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Timothy Hornsby, one of the UK lottery regulator’s commissioners, reflects on the themes emerging from the annual international lottery congress which he attended last month

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At this time in the UK, when we face grey skies and gloomy comments on Camelot’s latest sales figures, the lottery forecast from blue skies on the other side of the world is a good deal brighter. Indeed, one optimistic prophet at the annual international meeting of the lottery industry heralded a new renaissance for lotteries. There are, apparently, opportunities in an expanding leisure market for lotteries to increase their share. The capacity of technology to deliver outstrips the immediate demands of the lottery operators – in developing new offerings lotteries are limited solely by their imagination and not by technological constraints. As just one example the unexpected growth of SMS text messaging can enable consumers to play increasingly sophisticated lottery-type games at any time and in any place. Despite a degree of diversification, over the past ten years most lotteries have continued to manage their product range in a relatively traditional manner. The CEO of South Australian Lotteries, June Roache, told me she had succeeded in delivering year-on-year growth even in a mature market and against increasing competition, a contrast to the position in the UK. She sees a prosperous future for her lottery by introducing new ‘fun’ games and by enhancing customer service.

However, these potential excitements could be outweighed by a legislative backlash. Lotteries the world over have relied on maintaining a niche at the softer end of the gambling market (indeed, some argue that buying a lottery ticket is not gambling at all), and they have played up their contribution to good causes, or in some cases to state revenues. But in many countries there are new and rising social concerns, the effects of which are well illustrated by recent changes in the Congress’s host nation, Australia. Some MPs have been elected on an ‘anti-pokies’ ticket (pokies being poker gaming machines) and have broadened out their criticism of gambling beyond the pokies. State governments have imposed new forms of regulation on state lotteries that had previously been, in essence, self-regulating, so South Australia now has an Independent Gambling Authority and in Queensland there is a new Office of Gaming Regulation. Caps have been set on the number of gaming machines and the federal government has banned interactive gambling. Such has been the dash to legislation that one Australian regulator confessed that if he left a note with his minister with preliminary suggestions for new controls, they would all be embodied on the statute book within two months. In other countries fresh and critical eyes are being cast over lottery advertising. Massachusetts has slashed its lottery advertising budget. In South Africa there are worries that the lottery is making the poor poorer. Across the world lotteries foresee a measure of greater regulation.

I found it paradoxical to observe that the UK is moving, post-Budd report, into a large measure of deregulation just as some other countries are tightening up. At last year’s World Lottery Association Congress I was seen as something of an anomaly as a Commissioner of a separate body strictly regulating the National Lottery,. This year the breed is growing. More than a hundred nations and 300 lotteries attended the congress in Adelaide, so it proved an ideal opportunity to get a sense of broad themes. As well as the shifting nature of the regulatory environment, I discerned two other themes of relevance to the UK scene: an interest in new approaches to good cause expenditure, and hopes for new market openings for fresh game developments. The British lottery world is not alone in its anxiety to demonstrate how the lottery provides benefits to communities: many operators are stressing the same need. Those whose governments take a slice of the revenues and incorporate this into exchequer receipts are pressing for at least some of it to be separately flagged up as being of specific benefit to identified hospitals or parts of the education programme. One lottery CEO preached the advantages of the operator itself taking decisions on the distribution to good causes! Camelot’s television advertisement ‘You played, the nation won’ was screened to general admiration and indeed won the prize for the best television advertisement on public benefit, despite strong competition, including an implied claim from the Colorado State Lottery’s advert that virtually all the state’s scenic beauty had been saved thanks to the lottery. Some operators are particularly keen on sponsoring high-profile sport – preferably dashing cyclists speeding around wearing their logos. With this heavy emphasis on promoting good causes, I found it interesting that few if any other lotteries have considered the damaging potential arising from sustained media criticism of particular lottery-funded causes or schemes. If lotteries want to be seen to be supporting good causes, they equally, it seems, want to be seen to support their customers. Improved customer management was the congress’s third big theme: how relationships must replace products as the primary concern of operators. Meg Tiveus, the CEO of the Danish Lottery, says that 50% of her players possess a loyalty card. In Queensland, Golden Casket sends tailored emails to customers promoting new possibilities or drawing attention to an imminent rollover – marketing initiatives which have produced a 30% positive response rate from their players. The Congress provided an ideal opportunity for European lotteries (which account for 49% of worldwide sales) to speculate on and plan the advent of a European Lottery, with the proposed founding partners consisting of the UK, France and Spain. There was a flurry of lobbying at breakfast meetings and late into the night as some smaller European countries (who had initially been scepti-cal) sought to climb on that bandwagon. One sceptic told me he was concerned with the prospect of ever-increasing huge jackpots and asked ‘How much is too much?’ But his is a lone voice among a sea of female optimism. The CEO of the Georgia State Lottery told me that 70% of lottery CEOs throughout the world are women well up to the challenges of ensuring responsible gambling, exploiting the new technology and coping with regulatory pressures. I have glimpsed the future of lotteries and it smiles winningly. thornsby@timothyhornsby.freeserve.co.uk