Polla Chilena`s extended family

a publication of the
World Lottery Association
Polla Chilena’s
extended family
Issue no. 25, Winter 2007
Dedication to Good Causes is one of the Chilean national lottery’s
core values. Pictured here is lottery chief Verónica Montellano with
Rodolfo Valdés, President of the Children’s Village that now benefits
from lottery funding. Page 22
Building excellence,
supporting good
causes
Contents
5 Letter from the President
A Manifesto for Excellence
6 Hans Savonije outlines the challenges and opportunities
of Building Sustainable Excellence.
Association business
8 Continued partnership with sports federations and news
from the Regional lottery associations.
Retail security
10 Canadian lotteries have been swift to act on vulnerabilities
in the retail process.
WLA Responsible Gaming Framework
16 A unique tool to leverage worldwide best practice.
Global RFP Best Practice
18 The WLA standard helps to streamline a technology
procurement in the Netherlands.
Security
19 Ed Stefan reports on the continuing need for public
awareness in the fight against lottery scams.
Special series: Lottery beneficiaries
22 The Chilean national lottery takes a hands-on approach to
community projects.
World Meet 2007
26 Louisville, Kentucky: a report from the global lottery
community’s landmark event of 2007
The case continues
30 Lynne Roiter, Philippe Vlaemminck and Annick Hubert assess
the legal and regulatory situation around the world
This issue of the WLA Magazine continues to underline the
tremendous value of the material and emotional support that
most of our members contribute to the societies around them.
Polla Chilena’s support for projects on the ground is making
Chilean society a better place – and our Good Causes theme
continues with their story.
What leads us to underscore these contributions? Why is this
so important? As technology races ahead, people risk losing
the sense for the simple things. The human values of sharing
and teaching, warmth and trust.
What we can learn from these questions as lottery operators is
that they provide huge opportunities for our future. Connecting
with consumers as a “trusted friend” is key to our success.
Our ability to build a brand with a personality, a brand that
is warm, respected and trusted, determines whether or not
consumers prefer our products over others.
So our job is to leverage tools such as our unique Responsible
Gaming Framework and learn from others to build excellent
lottery operations and brands. Everything communicates,
our products, our distributors and our interactions with our
consumers and stakeholders. It’s all part of our joint mission of
Building Sustainable Gaming Excellence.
This issue reports on a fantastically organized World Meet, for
which we thank NASPL and the Kentucky Lottery team, and
includes coverage of the legal situation and analysis of our key
tools as well as news about our contributor partners. A draft
agenda of the 2008 WLA Academy program will also give you
a flavor of how we plan to link in with the different parts of the
world.
Yes, 2007 was a good year – and 2008 will be even better! The
WLA team wishes all of you a constructive and healthy 2008,
and a year of Excellence in all we do... together!
People
34 Nichelle Anthony, Minority and Community Affairs
Coordinator, Kentucky Lottery Corporation
Hans Savonije, Executive Director, WLA
The learning curve
36 Short reports from recent WLA seminars and an outline of the
WLA Academy program for the first part of 2008.
Corporate news
40 Selected news highlights from members of the WLA
Contributors Program
2
Winter 2007
WLA MAGAZINE is published by the
World Lottery Association,
Lange Gasse 20, P.O. Box,
CH-4002 Basel, Switzerland
phone: +41 61 284 1111
fax: +41 61 284 1350
e-mail: info@world-lotteries.org
www.world-lotteries.org
Publication Director: Hans Savonije,
WLA Executive Director
Editor, layout and ­coordination: ­
Paul Peinado,
WLA Communications Coordinator
Contributing Editor: John Smellie
Printed by: Werner Druck AG,
Basel, Switzerland
3
Letter from the
President
Gaming industry is a serious thing.
singulier - Photo : Daniel Podva. - * Photo : Française des Jeux. (11 VA V2)
*
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4
Once again, fall has been an extremely ence addressing Building Sustainable
active time for the WLA and the region- Excellence in Times of Change & the WLA’s
al associations. It kicked off with a joint Security Standards, and Funding for Good
NASPL/WLA World Meet ’07 conference Causes & the WLA’s Responsible Gaming
in Louisville. My Kentucky Lottery staff, Framework, respectively. Further details
the NASPL and WLA staffs, and I greatly regarding the conferences are featured
appreciated the opportunity and honor of in this issue. Congratulations to Carlos
hosting nearly 1,400 of our lottery mem- Borges, outgoing CIBELAE President and
ber and vendor community associates. Jose Manuel Avilés Morales, incoming
Entitled Racing for Excellence, Winning CIBELAE President, and CEO of Lotería
for Good Cause, this was NASPL’s third Nacional de Beneficencia, as well as
World Meet Conference, the previous two Henry Chan, APLA Chairman and Endoh
having been held in Vancouver, British Yasuhiko, President of the Japan Lottery
Columbia in 1996 and in Albuquerque, Association for their roles in leading and
New Mexico in 2001.
hosting these highly successful conferences.
During the last week of October, Lotería
Nacional de Beneficencia, the National Hans has done an excellent job outlining
Lottery of El Salvador, hosted the 11th some of the challenges that lie ahead of
CIBELAE Congress in San Salvador, us in this ever-changing world through his
which was themed “Safe Guarding the Manifesto for Excellence. He touches on
Common Good”. The Japan Lottery the lightning fast advances in technology,
Association hosted the third regional APLA changes in consumer preferences, buyConference in Tokyo, during the last week ing patterns and channels, our members’
of November. The conference’s title and and sponsoring governments’ struggles to
central theme was Synergy, Sustainability, adapt to these changes, the need for us to
and Social Value. The central themes of strive for excellence in our lottery operaall three conferences were consistent with tions, and the underpinnings of our public
the WLA’s vision of Building Sustainable acceptance – the integrity with which we
Gaming Excellence and featured presen- conduct our business, and ultimately the
tations of our core emphasis programs trust and confidence our public and playCSR/Responsible Gaming Framework and ers place in us.
Security Control Standards, as well as
touching on the best practices in market- Successful and meaningful WLA Academy
ing, advertising, and retail channel dis- seminars were held in Lomé, Togo on the
tribution. Hans attended the CIBELAE subject of Lottery Business from A to Z
conference and presented our Responsible during the last week of August and on
Gaming Framework. Both he and I were Excellence in the Sports Betting Arena,
featured speakers at the APLA confer- held in Punta Del Este, Uruguay during
the last week of November. Hans conducted the Togo seminar, presenting it himself
in French. Paul Peinado and Mélissa Azam
of the WLA Basel and Montréal offices coWinter 2007
ordinated and attended the Uruguay seminar. Reports of these seminars are also
included in this issue. Congratulations
and thanks to the National Lottery of Togo
and La Banca de Quinielas de Montevideo
(Lottery) for serving as hosts for these
seminars.
Another manifestation of the change we
constantly deal with is the career changes of key WLA leaders. Within the last
two months, Reidar Nordby, Jr., Basile
Neiadas, and John Branscombe resigned
their positions with Norsk Tipping, OPAP
and Camelot Group. Consequently, Reidar
and Basile will be vacating their positions
on the Executive Committee and John will
be stepping down as Chair of the Security
& Risk Management Committee. I’m sure
you join me in thanking all of them for
their service and leadership to the WLA
and our common lottery business over the
last several years. We wish them every
success in their future endeavors. Thanks
also to Carlos Borges for his service as
CIBELAE President and its representative
on the WLA Executive Committee over the
last two years. Carlos continues in his role
with Caixa, but will be replaced on the
Executive Committee by the new CIBELAE
President Jose Manuel Avilés Morales.
Clearly, 2007 was a year of change, a high
level of activity, significant progress, and
accomplishment. We look forward to an
even more exciting and successful year
in 2008.
Arch Gleason
WLA President
5
The WLA: A Manifesto for Excellence
appreciated World Meet ‘07 in
Kentucky, and at the end of a year
of challenges and change, it is an
­appropriate time to draw some conclusions on behalf of our members on
the ­current status of our sector and
environmental factors and basic operating
principles are shared, or should be.
Allow me to outline the most important
ones for your thought and reflection:
The world is changing so fast that none
of us – if we aim to play an important
role in the life of consumers – can afford
to simply stay in the here and now.
sentation, most of our members enjoy a
significant lead in terms of reputation over
the wilder offshore and other competitors,
many of which have hastily put together
an operation but without the trust fundamentals needed to build solid and sustainable brands. And it is this treasure of
brand excellence that supports most of our
members, that the WLA, as the world’s
leading lottery platform, needs to protect,
nourish, build and leverage to stay at the
forefront of the consumers’ minds, at the
top of their long list of choices
As our players develop new impulses, and
are constantly faced with new choices
and technological opportunities, our memKey questions to be answered,
bers’ ability to deliver relevant choices to
regularly coming from
consumers is the only guarantee for our Everything communicates,
our membership are:
stakeholders that we will remain at the especially our actions.
forefront of player protection and ser- Whilst the WLA membership devotes sig• Where is our lottery world heading?
vice to society. The stronger our lotteries nificant resources and funds to its written
• Will we be interesting to the new and
are, the more we can responsibly lead our and brand communication, we do at times
younger generations of players?
consumers along the road of trust and have problems in communicating what it is
• Will our vendor/supplier continue to
transparency. Your Association has devel- we stand for. As confirmed in the most reconsolidate in their sectors?
oped some key instruments that help you cent meeting of our Strategic Development
• Will the drive ­towards more choice for
to run your business better and change Committee meeting, our WLA platform
consumers continue?
more swiftly, leveraging experiences from must continuously nurture and build its
• Will the core of our business continue
colleagues all over the world. The WLA reputation as the world’s most trusted
to be based on good causes and player
Responsible Gaming Framework, the WLA gaming brands and lottery operators. But
protection?
Security Control Standard ©, and the WLA just saying this is not enough. To build our
Marketing Best Practices that are now be- reputations and consolidate the trust we
• Will the ongoing globalization of gaming developed, are just three examples of enjoy, it is our actions and our personing offers, mainly driven by technology,
the tools available to all members to en- alities, not just our words, that determine
render our current portfolios obsolete?
sure that their operations are run with consumers’ understanding of what it is
• Will the current structure of predomiunmatched excellence.
nantly state/jurisdiction controlled lotwe stand for. What builds our brands, for
tery regions and segments resist the
example, is our contribution to society, as
The three pillars of success
pressures from hard-lobbying, thirdillustrated by Polla Chilena in this issue’s
are trust, trust and trust.
party, tax-optimized gaming operators?
section on Good Causes. What builds our
Consumers around the world are buy- brands are product innovations, our relaDepending on where you are in this rap- ing our products because they trust that tions with our retail partners and our supidly evolving world, the answer to any of they have a fair chance to win and that we pliers, and our contacts with politicians,
the above vital questions will be different. make a difference to society by contribut- the press and our peers and colleagues
Some of our members seek to operate a ing a significant portion of our surpluses. – and of course the quality of our cooperalarger, younger and more technology-fed In return for this trust, consumers deserve tion and ability to share our knowledge.
game portfolio, while others will rely on our best efforts, and they deserve trans- Our prime driver today must be the detheir current strengths in distribution and parency. They and our other stakeholders termination to be the best and to display
government-protected operational the- specifically demand that we demonstrate excellence in every dimension of our opatres. No single answer is correct or in- excellence in our day-to-day operations, erations and our day-to-day life.
correct. However, there are a number of in the way we communicate with our aukey parameters that all of us in our unique diences, our communities and our employ- Sustainable, trust-based relationships
global membership share. Independent of ees. All of this is vital for our reputation, with our consumers and societies call
for sharing and learning excellence.
where you operate your business, whether for our brand value.
Trust is built on our brands and our ability
you are a state-controlled operator or a
private one, whether you operate in Asia, As Peter Dart, the global apostle of brand- to reach our consumers and players with a
North America or Europe, a number of key ing, pointed out in his Kentucky pre- fun and exciting gaming portfolio, and this
our future together.
