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// PUBLIC GAMING INTERNATIONAL // November/December 2016
PUBLIC GAMING
INTERVIEWS
Evgeniy
VLASENKO
Chief Executive Officer, MSL LLC, Ukraine
MSL Lottery in the Ukraine: A study in overcoming adversity in a
market disrupted by political and economic turmoil.
PGRI Introduction:
The Ukraine is the largest country in Eu-
rope by land mass, and has a population of 46 million. MSL
is the state-owned lotto for Ukraine. It was launched in the
middle 1970s to raise funds for the development of sports
in the Soviet Union. That mission changed when the Ukraine
became independent in 1991. MSL was originally an ab-
breviation for “Molod Sportloto,” but is now the brand name.
After the Ukraine gained independence in 1991, there was a
period of time when government regulatory structures were
not fully intact. There were no regulations and private opera-
tors were free to start lotteries, sell tickets and take in money,
then close without paying out prizes. Public trust in lotteries
was destroyed. In the year 2000, a regulatory system was im-
plemented. Even so, and even though MSL always operated
with integrity, the entire industry was tainted and it was very
difficult for MSL to reestablish public trust and confidence. But
they succeeded, step by step, in re-establishing consumer
confidence that its operations are totally transparent and prize
monies are paid out promptly and the games always operated
with integrity. The business of lottery relies not just on the con-
fidence of the consumer. Retail and advertising partners also
need to be confident that the time and resources allocated to
lottery will generate a positive ROI for them, and that the lottery
operator will be a good business partner in every way.
Before the political and military turbulence which began in
2014, when Russia annexed Crimea and turned eastern
Ukraine into a war zone, the market was growing consider-
ably. MSL sales were increasing at an annual rate of 50-80%
between 2010 and 2013. Total revenue in 2013 was over 2.5
billion UAH (approx. $150 million euro today but twice that
before the devaluation of the Ukrainian currency last year).
The lottery business has since declined amidst this turmoil.
Among classic lotteries, bingo ranks first at 30% of revenues,
scratch cards second at 24% and growing fast, and Lotto
third at 6%. Sports-betting and toto is 40% and is the fastest
growing category. Only 18% of the population in the Ukraine
plays the lottery at least once a year. That compares to 70%
in the UK. Illegal online gambling is vast. There are more than
270 sites accessible to the Ukrainian customers. They are
not properly regulated or taxed.
97% of MSL’s sales are at land-based stores. Transitioning
from a state-owned economy to a capitalist system is a big
transition. It is not just a matter of installing modern busi-
ness practices and models. The cultural adaptation as well
as economic and logistical transformation is not so easily
accomplished. Of course, Ukraine is over twenty years into
the process. The cultural transformation has largely been
accomplished and so now it is largely a matter of execut-
ing on fundamental business plans to develop a network of
dynamic entrepreneurs to operate the stores.
Evgeniy Vlasenko has led MSL since 2011.