From hiding behind her mother’s skirt to CEO of an $11b company Lottery Corp chief Susan van der Merwe decided against studying law because it would have required her to stand up in front of a crowd and present arguments.
On one level, Susan van der Merwe is not your typical chief executive. She may be the boss of the $11 billion Lottery Corporation, but as a child van der Merwe was painfully shy.
“My mum will tell stories of me hiding behind her skirt when we went up the road to visit her closest friend, whose daughter was my best friend,” South African-born Van der Merwe recalls.
“And I wouldn’t go into the convenience store. Mum would pull up outside and ask if I would run in and get a loaf of bread. I would say: ‘Oh no, I won’t go in.’ I was way too shy.”
Susan van der Merwe has led Lottery Corp since it was spun out of Tabcorp in May last year.
Later, she decided against studying law because it would have required her to stand up in front of a crowd and present arguments. She also gave up playing the piano because her teacher wanted her to compete, which meant getting up on stage.
On the other hand, perhaps it is no surprise van der Merwe, now based in Brisbane, has ended up running the operator of high-profile, highly popular games such as Powerball, TattsLotto and Keno. Her accountant father, who had a “big influence” over van der Merwe, would tell his only daughter from an early age that there was no such word as “can’t”, while also instilling the need to always try her best.
“Not doing your best and putting the utmost into it was not acceptable,” she says.
Meanwhile, one of her grandmother’s favourite mantras was “mind over matter”.
Years later, armed with tenacity and a preparedness to strive, van der Merwe found a profession that suited, an industry she loved and an ability to galvanise teams and think strategically.
Van der Merwe has led Lottery Corp since it was spun out of Tabcorp, which retained its sports betting and gaming services businesses, in May last year. The shares are trading at close to the listing price, despite the company posting a 9.4 per cent increase in comparable revenue to $3.5 billion and an 11.9 per cent rise in earnings before interest, tax, depreciation and amortisation (EBITDA) to $694 million in the 12 months to June 2022.
Macquarie predicts a 10 per cent rise in EBITDA to $393 million, above the consensus forecast of $372 million for the first half of the 2022-23 financial year.
The company operates in seven of the eight Australian jurisdictions in which lotteries are played (the outlier being WA), with the business comprising so-called jackpot games, such as Powerball and Oz Lotto, non-jackpot games, such as Saturday Lotto and scratchcards, and Keno, which is played in pubs and clubs.
‘World’s best lottery operator’
The CEO describes the past seven months as “incredibly successful”. She has established a new company, set the strategy and defined Lottery Corp’s culture, vision and purpose (to make positive impacts). An employer engagement survey, van der Merwe says, shows a high level of satisfaction.
The long-term vision is to be the “world’s best lottery operator”, which includes being recognised for a strong focus on customers, sound customer relationship management, use of player membership programs and strong responsible gambling programs.
On the growth side, Lottery Corp is trying to register more of its customers, which will enable it to market more products to them. About 46 per cent of Australians play Lottery Corp games in any 12-month period, or about 8.3 million people. Just under half are registered Lottery Corp customers. The average spend per game is between $12 and $15.
Van der Merwe says she is looking at new products and offshore expansion, while stressing that the immediate goal is to complete the separation from Tabcorp and maintain business momentum. Whether Lottery Corp puts its toe in an offshore market will depend, at least in part, on the tenure of the licence available and freedom for the company to develop products itself.
“There have been licences come up overseas, where they’ve been short term and the government wanted to retain control over lots of important elements, around what products you can have, whether you can change them and the retail network,” van der Merwe says, referring to shop owners who distribute lottery tickets.
“You’ve got to have control over those key elements,” she adds.
And, yes, she is thoroughly enjoying post-merger life.
“It’s having that full control over our destiny, our focus and not having to compete for capital. That allows us to prioritise what we think is important for our business in terms of capital, all our resources, operational expenditure, everything.”
Van der Merwe enjoyed a carefree upbringing in Durban with three brothers, two older and one younger. Her father was an accountant and her mother a housewife. She loved school, particularly maths and English, and played school sport, although she says she is “not a sports person at all”.
Lottery Corporation chief executive Sue van der Merwe and chairman Steven Gregg ring the ASX bell to commemorate the first day of trading in May 2022.
At university, having dismissed law, van der Merwe tried her hand at finance before switching to marketing and economics. (At the time, her father feared marketing would lead to his daughter distributing flyers.)
After van der Merwe’s parents separated, her mother remarried, to an Australian. They quit South Africa for the Gold Coast. The whole family eventually followed. Van der Merwe, who after university joined a fast-moving consumer goods (FMCG) company in South Africa, was 26 when she made the move.
Van der Merwe’s first job interview in Brisbane didn’t go so well. It was for an FMCG company and the manager asked if she would be happy to have a drink with the sales reps in WA after work, which is what the previous brand manager used to do. Van der Merwe said she enjoyed socialising and would be more than happy to do so. The interviewer then asked what she would drink. Van der Merwe now enjoys a cocktail but back then didn’t drink alcohol, so she replied: “A Coke.” The alternative (male) candidate got the job.
Van der Merwe then inquired about a senior brand manager role at a company that sold household name products. When the recruiter informed the young executive that it was a lottery business called Golden Casket, not an FMCG business, Van der Merwe had to do some homework.
“I had never heard of a lottery. We didn’t have them in South Africa,” says van der Merwe, a self-confessed night owl who concedes to sending emails late at night (although staff are not expected to respond).
She headed off to the local newsagent and bought a few products, applied, got the job, and 33 years later is still in the sector, effectively at the same company. In 2007, the Queensland government sold Golden Casket to Tattersalls, which had operations in Victoria, Tasmania, Northern Territory and the Australian Capital Territory.
Van der Merwe originally intended to move back into FMCG (and was offered the FMCG job she missed out on after a couple of years), but she never looked back.
“I thought, as soon as an FMCG marketing role comes up, I want to get back into FMCG. That was until I met my first winner and saw the joy somebody gets from winning the lottery prize. I also went to a hospital and saw beneficiaries of lottery funding,” she says.
“I’ve loved this industry for so long and am so passionate about it. People talk about lotteries as something that provides a lift in their day. [The lottery] gives people something to hope for and to look forward to.
“Lotteries were established to raise funds for worthwhile causes. For us now, as a private operator, that goes back in the form of lottery taxes.” Last year Lottery Corp paid a total of $1.7 billion in taxes.
Van der Merwe says that while the company is all too aware of problem gambling and has systems that pick up changes in behaviour, the scale of the problem is very different to poker machines and sports betting. For starters, it is low spend and not a highly repetitive game.
“For lotteries, it’s very much been very much at the low-harm end of the gambling. The association of problem gamblers with lottery products is extremely low,” she says. Indeed, Lottery Corp says some investors who refused to invest in the combined Tabcorp group on environmental, social and governance grounds can now buy shares in the group.
Van der Merwe is known to purchase lottery tickets herself. The first product she looked after was Saturday Lotto and to this day, Saturday, Monday and Wednesday lottos are her favourite products.
She buys tickets “just when I feel like it”. And the “occasional jackpots” and an Instant Scratch-Its ticket sometimes when she is “out and about” visiting a retailer.
For the Lottery Corp boss, getting over her shyness has been a bit of a lifelong journey, but she says she is comfortable making presentations.
“I think a lot of people are apprehensive before they do things like that, and I am too, but afterwards I always think: ‘I really enjoyed that. I liked that, because I like sharing the knowledge and the information.’”
So it doesn’t really worry her? Laughter ensues. “No, not as much as it did then.”