“Consumers deserve
our best efforts
and they deserve
transparency.”
Hans Savonije
WLA Executive Director
is what most of our members strive for as
a way to fulfill their ultimate mission: to
contribute to society by supporting Good
Causes and responsible gaming practices
so we can offer consumers an informed
choice.
It seems so simple, but the reality is more
complicated. This year has been a turbulent one for a number of members,
with issues ranging from retail security
concerns around the globe to continuing attempts by lotteries to clarify their
stakeholders’ perceptions of fair gaming
and competition. All these developments
illustrate the need for our WLA community to share their knowledge, leverage
each other’s experiences and strive for ex-
Photo: © Barry Westerman
Following the successful and greatly
cellence in gaming practices. Most of our
members demonstrate excellence in their
responsible approach to restraining product innovation, for example. But is this really in the interest of the consumer? What
if younger, more technologically oriented
consumers want newer forms of gaming
that we do not provide? What if our distribution channels underperform in an evergrowing global gaming sector? The quest
for fun, excitement and adventure is deeply engrained in the human psyche. It is our
responsibility to provide consumers with
exciting games consistent with our jurisdictions public policy limitations and an
informed choice, to make sure we do not
let them wander off into a distant world of
uncontrolled, profit-driven gambling.
Most of our members have shared their
experiences and learned from each other for many years. One of the latest tools
that will help them to do this is the ongoing revision and realignment of the
WLA Academy. Another is the upcoming Best Practices for Retail and Online
Distribution, which aims to share best
practice from around the world as a basis for distribution excellence. All of this
is possible because members have formed
a unique global forum of best-in-class lottery operators, a forum that helps them to
have confidence in their ability to provide
consumer choice and protection and contribute to society around the world in an
unmatched way
Diversity builds cohesive excellence.
All of the above translates into action in a
world that is still very diverse, with different consumer needs, political constellations and financial constraints. The ability
for local lottery operators to understand
the subtleties of local execution, while at
the same time using what they learn by
drawing parallels with other regions and
peers – this is what makes our platform
so unique and so strong. Global learnings
and initiatives such as the Powerball and
EuroMillions megabrands excite consumers around the world and bring lottery operations together.
It is great to be on a mission towards
excellence and in the meantime build
sustainable cohesion among people and
consumers. Don’t you think?
- the best bet
6
Winter 2007
a Betware company
7
Association
business
Regional
associations
Nebraska Lottery, United States
Applications for membership by a number of lottery organizations were accepted
subject to the approval of the membership
at the next General Meeting.
Established in 1993, the Nebraska Lottery
sells scratch tickets and a range of lotto
games including Powerball. Sales for fiscal
2007 totaled more than $114 million, with
the majority of the surplus going to environmental projects and education. Lottery
profits also help to finance the state’s compulsive gamblers assistance efforts.
Korea Lottery Association, South Korea
Korea Lottery Association was established
in February 2006 under the control of
the national Lottery Commission. The
Association is a combination of 10 different lotteries and is responsible for planning, producing, selling and managing
instant tickets and draw games.
Nanum Lotto, South Korea
The Nanum Lotto consortium was awarded the license to operate South Korea’s
national lottery games until 2012. The lottery has a turnover of approximately $2.5
billion annually. Intralot will be its main
technology provider.
Latvijas Loto, Latvia
Set up in 1972 as a subsidiary of Latvia
Sportloto, Latvijas Loto became a separate
company in 1993 and was reorganized as
a joint stock company. The state is its sole
shareholder. Its biggest products are Keno
and Superbingo.
Maltco Lotteries Ltd, Malta
Maltco Lotteries has an exclusive license
to operate all national lottery games in
Malta, including the Super 5 lottery, Lotto,
scratch games and the recently launched
fixed odds betting U*BET. Maltco was set
up in 2004 and is 73% owned by Intralot.
The remaining 27% is owned by other private interests.
Palm Commerce Holdings Co. Ltd, China
Palm Commerce Holdings has also joined
the WLA as an associate member. The
company provides lottery software, hardware and technical services to China
Welfare Lottery Issuance Centres as well
as lottery information and subscription
services through mobile phones, and electronic self-service kiosks selling lottery
and other products.
FIFA extends Early Warning System
FIFA’s early warning system is set to become
an increasingly powerful weapon in the
battle against criminal activity in the sport
and sports betting industry. WLA member
organizations that offer sports betting took
part in the pilot project for the 2006 FIFA
World Cup™, under an agreement signed by
WLA in late 2005. Based on the success of
that project, FIFA decided this year to formally set up and operate an Early Warning
System to monitor bets on the 2010 FIFA
World Cup™ qualifiers and the finals in
South Africa.
Working through Early Warning System
GmbH, a majority-owned subsidiary of FIFA,
member lotteries will provide information
8
to assist investigation of suspicious betting
patterns such as unusually high betting
turnover in a match, an unusual distribution
of bets on the outcome of a match, valid
rumors questioning the credibility of a match
or any other relevant information which
could be useful for other lotteries in regards
to such match-fixing speculation.
Zurich-based Early Warning System GmbH
is seeking agreements with as many betting
operators as possible around the world.
For further details contact the organization
on mail@fifaews.com or visit its website at
www.fifa-ews.com.
Incoming NASPL
President Ernie
Passailaigue
Committee news
John Branscombe
is standing down
as Chair of the
Security & Risk
Management
Committee. Current
Deputy Chair
Ed Stefan has been designated interim
Chair until a new appointment is made.
Evangelos Cosmidis from OPAP has been
appointed as a member of the Committee.
Reidar Nordby, Jr.
has resigned as
President and Chief
Executive Officer
of Norsk Tipping.
He will continue as
a special advisor
to the Norwegian lottery, with particular
responsibilities in the area of international
relations. Reidar will also be leaving the
WLA Executive Committee, which he has
served since 1999, most recently in his
­capacity as the Association’s immediate
past elected President.
Basile Neiadas has
resigned as Chief
Executive Officer
of the Greek lottery
operator OPAP. As
a result, he will no
longer be serving
on the WLA Executive Committee.
The members of the Communications
Committee are Jan Stewart, Arch Gleason,
Risto Nieminen, Dianne Thompson and
Hans Savonije. Lynne Roiter is also an
­ex-officio member. The key objectives of
this Committee are linked to the work of
the Strategic Development Committee,
which also met in Louisville and is
­continuing to examine the future strategic
priorities of the Association and its diverse
membership.
Photo: © Barry Westerman
New members
New President for NASPL…
The North American regional lottery
association elected a new President
at its general meeting in Louisville in
October – Ernie Passailaigue, a native
South Carolinian and Executive Director
of the South Carolina Education Lottery.
Licensed as a Certified Pubic Accountant in
1971, Passailaigue served as an Associate
Professor of Business Administration at
the Charleston Southern University from
1973 to 1988. At the same time, he was
managing partner of his own accounting
firm in Charleston. Passailaigue is also the
former owner of the Charleston Royals and
Rainbows Professional Baseball Team. In
1988, he was elected to the South Carolina
Senate and served for thirteen years until August 2001, when he resigned to run
the lottery. He has served on a number of
boards and committees, and has been the
recipient of numerous legislative and public service awards.
…and for CIBELAE
State lotteries from more than 20 countries came together in San Salvador
in October for the Eleventh CIBELAE
UEFA moves to control manipulation
European football’s governing body, UEFA,
reached a cooperation agreement with
European Lotteries (EL) and the European
Football Pool (EFP) in 2005. The partners are
working together to establish an information
system highlighting irregular betting patterns
for UEFA competition matches.
In December this year, EL called on the
European Union to take action against betting manipulations in football and other
sports, supporting the recent call for EU action made by UEFA President Michel Platini.
The European police network Europol is
currently looking into 26 UEFA matches
which were possibly rigged by betting manipulations. “The uncontrolled expansion
Winter 2007
of betting opportunities facilitates attempts
to rig matches,” said EL President Winfried
Wortmann. “EL members operate in the public interest and are placed under strict government control. They are the most reliable
partners for sport when it comes to keeping
sporting competitions free of any improper
influence associated with betting.”
EL members strictly monitor the volume of
stakes and closely cooperate with each
other and with UEFA and the authorities. EL
is firmly committed to intensifying its longstanding cooperation with UEFA and offering
its full support for the EU institutions’ efforts
to keep sport fair and free of any improper
influence and criminal activities
Congress, themed on “Safeguarding the
Common Good”. The business program
featured presentations and discussions of
topics including responsible gaming, player protection and CSR. At its general assembly, the regional association approved
the CIBELAE Code of Conduct, which covers the key areas of ethical and legal compliance, transparency, consumer rights
and underage play. In addition, it elected
El Salvador’s José Manuel Avilés Morales,
formerly one of the association’s Vice
Presidents, to the position of President.
Manuel Avilés previously served as El
Salvador’s Minister of Tourism and in a
number of other trade promotion and
cultural bodies before being appointed to
head Lotería Nacional de Beneficencia,
the national lottery of El Salvador.
Tokyo hosts APLA Conference
Under the title “Synergy, Sustainability
and Social Value”, Asia Pacific lottery industry leaders and key suppliers met in
Japan in late November for the Third
APLA Conference. Under the leadership of
APLA Chairman Henry Chan and Endoh
Yasuhiko, President of the Japan Lottery
Association, the regional association staged
a highly professional and impeccably organized event. A total of 152 delegates
came to Tokyo from around the region to
take part in a focused business program
with presentations ranging from Toyota’s
CSR strategy to an enthusiastic review of
the WLA Security Control Standard © and
the WLA Responsible Gaming Framework.
One of the key conclusions is that the
fast growth of the world economy and
of the lottery world is largely driven by
the advances in Asia, where both sophisticated as well as emerging lottery operations show continued acceleration of
growth through innovation and a continuous drive for excellence. WLA President
Arch Gleason and WLA Executive director
Hans Savonije made presentations on CSR
and security. A more detailed overview of
the program and key presentations are
available from the APLA website www.
asiapacific-lotteries.org.
9
Retail security
The new Canadian model
The last issue of the WLA Magazine outlined some initial considerations as a
starting point for new Retail and Online Distribution Committee as it develops a
framework for best practice recommendations. Here, we feature an overview of
the substantive measures taken by all the Canadian lotteries in the last year. All
of them aim to strengthen the procedures in place to ensure that lottery prizemoney ends up in the hands of the rightful winners, and to rebuild the playing
public’s confidence in the integrity of their lotteries.
tomer-focused service standards based on
honesty, respect and social responsibility.
Training and support
All 30,000 BCLC retailers will be trained
and tested within the next year to ensure
all retailers and their employees demonstrate knowledge and understanding of
the retailer code of conduct. The new system will also allow BCLC to identify all retailer clerks who operate lottery systems
and alert the lottery when a retailer is
claiming a prize.
