60 / 100
60
// PUBLIC GAMING INTERNATIONAL // September/October 2016
is a fabulous arrangement because the Nex-
us Group is highly investing in the retail
channel partners of Lottery, like pharma-
cies and supermarkets. In Italy we partner
with GameNet, one of the biggest gaming
machines operators in Italy which tightens
the synergies with the sports-betting mar-
ket there. INTRALOT acquired a majority
stake in EuroBet in Bulgaria, KINO and
scratch operator, complementing our bet-
ting portfolio as 49% shareholder of Euro-
football since 2002. Everyone benefits by
these kinds of partnerships.
Our strategy is to capitalize on INTRA-
LOT’s technology and products by extend-
ing them quickly into new market sectors
through partnerships. And it’s working.
Instead of developing everything internally,
you focus on your core competencies to ensure
that they are always best-of-breed and then
augment that with partnerships to bring in
the complete portfolio of best-of-breed.
N. Nikolakopoulos:
Yes, but it’s not
all about technology and products. The
operational synergies are equally impor-
tant. For example in Peru we are not go-
ing to utilize any other technology or
product partner. It is all INTRALOT.
Our partnership is with someone that
knows the consumer extremely well in
a very local and in some ways challeng-
ing market. And it is not about gaining
market share since INTRALOT already
has more than 90 percent of the market.
We are investing in growing the market
in Peru. We are partnering with some-
one that has thousands of consumer
touch points and knows the Peruvian
consumer better than anyone else. Com-
bine that with our operational expertise
in the industry, our technology, and our
products, and we are confident that the
market can be expanded.
You are not only assembling a best-of-breed
portfolio of assets, you are doing it in ways
that accelerate speed to market and flexibility
to change with the times.
N. Nikolakopoulos:
Exactly. The fact
is that nobody can be the best at every
single thing. Business challenges, opportu-
nities, and environments vary so much all
around the world. Our approach enables
us to deliver the uniquely best solution for
each unique set of circumstances. Creative
collaborations and partnerships enable us
to assemble the very best solutions for the
benefit of our clients.
And the synergy between sports-betting and
lottery is apparent in almost all markets apart
from the U.S. INTRALOT’s strategy to lever-
age that synergy makes a lot of sense.
N. Nikolakopoulos:
We think so. We
think the player profiles and the distribu-
tion channels and consumer touch-points
for Lottery are completely different from
casinos. The overlaps, especially as re-
gards operations, logistics, and distribu-
tion, between sports-betting and Lottery
are something we want to leverage for the
benefit of the operators. The majority of
the countries where we are present employ
this winning combination of offering with
thousands of PoS selling both lottery and
sports betting products.
I believe that INTRALOT has by far
the biggest land-based sports-betting op-
eration. We are in more than 18 coun-
tries. And we focus on helping lottery
operators extract significant economic
benefit from the distributional synergies
between sports-betting and Lottery. And
keep in mind that markets where sports-
betting is presently prohibited, like
Brazil and Argentina and the U.S. and
many others, are actively exploring mod-
els to regulate and tax sports-betting. So
imagine the opportunity for the opera-
tors, and for INTRALOT, when sports-
betting becomes regulated in these mar-
kets. The upside potential for everyone
is huge. The sports-betting market is al-
ready huge in these unregulated markets.
A lack of regulation is dangerous for the
players, has no apparatus to promote
responsible gaming or collect taxes or
minimize money laundering. Everyone
understands this, so it is just a matter of
time before sports-betting is brought out
of the gray underground economy and is
properly regulated and taxed.
Is there anything that traditional lottery can
do to evolve itself and its products to meet the
needs of the modern, younger player?
N. Nikolakopoulos:
That is the mil-
lion dollar question, isn’t it? A part of
the answer is to help retailers connect
with their customers and enhance the
player experience. INTRALOT is de-
ploying advanced digital strategies to en-
able our customers, the lottery operator,
to work hand-in-glove with their retail-
ers to accomplish that. Digital includes
in-store technologies and also the build-
out of the omni-channel model to pro-
vide connectivity on all channels—land-
based, Mobile and digital everywhere.
We need to focus on those things that
we can change, and not be side-tracked
by things we can’t change. Providing a
seamless, universal player experience is
something we can do and should work
harder to make it happen now.
We also need to develop game content
that is not so reliant on big jackpots. The
jackpot games have been very good for
Lottery, and the players will play them for
many years to come. But it is imperative
that we develop a more varied portfolio of
products that appeal to a broader base of
consumer play-styles.
■
The biggest FMCG brands may be leading
the way, but we can adopt best practices as we
observe them being applied.