Philippe Vlaemminck, Managing Partner, Pharumlegal, Legal Counsel to Lotteries

LOTTERIES LEADERSHIP: COOPERATING TO REBUILD OUR SOCIETIES

In a speech at Smart-Tech New York I referred to the Bob Dylan refrain: “If your time to you is worth savin’, Then you better start swimmin’ or you’ll sink like a stone. For the times they are a-changin’”.   I followed up in Lisboa at the EL Industry Days bi-annual event invoking John Lennon’s “imagine” to put us in the future frame-of-mind.

These words are today even more true and important. Following COVID-19 , the world has no other choice than to be one against the invisible enemy of a world pandemic.  Researchers around the planet are enhancing efforts to find a medical solution that can save the world. They need support.  At the same time people face huge problems as educational systems are disrupted, poverty is growing, cultural & sport organizer are fighting to survive… and the economy is undergoing unseen difficulties.

Governments and international institutions are increasing efforts to avoid the worst, … but there is so much more to do. That is where Lotteries can come into the picture.

Times are indeed changing fundamentally, but Lotteries can more than ever bring hope for people & solidarity amongst them, and peace for all …

The Lottery community is one world driven by common values, embedded in local life, but with great care for the consumers, with their entertaining products and based upon the principle of integrity, expressing the solidarity of humans.  Lotteries provide large amounts of money for R&D, education, fight against poverty, support for sport & culture and development aid. All areas that are seriously affected by this sanitary crisis.  So Lotteries can become even more essential for our future societies.  They can and need to take up this role and position themselves as valuable partners of governments and civil society. It is a matter of leadership. Bring the message, share the message, of hope and solidarity for a better and sustainable future, to the benefit of all our societies.

To do so we need urgently to rebuild our activities as they were seriously affected, in a less vulnerable way enhancing the dialogue with the authorities and regulators advocating for “regulatory openness for innovation and change and digital transformation” by Lotteries.  There is indeed no time to lose given the urgent needs of our societies.

Regulators and lawmakers may well argue that in an area as sensitive as lotteries, betting & gambling, we need to act with care in order to avoid that consumers get hurt by addictive games. But today we have no choice than to embrace innovation. More than others, Lotteries are the best placed , given the strict state control they are subject to, the standards and values they promote jointly  and life up to, to be recognized as the essential laboratories for innovation in the lottery, betting & gambling area.

Already in 1999 the Court of Justice did explicitly recognize this in the Finnish Läärä case : “Limited authorisation of such games on an exclusive basis, which has the advantage of confining the desire to gamble and the exploitation of gambling within controlled channels, of preventing the risk of fraud or crime in the context of such exploitation, and of using the resulting profits for public interest purposes, likewise falls within the ambit of those ( public interest) objectives.”

This was explicitly repeated in 2009  in the Santa Casa da Misericordia de Lisboa:  “In that connection, it must be acknowledged that the grant of exclusive rights to operate games of chance via the internet to a single operator, such as Santa Casa, which is subject to strict control by the public authorities, may, in circumstances such as those in the main proceedings, confine the operation of gambling within controlled channels and be regarded as appropriate for the purpose of protecting consumers against fraud on the part of operators.”

These are the common causes to be achieved by the broad leadership of the world lottery community experts.

Lottery has performed better than other sectors in an economic recession.  How severely will the economic repercussions of coronavirus impact Lottery?

The impact may be different from Lottery to Lottery depending whether lockdown will have impacted all or some activities due to closing of POS, absence of sport ( and betting) and the difficulties in organizing draws… However, this time Lotteries have in general been severely impacted by the pandemic

People are social animals and need to reestablish contact with each other to feel better. The psychological impact of the lockdown, as experts tell us, is probably bigger than we may think. Social contacts and recreational activities may help to recover. Lotteries need to help to bring social  and community life back alive , bring more interactive games and offer new games ( e-sports & virtual betting) along the existing games. More games with low stakes and smaller winnings could make people again enjoying life and provide them hope.  Digital transformation will be easier to implement as people gets more used to new technologies to communicate, to act … Travelling will not come back very fast, at least not when it will require mass commuting through airports , planes and cruise ships, but family commuting will come very fast, as well as more climate friendly ways of  transport and holidays. People will need to dream again and travelling will bring back those dreams , maybe in different formats. The touristic sector will need to re-invent its offer.  Casino have to provide even more different forms of entertainment and nearer by.

Lotteries need to continue to support the retail sector. It is more than just POS, it is for many persons the social neighborhood. At the same time we have to lessen the costs and increase the availability of new games and consider new, even digital,  tasks. 

Shapers of public policy will have a lot on their plate over the coming months.  Even so, what can we do to push harder than ever to get approval to invest in new games categories, and new technologies like in-lane sales and cashless transactions? 

Governments have the immediate task to reboot the economy, but one should not forget the societal issues that Lotteries provide money to. These must be rebooted also very rapidly, as it will help people to get back into a positive, healthy and necessary social environment. Government needs Lotteries for it. Lotteries can assist in re-establishing confidence in the future and small moments of joy and hope, while creating support for the medical research and avoiding that a generation of young people get spoiled due to educational hurdles.

The urgency is also driven by the fact that during the lockdown, many illegal gambling activities could flourish, creating even more harm. Stopping this, is a big challenge and requires a lot of means. As the Court of Justice of the EU said, we need to follow a policy of “controlled expansion involving new and attractive , low risk,  games, new distribution techniques and  an appropriate level of advertising to protect the consumers and fight the illegals”. The problems are vast and the need imminent.

To do these jobs, Lotteries need to get additional means to develop their activities and make them more sustainable. The business continuity question requires the urgent digital transformation. To get there we need a regulatory openness for innovation within the context of strict government-controlled lotteries. At the same time the Lottery association  must invest further in modern and future oriented responsible gaming rules and tools as well as security standards adapted to those needs including the business continuity aspects. The multidisciplinary task force needs to start now with the best experts from all over the world. There is no time to loose. We need to contribute by stopping the further negative fall out inside and outside the lottery sector. By proving our willingness to participate in the overall reconstruction of our societies we can create an essential and sustainable goodwill. 

What are some of the new challenges and obstacles that we will need to adjust to?

The disruptive effect of the crisis and lockdown are probably bigger than we know today. Cooperation between lotteries can be very useful, and flexibility. Vendors and operators need to construct new ways of moving forward and help each other. The retail is in trouble, the games have undergone organizational problems, the turnover is down, and the societal needs are growing even more. People need to regain confidence in the future. Social networks and ways to meet restored. This is not easy given that the lockdown will in most countries not be cancelled asap in all sectors. We may still have a long period before we are completely back to normal life.  We need to be fast , our associations need even to be faster to explore the potentials through the task force I mentioned already. Our communication lines must be open, digital and flexible.