The story first hit the headlines in late Caveat emptor
2006 when Canadian television, based BCLC recommends that players sign the
on data available through the Freedom back of the lottery ticket to identify them Retailers are no longer able to purchase,
of Information Act, reported statistical as the rightful ticket holder. It the ticket play or validate their own lottery tickets at
anomalies in the number of large prizes is a winner, the validation terminal plays their place of work. If they do win a prize,
claimed by retailers and their staff at one a winning jingle, which is now louder. they will be interviewed by prize payout
of Canada’s provincial lottery operators. Customer display monitors are now locked staff and security personnel, who will
In the months that followed a tide of in- in position to ensure they are always fac- also investigate their prize claim to condignation and suspicion swept through ing the player. And players should remem- firm they are the rightful winner. BCLC’s
the Canadian lottery world as players ber that retailers are now obliged to return President and CEO must now approve all
sought further assurances about the in- the winning ticket along with the valida- retailer prize claims of $1,000 or more.
tegrity of the retail process. Closer analy- tion slip, with the winning ticket stamped
sis suggests that certain lotteries’ retailers “Paid by Lottery Retailer”. Players will also Improved support measures have been inactually play two to three times more fre- be able to check their own tickets at self- troduced to handle customer concerns and
quently than the general population – in check terminals, which were scheduled to a new mystery shopper program will help
some provinces, for example, they are be installed in all lottery retail locations by assess service levels and confirm that reobliged to purchase all unsold tickets be- November 2007.
tailers are adhering to procedures. BCLC’s
fore the draw takes place. Nevertheless,
corporate security investigation team has
official reports and independent reviews A new retailer code of conduct and direc- also been expanded, and a progressive
have confirmed a number of vulnerabili- tives have also been issued to outline cus- discipline system has been introduced
ties in ticket validation processes and
that will result in suspensions or terminahighlighted opportunities for improving
tions of retailers who do not comply with
British Columbia Lottery
customer care and reporting procedures.
procedures.
Corporation: Earning back
All the Canadian lottery operators have
public trust and confidence
Atlantic Canada
since taken further steps to mitigate a risk,
perceived or real, that may have been
“Although the intense scrutiny we’ve
The Atlantic Lottery Corporation launched
underestimated in the past and that has
been under over the past year has been
an internal review into retail wins in
undoubtedly damaged the public image of
a challenge, it’s also been an opportunity
November
2006. In March 2007, the inseveral of our members.
for us to re-examine how we operate our
ternal
review
showed that retail-ownbusiness and to make sure we’re able to
British Columbia
ers
were
winning
at a higher rate than
assure players of the integrity of our lottery
would
be
statistically
expected, based on
business. We now have better information
Acting on the provincial Ombudsman’s 23
the
retailers’
self
reported
rate of play.
tracking, better processes and some very
recommendations for improvements to
The
lottery
announced
a
series
of meapublic player protection measures. We
the player protection and ticket validation
sures
under
the
umbrella
of
the
Customer
are continuing to make changes so that
procedures, the British Columbia Lottery
Confidence Program that strengthens
we can be confident in our business proCorporation (BCLC) has developed the
player
protection and verification procecesses. We believe we will be able to earn
“Player First” program, a comprehensive
back public trust and confidence.”
response to the recommendations – and in
Dana Hayden, President and CEO
Continued on Page 12
many cases going even further.
10
British Columbia’s “Player First” program is a comprehensive response to the Ombudsman’s recommendations. It includes an extensive
information campaign explaining what BCLC is doing to enhance retail security, how players can protect themselves from retailer fraud,
and how they can contact the lottery if they have any doubts about retailer integrity.
Winter 2007
11
“We are determined to pay the right prize to the right
customer through all of these important initiatives.”
Kelly McDougald, CEO, Ontario Lottery and Gaming Corporation
checkers. Customer-facing screens on re- Ontario
tailer terminals have been installed at all
dures. Additionally, an external review 3,000 retailers to show the customer the To strengthen the lottery system in
of its policies was conducted by KPMG. amount won, as the ticket is being validat- Ontario, the Ontario Lottery and Gaming
That report contained 23 recommenda- ed. A complete “consumer tips” strategy, Corporation (OLG) is implementing 60
tions, which ALC had met or exceeded by as well as a dedicated toll-free customer recommendations made by Ontario’s
October 2007.
complaint line, were also implemented Ombudsman and KPMG. OLG has made
early in 2007 as part of the Consumer significant strides in changing the way it
Player awareness
thinks about customers and the imporConfidence Program.
Many of those measures directly involve
tance of the assurance of honesty and
players and provide them with the tools Tracking retailers
integrity in its relationship with the pubthey need to maintain better control of The lottery has also modified procedures lic. State-of-the-art technology, including
their tickets. These include continued ed- to clearly identify retailers, retail employ- 8,900 ticket checkers, as well as improved
ucation about the importance of treating ees and their families, to ensure all retail awareness and tighter controls are helping
every ticket as a potential winning ticket, wins are tracked. In fact, ALC has ex­ to safeguard the integrity of Ontario’s lotpanded and revised its Non-Arms Length tery system. The Prize Integrity Program
and ensuring that tickets are signed.
Party Prize Claim process to include this introduced by the OLG is designed to imALC has introduced new technology and group, as well as lottery employees, their prove customer service, protect customers
business procedures that include a new families, and certain classes of suppliers and provide them with clear and concise
signature line on the front of the tick- and their families. All non-arms length information regarding the winning status
et and a requirement that all tickets wins of over $10,000 are fully investigated of tickets. As part of this program, one of
be signed before validation by retailers; by the lottery’s internal auditing team, as the changes made was the introduction of
stamping of winning tickets as paid; and well as the security and compliance team the Terminal Freeze function. Whenever
returning a redesigned validation slip with to ensure they are legitimate. There is al- a retailer validates a lottery ticket worth
the ticket to the player. As well, the pro- so a mandatory “cooling off” period of 30 $10,000 or more, all transactions at the
gram includes an overhauled customer days before paying any non-arms length terminal are suspended and an OLG cusclaim process at head office and banking party who claims a prize of $10,000 or tomer service representative immediately
outlets, and an extensive customer aware- over.
calls the location to speak to the retailer
ness campaign.
and to ask the customer some questions
The ALC sales team has been regularly that may help determine ownership of the
Additionally, lottery terminals make a dif- educating retailers to remind their play- ticket.
ferent sound to differentiate between win- ers to sign the back of their tickets and to
ning and non-winning tickets, and players return validation slips to the player. The Changing habits
can now determine whether they have security and compliance team receives a In an extensive public awareness program,
won – and how much – on self-serve ticket daily summary of potential issues from the OLG has taken a number of steps to enfield, including any complaints received courage players themselves to change the
regarding retailers. Monitoring of retailer way they treat their lottery tickets. Lottery
Atlantic Lottery Corporation:
activity through security processes and tickets have been redesigned to include
continuous process improvement
internal audit is ongoing. The winners’ a box for the player to sign their ticket.
database has been completely redesigned Lottery retailers are required to check
“The past year has been a transformationto ensure real-time cross-referencing of that the ticket is signed before validating
al one for the lottery industry worldwide.
winners and retailers and we now require it, and to ask the customer to sign it if it
My advice to other organizations is to conis not.
background checks for all new retailers.
Continued from page 11
tinuously assess your processes and procedures and ask a lot of fundamental questions about how they can be improved. To
quote Alfred Edward Perlman: ‘After you’ve
done a thing the same way for two years,
look it over carefully. After five years, look
at it with suspicion. And after ten years,
throw it away and start all over.’”
Michelle J. Carinci, President and CEO
12
Key to the success of the Customer Soon it will be mandatory for customConfidence Program has been commu- ers to sign their tickets before a retailer
nicating these changes to players, retail- can ­validate them. Lottery retailers must
ers, shareholders and the general public. provide a validation receipt and return
­ alidated tickets to customers whether
As part of ALC’s ongoing commitment to v
openness and transparency, an annual ac- they have won a prize or not. If a prize is
countability report will be issued in July paid out, retailers must now tear through
the bar code of the winning ticket be2008.
fore returning it. They are also obliged to
make sure the customer display screen is
readily visible to the customer. New winning and non-winning jingles with voiceover ­messages that were tested at select
locations in November will soon be rolled
out to all lottery terminal locations in the
province.
Checks and balances
Through in-store visits by third-party inspectors, OLG has been auditing and educating its retail partners with regards to
proper validation procedures. A database
now keeps track of individuals involved
in the direct sale and redemption of lottery products. In addition, the lottery has
introduced new measures to identify and
penalize retailers who engage in questionable activity.
Ontario’s Ombudsman recommended a
new regulatory framework for Ontario
lotteries. The Ministry of Government
Services and its agency, the Alcohol and
Gaming Commission of Ontario, responded by announcing new regulations and a
structure to regulate lotteries in the province. OLG has also created a new Senior
Vice President position for corporate compliance.
OLG security and surveillance personnel
will lead all Insider Win investigations, and
starting in 2008, the Alcohol and Gaming
Commission of Ontario will investigate all
wins by retailers, retail employees and key
lottery suppliers, and all prize claims that
appear suspicious.
“We are determined to pay the right prize
to the right customer through all of these
important initiatives,” said OLG’s new
Chief Executive Officer, Kelly McDougald.
Western Canada
At Western Canada Lottery Corporation
(WCLC), a number of improvements have
been introduced or are planned in the
near future to protect players and help
them play with greater confidence.
Winter 2007
Ontario’s lottery tickets have been redesigned to include a box for the player to sign
their ticket. Soon it will be mandatory for customers to sign their tickets before a retailer
can validate them.
In November, the lottery started installing
customer-facing display units at every retail location, and is introducing new ticket
terminals that play a distinctive phrase
whenever a winning ticket is checked.
Additional self-service ticket checkers will
also be installed starting this fall to enable
players to electronically check their own
tickets prior to validation by the retailer.
Effective August 1, 2007, a new policy in
effect throughout the WCLC jurisdiction
makes it mandatory for players to print
their name on the back of their ticket before presenting the ticket for validation at
retail. This ensures that the ticket cannot
be cashed by any other person. Retailers
must return the validation slip to the customer for every ticket checked as an official record of the transaction. Training
and communication to retailers has been
strengthened to ensure the proper procedures are followed. The lottery is also
enhancing its consumer education efforts
to make players more aware of the simple
steps they can take to ensure they receive
the correct prize – printing their full name
on the back of the ticket after purchase,
checking the winning numbers themselves
and making sure they receive the valida-
Continued on page 14
13
Western Canada has also enhanced its consumer
complaints process to shorten response times and
ensure better follow-through.
Continued from page 13
ty with respect to the statistical norm, was 3. Retailers should return both winning
validated by Deloitte & Touche, aided by a
and non-winning tickets to the custion slip generated by the terminal when mathematics professor from the University
tomer along with the corresponding
their ticket is checked. The enhancements of Québec. However, given the importance
validation slip.
include validation reminders on every on- that the organization places on the integline ticket, ticket tips on winning number rity of its operations and the trust it re- 4. Prize payment processes should be
pages of the website and in the player ceives from the population, Loto-Québec
managed more closely to reduce the
magazine, and additional validation infor- also mandated an independent review of
risk of not paying the rightful winner.
mation in assorted POS materials.
its prize payment processes and policies
Detailed decision-support tools should
in order to ascertain if the risk was being
be developed to assist prize payment
Process improvements
correctly managed and to recommend any
staff and initiate investigations when
In addition, the lottery has enhanced its additional measures that should be taken.
appropriate.
consumer complaint process to ensure
that consumer concerns are investigated This review by KPMG was released in 5. The prize payment department should
upon receipt and that the player system- October 2007 and the lottery is now in the
have up-to-date information about
atically receives a follow-up response. All process of implementing its recommendacomplaints against individual retailers.
major prize claims by retailers are now tions. KPMG identified 35 improvement
Department staff should have access to
reviewed to ensure there are no irregu- paths with respect to retailer managethe names of all retailers and their emlarities. Additional questions and review ment, prize payment processes, customployees, all employees of Loto-Québec
procedures have been implemented for all er complaints, investigations, governance,
and its subsidiaries, and all ticket
current and future retailer prize claims of and ticket printing and security.
agents. They should also have hotline
$1,001 or more.
support and details about prizes paid
KPMG recommended five main improveto retailers and cases of retailer nonErnst & Young conducted an independent ment paths for Loto-Québec:
compliance with validation and payreview of the lottery’s internal prize payment procedures.
out processes, which was commissioned 1. A consumer awareness campaign
before the release of the Ontario and
should be conducted on a recurring
Loto-Québec has undertaken to implement
British Columbia Ombudsmen’s reports.
