluence of advertising on risk behaviors in the context of sports betting¹, which won the 3rd International Contest on Responsible Gambling Research in 2017. Organized by ONCE every two years, the contest aims to promote the development of preventive tools and strategies to minimize undesired effects of gaming in all areas.

• Although further investigation is need- • Another possible danger could come particularly vulnerable age groups, and ed, it is reasonable to say that sports from the suggestion that betting is a to children whose parents have an ad- betting advertising represents a real rational way of investing money or that diction to gaming, who could also be problem for a significant proportion of gamblers are professionals in finance. especially exposed to risk. people who take part in sports betting regularly. • Equally dangerous is presenting sports • It is very important to take into consid- betting as an alternative to practicing eration impulsive gaming, which is en- • Some of the ideas transmitted through sports. couraged by high levels of engagement, advertising – like the idea of showing emotionally charged situations and the loyalty to your team by betting on these • Special attention should be paid to chance to take immediate action by games – are potentially dangerous. children and adolescents, who are in a betting on mobile phones.

1 “Influencia de la publicidad comercial en la conducta de riesgo en las apuestas deportivas de los jóvenes: Guía para reguladores, operadores, instituciones y medios” by Ana Estévez, Susana Jiménez-Murcia and Hibai López- González

46 WLA magazine | No. 48 | Winter 2017 / 2018 LEARNING LEARNING CURVECURVE

Cybersecurity – Combating digital threats

The WLA seminar season ended with the annual WLA/EL security seminar held in Oslo, Norway from October 24–26, 2017. Generously hosted by Norsk Tipping, the seminar drew more than 80 international delegates. Among the themes covered this year were organizational resilience, cyber criminality, and – in a special session – the multi-faceted potential of blockchain technology. A selection of some highlights from the seminar are presented below.

An Umbrella for Success: Th e seminar delegates were warmly wel- Th e timing of the seminar coincided with the Organizational Resilience! comed by Norsk Tipping CEO, Åsne 20th anniversary of Norsk Tipping achiev- A Joint EL/WLA security seminar Havnelid, who was quick to stress the impor- ing WLA-SCS certifi cation. As one of the October 24 – 26, 2017 tance of cybersecurity for the lottery industry. fi rst WLA member lotteries to attain WLA- Oslo, Norway She also emphasized the signifi cance of shar- SCS certifi cation, Norsk Tipping had every Hosted by Norsk Tipping AS ing information among member lotteries, as reason to celebrate. Norsk Tipping’s Chief the sharing of best practices is one of the keyss to strengthestrengthening cybersecurity globally.

