12 PUBLIC GAMING INTERNATIONAL • JANUARY/FEBRUARY 2022 to deliver ongoing improvements to its games and the playing experience – not just in the online space but in every aspect of business operations, distribution, and brand management. What have we learned so far – what are some insights that we can begin to act on now? H. Höltkemeier: We have learned that in future we will not focus on just one main aspect: It’s not just about iLottery, channels of distribution, or even the “omni-channel” relationship to the players. The digital transformation offers our business tremendous opportunities to innovate and gain competitive advantage, to mature in our ability to engage customers and to answer their needs. Like other businesses, we’ve recognized the technology’s strategic importance as a critical component of our business, but the way we integrate our products, services, brands, sales channels, etc. is also crucial for us to add value to our relationship with our customers. This is true for all businesses, not just lottery. Apple and Tesla are a couple examples of how the relationship between customer and merchant has been turned into a community of like-minded people whose connection to each other is as important to the consumers as their connection to the product. The brand represents something bigger than the product or service. It represents an eco-system which delivers a sense of purpose, belonging, and affiliation that the consumer values as much as the material product or service. We need to tell our story and nurture the development of a lottery eco-system that engages all stakeholders, including political constituents, beneficiaries of lottery funds, the general media, the general public, and of course the players. Are there any attributes or values of traditional lottery that we should hold onto? H. Höltkemeier: Of course. Funding for good causes, responsible gaming, service to society, and a sustainable approach towards evolving the lottery eco-system and market-place will continue to be the core pillars of the Brand Lottery. Public awareness of the value of lotteries seems to be increasing again, as we are facing uncertainty over the pandemic. Lottery’s contribution to funding of good causes isn´t taken for granted anymore and is getting more attention. The broader range of stakeholders that include the general public, the media, and our political constituents are looking more positively at the role of lottery in society. While social distancing disrupted sports betting, casinos, movies, and other forms of recreation, and tax revenues declined – lotteries remained as a reliable source of good-causes-money as well as entertainment. The future ecosystem for lotteries will continue to be based on the traditional values of service to society, protection of players, and the most popular games that consumers love to play – perhaps now more than ever. Coming back to Retail: How might we reinforce the symbiotic relationship that Lottery has always had with its retail partners? H. Höltkemeier: This is a very important question! Lottery operators depend not just on the shops to stay open and have an active customer base. As said before, the shops play an important role as touch-point and as part of the player-experience. This leads to two vital initiatives: Driving traffic to Retail-partners and supporting them in delivering a unique player-experience. I personally believe that our obligation to support our retailers is not fulfilled just by paying the commission and having sales reps call on them twice a month. We want to work more intimately with them to help them achieve their goal of bringing more customers into the store, increase the dwelltime in the store, and help them to increase the basket size at check-out. Of course, those goals are somewhat aligned with lottery’s own goals anyway so the ROI on increased effort to support our retailers is very positive. That is how we will increase the sales of lottery products. I think there is lots of potential for the lottery product, and the lottery playing experience, to enhance the overall in-store shopping experience. That benefits the retailer and players as well as the lottery operator. It looks like competition increased over the last two years. There are more legal offers like in the US and in Germany now but also illegal operators that seem to ILULÄ[ MYVT [OL YLZ[YPJ[PVUZ [OH[ SLNHS operators faced over the last period. How does this affect the lottery-business? H. Höltkemeier: Private operators like sports betting companies and casinos are impacted much more than lotteries by the governmental restrictions due to the pandemic. And that is causing them to push even harder for regulatory changes that will help them recover economically. They may ask for direct government aid, fewer and more lenient regulations, and lower taxes. And of course, regulatory and taxation changes can have significant impact on the competitive landscape within which lottery operates. The pandemic also brings to light the threats that unlicensed online gambling operators represent. Some countries, like Spain for instance, closed even the lottery shops and this opened the doors for unlicensed online operators to meet the demand for recreational gaming, including lottery. While governments are starting to apply stricter constraints on the amounts and kinds of advertising of online gambling, they need to take a more aggressive stand against illegal and unlicensed online gambling. I do not know whether governments will increase support for lottery going forward. But I have cautious hope that they will recognize the importance of lottery funding for good causes, the need for a stable and sustainable approach towards expansion of recreational gaming, and that this recognition will cause them to increase their support for their own government-licensed lotteries. And how might current events re-shape our approach to Responsible Gaming? H. Höltkemeier: Responsible Gaming and creating a safe user experience that protects players from developing unhealthy behaviors was and is always on top of our minds. The more we re-shape our products, the more “The future eco-system for lotteries will continue to be based on the traditional values of service to society, protection of players, and the most popular games that consumers love to play – perhaps now more than ever.”
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