basis to encourage players to sign the
all of the 35 recommendations, some of
In light of the findings in these reports,
back of their lottery tickets, check the
which had even been put into place when
WCLC has commissioned a second, more
customer display while the retailer is
KPMG’S report was issued. For example,
in-depth review including internal and
validating the ticket, and listen out for
wording has been added to tickets adexternal prize claim processes and prothe jingle that sounds when a winning
vising players to sign their tickets at the
cedures, past and present retailer prize
ticket is processed at the retail outlet.
time of purchase. A multimedia awareclaim rates, consumer awareness and
ness campaign will be launched at the
education programs, customer complaint 2. Procedures should be put in place to
start of 2008 to remind consumers of the
handling procedures and retailer manageensure that retailers do not validate
importance of signing their tickets, lookment. The review will also examine the
unsigned tickets.
ing at the customer-facing screen during
lottery’s consumer protection measures.
validation to see if they have won, and how
This second Ernst & Young report is exmuch, and listening out for the different
Loto-Québec: no effort spared
pected in November 2007 and its findings
win-sounds – which vary according to the
will be made public.
amount of the prize. As of January 2008
“Loto-Québec’s commitment to follow up
the retailer will return all validated tickets
on all the findings of the KPMG report as
Québec
to the player along with the correspondrapidly as possible is a clear demonstraing validation slip. And the new generation of the fact that it will spare no effort to
Based on a five-year statistical analysis of
tion of equipment being installed in 2008
maintain public confidence it has earned
retailer wins of $5,000 and more, Lotoat retailer locations will permit customers
over the last 37 years. Everything related to
Québec concluded that when taking their
to self-check their tickets before claiming
the integrity of our operations calls for the
respective estimated ticket purchase rates
their win.
implementation of strict precautions and
into account, its retailers did not win more
our constant vigilance”
frequently than other lottery players. This
Alain Cousineau,
conclusion, on the basis of the hypotheses
President and CEO, Loto-Québec.
provided and the calculations of probabili-
14
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Winter 2007
15
WLA Responsible Gaming Framework
A unique tool to leverage worldwide
best practice in your lottery
Responsible Gaming
As many lotteries have announced
their intent to join the newly launched
WLA Responsible Gaming Framework
entry deadlines have been extended
as a result of requests from members
and the need to review certain aspects of the program. This decision
was made during the recent World
Meet in Kentucky.
16
At World Meet, Michelle Carinci, deputy us to better tell our CSR story,” Margaret
chair of the WLA CSR Committee and remarked. “It helped us to populate our
President and CEO of the Atlantic Lottery CSR report and it helped us plan for future
Corporation, provided an overview of the CSR activities.”
WLA Responsible Gaming Framework.
Following her presentation, moderator Who will be on the Assessment Panel and
Don Feeney, Research & Planning Director how will they address jurisdictional reat the Minnesota State Lottery, opened quirements?
the floor to questions for Michelle and
Dianne Thompson, chair of the WLA CSR “To have credibility,” Michelle stated, “an
Committee and CEO of Camelot plc in the assessment panel needs to be indepenUnited Kingdom. Here is a sample of the dent.”
questions that were asked.
To ensure this independence and knowlIsn’t the Framework a lot of work?
edge of Regional differences driving flexibility in demand three-person regional
These requirements should not be oner- Assessment Panels will be established.
ous especially for organizations that have Each panel will have an independent CSR
integrated Corporate Social Responsibility expert. The remaining two positions will
(CSR) throughout their organization. At be the chair and a peer reviewer.
Level 1, all that is required is a letter of
commitment by the organization’s CEO. A The benefits of having different panels in
self-assessment needs to be completed at different regions was highlighted when a
Level 2, and a planning document must be question on how the framework would adproduced to achieve Level 3. At Level 4, a dress different jurisdictional requirements
report is published, external stakeholders was asked.
are engaged and third-party assurance
providers have conducted an independent “Regional representation will ensure that
review.
the Assessment Panel understands any
regional differences that exist,” explained
Using her lottery as an example, Dianne Michelle. “Because organizations only
Thompson explained that “it is not extra need to achieve 75% of Action Items, this
work for Camelot because we are already provides the Framework with the flexibildoing it as part of our CSR program. It’s at ity to accommodate these regional differthe heart of what we do – it’s the way we ences.”
do business.”
My organization doesn’t conduct research
A delegate from Canada also shared her but funds it. Will this contribute towards
experience in preparing her organization the Framework?
for entry into the Framework. Margaret
McGee, Vice President of Business The answer is yes. Again, Dianne
Innovation at the Nova Scotia Gaming Thompson used Camelot as an example,
Corporation, explained the hidden bene- explaining how the lottery funds organizafits that the Corporation discovered when tions that study gambling.
it completed the Self-Assessment as part
of its plan to achieve Level 4.
Camelot helps to fund two leading academic centers specializing in the
“It was the information that we had gath- study of gambling – Nottingham Trent
ered for our Self Assessment that allowed University and the University of Salford.
Research topics are determined by the
universities. Camelot has recently joined
the International Responsible Gaming
Organisation (IRGO), an independent international research platform which aims
to provide up-to-date information in order
to allow gaming operators to develop and
maintain the most effective responsible
gaming strategies.
Once you achieve Level 4 in the Framework,
are you at Level 4 forever?
Organizations have to re-qualify every
three years if they do not qualify for the
next level within that timeframe. At Level
4, organizations are still required to qualify every three years.
An evolving Framework
In addition to the feedback received from
members, important insights have also been gained in the year since the
Framework was approved.
As the WLA has held workshops with
key lottery experts in order to secure
a sound operational applicability of the
Framework, some of its tools have been
modified. The Framework offers a unique
opportunity for members to gain significant experience in this vital aspect of
Sustainable Excellence without making
expensive mistakes when recruiting staff
or working with third-party consultants.
The WLA Framework also allows lotter-
Winter 2007
The Responsible Gaming
Framework is a unique
opportunity for members
to gain significant
experience in this vital
aspect of Sustainable
Excellence.
Responsible Gaming Framework, and also
to prepare for Level 2, 3 and 4 applications. The first workshop will be held In
Canada in the last week in February 2008
and is expected to build on the experience from the very successful first event
in Brisbane in 2007.
The full program will be available shortly
on the WLA website and registration is
still open. The number of participants will
be limited.
Call for action
ies and suppliers make significant time
savings by applying a specially developed
toolbox that makes Responsible Gaming
a practical activity with the consumer
placed firmly at the center of our members’ actions.
In view of the interest expressed by legislators and gaming boards around the
world, it has been decided that these bodies can apply through their respective
WLA member organizations to take part in
the WLA Framework initiative alongside
their lotteries. Adjusted application fees
for Level 3 and Level 4 have been agreed
for these applications.
Taking part in the Responsible Gaming
Framework is a chance for every to every
lottery to build a sustainable, responsible
operation. All lotteries that have not yet
entered Level 1 are encouraged to send
in their Letter of Commitment to the Basel
business office. The membership voted
unanimously to support the Responsible
Gaming Framework in Singapore in 2006
and a Letter of Commitment is an easy
way to show that your organization supports Responsible Gaming and the WLA
Responsible Gaming Principles. Above all,
entering this program is a great way to leverage a unique set of dedicated tools and
to benefit directly from world-class expertise and global experience.
Workshops to build on practical experience
During 2008 a number of workshops will
be organized to help members get to grips
with the different aspects of implementing a lottery operation focused on the
17
Global RFP Best Practice
Security
WLA standard streamlines
Dutch procurement
Lottery scams: the fight continues
While it is easy to think that most people would not fall for lottery scams, the
sad reality is that many still do. Scammers are persistent, and they are increas-
One of the main technology procurements in the Netherlands at the moment is
for the supply and operation of a new online capability. In an innovative move,
the two Dutch lotteries Staatsloterij and De Lotto have joined forces to share
the technological infrastructure, while continuing to compete in the Dutch marketplace, where they offer different products and services to their respective
customers. They chose to build this complex Request For Proposals around the
Global Best Practice package developed by the WLA.
“We see the joint procurement as a natural
and clever way of decreasing operational
cost while enhancing customer service,”
says Jaap Stavast, Director Technology
& Development for De Lotto. “It makes
perfect sense to both lotteries to share
the infrastructure, but not the data and
applications.” Frank Vogt, his counterpart at Stichting Exploitatie Nederlandse
Staatsloterij (SENS), adds: “All we have to
do is to ensure each lottery has the ability
to control its own products, customer data
and service levels. We believe this is fully
feasible and that our project will actually
break new ground in the lottery industry.”
By using the standard,
lotteries and bidders
alike can focus directly
on the content of the RFP
instead of spending time
on administrative tasks or
figuring out procurement
processes.
the apparent successful bidder is expected
early 2008 and startup of the new system
in 2009.
Crystal clear criteria
All three bidders concur that formally responding to the RFP was easier than ever
before. They particularly appreciated the
clear distinction that is made between
mandatory and non-mandatory sections,
and the explanations of the type of response expected by the lotteries. Another
plus point for suppliers is that bid evaluation principles and procedures are clearly
stipulated, providing appropriate insight
into the entire process so they can understand what the lotteries are really looking
for in a completely transparent way.
At SENS and De Lotto, the evaluation process itself was simplified by the clear rules
and procedures set up in the RFP. In particular, the lotteries have a firm guideline
on how to address issues that might have
caused problems in a traditional procurement. With fewer ambiguities, the evaluation process is faster, simpler and, above
all, fairer.
Common ground
Commencing the procurement project,
both lotteries had their respective ideas,
plans and methods for conducting the procurement. After analyzing the Global RFP
Best Practice package developed for the
WLA by QLot Consulting, they decided to
use the RFP template to establish common
ground for the RFP.
itself was not much of an issue, as the RFP
template structured the whole process and
saved a huge amount of time.
Although the Dutch lotteries are still to
make their selection in this large-scale
technology procurement, Frank Vogt has
already reached one important concluSays Jaap Stavast: “Using the RFP tem- sion: “We are very happy we chose to use
plate proved to be a great move for us. We the Global RFP Best Practice,” he says.
could now focus directly on our specific “Compared with the ‘old style’ RFP we
requirements, and did not have to spend used to prepare only a short while ago, we
time on figuring out the procurement pro- have saved ourselves enormous amounts
The lotteries had prepared their respec- cess, the structure of the RFP and other of time and headache.” Jaap Stavast
tive procurement for quite some time, and time-consuming administrative tasks.”
agrees: “We clearly see the simplification
had already to some extent prepared their
and streamlining the RFP template has
respective foundations for an RFP. Once “Our requirements are very specific,” brought. A technology procurement is difthe decision to go for a joint RFP was Frank Vogt adds. “We have a complex ficult enough as it is, and we have finally
made, QLot helped to merge the require- technical situation and our requirements found a way to significantly reduce the
ments and develop the joint RFP around are quite unique. We were concerned at time and effort involved.”
the standard template.
first that using the RFP template might restrict us in some ways. It turned out that
Within this structured framework, the this was not at all the case.”
working group led by QLot could focus on
requirement specification (i.e. the actual The RFP was released early summer 2007
content of the technical requirements sec- and proposals from Scientific Games,
tions of the RFP), and conducting internal Intralot and GTECH were received by the
and external reviews. Developing the RFP due date of September 15. The selection of
18
ingly tech-savvy in their approach. Warning the public how they operate is part
of our “duty of care” with respect to our player base, says Ed Stefan, Deputy
Chairman of the WLA’s Security and Risk Management Committee.
“We have to face the fact that lottery scams
will remain part of our social landscape
until people stop believing they have a
chance of winning a prize in a lottery they
never played. Official statistics on fraud
complaints suggest that this is far from the
case, and that the prevalence of lottery-related scams is still high,” says Ed Stefan.
Lotteries around the world receive literally thousands of emails every week from
members of the public hoping to confirm
the legitimacy of an email or letter that
they have received stating that they have
won. Far worse, of course, are the inquiries about the status of prizes when the required “processing fee” has already been
paid out.