WLA magazine i | N48No. 48 | WWinter 2017 / 2018 47 LEARNING LEARNING CURVECURVE

Security Offi cer, Trond Laupstad, spoke on of others as well. As Oscar Wilde once said, threats, and the measures they are taking their 20 years of certifi cation and what it has “Experience is simply the name we give to to defend against them, the working group meant for the organization. Trond told of our mistakes”. It is through learning from is also looking to establish an information how the WLA-SCS has played a signifi cant our mistakes that we can create strategies of platform to help better defend state lotteries throughout the years in strengthening the continuous improvement and execute co- across the globe. trust of Norsk Tipping’s players. As he put it, herent actions. “Trust takes years to build, seconds to break, Based on a cybersecurity survey that was and forever to repair”. But in order to reach the top, it is important launched at the seminar, the working group to remember the signifi cance of cooperating will work to produce a whitepaper in 2018. Organizational resilience and collaborating with your team. With that, Th e whitepaper will take the anonymous, Th e title of the seminar, “An Umbrella for Tony closed with an old African proverb, “If aggregated data of the survey and produce Success: Organizational Resilience!” was de- you want to go fast, go alone. If you want to a document that will allow member lotter- lineated by Tony Reilly, BSI Group Marketing go far, go together”. ies to benchmark themselves against the in- Director. He defi ned Organizational Resil- dustry in order to know where they stand on ience (OR) as the ability of an organization to Cybersecurity cybersecurity. anticipate, prepare for, respond, and adapt to With the continuing expansion of businesses incremental change and sudden disruptions into the online sphere in recent years, the Attila Pogany, Soft ware Development Man- in order to survive and prosper. According importance of cybersecurity has accordingly ag er of International Lottery Systems for to results obtained from a survey of 411 se- increased. In a short video presentation, Scientifi c Games, USA, discussed the im- nior executives conducted by Th e Economist provided by Camelot's head of information portance of information security in new Intelligence Unit (EIU), OR is defi ned as a security, David Boda, the signifi cance of operational environments. Information is business priority and an essential element to cybersecurity in today’s online world was an important business asset and as such long-term growth and competitive advan- emphasized. Th e threats to cybersecurity are needs to be suitably protected. According to tage. Th e EIU is the research and analysis dynamic and complex. Many organizations a yearly global economic crime survey con- division of Th e Economist Group, a leading today struggle to manage this area of risk ducted by PwC Global, the three most com- analytical source for international business and have been successfully attacked. David monly reported types of economic crime in and world aff airs. emphasized that the lottery industry is not 2016 were – in order of frequency of occur- immune to these attacks. rence – asset misappropriation, cybercrime, As Tony reported, there is a lack of resil- and bribery and corruption. Cybercrime, ience-oriented practices in about 70% of all David spoke of the world of cyber criminals which before 2011 did not even appear on organizations worldwide today. OR involves as being highly organized with criminal el- the survey, is now the second most frequent a whole new mindset, one that maintains a ements collaborating internationally. Th e economic crime. With cybercrime steadily balance between innovative action and pre- buying and selling of criminal services and increasing, it is estimated that less than 40% ventative control, between consistency and the trading of information on which orga- of all organizations globally are capable of fl exibility. It is the capacity of an organiza- nizations are vulnerable is common prac- adequately responding to a cyber attack. tion to embrace paradox that aff ords it the tice in this realm. David posed the question, fl exibility and resilience to survive in a rap- “If cyber criminals are collaborating, why According to Judie Ayoola, UK Information idly changing world. aren’t we?” Security Manager for Playtech, more compa- nies are investing in cybersecurity today Although top-level management is responsi- David, who is also a member of the WLA than ever before – 63% in 2017 compared to ble for adopting resilience-oriented policies, Security and Risk Management Committee 56% in 2016. In her presentation, "Managing OR is not just a top-down approach. It is not (SRMC), spearheaded a cybercrime work- Th ird Party Risks", Judie stated that for busi- only about building best practices, it is about ing group within the SRMC at the outset of nesses, the costliest cybersecurity breaches embedding OR into the entire organization. 2017. With this eff ort, David is working to are those that result from the failures of collaborate and raise the bar on cybersecu- third-party suppliers, and that your secu- Tony pointed out that no organization is rity across the lottery sector. Eight lotteries rity is only as good as your weakest link. perfect. But we should learn from our errors: have joined the working group to date. In Transparency and the lack of visibility of a not only from our mistakes, but the mistakes addition to sharing information on cyber supplier’s environment, operation, and sup-

