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May/June 2016 // PUBLIC GAMING INTERNATIONAL //
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In order for government-lotteries to have a
positive impact on the sports-betting indus-
try, they must have an offer that appeals to
the consumer. They must offer a competitive
value proposition and prize-payout percent-
age. In Germany, for instance, the lack of an
effective regulatory and licensing regime has
resulted in the lottery share of the sports-
betting market to plummet from over 60%
in 2006 to less than 5% today. That not only
harms the lottery and its beneficiaries, it is not
good for the industry or the consumer. Gov-
ernment-lotteries have a positive influence
for society and the consumer. They should be
given the tools and the ability to compete in
the market-place. Finland in a monopoly en-
vironment and Denmark again in a licensed
environment are doing much better because
the government makes a special effort to en-
sure that they are equipped to compete and
meet the needs of the market-place.
Explain some of the different types of sports
betting. And how we got to this point where
live-betting has become so popular.
J. Hovi:
The constant development of
technology has enabled operators to deliver
a much more fulfilling sports-betting experi-
ence. It used to be that a sports-bet was on
who won a match, and who beat the point
spread. Now, you can bet on countless mo-
ments that happen during an event, from
who scores first to when time-outs will be
called or when the next point in basketball is
made. For instance, during the FIFA World
Cup we had more than 200 different betting
choices on each football/soccer match.
Kambi manages more than 170,000 in-
play events a year now, and a small portion
of those are actually televised. But through
Kambi’s platform, we empower our opera-
tors by enabling them to live stream sporting
events. For instance, Philippine basketball is
our fourth most popular basketball league for
our streaming service because they are played
at times of the day (on the global time clock)
where there’s not very much else going on.
The rich variety of live-action betting options
would certainly seem to be more exciting than
the pre-match fixed-bet play-style.
J. Hovi:
The sports player can now bet
on each single point, for example, in a ten-
nis match. In football/soccer we now have
bets on the next throw in. We are always
testing more and different betting options.
In American baseball, for instance, we are
testing to see if players want to bet on ev-
ery single pitch. What are the odds of the
batter reaching first base on any given pitch?
The industry is definitely moving in this
direction. Consumers are interested in in-
stant play and live-action betting as it is fast
and entertaining. Here the speed of a single
bet has become almost instant. Due to this
speed, only a few companies can actually of-
fer this service in a reliable way since it re-
quires not only specific sports expertise and
man-power, but also sophisticated technol-
ogy that is again underpinned by our intel-
ligent data modeling tools.
Lottery people like me tend to think of the
fast-play/high prize-payout/low-margin mod-
el as being more like gambling, and therefore
perhaps more likely to lead to problem gam-
bling. But it occurs to me that it also allows
the players to enjoy the playing experience for
a longer period of time. The play-style is more
like playing a real game, delivering a higher
entertainment value. And you can play longer
without losing too much money.
J. Hovi:
This is an entertainment busi-
ness. It’s about creating the products that not
only compete with other gaming products
but also compete against other leisure and
entertainment activities for both time and
money. For the general public, sports-bet-
ting is really all about fun and excitement.
In fact, the sports-betting player knows they
will never win a lottery-size jackpot. They’re
playing for fun and hope they will win a
little money instead of losing, but either
way the focus is more on the playing experi-
ence, making your stake last a longer time,
and making the spectator sport of watching
a sporting contest much more entertaining.
Some of us are wondering if the increased
availability of different gaming categories en-
abled by the Internet will increase the likeli-
hood that players will migrate from one cat-
egory to another. Do you think that lottery
players will embrace sports-betting if it were
made readily available to them?
J. Hovi:
That’s a good question. Lottery
offers a different player experience and the
lottery player has a unique player profile. But
look at the explosive popularity of Fantasy
Sports in the U.S. It is quite a phenomenon
that I suspect stretches across a wide variety
of player demographic profiles and historical
play-styles. The main thing is for operators
to make as wide a variety of gaming options
available to its players; and to develop the
applications to make the games especially
user-friendly and enjoyable on Mobile. More
than half of our business is now on Mobile
and that percentage increases every month.
As the demographic profile of lottery
players continues to age, it is becoming more
important than ever to attract younger con-
sumers. While it appears that lottery players
do not migrate as much to sports-betting, it
is the case that sports-betting players do play
the lottery. That is why it is strategic for lot-
tery operators to offer sports-betting. They
need to have a complete portfolio of games
that includes games that appeal to younger
adults like sports-betting. Younger consum-
ers are much more likely to experiment with
all forms of gaming.
Do Lottery’s land-based retail network give it
a competitive advantage over operators which
have only an internet-based model?
J. Hovi:
Lottery’s network of retailers,
and its competency at managing networks
of land-based store-fronts, is a powerful
competitive advantage. If you have retailers
already for other products, you can just add
more products, like sports-betting, to the
same channel. For instance, all the bars would
want sports-betting because they already have
the TVs. And people are already betting. The
betting may be unauthorized now, but that’s
why it should be brought into the regulated
environment. Too, the theme of the EL In-
dustry Days event is Renaissance of Retail in
Digital Times. Sports-betting is the category
of choice for much of the modern consumer
market. And it has a powerful social compo-
nent to it—people love to watch sports to-
gether and bet on sports together. They need
a venue to do that and that venue can also sell
all the other lottery products. Sports-betting
is the perfect game to advance the renaissance
of retail in digital times!
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