Prevention better than cure
In many jurisdictions the only thing that
can be done when a member of the public
files a complaint is to refer them to their
local law enforcement agency for action
after the fraud has been perpetrated or to
provide guidance on ways to regain their
lost assets. There are steps we can take,
however, to minimize a fraud ever gaining
this level of success.
“The first thing to recognize is that these
scams are getting more complex all the
time, but that the simple scamming techniques remain,” says Ed Stefan. “The key
to prevention is increased public awareness.”
Many WLA member organizations now
feature a fraud warning on their websites,
and the WLA’s home page has a link that
advises players and warns them:
• not to respond
• not to pay any money in advance.
• always to protect their bank account
numbers and other financial data.
Winter 2007
names getting into the wrong hands. This
typically occurs when a web page’s registered name is allowed to unintentionally
expire and the cyber-squatter picks it up.
This can easily result in the email scammers having a more authentic web presence to share with their victims.
To combat these and other similar issues,
the following are some techniques to conScammers are persistent,
sider:
• awareness campaigns at the point of
and they are increasingly
sale, through local radio and other metech-savvy in their
dia outlets
• prominent display of fraud notification
approach. The key to
on your lottery’s web site
preventing them is
• enhanced retailer training
• ownership of multiple, similar sounding
to raise public awareness
web site names with redirects back to
of the dangers.
the “official” home page
• establishment of a monitored player
reporting form or “abuse” type email
account
Fighting phishing
• web page links to common “malware”
Much like in the banking sector, scam artscanners
ists have in some cases put up a fake ver- • prevent unintentional expiration of
sion of a lottery website with very similar
owned domain names and consider
sounding names or ones with common
ownership of domain names similar to
misspellings (e.g. thepowerball.com inthose already registered
stead of powerball.com), directing users • bolstered relationship with local auto fill out their “online claim form” in the
thorities promoting activities to prevent
scam email that they receive. Other scam
and fight fraud
artists have used actual names of a lottery’s Chief Executive or even one of the “While none of these techniques will likelottery’s drawing officials to help their ly result in the elimination of the chalpostal mail or email claims appear legiti- lenge, they will certainly help to reduce
mate.
the number of successful scam attempts,”
says Ed Stefan. The WLA’s Security and
An entire business has been built around Risk Management Committee will soon be
a similar type of common mishap – that publishing a guideline providing a more in
involving authorized Internet web page depth review of this issue.
Bio: Ed Stefan
Ed Stefan is Chief
Information Officer of
the Multi-State Lottery
Association, the organization that administers Powerball ® and
other multi-jurisdictional games on behalf of
some 30 state lotteries in the United States.
Ed is responsible for all facets of informa-
tion technology and security at the MUSL
office, and acts as information and physical
security consultant for the member lotteries,
as well as helping to evaluate the technical
infrastructure and security of third-party lottery service organizations. He has served on
the WLA’s Security and Risk Management
Committee since 2002 and is currently its
Deputy Chairman.
19
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21
G O O D
C A U S E S : getting the message across
Lottery beneficiaries:
part of the family
One of the responsibilities of a business like Polla Chilena de Beneficencia, the
Chilean National Lottery, is to keep alive the belief that anyone who plays the
lottery can win a prize. Another is to bring citizens together at the national level
and encourage more people to put their trust in the lottery as an expression
of solidarity with the most needy members of the community. So Polla Chilena
works hard not only to sustain the excitement of playing and the hope of winning, but to keep Chileans informed about the lottery’s work for charity and engaged with the system of values it shares with its beneficiaries.
The good news for Polla Chilena and its
beneficiaries is that things are going well.
“Sales have doubled in the last six years,”
says Verónica Montellano, President of
Polla Chilena’s Board of Directors, “and
that means that grants to our beneficiaries have also doubled.” Polla Chilena recognizes that what is good for the lottery
is good for the country, and Montellano
is quick to point to the paramount importance of good management in a state run
organization: “A well-run lottery is good
for the country in terms of fiscal support.
But management excellence is even more
critical in a heavily regulated industry
like gaming. If Polla Chilena does well in
this kind of environment, it speaks well of
Chile,” she adds.
The Aldea de Niños
(Children’s Village) cares
for at-risk children and
young people and has
been a beneficiary of Polla
Chilena since June 2006.
22
Chilean President Michelle Bachellet has
placed a strong emphasis on the social
protection of the nation’s children, underscoring the importance of the continuing efforts of Polla Chilena, which has a
long history of helping minors through
its charity work. The lottery was established in 1934, during a devastating
global economic depression that was further compounded by a rapid decline in
the world market value of saltpeter, then
one of Chile’s major commodity exports.
Winter 2007
Amid the poverty, unemployment and
homelessness that ensued, a small ray of
hope emerged: Chilean President Arturo
Alessandri Palma passed a law authorizing what is now Polla Chilena to conduct
four raffles per year and to organize a
series of horseraces at authorized racetracks. Under that law, 50% of the profits
from these gaming activities were to be
used to finance the construction and maintenance of the Casas de Socorro, while the
rest was for improvement of hospital services throughout the country.
Much more than a law
Philanthropy offers human beings a
chance to give meaning to some of their
simplest acts, and Polla Chilena has fully
understood this principle. “Although our
role in supporting charities is determined
by law, the meaning of our actions goes far
beyond that,” says Montellano. “A game of
chance is much more meaningful for the
player if ticket sales help different social
causes. It makes us all aware, both inside
the lottery organization and in the playing
public at large, that what we are doing is
making a concrete contribution to society
and helping our fellow humans to improve
their lives,” she says. “This commitment to
protecting the vulnerable and improving
23
“Although our
role in supporting
charities is
determined by law,
the meaning of
our actions goes
far beyond that.”
Verónica
Montellano,
President of
Polla Chilena
people’s everyday lives is the core value
underpinning our family – an extended
family that includes Polla Chilena as well
as its beneficiaries and is held together by
real bonds of affection and commitment.”
The Consejo de Defensa del Niño (Codeni)
is one of these beneficiaries. Also established in 1934 as a direct result of the
depression, Codeni still pursues its mission to support the children of the unemployed and other young people whose
family or socio-economic conditions prevent them from accessing basic opportunities for physical and intellectual growth.
Currently Codeni operates 47 programs,
15 of them in Santiago and 32 in other
regions, providing food, recreation, education and medical, social, spiritual and
psychological assistance for approximately 4,000 minors. The 2006 amendment to
the lottery legislation increased Codeni’s
share of Polla Chilena’s funding from 2.5%
to 6%, making a major difference to the
organization.
Reliability and flexibility
Polla Chilena’s grants to Codeni are not
earmarked for a specific purpose, but are
added to the organization’s general budget, which then allocates the funding according to the needs of each project. “In
two of our family residences, our fiscal
subsidy cannot cover the costs of social
and psychological support,” says Codeni
Secretary General Santiago Villablanca.
24
“Thanks to the support of Polla Chilena we
can pay the salaries of psychologists and
social workers at both establishments.”
“The foundation has other sources of
funding,” says Villablanca, “but with this
ability to allocate lottery money to the
projects that need it most at any particular
time, Polla Chilena grants play a crucially
important role. Polla Chilena represents a
relatively small proportion of our overall
income, but if all these funds were directed systematically into the projects with
the lowest income, they would represent
almost 50% of the annual budget.”
Leaders of other beneficiary organizations agree with this analysis. Reimundo
Sapag, Executive Vice President of the
children’s charity Fundación Aldea de
Niños Cardenal Raúl Silva Henríquez,
says that one big advantage of the lottery’s support is flexibility. “Polla Chilena
doesn’t demand that the money be used
to build infrastructure or renovate buildings, for example, and this is a huge plus.
Obtaining money for capital projects is often easier than financing operating costs.
So Polla’s support helps to cover the costs
of our operations – mainly food, clothing,
schooling and recreational activities for
the children.”
The man behind this foundation, Cardinal
Raúl Silva Henríquez, has a special place
in the heart of the Chilean people. What
inspired him 29 years ago was the need
for love and protection of the most vulnerable children in the country, and the same
spirit and dedication drives its staff and
benefactors today.
Lobbying for lottery funds
Finding the necessary economic resources to keep the Cardinal’s vision alive has
never been easy, but after the founder’s
death in 1999 the task became even more
difficult. Reimundo Sapag lived through
those moments of crisis. In the early days
of Chile’s new democracy, he and the
foundation’s Executive Secretary, Pablo
Huaracán, wrote letters to each of the
Chilean legislators in an effort to have
the foundation included in the list of beneficiaries of Polla Chilena. “We knew that
a change in the law was necessary to
achieve our objective, but we never imagined just how much work it would take,”
says Sapag. Their drive and determination paid off in the end, and last year they
received the news that they would receive
15% of the lottery’s funding of good causes
under the 2006 amendment to the Chilean
law governing the national lottery.
The day the symbolic first check was
handed over to the foundation by Polla
Chilena is remembered with happiness by
both parties. The children themselves may
not have understood the significance of
the event for a simple reason – they were
too busy with the hugs, affection, chatting
and dancing that their “uncles” from Polla
Chilena had prepared for them. They already felt like family.
Committed for the long haul
Back in 1947, large numbers of Chilean
children were struck down by poliomyelitis and Pott’s disease, a type of tuberculosis that affects the spine. A group of
doctors, educators and parents formed
the Sociedad Pro Ayuda al Niño Lisiado,
a foundation for disabled children now
better known as the Teletón Foundation.
“We have been lottery beneficiaries since
a new law was passed more than 50 years
ago,” says Ximena Casarejos, Executive
Director of the Teletón Foundation. “We
only obtained the funding after long negotiations led by the foundation’s president,
Inés Tonkin, and Salvador Allende, who
was a member of the Chilean Senate at
the time,” says Casarejos. In 1955, as the
polio epidemic intensified, Polla Chilena
donated a residence in the downtown area of Santiago in order to continue caring
for the growing number of young disabled
people. “Those were difficult times and
lottery funding was one of the most significant resources enabling the institution
to carry out a large portion of its medical
activities.”
Today a total of ten rehabilitation centers in ten different regions of the country
serve 25,000 patients, all under the age
of 20 and all suffering from neurological,
muscular and skeletal disabilities. “Polla
Chilena needs to be certain that this money is being invested well,” says Ximena
Casarejos, “and in our case we can show
them the tangible results of our medical
and therapeutic activities. Even though
our patients are all young people, the care
they require is of a long-term nature. Polla
Chilena has sustained their support to us
over the years without having to redirect
funding to other activities. They were visionaries of their time, and they have
stayed the course. That speaks well of the
institution.”
Other beneficiaries of Polla Chilena funds
include elder care and child development
organizations, the Chilean Red Cross, the
national firefighters guild, health funds,
agricultural education funds and other
foundations supporting a range of charitable operations.
Winter 2007
Where the money goes…
and how it gets there
Historically, state lotteries have often been
introduced to fund a particular cause or
event. In more modern times, however,
governments have developed very different models for the way they channel lottery
profits into good causes. In some parts of
the world, the link with good causes has
already been lost, with lottery profits simply
directed to consolidated revenue for the
government of the day to use together with
money raised through any other form of
taxation.
In other parts of the world, lottery revenue is
hypothecated, or earmarked for a particular
good cause. But the money goes through
state or national coffers where it becomes
difficult to determine whether it constitutes
additional funds for that good cause or simply a substitute for other forms of revenue.
This is the subject of debate in several US
states which direct lottery money to education.
In some jurisdictions, including South
Australia and Queensland, the money is
directed to the state health services. Other
places channel it into sports, as is commonly
the case in Europe, or into the arts through
relevant government departments.
