Paul's Blog - Objects in your rear-view mirror are closer than they appear

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The news of the day is populated by stories that I think have interesting connections. 

1.      Driving changes to the curve:  Lottoland continues its disruptive activities, now ramping up a super-aggressive PR campaign to attack the authorized state-sponsored operators of the UK National Lottery and the Ireland National Lottery.  Governments and regulators are effectively pushing back on the Lottoland “synthetic” or “secondary” lottery, a model in which the consumer bets on the outcome of the lottery draw.  This model enables the operator (like Lottoland) to leverage the brand equity and operations of the authorized lottery to be the basis for its betting model.  It is not fair to the owners of the lottery brands, it is not fair to the Good Causes that are funded by the proceeds of state-sponsored lotteries, and it’s not fair to the consumer who thinks they are playing the lottery when they are not. See article “Ireland: Online lotto sales set to soar but National Lottery may lose out” for the long-term implications of the “bet-on-the-outcome-of-lotto” model. 

2.      Falling behind the curve:  Because of the disruption caused by countless online operators which cross national borders to offer their products without proper license, Sweden is acceding to pressure to open up its markets to multiple operators.  Sweden has been stalwart in its commitment to its single-operator model, relying on Svenska Spel to provide games-of-chance at both retail and online.  But technology and the ingenuity of private operators have fragmented the market-place in Sweden to the point where the authorities have decided that it is better to join them than fight them and so now move to a multiple-licensed-operator model.  Hopefully, they will invoke some form of “bad-actor” provision to not reward illegal operators with a license to now operate legally.  This is not so much about Lottoland as about the myriad of online gambling operators who advertise and offer online games to the Swedish consumer.

3.      Keeping abreast of the curve: Pennsylvania’s implementation of a regulatory regime for  i-gaming  is the next U.S. state to be showing us the way.  It is so important to regulate the online gambling industry.  Prohibition not only drives the consumer to patronize criminal enterprises to gamble online, it not only turns taxable revenues into giant profits that enrich criminals – it also creates the foundation for being in the position that Sweden finds itself.  Once the consumer markets have migrated to illegal operators, the battle to redirect the consumer to play on regulated websites (that have lower prize payout percentages than the illegals) becomes that much more difficult.  The best way to protect the consumer, to protect the interests of Good Causes funded by state-sponsored Lottery, to preserve a stable market of controlled and regulated growth, is to be proactive with a thoughtful regulatory regime. 

4.  4. Staying ahead of the curve:  We need a few more states to go the responsible path like Pennsylvania, Delaware, Georgia, and Illinois, and regulate the online games-of-chance market-place.  It is necessary to preserve long-term sustainability of the Lottery industry.  The problem is that a very well-funded cabal that includes casino tycoon Sheldon Adelson and his congressional proxies and his Coalition to Stop Internet Gambling (CSIG) is struggling mightily to take away the rights of states to decide whether or not to prohibit i-gaming, including i-Lottery.  They want the federal government to impose a nation-wide prohibition of all i-gaming and i-Lottery.  It makes no sense for the federal government to do that, it has zero to do with protecting the consumer (of course, prohibition does the opposite by compelling the consumer to play on illegal websites), and has everything to do with protecting Sheldon Adelson’s land-based casino interests.  Currently, federal law already prohibits all forms of gambling until and unless the individual state exercises its right to regulate and tax the games-of-chance industry.  Adelson and CSIG want to take away that right.  The best way to ensure he does not succeed is for a few more states to join Pennsylvania and regulate the i-gaming industry.

I’m sure we could continue with “curve” scenarios.  The hoped-for imminent lifting of the federal prohibition, for instance, could be tagged “redefining the curve”.   The good news is that Lottery is taking charge and is itself redefining the curve, innovating and setting the market-place standards that will drive the industry forward.  That is evidenced by the presentations and in the panel discussion just held at PGRI SMART-Tech Miami.  Thank you to all of our sponsors, presenters, panelists, and moderators for making it happen.  A few of the video-recordings of the conference are posted to with the rest coming this week. 

Mark your calendars for October 23 to 25.  PGRI Lottery Expo NYC will be held in mid-town Manhattan.  THEME: WHAT's Your WHY? More info to come.      

“Outside of a dog, a book is man's best friend. Inside of a dog it's too dark to read.” 
Groucho Marx