Online lottery betting operator Lottoland is getting into the insurance game after receiving a financial services license from Gibraltar regulators.
On Monday, Lottoland proudly announced that its new Fortuna Insurance subsidiary had received a license from Gibraltar’s Financial Services Commission to handle future collateralized reinsurance and insurance-linked securities (ILS) transactions. Lottoland believes it marks the first time an online gambling operator has set up its own insurance company.
Lottoland offers players the ability to place bets on the outcomes of draws from major lotteries around the world, including Powerball and EuroMillions, with winning bettors claiming similar prizes as if they were directly participating in these lotteries.
The company takes out insurance to guard against the possibility that one of its players will hit one of these nine-figure paydays. To date, Lottoland’s biggest payout was a €22m prize claimed by a German punter last year.
It was only last month that Lottoland announced it had taken out a record insurance policy with an unnamed provider, giving it €120m worth of ILS coverage. Lottoland now says this ILS transaction will be transferred to operate under Fortuna Insurance, which will be guided by a five-person board and management team.
The arrangement will allow Fortuna to handle all of Lottoland’s financial risk management, including that of its B2B partners, allowing for ready access to global reinsurance and ILS markets when laying off some of that risk with third parties becomes advisable.
Lottoland CEO Nigel Birrell said the unique arrangement “highlights our commitment to industry best practice and transparency. This is a huge step forward not just for Lottoland but also for the gaming industry.” The company also expects the new arrangement will serve as a marketing tool for customers skittish about their likelihood of getting paid should they land a major score.
BIRRELL SAYS AUSTRALIA CONTROVERSY GOOD FOR BUSINESS
Meanwhile, in an article posted Monday, Birrell told Olive Press that “Gibraltar is our home” and that the company’s ongoing challenges in the Australian market won’t affect the 230 staff – out of the company’s total global workforce of 350 – based at Lottoland’s Gibraltar HQ.
Lottoland Australia was recently the target of a major “Lottoland’s Gotta Go!” campaign launched by local lottery operator Tatts Group and lottery retailers who fear their sales have taken a hit since Lottoland won its Northern Territory online betting license in January 2016.
State and federal politicians have added to the drama by threatening to prohibit Lottoland’s operations in their regions, while some are pushing for the Northern Territory to rescind the company’s license. Lottoland has pushed back against claims that it’s cannibalizing anyone’s business or not paying its share of fees and taxes.
Birrell went one better on Monday, telling Olive Press that the “myths and untruths” being propagated about Lottoland weren’t negatively impacting its Australian operations. “If anything, all the free publicity is driving more registrations and increased brand recognition.”