Jumbo Agreement
Online lottery e-tailer Jumbo Corporation Limited on July 10 announced an agreement with Internet-based reseller the Mater Foundation that positions Jumbo as sole online ticket reseller in Mater's Prize Home Lottery for a three-year period. Mike Veverka, CEO of Jumbo, forecasts " [...] significant potential in online ticket sales growth for Mater due to synergies with our existing OzLotteries.com business and various opportunities via our affiliate network, www.jumboaffiliates.com." Jumbo also plans to renovate the Mater Prize Home lottery Web site, while at the same time commencing online promotions using Mater's existent customer database. In conjunction with these efforts, Veverka plans to use Jumbo's Web property to launch additional promotions.
Intralot, Lotto Hamburg and Adaptation
Intralot on July 10 reached an agreement with Hamburg's state lottery, Lotto Hamburg, calling for the installation of Intralot's patented LOTOS system, which is "the base platform of Intralot's integrated gaming management system along with POS-terminal software." The installation of LOTOS gives Lotto Hamburg a significant technological upgrade, with conversion slated to begin within the first half of 2007. Siegfried Spies, managing director of Lotto Hamburg, said of Lotto Hamburg's burgeoning technological dexterity, "Our objective is to become technologically innovative and flexible whilst continuously providing absolute security in the processes of the games business. On that basis we have repositioned ourselves strategically in terms of IT." In the meantime, Intralot will assume the cost of the entire investment for the ongoing LOTOS adaptation.
Scientific Games and Lotterie-Treuhandgesellschaft
Lotterie-Treuhandgesellschaft mbH, the German state lottery of Hessen, on July 12 awarded Scientific Games a contract to install a new Internet system that features improved graphics and Flash animation. The system also offers enhanced player services and responsible gaming promotions--in sum, a comprehensive upgrade of the ELOS system already in place. "We are pleased to be working to keep the Hessen state lottery a pacesetter in developing new Internet capabilities for state lotteries," Scientific Games Chairman and CEO Lorne Weil said. Scientific Games projects an October 2006 system launch.
VAT Ruling Could Create Problems for Gaming Industry
A July 14 ruling by the European Court of Justice, which dealt broadly with gaming and lottery operators with outsourced operations, more specifically with outsourced call center services. According to Financial Times, the ECJ ruled that call center services provided by United Utilities to Littewoods Bet Direct did not qualify for exemption from value added tax. While betting and games of chance are typically VAT-free, United Utilities, which services calls and records bets for Littlewoods, became embroiled with Revenue and Customs (HMRC) on the matter of whether its own activities should be exempt. While the ruling deals only with outsourced call center services, FT reported tax specialists expressing concern over possible wide-spread ramifications for the gaming industry.
Patrick Walker, U.K. head of indirect taxes for PricewaterhouseCoopers, cautioned that the ruling could affect "newsagents who sell National Lottery tickets or even Web site companies that service Internet gaming organizations."
Robert Crooks, U.K. head of indirect taxes for Ernst & Young, likewise cautioned that July 14's ruling casts doubt on the accuracy of Revenue and Customs' decision to allow retailers to exempt their lottery ticket sales. Citing qualification in the legal minutiae, however, Crooks asserted that HMRC's decision may have been justified under a general exemption for cash handling.
Whatever the case may be, Karen Killington, VAT manager for KPMG professional services firm, offered summarily: "It remains to be seen if HMRC will review the treatment of exempt lottery commissions earned by retailers in the light of this case. As exemptions have to be narrowly construed, there must be a risk such commissions will become standard-rated which will reduce retailers' margins or increase lottery operators' costs."
Chariot's Master Recovery Plan - Part 1
U.K. lottery operator Chariot stated on July 14 that charities will be required to pay a 6p on-the-pound charge to participate instead of the original 1.8p fee. Chairman Peter Jones said that the move is necessary following disappointing ticket sales. Under the agreement, charity contracts will be extended from two years to three years, and Jones said 60 of the 70 participating charities have already agreed to the deal. The change, he said, will be reviewed after six months, and extra fees would be given back.
Chariot's Master Recovery Plan - Part 2
Chariot, having cut ties with its above-the-line agencies, M&C Saatchi and US London, intends to shift its marketing approach to focus on digital advertising. After launching its game in May, backed by an ad-spend budget of £10 million, the change in approach has so far yielded disappointing results. Internal instability has been linked to Chariot's lack of success. Industry source Campaign reported the new-media design agency, Grasshopper, which created portions of the monday lottery Web site, is now off the project. A replacement has yet to be named. Amidst confusion over a viable marketing stratagem, Chariot has also reportedly cut the level of its payouts to charities, while securing an extra £2.5 million in funding in early June. A source at Chariot said: "We are a smaller company with a strong focus on our role as an online game. Our future strategy will reflect this."
World Cup Betting Boosts HKJC Numbers
According to the South China Morning Post the Hong Kong Jockey Club posted a record year after soccer betting, energized by this summer's World Cup, climaxed at nearly 17 percent in the end of June. By contrast, the club's perennial revenue sources, horse racing and the Mark Six Lottery, both dropped more than 4 percent. The newspaper reports that figures released by the club demonstrate that turnover from soccer betting climbed to $31.27 billion from last year's $26.73 billion; however, racing revenue dropped to $60.05 billion from $62.66 billion in 2004-05. The Mark Six lottery also suffered, down $6.29 billion to from $6.59 billion. Soccer betting, spurred by the World Cup, offset the fall in other revenue, helping total turnover to increase 1.75 percent to $98.89 billion; soccer betting alone generated gross profits of $5.12 billion.
Camelot's New IT Director
Camelot, operator of the U.K. National Lottery, announced on July 21 the appointment of Neil Kellar, currently the company's director of IT services, as its new IT director. Kellar replaces Tim Newing, who steps in as easyJet's new IT director. The move was effective Aug. 1, with Kellar assuming responsibility for all lottery sales channels and internal processing systems.
Camelot's New Lotto Campaign
Camelot announced July 26 its intention to launch a high-profile, comprehensive marketing campaign, covering TV, radio and online activity, in an effort to promote its Wednesday Lotto draw. The campaign ethos is "light hearted," said Zoe Vaughn, Camelot's product manager, "highlighting the fun of playing Lotto on Wednesdays. The advertising also depicts the kind of lifestyle a lot of people associate with winning a lottery jackpot and the campaign is designed to whet their appetite for being in with a chance of achieving that." The campaign concludes in late September.
Lotto Hamburg's New Internet Portal
Lotto Hamburg details the success of its new Internet portal in a press release from July, reportedly securing 1,000 registrations on a busy first day. The game on offer at Lotto Hamburg's Web site is based on Adesso's multi-channel platform, in|FOCUS. Adesso successfully courted Nordwest Lotto und Toto Hamburg (NLTH), distinguishing itself from other competitors during the tendering and bidding phase. "In addition to the tendered requirements, Adesso also especially convinced us as a reliable partner in the software development and consultation," NLTH IT Manager Alexander Raake said. "The in|FOCUS product excellently matches our IT-strategy. Many of the bidders can provide an attractive web design, but only a few of them were able to provide a complete software system together with the required specialized lottery knowledge."