The new normal for lotteries

| By Daniel O'Boyle
With pan-European lottery operator Sazka Group among the bidders for the UK’s fourth National Lottery licence, Daniel O'Boyle talks to group CEO Robert Chvatal and chief executives of two of its operating companies – OPAP’s Jan Karas and Austrian Lotteries’ Bettina Glatz-Kremsner – about the lottery sector’s post-pandemic response and recovery

How did players’ lottery habits change during lockdown? And now that most restrictions across Europe have been eased, has play generally returned to normal or have some changes that occurred in 2020 become permanent?

Robert Chvatal (RC): The last 18 months have necessitated constant adaptation. In society at large we’ve seen some significant and probably permanent changes in behaviour, as individuals, businesses and governments reassess the status quo. There have also been more temporary shifts as a result of particular phases of the pandemic. Unsurprisingly, both been reflected in lottery as an industry as a whole and across our operations in particular.  

Fortunately, customer demand has remained throughout. We have been innovative to enable loyal retail customers to continue buying tickets in person safely – restrictions permitting – and have facilitated a move to digital for those that otherwise might not have taken that step at this point. For those that already familiar and comfortable with online and mobile options, we’ve focused proactively on improving and delivering a first-class user experience. SAZKA Group’s recent Q1 results are a clear indicator of how lotteries can thrive as we emerge from the pandemic. In the Czech Republic, Austria, and Italy we’ve even enjoyed our best-ever quarters, and we expect to see similar results in Greece now that retail is reopening.  

Bettina Glatz-Kremsner (BGK): More than 90% of Austria’s retail outlets were still open during the lockdowns, although customer frequency was greatly reduced due to the restrictions.

The greatest decline was recorded during the first lockdown for instant products in general and the break-open tickets in particular. Customers didn’t like taking the break-open tickets out of the dispensers, and the dispensers were more difficult to access due to the retail outlets’ security measures, which involved Plexiglas panels.

Meanwhile, we saw many players moving online, with our Win2day site experiencing huge growth. In 2020, gross gaming revenue from the electronic lotteries on Win2day increased by 27.8%.

Right now, players are still adjusting, and we are seeing both a return to the retail environment alongside higher than pre-pandemic levels of picks placed online at Win2day for the classic retail betting slip games such as Lotto, EuroMillions and Toto.

Jan Karas (JK): The lockdowns forced people to spend more time at home, while the rising penetration of new digital capabilities meant there was a fast evolution of customer expectations. Because of this, the transition from offline to online – which was already happening – was definitely accelerated. In this framework, at OPAP, we saw our online customer base and revenues reach new historical highs.

After the lifting of the lockdowns, our retail business has been recovering at an encouraging pace, despite some tight restrictions remaining, but many customers still opt to play online.

In my view, this proves that customers live in the middle of two ‘worlds’: retail and online. Considering that we need to put customers at the centre of our focus, this means that we have to deliver world-class gaming entertainment in both of these worlds. 

Have you been able to attract many new players during the pandemic? And have the demographics of who plays the lottery changed or are they largely the same as before?

RC: Our priority through the pandemic has been the wellbeing and welfare of our employees and existing customers, ensuring their needs are met and concerns addressed. Of course, a business of our size is always looking for new ways to increase its market share and Sazka Group’s combination of scale and agility has helped drive our growth. Our brands have launched new products and welcomed players online. Many of these new adopters have enjoyed the experience and continue to reap the benefits. Our job is to provide them with a first-class experience, whatever channel they choose.  

BGK: The pandemic hasn’t changed much when it comes to overall gaming behaviour and the demographic structure of who plays our games.

For the most relevant games – Lotto, EuroMillions and scratch-off tickets – there were increases in the 30-49 demographic as well as slight decreases among the younger demographic, 18-29 years, and older, 60+ years, gaming participants. Win2day, meanwhile, experienced noticeable growth among those aged 18-49.

JK: During the pandemic, our online penetration has been picking up pace and this has been evident in the lottery segment too. We undertook initiatives to support Joker, the only lottery game offered online in Greece. As a result, in Q1 2021, online GGR made up nearly 20% of the total GGR for Joker.

Overall, Joker online attracted more than 160,000 new players.

The majority of new customers were male and were aged 45 or older. This also shows that older age groups, with more traditional gaming habits, have opted to play online too. 

With Covid-19 and lockdowns affecting so many parts of society, do you think that the ‘good causes’ aspect of lotteries has become more important to players when they choose to play?

RC: Supporting good causes has always been a fundamental aspect of lottery. It unites players whatever market they find themselves in. The community spirit evoked by the pandemic has really crystallised that as a concept shown the value in collective action.  

With an addressable market of over 79 million adults and delivering €2.0 billion in gross gaming revenue in 2020, Sazka Group is significant contributor to sport and society in Austria, Czech Republic, Greece and Cyprus and Italy. Our track record in this area is second to none. Across the Group, we harness business skills and resources to the benefit of local populations. For example, up until the end of 2019, SAZKA Group increased its donations to deserving organisations and societies in Austria by 9% (since 2015), Czech Republic by 300% (since 2012), and Greece by 82% (since 2013).    

BGK: The actions taken by our group are characterised by social responsibility; we attach great importance to the support of charitable projects. Even in this truly exceptional period, Sazka has taken this role very seriously and has fulfilled its social obligations, maintaining partnerships and taking additional steps to contribute to containing the spread of the virus.