Government oversight
Another model adopted by some governments is to set up a special government
body with responsibility for distributing lottery profits to the beneficiaries determined
by government legislation. The UK and New
Zealand national lotteries are examples of
that model. In those jurisdictions, legislation specifies that certain proportion of
the lottery revenue is used for charitable
purposes, for sporting purposes, for the arts,
for conservation and heritage, and in the
case of New Zealand, to support the New
Zealand film industry. In these examples,
government appointed committees oversee
the grant process, and set policies for this
specific distribution of the money. Usually,
these grant making bodies have a range
of representatives from the community, as
well as senior bureaucrats and government
representatives. While the link between lottery revenue and good causes is more overt
than in the hypothecated model, some lotteries have been the brunt of criticism over
controversial decisions by the grant making
bodies – decisions over which the lottery
has no control.
Accountability
The final model is a much rarer one, and
involves the operator itself managing a trust
or grant making function and distributing
all or part of the profits as well as running
the lottery. Examples of this include Santa
Casa in Portugal, Lotterywest in Western
Australia, and the Hong Kong Jockey Club.
Lotterywest, for example, has direct control
over the way that approximately 40% of its
profits are distributed to various community
and charitable groups in Western Australia.
This model has some distinct advantages:
the lottery is fully accountable for any controversial decisions, and also has direct and
personal relationships with beneficiaries
who in turn become the strongest advocates
for the lottery. Making that very direct link
between lottery products and benefit to the
community can be a very powerful marketing tool. And lottery employees and retailers
are highly motivated to take part in raising
funds for good causes in which they feel
personally involved.
Clearly, each government must make its
own decisions about how lottery funds are
distributed to good causes, and it is equally
clear that the choices made in different
parts of the world – in terms of beneficiaries
as well as distribution models – reflect longstanding historical, ideological and political
differences.
25
Jockeying for position
On Wednesday, October 3, 2007 at 5:30
p.m. sharp, World Meet 2007 opened its
doors for the first time with the inauguration of the trade show, kicking off an event
which had been months in the making.
Rewarding the tireless efforts of an international team of organizers, a colossal
happening came to life.
On the two days which followed, lottery professionals from around the globe
came together for an impressive line-up
of speakers, a vast trade show featuring
around 60 of the most innovative vendors
in the lottery business today, and breakout
presentations on the burning issues currently affecting the industry.
World Meet 2007 left a lasting impression on participants, strengthening their
resolve to strengthen our lottery brands
and better communicate to the consumer
about who we are and what we stand for
if we are to stay ahead in this race for excellence.
World Meet 2007:
Unleashing the spirit
of excellence
Three incredible days in Louisville, a city full of southern charm and ethnic and
A common thread
Outgoing NASPL
President Clint Harris
cultural diversity on the winding Ohio river – this was the setting for World
Meet 2007, the top event in this year’s lottery industry calendar. More than 1,300
delegates from around the globe came together to meet, mingle and share their
knowledge of a business that is as fascinating as it is challenging.
“Racing for Excellence, Winning for Good Causes” was the theme for the
event, the third-ever World Meet staged by the global lottery community.
WLA President
Arch Gleason
This theme was reflected in the whole range of topics, from Corporate Social
Responsibility, branding and marketing innovation, to the need to take the lottery industry to the next level. The rules of the game are rapidly changing all
around us, causing us to reassess our strategies and search for new ways to
reach and protect our players and serve our beneficiaries. In the true sense of
the word we are running a race – and winning that race will require us, as an
industry, to demonstrate Sustainable Excellence.
26
NASPL Executive
Director David Gale
The keynote addresses were delivered by
Dr. Robert Ballard, a world-famous deepsea explorer, global marketing guru Peter
Dart, Target’s trend master Robyn Waters
and Bill Samuels, a rocket scientist turned
master of the art of marketing. All four
come from vastly different backgrounds,
and all four are vastly different in character, yet there was a common thread
running through their presentations: the
need to innovate, to think outside the box
and to muster the courage to do something different. As we move further into
the new millennium we will need to break
old patterns and adapt to the needs of the
consumer in a rapidly changing marketplace. Strong, solid branding and a new
approach to the younger demographic are
increasingly becoming the keys to success
in the lottery business.
At the same time, we need to nurture the
trust of our players and remain relevant to
the consumer by winning for good causes
and maintaining our high level of social
responsibility. This is the “difference that
makes the difference”, according to Peter
Dart. This is the pillar of our industry we
must continue to strengthen. This is what
PGRI’s Lottery Hall of Fame: three new members inducted in Kentucky
The US based Public Gaming Research Institute (PGRI) inducted three new members into
their Lottery Hall of Fame during the opening of the World Meet 2007 trade show. PGRI
established the Hall of Fame in 2005 in recognition of those individuals who have made an
outstanding contribution to the global lottery industry. The three new inductees join a select
group of distinguished lottery industry leaders from around the world. The group now comprises of 26 members.
Jan Stewart, CEO of Lotterywest in Australia, was recognized for her
leadership in the lottery industry. She has made countless presentations and moderated panel discussions at every WLA conference
since its inception in 1999. Her service to the WLA membership is
widely respected. Jan has held numerous positions with the WLA
and is ­presently Senior Vice President and serves on the Executive
Committee.
Reidar Nordby, Jr., president and CEO of Norsk Tipping since 1999,
is recognized internationally as one of the lottery industry’s leading
statesmen. Reidar served as President of the WLA from 2000 to 2006
and is still a member of the Executive Committee. As WLA President, he
helped to make the Association a world-class organization. Reidar was
instrumental in strengthening the international lottery community and
reinforcing relations between regional lottery associations. In recognition of his international perspective, he has been appointed member of the strategic advisory board of the China Center for Lottery Studies at Peking University.
Constantinos (Costas) Antonopoulos, has been CEO of Intralot since
1999 and is one of the global lottery supplier’s founding members and
shareholders. Costas has been honored for his dedication to helping
lotteries raise significant amounts of revenue for good causes around
the world. His hard work, vision and dedication to the customers and
communities that Intralot serves has led to the establishment of a global presence in over 40 countries with over 3,600 employees. Costas has
always striven to provide a beneficial presence in all of the communities which he serves
through support, social responsibility and good corporate citizenship.
Constantinos Antonopoulos making his acceptance speech after being inducted into
PGRI’s Lottery Hall of Fame.
Continued on page 28
Winter 2007
27
Moments to remember:
snapshots from World Meet 2007
Continued from page 27
sets us apart from the private operators
who have built their businesses without
the underlying trust needed to build solid,
sustainable brands.
The power of brands:
competing in a global market
Breakout bonanza
The breakout sessions covered a variety
of topics, with presentations by lottery colleagues from around the world outlining
the latest developments in the lottery industry from their own respective angles.
The sessions were set informally and
the discussions were lively, passionate at
times but always fruitful. Topics ranged
from responsible gaming to retailer relations, and included such sensitive issues
as privatization in the United States and
the wave of retailer security concerns
which have plagued a number of lotteries
in different parts of the world this year.
World-class trade show
Churchill Downs bugler sounds off the start of the World Meet 2007.
Arch Gleason and outgoing NASPL
President Clint Harris cut the ribbon
­inaugurating the World Meet trade show.
Guy Simonis roasts and toasts retiring Iowa
Lottery CEO Ed Stanek.
All photos of World Meet 2007
© Barry Westerman.
28
Bill Samuels, president of Maker’s Mark
bourbon distillery: from rocket scientist to
brand builder
Incoming NASPL President
Ernie Passailaigue, Executive Director
of the South Carolina Education Lottery
The giants of the industry as well as
some innovative new players came to
Kentucky to promote their capabilities. All
in all, some 60 exhibitors filled the 68,000
square foot exhibit hall. Prominent among
them were WLA Platinum Contributors
GTECH, Scientific Games, Intralot and
Ace Interactive. Underscoring the importance of engaging the consumer in order
to remain relevant, a number of new game
concepts illustrated the supplier industry’s
focus on product innovation in the lottery
sector. It was inspiring to see the roadmap that some of the leading vendors are
proposing. They are setting the tone for
the future and offering lottery operators
an extensive toolbox of solutions that will
help us stay ahead in the brave new gaming world of tomorrow.
Peter Dart: “There has
never been a more
­important time for
strong brands.”
The lotteries are
increasingly facing competition
from the private
gambling sector. Online poker
rooms and the
private sports betting industry have
begun to make
full use of the internet and mobile
communication
devices.
Their impact on the market is no longer
regional; they have taken it global. And,
according to Peter Dart, an international
marketing and branding expert with over 30
years’ experience, “there has never been a
more important time for strong brands”.
As a strategic advisor for WPP based in
London, Peter Dart has worked on some
of the world’s most recognized brands. At
World Meet 2007, Peter made a convincing
argument for the lotteries to embrace stronger branding in order to win the battle for the
hearts and minds of the consumer.
The difference that makes the difference
In order to stay ahead of the pack, it is becoming ever more apparent in the global
lottery community that the strength of the
lotteries’ brands will be the key differentiator
in maintaining the loyalty of their customers.
Dart considers that the lottery industry is
investing far too little in strengthening and
sustaining their brands.
In order to sustain branding excellence in
the future the lotteries will have to consider
the following:
Trust: this is probably one of the greatest
assets that the states lotteries own. This
is what holds them apart from the private
gambling sector. The trust of the player must
be nurtured and protected. Relevance and
social responsibility are two binding factors
in maintaining the trust of the player.
&ULFILL9OUR.ET0OTENTIAL
Competition: The lotteries are running a
head-to-head race with the private gambling
sector for a share of the consumer’s time
and money. Constant innovation is essential.
Fun, excitement and adventure are core
drivers of innovation. This must be tempered
though, with strong links to good causes and
charities. Socially responsible marketing is
becoming increasingly relevant.
Beat the upstarts
Also of crucial importance for the lotteries
is the need to embrace the media metamorphosis which is rapidly transforming communication and the transaction landscape. The
player can now be reached 24/7 and has the
ability to make small transaction online with
ease. It is here where we need to “beat the
upstarts”, said Dart, but lotteries are investing in this area “well behind the curve”.
As global brands increasingly set the pace,
the ability for the lotteries to innovate, communicate and sustain relevance will determine their success as they move into the
future.
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As the top lottery event of the year, World
Meet 2007 truly lived up to expectations.
The warmth and hospitality of the staff
from the Kentucky Lottery Corporation
struck a chord with the participants, and
the WLA are grateful to them and to
NASPL who worked tirelessly to make the
World Meet 2007 such a huge success. Our
appreciation also goes out to the international team of volunteers who provided
all manner of practical assistance to the
delegates and helped to make our stay in
Louisville one to remember.
"WFSTBUJMFPOMJOFHBNJOHTZTUFNGSPN#PTT.FEJBFRVJQT
ZPVXJUIUIFUFDIOPMPHZUPDPNQMZXJUIUPVHITUBUVUPSZ
SFHVMBUJPOTBOEHJWFTZPVUIFGSFFEPNUPFBTJMZNPEJGZ
ZPVSHBNFTFMFDUJPOPWFSUJNFUPNFFUDIBOHJOHDVTUPNFS
EFNBOET
The WLA is proud to have been part of this
outstanding international event.
Winter 2007
!LLYOUNEEDFORASUCCESSFUL)NTERNETGAMINGOPERATIONWWWBOSSMEDIACOM 29
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The case continues
Pondering the next steps
Lynne Roiter, facilitator of the Global
Legal Network, is head of the WLA
Montréal office and VP Corporate Affairs
and Corporate Secretary at Loto-Québec.
As the year draws to a close, ­several
developments are expected in the
Internet gambling situation in the
United States in connection with
the Unlawful Internet Gambling
Enforcement Act of 2006 and the
­ongoing dispute with Antigua
& Barbuda at the World Trade
Organization, reports Lynne Roiter.
Even a federal licensing
system would not solve
the WTO situation because
each state would retain
the right to determine
whether Internet gambling
is permitted in its
jurisdiction.
by Sportingbet which announced that it
would take it from 5-10 years to make up
the profit shortfall resulting from its withdrawal from the US market.
