Paul's Wall July 16, 2012

Paul's Wall July 16, 2012

Greetings from Orlando, Florida.  Susan and I are very excited to be here for the NASPL Professional Development seminars.   NASPL (North America), EL (Europe), APLA (Asia Pacific), Cibelae (Latin America, Mexico, Caribbean), are our regional industry associations.  They, along with the WLA (the World Lottery Association) provide what can best be described as our industry's only post-graduate curricula for studying and learning about the government-gaming industry.   The educational seminars, taught by our industry's top executives, create the kind of widespread understanding of our industry that is key to liberating the talent of middle and upper level management to serve our noble mission most effectively.  They are the ones who will be creating the solutions to the problems and opportunities that face the government gaming industry.   A big Thank You to our Industry Associations for giving them the tools to make it happen.

We came to Orlando from Nashville, Tennessee, where we had the honor of being a part of the Emerging Leaders Program at the TN Education Lottery Corporation .   TN Lottery CEO Rebecca Hargrove has always given Executive Development a high priority.  So four years ago, Rebecca, Wanda Wilson Young (TN Lottery Chief of Staff and Legal Counsel), and their executive team developed a program to ensure that executive development was conducted in a more comprehensive, fresh, and interdisciplinary fashion, with regular monthly sessions.  That has resulted in a progressive and innovative approach to understanding our industry and creating the knowledge base that will be foundational to our industry's success.  My presentation turned into a 1-1/2 hour discussion about how lotteries all around the world face a number of universal issues.  That's sorta my thing, acknowledging the differences that exist between markets, gaming cultures, and political/regulatory structures, but working hard to identify the commonalities and talk about the importance of understanding the ways in which many of the issues we face are in fact universal, and that this understanding will inform the collaborative approach we need to best serve the interests of our state and lottery-specific stakeholders.   The beneficiaries of lottery funding need our leaders to work together in a spirit of mutual support and cooperation to learn from each other, to effect a Best Practices approach towards business operations, to develop multi-jurisdictional games, and of course, to speak in one voice to defend the interests of the public when it comes to the regulatory structures that have such a profound effect on the future of government-gaming.

The EL Association, for instance, takes a most progressive and outspoken role in representing the interests of their members at the highest levels of policy-making in Europe.  They have carved out a meaningful role as advisors to the parliament of European member states, as spokes-persons for our industry and communicating our positions to the European Union Commission, and even take an active role in helping to defend the interests of member states at the highest court of justice in Europe (the "CJEU" in Luxembourg).  Philippe Vlaemminck is legal counsel who works to foster collaboration between member states and their lotteries, and to represents the interests of EU member states at the CJEU in Luxembourg.  Philippe is also a friend, a regular contributor to our magazine, and a presenter at our annual conference in New York.  But Philippe would hasten to emphasize that his mission is to serve the industry at the direction of leaders like Friedrich Stickler (president of the EL Association) and the many European lottery leaders who do the real 'heavy lifting' when it comes to taking a stand in defense of their governments and their lottery beneficiaries.  A part of that mission is to simply get the word out, to push our message into the general media so that the shapers of public policy can see that the voting public is informed of our lottery message.  Legislators all around the world can see that the messaging of commercial interests are getting huge play in the general press.  And they are being bombarded with well-funded lobbying efforts to try to convince legislators that the public supports the opening up of the markets to multiple operators.  Friedrich and his colleagues are combating this as well as they can. Exhibit A can be found in this Morning Report:  The announcement of the important role that European lotteries play in the financial support of Good Causes.  Friedrich points out that the lotteries just contributed a record-breaking 25 billion euros to governments and Good Causes.  And in this, as in almost all public announcements, Friedrich beseeches everyone to recognize the value of that and to vigorously fight the forces of evil that would undermine the mission of government-gaming.  In Europe, those have been the illegal operators who set up shop in Malta and Gibraltar to illegally export gambling into neighboring European markets, and to try to convince the EU Commission to sanction this illegal activity.  In the U.S., it is the Harrah's Entertainment, MGM and Wynn Casino operations, and the community of commercial operators who rule the mass communications airwaves with messaging that threatens to marginalize U.S.lotteries.  These commercial interests would say that it's just about i-poker.  It's not.  It's about the right to connect with the consumer via the medium that will rule in the future, the internet.  Witness the "give em' an inch and they'll take a mile" strategy applied  by the commercial gambling operators in Europe.

I saw a news item stating "Fifty Shades of Gray: What's fueling its runaway success?".  Is this erotic novel somehow a breakthrough literary accomplishment, albeit of the erotic genre?  According to this pundit, this book is no different or better than the countless romance novels that have migrated into the erotic genre.  The reason for its success is packaging.  Instead of a cover with sexy models, it has a cover with a sophisticated silk tie and cuff-links or keys or images that have little apparent connection to the subject or genre.  This clever innovation unlocked a whole new demographic of readers who do not "self-identify" as readers of erotic novels.   Their self-image is that of a more intelligent and sophisticated reader who would not want to be seen reading a Harlequin romance novel  or with a book that had a cover with scantily clad models.  So now they can indulge in this new genre without creating the cognitive dissonance that results from behavior that is inconsistent with one's self-image.  Perhaps there is a lesson in this for all marketers of consumer products, including lottery (and no, it's not to start reading erotic novels!).

Other important news items that, when seen in conjunction, tell an important story and reflect important trend-lines:  PokerStars is pushing hard to get the charges against them dismissed to pave the way for acquiring Full-Tilt and re-enter the U.S. market under what they hope will become a new regulatory regime.   Zynga is all ready to "swoop in and offer a paid gaming service, it's just a matter of where and when.  Zynga could very quickly become the online i-poker giant."   Betable, a UK start-up, is creating a portfolio of templates to convert almost any online social game into a real-money betting platform.  California voters support state-regulated implementation of sports-betting.  Georgia voters getting the opportunity to weigh in on who should benefit by casino gambling (i.e. education or private commercial interests?).  An important group called "US Media" is giving unprecedented mass media attention to gambling and the public policy implications of how the industry should be regulated.  The "times they are a-changing" and Team Lottery is running fast to stay at the forefront of the industry.

Europe isn't the only region reporting great annual lottery results.  So are the U.S. lottery operators whose fiscal year ended June 30.  Congrat's to the world-wide community of lottery operators whose stellar performance reflects a new era of creative drive to innovate and position their beneficiaries for continued funding increases.

Thank you for your support.  I welcome your feedback and criticism.  Please mark your calendars for Lottery Expo in Miami, October 22 to 25.  Click on www.PublicGaming.org for more info.