Just as an example, 135,000 facemasks and over 10,000 disinfection vials were provided as Covid-19 assistance to our guests and distribution partners. The ‘Österreich impft!’ [‘Austria vaccinates’] campaign was also supported by the group, as was the effort to promote the wearing of masks with the ‘#wirtragenmaske’ [‘we wear masks’] campaign. This clearly demonstrated Austrian Lotteries’ commitment to social responsibility in a broadly effective manner, and it was perceived that way by the public.

JK: Corporate responsibility is an integral part of OPAP’s DNA. We’re proud of our continued efforts to support society and aid the Greek state’s response to Covid-19. During the pandemic, we delivered much-needed equipment and materials to four public hospitals, as well as to local authorities and front-liners tasked to manage this unprecedented crisis.

In addition, we donated personal protective supplies to cover urgent needs of public elderly care centres and social institutions across the country. As well as this, we continued our long-term initiative for the complete renovation of Greece’s two largest paediatric hospitals, delivering clinical units that offer high-quality medical services to children, including coronavirus patients.

Do you think that any changes brought about by Covid-19, such as a shift to playing lotteries online, were simply an acceleration of something that would have happened anyway, or is it a permanent change in itself?

RC: The evolution of online gaming has been in full swing for a number of years in lottery, and we have embraced that change. For example, online sales of draw-based games across all our markets increased by 134% between 2015-2019. So, our clear, pre-existing strategy was to drive greater online sales.

The pandemic has probably accelerated this change more than we might have expected, but we were fully prepared. The nature of lottery and its core products means that it will always have a large retail presence and we are passionate about offering a ‘best of both worlds’ service in all our markets.  

JK: The pandemic accelerated the online market’s growth. At OPAP, we saw our online business posting new records. Yet our retail business remains strong and resilient, with customers getting back to stores.

This showcases the importance of an omnichannel approach and of delivering a great gaming experience for hybrid customers, who wish to have all online and retail options available to them.

This requires us to strike the proper balance between retail and online, which offer different gaming experiences.

For retail, it has to do with store ambience and how people socialise. Online is more about how customers interact with the products and enjoy the convenience.

BGK: The pandemic has clearly accelerated digital trends, not least since many gaming offers were limited to digital consumption due to the lockdowns.

Certainly, some of that will continue going forward, and it progressed more quickly than it would have without the pandemic. Still, we can clearly see that people enjoy doing all the ‘analogue’ things they were doing before the lockdown.

It’s nice to go on a virtual tour of a museum, for example, but it’s a completely different thing when the museums are open again and you can enjoy art and history right there, in person.

Many lottery operators seem to have increased the amount of new content they released during lockdown to keep things fresh and keep players engaged when other entertainment options were limited. Is that something you did across the Sazka Group?

RC: This is another example of a trend that was already established which has been intensified by the pandemic and fuelled by customer demand. It’s also another example of the approach that sets the best operators apart, not just in lottery. It isn’t enough to simply react to market and customer needs, we need to anticipate and predict them. Our operational experience, allied to our technological expertise, means that we are quick to develop and roll-out new products.

JK: During lockdown, we emphasised upgrading our online portfolio, launching new betting content and numerous online casino games. At the same time, we added a third weekly draw in Joker, to support our lottery’s online penetration.

In view of the retail reopening, we set up a comprehensive commercial and customer engagement plan, to welcome people back to our stores. We added new sports betting markets and revamped our virtual sports betting portfolio. Moreover, we launched Powerspin, an exciting RNG game, which has been warmly received by customers and partners. We also launched our OPAP Rewards loyalty programme to upgrade the in-store experience of our customers, rewarding them in multiple ways. 

BGK: We expanded the Win2day online offering with numerous games. In 2020, for example, we introduced 13 new e-instant games at Click & Win, expanding our portfolio to 22 games. These added to our existing offering of online instant games, as well as digital break-open tickets and scratch-off tickets.

In the early months of the pandemic, we also reacted quickly to bolster and diversify our sports betting offering at Win2day in response to interruptions to live sport.

RC: Lotteries are the standard-bearer when it comes to responsible gambling. It is also a core principle at Sazka Group, where we have increased funding for player protection initiatives by 29% across our European operations since 2015.

JK: OPAP is the only Greek gaming group holding the highest responsible gaming certification – Level 4 – from the World Lotteries Association, as well as European Lotteries’ Certificate of Alignment with Responsible Gaming Standards.

As part of our Responsible Gaming initiatives, we run integrated awareness campaigns, while our employees and store partners undergo frequent training. Besides, since 2011, we have cooperated with the Therapeutic Centre for Addicted Individuals (KETHEA) to establish and run a problem gambling helpline.

In online and VLT games, we give customers self-exclusion options and we have developed an algorithm for identifying and monitoring excessive play patterns.

Furthermore, we proactively apply self-regulation for our activities. For example, we voluntarily refrain from advertising Kino, our most popular RNG lottery game and the top-performing game in our stores’ network, to the wider public.

BGK: Like all operating companies in the Sazka Group, Austrian Lotteries works tirelessly on player protection.

As Austria’s only legal online gaming provider, Austrian Lotteries and Casinos Austria have placed particular importance on protecting minors and working against excessive gaming on the Win2day gaming platform from the outset. ‘Responsible Gaming’ is more than just a motto – it’s the guiding principle of all our business activities.

With the #passaufdichauf [‘take care’] hashtag, newly registered and active users are offered responsible gaming tips on Win2day and are encouraged to keep an eye on their own gaming behaviour, to set limits and to be mindful of their own stakes.

Our customers can also sign up for the Mentor programme. Mentor makes it possible to verify your self-assessment, provides information about changes in your playing behaviour – such as changes to your typical stakes and/or playing times – and offers a possibility to compare your own playing behaviour with that of other users. 

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