Recent data from the Annenberg
Public Policy Center at the University
of Pennsylvania indicates that weekly
Internet gambling among college students
declined from 5.8% to 1.5% in the year
since UIGEA was signed into law. It is too
soon to determine whether this is a permanent drop in Internet gambling among
18 to 22 year olds. However, the same
study found that other types of student
gambling had not declined in the same
way, suggesting that reduced availability
clearly has had an impact.
Signed into law in October 2006, the
Unlawful Internet Gambling Enforcement
Act (UIGEA) is designed to ban illegal final decision is taken. These should be
Internet gambling by requiring US finan- filed by December 12, 2007.
Day of reckoning
cial institutions to have procedures in place
that block payment to these sites (see issue It is not surprising to note that the Poker December 14 is the day that the result of
22 of the WLA Magazine for a more com- Players Alliance as well as pro-Internet the arbitration proceedings in the Antigua
plete description of UIGEA’s terms). The gambling groups based in Europe did not & Barbuda vs. United States at the World
legislation required the Federal Reserve wait, but immediately issued statements Trade Organization (WTO) case should be
Board and the Department of the Treasury criticizing the regulations as unworkable known. The arbitration decision was to
to enact regulations for implementing the and an intrusion on personal freedoms. have been rendered in November but was
There might well be cause for concern postponed until mid-December. Antigua is
ban.
from these groups since the UIGEA ap- claiming US$ 3.4 billion, which is nearly
The proposed regulation was released for proach either has been or is being consid- four times greater than the country’s enconsultation on October 1 this year. It re- ered for implementation in several other tire economy; the United States for its part
quires financial service companies subject jurisdictions, such as France, Norway, the has offered compensation of US$500,000.
One difficulty in this case is to determine
to US jurisdiction and offering services Netherlands and Brazil.
the true economic loss for Antigua, since
in the field of automated clearing house
contrary to other areas of economic activactivities, credit card payments, check Squeezing the supply side
collection, money transmission and wire There are indications from several quar- ity there is little reliable data.
transfers to have in place polices and pro- ters that the enactment of UIGEA has had
cedures that are “reasonably designated” an impact in reducing Internet gambling Negotiations are also continuing between
to prevent the processing of prohibited in the United States. A study by Casino the United States and several other WTO
Internet gambling transactions. The regu- City showed that the number of sites al- members who have filed claims for comlation offers non-exclusive examples of lowing American players had dropped by pensation further to the decision by the
what these policies and procedures could 45%, and by 64% for online poker sites, United States to change its WTO commitentail. Companies who implement such in the year since UIGEA was adopted. ments to remove gambling. The American
policies will be deemed to be in compli- Statistics for overall traffic to Internet position is that it could not know that
gambling sites show that the share of Internet gambling could be interpreted
ance with the law.
American users has decreased to just over as being part of its undertakings when it
The federal agencies who drafted the 8% while that of European visitors has in- signed the GATS agreement in the midproposed regulation have asked for com- creased significantly. The impact of UIGEA nineties as the activity did not exist. Claims
ments from the affected parties before a is equally clear from statements made from several countries, such as Australia,
30
Japan and Canada, appear to have been
settled; however, no settlement has been
reached with the EU. The deadline for
reaching these settlements, after several
postponements, has also been fixed for
December 14. Failing agreement a WTO
panel will decide on the proper compensation. It has been reported that European
gambling firms are seeking $100bn in
compensation.
EU Trade Commissioner Peter Mandelson
was in Washington in November and he
did according to the press issue several
statements dealing with the matter confirming that compensation should be paid.
There is also mention that the dispute is
being used to garner support for changes
to US legislation that bars Internet gambling.
States’ rights
In this regard, the bill introduced by
Democratic congressman Barney Frank
is getting the most attention. His Internet
Regulation and Enforcement Act aims to
introduce a federal licensing system for
online gambling in the United States, and
has 41 co-sponsors in Congress at the
present time. Even if it passes Congress,
however, the proposed legislation would
not solve the WTO situation. This is because the Frank bill recognizes that a
State has the right to determine whether
Internet gambling is permitted in its jurisdiction. As a result, a federally licensed
operator would not be permitted to offer
its services in a State where these are prohibited by law. In addition, sports betting
– an area of particular interest to providers of Internet gambling sites – has been
carved out of the draft legislation.
At the time of going to press, we did not
know how things will play out. The WLA
Global Legal Network will keep its members informed of the latest developments
as they unfold.
Winter 2007
Opening the debate,
not the market!
By Philippe Vlaemminck & Annick Hubert
Vlaemminck & Partners
The infringement cases initiated by EU
internal market commissioner Charlie
McCreevy against nine EU Member States
are quite controversial, in that they hinge
on factual interpretations of the behavior and gambling policies of the Member
States involved. As Norway’s experience
has shown, the authorities that question State policy in this way are not
always on solid legal ground. So why
did Commissioner McCreevy choose this
route? One suggested explanation is that
he felt frustrated after both the European
Parliament and the Council of Ministers
had excluded gambling from the Services
Directive and rejected a regulatory approach based on country of origin.
Recognizing specificity
Whether or not this explanation is true,
the Commissioner’s action should not be
seen as an indication that the EU Member
States do not want a proper solution.
Quite the contrary. Such a solution is
badly needed as a result of the growing
involvement of organized crime in online gambling and the absence of an adequate regulatory approach to defend the
interests of the consumers in a global,
Internet-driven world. Opening up gambling markets is simply not an acceptable
alternative, as the United States has indicated by withdrawing its GATS commitments. But rather than quarreling about
compensation for the EU, the Europeans
and the Americans need to take joint responsibility to stop the unregulated development of Internet gambling.
Two billion euro question
In related developments, the White Paper
on Sport raises some important questions
about the future financing of sport in the
EU, and more time will be needed to reflect
on these issues. As recently as November,
at a conference on EU law and sport organized by the French Olympic Committee,
a representative of the EU Commission in
charge of sport declared that liberalization of gambling was to a certain extent
“inevitable”. We therefore need to think
about the future of sport financing, he
said, probably not realizing that he had
just put a 2 billion euro question on the
table. Funding of sport by Lotteries is not
only the most stable form of sport financing, but also the most ethical.
Various measures have been taken by
sports federations and the sports betting
industry itself to ensure that strict rules
of ethical conduct are applied. State lottery organizations throughout Europe, for
example, have adopted a strict code of
conduct on sports betting. Similarly, the
roll-out of FIFA early warning system (see
page 8) is a clear sign that sports and
sports betting are committed to the highest standards of integrity and player protection.
While sport financing cannot in itself be
a justification for a restrictive gambling
policy, neither does it exclude the possibility of invoking other reasons for restricting gambling. What is unacceptable is
the “inevitable” wording used by the EU
representative. There is no reason why
Continued on page 32
31
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The case continues
Philippe Vlaemminck,
advisor to the WLA and EL on
European and international
legal questions
Continued from page 31
liberalization of gambling is inevitable. On
the contrary, EFTA’s case against Norway
proved very clearly that an infringement
case can lead to a consolidation of a state
operator’s monopoly on gambling.
Re-regulating from the ground up
The only issue that can no longer be
sustained is the absence of a discussion
to find a proper regulatory framework
for gambling services in the EU. Several
Member States have taken initiatives in
that regard, starting with Belgium. On
July 10, the representative of the Belgian
government before the European Court
of Justice brought agents of the different Member States together in Brussels
for the first time to discuss the gambling
cases pending before the European Court.
The meeting, attended by 24 EU and EEA
jurisdictions, was clearly a great success
and an important step towards achieving
a better understanding of the problems
and a greater awareness of the need for
solutions.
As a result of this meeting both Finland
and France have taken a number of steps
to establish an informal working group to
open up the debate on gambling. France
invited a number of the Member States
represented at the July 10 meeting to reflect upon a paper addressing the need
to regulate online gambling and to find
proper solutions for pan-European taxation. France is very much concerned about
uncontrolled development of the e-society
and is therefore proposing a “controlled
opening” of the online gambling market. This would involve both quantita-
32
Opening up gambling
markets is not inevitable.
Nor is it an acceptable
alternative, as the United
States has indicated by
removing gambling from
its GATS commitments.
tive and qualitative measures, as well as
ways to tax winnings or stakes to reduce
the negative impact of gambling on society. Discussions about this approach have
started with the EU Commission but results may be a long time in coming, even
though the need for solutions is widely
recognized. Finland has called for the formation of an EU Council working group
to address all aspects of gambling at EU
level. The advantage of this approach is
that that a more comprehensive and sustainable outcome could be achieved in the
long term. National governmental groups
have been formed in a number of Member
States to reflect on gambling policy solutions.
Poland has also invited EU Member States
to an informal meeting of the EU Council’s
working group on tax questions to discuss
taxation of winnings and set up a framework for closer cooperation at finance
ministry level. Poland is involved in an infringement case about this question and
its finance ministry is working on legislative changes in order to comply with the
Treaty. However, the Polish government
believes that risks connected with gambling services are the key reasons for the
restrictive taxation policies pursued by
some Member States.
Annick Hubert, senior associate with
Vlaemminck & Partners, is a former state
attorney for the Belgian government and
an expert in EU internal market law.
ww
The role of state lotteries
Many questions still remain open in Europe
but the signs of broader dialogue and debate are encouraging. Looking at the online market alone may not be enough,
however, and a more comprehensive solution may be more appropriate. And what
about the Lisbon Reform Treaty, which
strengthens the role of the European
Parliament and also designates sport as a
special competence of the EU in support
of national policies? Surely sustaining the
financing of sport through state lotteries is
worthy of EU support in this context.
What role do lotteries have in all these developments? Some lottery organizations
are very well connected and can play a
tremendously important role in the policymaking process. Others can rely on input
from their industry associations to provide
support to policy-makers. Both the WLA
and EL are focal points for the highest
level of expertise in the area, and their
role in codifying best practices and setting
standards of excellence is more important
than ever before.
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The associations can also play a key role
in conveying these messages to the institutions and stakeholders. We know that the
role of lotteries in society is still as valid as
ever, and we also know that liberalization
is anything but “inevitable”. But a lot of
hard work lies ahead of us as we continue
to defend that vital role. Recent developments suggest that a renewed effort is
underway to open up the debate on many
of these issues – and to find the common
ground with our peers and partners that is
the prerequisite for adequate regulation of
this unique sector.
EXPERIENCE MEETS VISION.