48 WLA magazine | No. 48 | Winter 2017 / 2018 LEARNING LEARNING CURVECURVE

ply chain can be a challenge for an orga- sentations of Lillaill Kovacs, Legalld Adviser to In closing the blockchainkhi workshop kh CarlosCl nization. In order to manage and mitigate Szerencsejáték Zrt., Hungary, and Manuel Bachmaier, WLA SRMC Chair and third-party risks, it is important to make Machado, Digital Transformation and PDGRyCN of SELAE, Spain, discussed the information security part of the procure- Blockchain Global Solutions Sales Manager, potential of blockchain for the lottery sector. ment process and contract requirements. Worldline Global, Spain. He spoke about blockchain as a replacement Monitoring your supplier’s security policies for Random Number Generators (RNG). and procedures, and their organizational se- Lilla discussed how blockchain can be used He highlighted the case of the Isle of Man- curity, is vital for the security of your own in the implementation of “smart contracts”. licensed Quanta, a blockchain lottery plat- organization. Th e idea of the smart contract was fi rst pro- form that will use smart contract technology posed in 1996 by Nick Szabo, an American to replace current RNG technology. Quanta Blockchain computer scientist, legal scholar, and cryp- claims that the system will be decentral- Th e semin ar concluded with an optional tographer best known for his research in ized, autonomous, and will need no human blockchain workshop, coordinated by Fred digital currency and digital contracts. A intervention. Th ey further assert that a de- Steinmetz, Research Associate from the smart contract is a computer protocol in- centralized autonomous lottery game will University of Hamburg, Germany. Fred is tended to digitally facilitate, verify, or en- provide full protection from RNG manipu- a member of the Blockchain Research Lab force the negotiation or performance of lation as happened in the notorious case of team, whose goal is to explore the disruptive a contract. Like digital currencies, smart Eddie Tipton, the former information secu- potential of blockchain technologies from contracts allow the performance of credible rity director of the US Multi-State Lottery an economic perspective. Fred provided the transactions without third parties. Th ese Association who was convicted of lottery delegates with a comprehensive overview of transactions are trackable and irreversible. fraud in 2017. the fundamentals of blockchain, its origin, the philosophy behind it, and how blocks Manuel provided insights into how block- Th e amount of material that this semi- are technically conceived and maintained chain can be used to enhance digital iden- nar provided was regrettably too exten- within a blockchain network. tifi cation and privacy. Digital identity is sive to cover completely in this report. We becoming a key part of our everyday lives: would however like to thank all partici- Blockchain was conceived to develop a it is critical to many business and social pating speakers for sharing their valuable monetary system (Bitcoin) that is free of transactions. According to Manuel, cur- knowledge in Oslo. Special thanks go out to government scrutiny, requires no bank in- rent digital identity solutions are costly, the knowledgeable and respected veteran of termediation, and allows the holder full disjointed, and fallible. Furthermore, they the lottery industry, Ray Bates, for his out- control over their funds. It represents a sys- do not do enough to counter growing con- standing moderation. We would also like tematic eff ort to delegate authority to the cerns over privacy. Blockchain holds the to thank Norsk Tipping, in particular CEO, lowest possible level. A blockchain is a dis- key to digital identity management in the Åsne Havnelid and Chief Security Offi cer tributed database jointly managed by the future. It allows one to keep personal in- Trond Laupstad for their gracious hosting of participants of a network. It allows for effi - formation secure and private but shareable this seminar and for making us feel at home cient, low-cost transaction processing, with on a trusted network, and made available in Oslo. And fi nally, many thanks to the EL minimal dependencies, and no single points only to those that need to know. It empow- for their collaboration and excellent organi- of failure. ers consumers to control their own identity zation.. and share between trusted entities with their Franz Müller, Head of Information Security consent. Because no single institution can at Saarland Sporttoto, Germany, took the compromise a person’s digital identity, digi- discussion further, providing an in-depth tal identity with blockchain is benefi cial for view of digital currencies. Franz explained consumers, business, and reg- the complexities of the blockchain trans- ulators alike. It off ers consum- action in detail, contrasting the classical ers greater control over their centralized ledger (current-day banking sys- personal data; for businesses tem) to the distributed ledger (blockchain). it can reduce the risk and the cost of a data breach; and for As blockchain allows for the transfer of regulators it brings increased value, it is not limited to fi nancial transac- effi ciency in compliance control tions. Th is was demonstrated in the pre- and monitoring.

WLA magazine | No. 48 | Winter 2017 / 2018 49 OUR CONTRIBUTORS OUR CONTRIBUTORSOUR CONTRIBUTORS

Many thanks to our PLATINUM Contributors

Many thanks to our GOLD Contributors

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

Editor: Paul Peinado, WLA Communications Coordinator Contributing Editors: Bronwen Bartlett, Cristina de Ramón Ortiz, Göran Wessberg, Isabella Stadlin, John Smellie, Patricia McQueen, and Steve Hoare. Print: Werner Druck & Medien AG, Basel, Switzerland Layout: 3satz GmbH, Thalwil, Switzerland

50 WLA magazine | No. 48 | Winter 2017 / 2018 CORPORATE NEWS CORPORATECORPORATE NEWS NEWS

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WLA magazine | No. 48 | Winter 2017 / 2018 51 OUR CONTRIBUTORS OUR CONTRIBUTORSOUR CONTRIBUTORS

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© 2018 Scientific Games Corporation. All Rights Reserved. 52 WLA magazine | No. 48 | Winter 2017 / 2018