Public Gaming Magazine May/June 2016

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18 // PUBLIC GAMING INTERNATIONAL // May/June 2016
How do margins vary between the different
game categories?
B. Hrafnkelsdóttir: The payout per-
centage from VLT’s is higher than in the
class lottery and scratch cards. VLT’s are
the biggest division and the net margin in
Icelandic króna, which is the gross gaming
margin minus the operating costs of the
system, is twice as high with VLT’s as it is
with the class lottery. This means that each
percentage point change in the turnover of
the VLT’s weighs more than twice as much
as a change in the class lottery in terms of
its impact on the net margin. Despite this,
the UIL’s policy is not to advertise VLT´s.
On the other hand, we have worked a lot
with IGT, who is our machinery and system
suppliers, in an effort to make the supply of
games more interesting with more effective
game controls. Too, we have conducted ex-
periments in various sites with the look and
presentation of machines, messaging to cus-
tomers in the locations etc., and all of this
has obviously boosted our turnover togeth-
er with an improved economy in Iceland.
What do you see as the best strategies for
maintaining growth in the draw-based
game category?
B. Hrafnkelsdóttir: We’ve achieved
good results in the sale of class and instant
lotteries. Ticket prices have risen twice in
the class lottery, from ISK 1,100 to ISK
1,500, i.e. by 36%, since 2011. And yet we
still have an increase of approximately 11%
in the number of tickets sold between 2010
to today. I believe that can be attributed to
the changes we made to the class lottery in
2012 when we offered a new winning pot,
called Milljónaveltan (the Millions raffle),
where all tickets are drawn for a single win-
ning ticket of $80,000. If a winner is not
found, the prize remains in the pot and is
added to the draw of the following month.
Direct phone sales have also achieved great
results. We strive to have humour at the
forefront of our marketing campaigns and
use Facebook a lot, where we have 32,000
followers. Also we upgraded the website and
procedures to facilitate the buying of tick-
ets online. Subscriptions account for 88%
of the turnover, but there are always some
users who stop briefly, and jump in when
the Milljónaveltan pot increases. The ma-
jority of lottery ticket holders essentially do
business with us to support the University
of Iceland but also in the hope of winning.
People of all ages play the lottery but, as
is natural, the most active participants are
middle-aged people who have the most dis-
posable income. The challenge is to turn
the class lottery into an exciting option for
young people between the ages of 20–35,
while at the same time retaining the rest
of our loyal clientele from all age groups.
Today 15% of participants in the lottery
are in the 20–35 years age bracket. This
target group poses many challenges, such
as the demand for digital communication
options, greater speed and the most up to
date technology.
What do you think is the future of draw-games?
B. Hrafnkelsdóttir: For the class lottery
to continue as the leading lottery here in Ice-
land in the future, we need to keep a sharp
eye on player and general market-place
trends as they emerge. A fundamental pre-
condition for this is to make sure that our
website and the interface in all our gaming
machinery are simple and accessible so that
they do not test our customers’ patience.
The younger generations in particular ex-
pect us to deliver a user experience that is
just as easy and up-to-date as the most ad-
vanced e-commerce websites—everything
needs to be preferably “one click away.”
There are also other challenges raised by
trends today. Online marketing is constantly
growing and the emphasis is shifting away
from well-established media such as TV, ra-
dio, and particularly newspapers. The class
lottery is following this trend and we are
increasingly using online advertising plat-
forms, such as Facebook, Google, YouTube
and other popular networks. These changes
entail the application of a vast volume of
measurable data which market experts can
examine and evaluate to assess the results of
their marketing efforts. This benefits us in
the class lottery and the policy is to advertise
in the places where the marketing funds are
best used and yield the best results.
We must be doing something right be-
cause we’re witnessing a rise in popularity
among people of all ages. We believe that,
with the right presentation and simplicity
of our games, this popularity will contin-
ue to grow. We don’t envision any radical
changes in our games or rules in the near
future. What we are more likely to see is the
appearance of new games. We believe that,
so long as we manage to follow trends each
step along the way, the future of the class
lottery should be bright and we have ev-
ery reason to believe we can maintain this
as an exciting option for the players of the
future. After all, it has been running in this
country since 1934. It has had its ups and
downs, and it’s still going strong.
Iceland is known for being a global hub for
young innovators in the tech, entertainment,
design, and media industries. Will you benefit
from Iceland’s indigenous creative resources?
B. Hrafnkelsdóttir: That hasn’t been
the case. The most popular online Icelan-
dic games, Eve Online and Quiz-Up are
not in gambling, and is in
sports which we don’t have a licence for. So,
this could represent an opportunity for us
to innovate further. But reality is that we
have strict limitations as to the games we
can offer and the media/channels through
which we are allowed to distribute.
Are remote i-gaming operators as successful
at disrupting the markets in Iceland as they
are elsewhere in the world? Are your govern-
ment or agents of law enforcement doing any-
thing to prevent illegal i-gaming in Iceland?
B. Hrafnkelsdóttir: The lottery is a fun,
exciting and useful phenomenon which of-
fers a twofold benefit: On one hand it gives
the people who play a chance to make a
contribution to the community, while at
the same time enjoying the hope of win-
ning a prize that may enhance or change
their lives, and this is what makes the game
so exciting. On the other hand, the many
agencies and organizations involved in
worthy causes for the community benefit
from the contributions of lottery compa-
nies and the Lotto.
In recent years there have been radical
changes in consumption patterns, particu-
larly in younger generations. Leisure, shop-
ping and various other services are increas-
ingly moving online. The same applies to