SBC Digital Summit: The path forward for lotteries


The third day of the SBC Digital Summit turned to lotteries, and the unique challenges they have to face as a result of the COVID-19 pandemic. With many operators having to close up retail locations, and others beholden to their government partners, lotteries are facing a whole bunch of unique problems apart from the rest of the gambling industry.

sbc-digital-summit-the-path-forward-for-lotteriesThe day began with a speech from the President of the Global Lottery Monitoring System (GLMS), Ludovico Calvi. He emphasized the five points of priority for the GLMS during the criss: Employee’s wellbeing, effective communication, business continuity, effective cost management, and fiscal and financial assistance, in that order.

He also offered a few predictions on what kinds of gaming companies will find success once this crisis is over. Of course, companies that emphasize safety for both customer and employee will do better than those who don’t, and those which were already financially on solid footing have a better chance of surving. But from there, companies that manage to be more agile, can push digital platforms more successfully, and apply better cross functional cooperation will likely do much better than those that cannot.

Calvi continued to emphasize that point in the first panel of the day, “How Lotteries are adapting to the outbreak”, moderated by Harmen Brenninkmeijer, CEO of Quanta, with fellow panelists Sami Kauhanen, VP of Betting, Veikkaus, and Arno de Jong, CMO of Nederlandse Loterij. He noted that companies which continue to keep their retail and digital strategies separate will have a hard time with the new normal.

Brenninkmeijer asked the panel for a summary of what each panelist was seeing in their respective country. In the Netherlands, Finland, and even Hong Kong, restrictions are begining to be relaxed to some degree, but Italy is till on a hard lock down, preventing any retail operations. That has meant a shift to online gaming, of course.

In Italy, for example, online action has shifted primarily to poker, virtuals and esports. But Calvi noted, “don’t forget that the GGR in this country is about 20 billion. Out of that, about 1.9 billion is digital,” meaning operators are hurting pretty bad.

In Holland, Jong noted that without the typical sports offering, and esports can’t become a regulated offering just yet, they’ve had to shift to ingenious methods of continuing lottery sales. Digtial scratch tickets are also prohibited, but Nederlandse Loterij has resorted to selling the tickets online and shipping them to customers.

Finland, which has had pretty relaxed restrictions compared to other countries, was seemingly already well prepared for this. Kauhanen noted that many of their customers had already shifted to online platforms.

Finally, Brenninkmeijer asked what the new normal might look like. With de Jong and Kauhanen being an important part of their respective country’s sports and charity funding, they expected regulations to stay pretty much the same, but de Jong added:  “My message to our audience is don’t talk yourself into depression, but invest, look forward, and continue optimizing your business.”

A panel later in the day, “Lottery in society – Post-Corona Positioning”, took a look at several more lottery operators around the continent, and we gained more insights into the sports side of things. Moderator Andrew Gellatly, Head of Global Research for VIXIO, spoke with panelists Marko Stokuca, Deputy Director of the Gaming and Game Development Division of Hrvatska Lutrija,Thanos Rigas, Trading Director of OPAP, and Jens Nielsen, Sportsbook Director for Danske Spil.

Nielsen noted that right away, lotteries have had to shift to alternative sports offerings, noting it’s been a strong period for esports, Belarussian football and chess. Stokuca and Rigas didn’t really see much esports action happening in Croatia and Greece respectively, but table tennis has come out of this as a clear favorite, with virtual sports grabbing a healthy share of the market.

When Gellatly asked what kinds of predictions the panel would make for their retail offerings in a post-pandemic world, the post-COVID-19 positioning part of this conversation became much more in doubt. All of the panelists agreed that we can’t really predict how retail will do when shops reopen, as social distancing measures begin to dictate life, and we simply don’t know what that really means yet.

So does that mean innovation will be a key part in re-starting the lottery world. In a panel moderated by Paul McNea, Director of iGaming Performance, panelists Robert Urwin, CEO of Odds Bods, Martin Clarke, Director of Product of Digitain, Jeremy Cornwall, Global Sales Leader – Braintree PayPal Group, all considered what lottery operators can do to improve their offerings for whatever the future might hold.

Cornwall predicted, and the panelists all agreed, that less money will go to discretionary entertainment as the economy likely enters a depression. But McNea wondered if this will spur another huge round of innovation, as companies have previously innovated during shocks to the economy, like Netflix and Alibaba.

Cornwall agreed with that, and noted the gaming industry is ready for it. “We’re constantly adjusting to new normals,” he said. The key is to identify the new normal and build your business for it.

The problem, Clarke noted, is the sports betting side of the industry in particular has gotten too comfortable. Most are looking at each other, rather than trying to find new ideas. Urwin added that corporations have to be willing to flirt with more failure to realize true innovation.

McNea asked each of the panelists to offer something they are working on that could help innovate the industry sooner rather than later. Cornwall offered up that Paypal is working on a new secure payment system that will allow cross spend from, for example, a media site to a gambling firm. Urwin’s Odds Bods is working on dashboards to allow traders to more efficiently understand what’s going on in their books, suspend lines at better times, and offer up arbitrage opportunities.  Could result in 10% increase in volume and better margins. Finally, Clarke said Digitain is working on new games, like table football, but also a better customer data platform to keep players entertained and out of danger.

Even if you’ve missed out on the SBC Digital Summit so far, all of the talks and panels have been recorded to watch, so it’s not too late. Head over and register and see how the gambling industry will come out of this COVID-19 crisis.