Winter 2007
33
S P O T L I G H T People who make lotteries work
Nichelle Anthony
Minority and Community Affairs Coordinator,
Kentucky Lottery Corporation
The
Kentucky Association, American Cancer Society, Gambling, the Kentucky Department of
Lottery Cor­pora­ Muscular Dystrophy Association, Boys & Mental Health and certified compulsive
tion is increas­ Girls Clubs of America, American Heart gambling counselors. The program is now
ingly seen as an Association and various schools are just in its 6th year.
organization that a few of the organizations that employ­
cares about the ees volunteer with and raise funds for. Diversity makes sense
community
be­ “Community involvement is important to Nichelle interacts with the state’s diverse
yond just gener­ me individually, and I’m lucky to be able population on a daily basis, coordinating
ating revenue for to combine that personal commitment event sponsorships, serving on the boards
the state. Behind with my professional objectives and ca­ of a number of minority- and womanowned business councils and working as
that positive im­ reer path.”
a volunteer on various community initia­
age lies a history of concrete action on the
tives.
ground – and a lot of hard work by lottery Hands-on involvement
staff like Nichelle Anthony, whose mission Among her accomplishments with the
is to bridge the gap between the lottery or­ Kentucky lottery so far, Nichelle worked At least 10% of the lottery’s overall pro­
with the state’s problem gaming council curement goes to minority-owned or
ganization and the community.
to re-brand and market a program devel­ woman-owned businesses. Arch Gleason
As Minority and Community Affairs oped in Missouri to reach the children of and COO Margaret Gibbs have displayed
Coordinator, Nichelle Anthony works on Kentucky and warn them of the dangers a commitment to having a diverse sup­
a daily basis to make sure the lottery of drugs, alcohol and gambling. She dis­ plier base for the past 10 years and the
stays on course in two key aspects of covered that one of the key challenges lottery has been recognized as one of
the top state agencies in this arena. “For
Corporate Social Responsibility. She is cur­
supplier diversity initiatives to succeed,
rently focusing specifically on responsible
it takes a top-down approach starting
play and diversity, handling a variety of
with real management commitment,” says
diversity and community-related initia­
Nichelle. The lottery’s Supplier Diversity
tives. She oversees the budget for event
committee works to train staff and sup­
sponsorships, serves as co-chair of the
pliers and promote employee recognition
lottery’s supplier diversity program, over­
in this area. Nichelle Anthony supports
sees its responsible play program and co­
that deployment effort, networking with
ordinates diversity-focused advertisement
various groups in the business community
campaigns.
was getting buy-in from educators at the and helping to apply the open door policy
After graduating in Communications from state and local levels, and found it took a she created to allow minority and women
Oakland University in Rochester Hills, hands-on involvement and three years of businesses an opportunity to meet with
Michigan, Nichelle spent seven years in hard work to turn well-intentioned mis­ department heads to share their abilities.
the TV news business before joining the sion statements into real action and mea­
lottery. Her media background helped her surable results. The program in now in “We have a winning formula that extends
appreciate the difference between the im­ roughly 150 schools across the state of beyond just Kentucky Lottery players,”
ages people see on TV and the realities Kentucky and includes video materials she says. “My job is to make sure state­
on the ground, and today she is proud to and other tools showing children how to ments like that are not just taglines in a
work for an organization that “puts its get help for themselves or loved ones in publicity campaign. Saying you’re doing
their life suffering from addiction.
the right thing is important but actually
money where its mouth is”.
doing it is what makes the difference. And
“The lottery really encourages its em­ Another idea Nichelle Anthony brought for a community-focused organization like
ployees to get involved as volunteers to from Missouri is Responsible Gaming us, making a difference makes great busi­
improve the well-being of all Kentucky Education Week, a large-scale public ness sense!”
citizens,” says Nichelle. The Alzheimer’s awareness campaign about problem and
compulsive gambling. To make it work
in her new home state, she pulled to­
gether a coalition including legal gam­
ing entities in Kentucky and southern
Indiana, the Kentucky Council on Problem
34
Winter 2007
35
The learning curve
WLA Academy
The WLA seminar in Togo brought together the nations of Africa for three days of intense learning.
Lottery Business from A to Z,
Lomé, Togo
August 28 – 31, 2007
What makes lottery operations successful
From August 29 until September 1, 2007
around 45 African senior lottery officials
met under the excellent hosting and hospitality of the National Lottery of Togo in
Lomé, Togo’s intriguing beachside capital,
in the colorful setting of the Lomé Holiday
Inn Hotel.
The 45 participants originated from 8 different nations, from Ivory Coast to Benin,
and from Burkina Faso to Niger. The program included discussions of a wide array
of lottery business cases – 19 in all – that
were scrutinized in six smaller, multinational groups.
Subjects ranged from sports betting time
closures to lost tickets and PR around winning claims, all based on real-life lottery
experiences from across the globe. The
cases, originating from Canada to South
Africa and from France to New Jersey
were as diverse as they were energizing,
and passions ran high in the six groups as
different problem solving strategies were
proposed.
Under the balancing leadership of Hans
Savonije, who presented and moderated
the seminar, the participants learned a lot
about lotteries and teamwork, and, above
The seminar attracted the interest of the African media. Hans
Savonije had the privilege of delivering the vision and mission
of the WLA to the African people via the television news.
36
all discipline of the highest caliber. The
colorful opening reception, hosted by the
National Lottery of Togo’s managing director Kudjow-Kum Pekemsi with Mamata
Bako Djaouga, President of the African
state lottery association (AALE), was attended by Togo’s Minister of Finance.
The WLA thanks the AALE and Loterie
Nationale Togolaise for staging three days
of solid learning and a very successful
event. We also thank Guy Simonis and
Jean Jørgensen for their support on the
content of the course material. Given the
tremendous feedback from participants, a
further session on the same model will be
programmed during 2008.
Hans Savonije with Mamata Bako Djaouga, Managing Director
of the National Lottery of Benin and Kudjow-Kum Pekemsi,
Managing Director of the National Lottery of Togo.
Winter 2007
37
DE:CL>9:L>C
The learning curve
Upcoming seminars
January 23 – 25, 2008
Three Days of
Marketing Excellence
London, England
Joint WLA/EL seminar
WLA Communications Coordinator
Paul Peinado speaks with La Banca
President Roberto Palermo Suárez.
Excellence in the Sports
Betting Arena
Punta del Este, Uruguay
November 25 – 28, 2007
A warm breeze blows in the port of Punta
Del Este, Uruguay, making it a popular
destination for sailing enthusiasts from
around the world. There is a comfortable
but lively energy running through this
town on South America’s Riviera, where
the WLA held its last seminar of 2007,
“Excellence in the Sports Betting Arena”.
La Banca de Quinielas de Montevideo graciously played host to this seminar. A total
of 65 international delegates came together in Punta del Este to discuss the latest developments in Sports Betting world
wide.
Jean Jørgensen and Mélissa Azam
of the WLA chat with La Banca
­director Jorge Stighetti.
strengthen our lead through marketing
and strong branding.
At the same time the dark side of a criminal industry is starting to impinge upon
the integrity of sports betting. Match fixing and money laundering are threats to
the industry, and we must embrace efforts
such as FIFA’s early warning system in our
battle against criminal activity in sports
and sports betting.
The Latin Americans are seasoned veterans of the sports betting industry, and the
seminar offered a close-up view of sports
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February 10 – 15, 2008
English for the Lottery Sector
Aldwark Manor, York, England
Seminar conducted by
Partners in Training
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February 24 – 27, 2008
CSR, Responsible Gaming
and Marketing
Ottawa, Canada
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March 18 – 20, 2008
Security, Risk Management
and Business Continuity
Marseilles, France
A joint WLA/EL seminar
April 2008*
Excellence in Lottery Operations:
Public Relations and Good Causes
Kuala Lumpur, Malaysia
A joint WLA/APLA seminar
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May 2008*
CSR / Responsible Gaming
Mexico
A Joint WLA/CIBELAE seminar
Tricky waters
A common thread running through the
various presentations was that the sports
betting industry is maneuvering through
tricky waters. The competition being offered by the private sector betting industry is ever present and getting stronger.
The lotteries offering sports betting are
still a step ahead but the gap is closing.
The time to innovate and strengthen the
industry is now. Offering higher pay-outs
and the added attraction of single-event
betting, the private betting industry is
moving in on territory which until now
has been forbidden for most state sports
betting organizations. New legislation is
needed to leverage the advantage that the
state lottery agencies have.
As well as exclusive access to retail channels, state lotteries enjoy advantages such
as credibility and scale which are highly
coveted by the private betting sector. The
time has come to realize our potential and
38
In order to heighten the spirit of
competition, a go cart race was organized for the participants.
betting in the region. Sport is ingrained
in the Latin American spirit and culture,
and it was fitting that the world of sports
betting should come together on these
three days to share the spirit of excellence with our colleagues in Uruguay. We
wish to thank once again Jorge Stighetti
and Roberto Palermo and their team from
Banca de Quinielas de Montevideo for
their hospitality and tireless effort in helping us make this seminar an resounding
success.
*Exact date to be announced.
For more details and a complete list of
2007 WLA seminars, please visit our
website: www.world-lotteries.org
WLA Conventions
October 19 – 24, 2008
Discover the island of Rhodes
2008 WLA Convention and Trade Show
hosted by OPAP.
Rhodes, Greece
Winter 2007
39
Platinum Contributors
WLA Contributors
Corporate news
Leadership changes
W. Bruce Turner, Chief Executive Officer
of Lottomatica S.p.A. and GTECH
Corporation, has resigned to pursue an
opportunity to start an investment firm.
Jaymin Patel, currently President and
Chief Operating Officer of GTECH, will
become Chief Executive Officer of GTECH
Corporation, while Lorenzo Pellicioli,
Chairman of Lottomatica S.p.A., will take
on the additional responsibilities of Chief
Executive Officer of Lottomatica Group.
Ramping up capacity
Scientific Games has inaugurated its new
high-speed printing press in Alpharetta,
Georgia, expanding its instant ticket printing capacity by approximately one-third
to over 30 billion tickets a year. The inauguration was commemorated with a ribbon cutting ceremony attended by Georgia
Governor Sonny Perdue and Georgia
Lottery President and CEO Margaret
DeFrancisco.
The company has also acquired a 50% interest in Guard Libang, a leading provider
of instant lottery ticket cooperative services to the China Welfare Lottery, for approximately $28 million.
Scientific Games has become the first lottery vendor in the industry to be certified by NASPL for software development
and quality best practices. The company
received certification for both system requirements definition and development.
Thriving on competition
Intralot has further expanded its presence
in the Australian market following the
Victorian Government’s decision to break
a 54-year monopoly of the public lottery license. Intralot’s local subsidiary has
been granted a 10-year license to operate a variety of lottery and instant games
in Victoria. The current lottery operator
(Tatts) will continue to operate the existing
lottery games which are combined with
other jurisdictions.
40
The company’s General Technical Division
has been awarded the “Committed to
Excellence in Europe” distinction by
the European Foundation for Quality
Management (EFQM). The distinction rewards various achievements, including
ISO 27001 certification of its Information
Security Management System.
Blue is the color
Venezuela’s largest lottery company,
Grupo Selco, has commissioned Wincor
Nixdorf to deliver 1,000 Xion /Mtop terminals as part of the expansion of its sales
network. Grupo Selco has worked closely with Wincor Nixdorf’s subsidiary in
Venezuela since 2002. The company has
even chosen the distinctive blue of Wincor
Nixdorf’s terminals for its POS branding,
and now refers to its nearly 3,000 lottery outlets all over Venezuela as “puntos
azules”.
Gold Contributors
Strong performance by
Pollard Banknote
Since it went public in 2005, Canadian
ticket supplier Pollard Banknote has gone
from strength to strength. The company
has completed testing of a new automated
finishing and packaging line, and a number of key customers have been growing
their instant ticket product lines. Sales
performance remains strong, with a numerous contract extensions, successful
re-bids and a landmark award for a new
client in Poland.
Third-quarter gross profit increased from
$9.7 million in 2006 to $10.4 million in
2007 on quarterly sales of just over $42
million. “The mix of products sold during
the quarter included more higher-margin
items, and production volumes increased,
resulting in a positive impact on gross
profit,” said Co-Chief Executive Officer
John Pollard.
Silver Contributors
- the best bet
???? 200?
41
What does it mean?
With more sales than ever coming from instant games, choosing a supplier to support and
manage this critical product category has never held more promise for today’s lotteries.
Likewise, the need has never been greater for flawless synchronization and execution of the myriad
integrated marketing and logistical components that drive sales of this fast-action product.
This mission-critical category requires serious suppliers willing to
make serious investments and Scientific Games is doing just that.
Our latest investment in our 6th in-line press means we now have
the four newest and most modern presses in the lottery industry.
But presses – while important – are but the middle link in a complex, interrelated process.
Today’s instant category demands a supplier that can also contribute to the marketing
on the front end and just-in-time distribution and retailer support process on the back end.
And it’s here where Scientific Games sets itself apart.
> We are now the only major producer
of instant tickets in Europe.
To access a special web presentation
on our new Servo press, go to:
www.scientificgames.com
42