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// PUBLIC GAMING INTERNATIONAL // May/June 2015
From the Publisher
By Paul Jason, Publisher
Public Gaming International Magazine
April 11 was a very sad day for so many of us. Buddy Roogow
was only 65 years old when he died of an aneurysm. He was not
only a fearless innovator and leader, he was a good friend and in-
spiration to everyone who knew him. We will miss him!
The high margins and long-term sustainability of government-
lotteries would not happen without monopoly protection. And mo-
nopoly protection depends on a regulatory system that is effective
and enforceable. Otherwise commercial online gambling opera-
tors could enter the market with superior product offerings/prize-
payouts and generate outsized profits for private shareholders -
essentially re-channeling the proceeds from government-gaming
operators away from
Good Causes
and over to private sharehold-
ers. That’s what happened in the sports-betting market in Germany,
and to a lesser extent all over Europe as well. What exactly is there
to prevent this syndrome that has turned sports-betting into a low-
margin, competitive multi-operator market-place from happening
to government-lotteries? In “
Change and Disruption in the Eu-
ropean Government-Lottery Industry
”, we attempt to provide
proper context for understanding how European regulatory struc-
tures have evolved to become so vulnerable to major disruption.
More than ever, the inability of regulatory frameworks to keep up
with technological and marketing changes is paving a smooth path
for disruption of the games-of-chance industry. Unfortunately,
regulatory change and uncertainty is more useful to those opera-
tors willing to skirt the edges of legality than it is for those, like
government-lotteries, who are dedicated to raising the standards
of integrity, consumer protection, and business practices that align
with public welfare.
It is hard for those of us based in the United States to imagine
this kind of scenario actually happening in the U.S. To be sure,
payment-blocking (and to a lesser extent, ISP-blocking) has been
used to great effect in the U.S. These regulatory mechanisms are
invaluable tools that enable effective enforcement of many of the
laws that prohibit illegal online gaming and the illegal sale of lot-
tery products. Unlike its counterparts in Europe, the U.S. is not
politically conflicted about the enforcement of the monopoly mod-
el to channel lottery proceeds to support charitable causes. Our
other feature, though, discusses how regulatory laws are based on
legal definitions of gambling that may become obsolete; and how
that may come to affect the stability of the U.S. lottery monopoly
model. James Maida and his panelists discuss how clever opera-
tors and game developers are finding ways to circumvent the tra-
ditional definition of gambling (
Chance+Consideration+Prize
).
Government-lotteries are particularly vulnerable to the disruptive
impacts because, unlike commercial operators, government-lotter-
ies are constrained to abide not just to the letter of the law but also
to the spirit of the law.
I have often been asked to provide the concrete data that illus-
trates and proves the contention that selling lottery products online
not only does not cannibalize land-based retail sales, it helps and
augments retail sales. That may seem counter-intuitive, but it is the
fact as revealed in the experience of lottery operators which have
been offering lottery products online for many years. Retailers are
understandably concerned that making the products available on
other channels might further segment the market and cause retail
customers to buy online instead of at retail. The thing is, as many
retailers are coming to recognize, the future of retailing includes an
integration of an online internet-based consumer connection into
the land-based retail shopping experience. We are very pleased to
provide the evidence showing the positive impact that iLottery has
on land-based retail sales. It’s no longer just theory or supposition
or claims made by those of us who are advocating for the omni-
channel model to be applied to lottery. Thank you to IGT for doing
the research and gathering the data and turning this into a white-
paper that can hopefully be used to help all of our constituents and
channel partners to embrace the omni-channel model. Truly, this
is vital to the ongoing success of lottery and its retailers. iLottery
expands the market and enhances the consumer experience for ev-
eryone, and that ends up benefitting land-based retailers.
Susan and I are off to the EL Congress in Oslo (June 8 to 11).
The U.S. is different from Europe, and the efficacy of its regula-
tory frameworks more stable than those in Europe. But it would
be a mistake to under-estimate the ingenuity of commercial online
gaming operators to invent new game concepts and methods of
making them available to the consumer. Partly because of the ma-
turity of its gaming markets and cultures, and partly because of its
politically conflicted approach to regulations, Europe is the breed-
ing ground for “Uberification”, i.e. the application of innovation
and business methods that push, or cross over, the edge of legality.
The EL Congress is a forum where these most challenging issues
are addressed. We will be reporting on the proceedings of the EL
Congress, as well as envisioning how these issues may manifest in
the U.S. and bring them to you at PGRI conferences.
Thank you to all of our editorial contributors - Your perspectives
are so insightful and helpful, and your willingness to share so ap-
preciated!
Lottery Expo
will be held at the Eden Roc Miami Beach on
September 9, 10, and 11. Check in at
for
updates and information on PGRI conferences. Hope to see you
there!
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