I-Lottery Update - November 2002

6 November 2002

Camelot Weighs Offering Sports Betting, Skill Games

Camelot, the operator of the United Kingdom's National Lottery, is considering branching out into other types of real-money games so as to raise more money for charity.

Diane Thompson, chief executive of Camelot, said recently she has spoken to the culture secretary about growing the business by following the lead of other European lottery operators. Skill-based games, sports betting and rapid-draw keno could all be added to Camelot's lineup of games.

"Lotto has reached its maturity in the market place at the moment," said a Camelot spokeswoman. "It is increasingly clear that it is almost impossible for the national lottery to grow without moving into new areas."

If the company branches out, though, that will mean it's entering someone else's turf, namely that of the major bookmakers and gaming brands in the United Kingdom. Warwick Bartlett, chairman of the Betting Office Association, told BBC Radio 4 that if Camelot sells sports betting services at its 35,000 outlets, it would have a major impact on the country's sports books.

Camelot is also reportedly making moves to expand the national lottery throughout Europe. The UK Times reported recently that the gaming company has signed a letter of intent with lottery operators in Spain and France to jointly develop a pan-European lottery that could be launched by spring 2004.

Lottery ticket sales have been in decline for some time, and the pan-European lottery game is one of several measures being considered by Camelot to save the enterprise. The company is reportedly planning to launch Internet-based scratch card games by January and mobile phone betting by 2004.

A Swedish Scratch Card Game with an SMS Component

Netgame Factory of Stockholm recently announced that its "YeeHaa!" game was launched by Folkspel, a Swedish lottery group.

The game is a lottery, with traditional scratch cards combined with SMS text messaging on cell phones. Folkspel purchased the license to use Netgame's mobile lottery system for the new game.

Netgame developed the game concept and executed the lottery system, and Folkspel will handle marketing the game as well as distribution and the lottery license. As part of its deal with Folkspel, Netgame will develop lottery games.

Gamblers have the chance to win up to US$108,000 by scratching off three identical symbols in the YeeHaa! game. They have the chance to double their winnings if they can correctly answer a trivia question via text message.

Thomas Olson, CEO of Finab, Folkspel's development company, said he hopes to strengthen Folkspel's market share with the new game.

"We are very pleased with being first with this type of lottery in Sweden, and in fact in the world," he said. "Our objective is to further strengthen our Swedish market position and share. Our cooperation with Netgame Factory is a continuation of the successful test launch of the SMS game "Folke" last fall."

Folkspel is a non-profit organization that each year contributes more than US $1 million to Swedish charities.

Claes Peyron, CEO of Netgame Factory, said the launch of YeeHaa! Is a breakthrough for mobile lotteries.

"This is an important first step in the process in which lotteries gradually shift to more interactive channels like the mobile phone," he said. "The market is still small, but potentially huge and Netgame Factory has a leading position."

World Lottery Association Meets Nov. 17-22

The World Lottery Association Congress will take place in Adelaide, Australia from Nov. 17-22.

The event attracts members of the worldwide lottery industry as well as regulators and politicians for an exhibition and conferences dealing with the social and ethical aspects of lotteries, new technologies, legislative issues and emerging markets.

Cirsa Interactive Corp. has announced it will be attending and exhibiting at the event. Cirsa Interactive is the section of Cirsa Corp. that deals with the development and marketing for online systems for lotteries, interconnected bingo halls, gaming software, interactive software and mobile gaming.