COVID-19: Lotteries in recovery mode

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Like the global financial crisis of 2008, or the 9/11 terror attacks, the coronavirus pandemic has proved to be an earth-shaking event. The full magnitude of its consequences will likely be felt for years to come. Now, emerging from the pandemic lockdown, we are faced with many uncertainties. True to its nature, the world lottery community is collectively working to seek clarity in the wake of the crisis.

Governments around the globe have adopted various emergency measures to manage the fallout of the pandemic. It is reasonable to assume that some of these measures will remain in place for the long term, if not permanently.

For the world lottery community, the key to success going forward will be continued global cooperation. Now, more than ever, the sharing of information among our members is paramount. We will do all that we can to disseminate best-practice information, including sharing the experiences our members have had in dealing with the pandemic crisis throughout the past weeks.

We recently interviewed 10 lottery CEOs from around the globe to get their perspectives on the current and lasting effects of the pandemic. Each of the questionnaire participants was posed the following ten questions:

1. How has the pandemic and the resulting lockdown affected the lottery and sports betting sector?
2. What do you believe will permanently change in the lottery and sports betting sector once the pandemic lockdown has been lifted?
3. How has the pandemic lockdown affected the working environment of your operation? Do you foresee any permanent changes in how staff will work once the lockdown has been lifted?
4. Has the lottery sector's fundamental mission of raising funds for good causes been affected by the lockdown?
5. Lottery retail points of sale have been among those hardest-hit by the lockdown. Even operators with a well-established online presence rely heavily on retail channels to drive sales and acquire new customers. Do lottery leaders need to redefine how their retail points of sale operate?
6. Pan-jurisdictional lottery games such as Powerball and EuroMillions, which were once viewed as robust gaming products, have also suffered as a result of the lockdown. What do lottery leaders around the world need to do to protect pan-jurisdictional games in the event of another lockdown?
7. The cancellation of major sporting events has been devastating for the sports betting sector. Going forward, do you see sports betting operators embracing new products such as eSports or virtual sports to lessen their reliance on live events?
8. Have illegal gaming operators been able to capitalize on the lockdown?
9. What regulatory and contingency measures should be put in place in order to protect the lottery and sports betting sector as a whole in the event of a future crisis?
10. How do you feel the WLA can best help its members in the event of a future lockdown?

The ten lottery CEOs who participated in the questionnaire were:

Each respondent’s answers can be accessed by clicking on their name above.

The inquiry had five main objectives:

1. To evaluate what measures have proven successful;
2. What measures were taken to protect lottery employees;
3. What lotteries have done to support their communities;
4. What can be learned from this crisis to better prepare the lottery in the future; and
5. To evaluate what further the WLA can do to help support the world lottery community through this crisis.

By way of this inquiry, we hope to not only mitigate the impact that the COVID-19 pandemic has had on the lottery sector, but also to turn this crisis into a valuable learning experience for all our members.

Key takeaways from the questionnaire

Accelerating trend towards online

The COVID-19 pandemic has accelerated the trend toward online gaming that has been slowly taking hold in the lottery sector for the past 15 years. Lotteries that already had robust online gaming platforms in place prior to the outbreak of the pandemic were able to better mitigate the effects of the lockdown. For lotteries in countries where online gaming is prohibited by law, it is hoped that, given lessons learned over the course of the lockdown, regulators will be ready to re-examine the laws governing online gaming.

During the lockdown, retail Points of Sale (POS) were completely shut down in some countries. In jurisdictions where POSs were able to stay open, retail revenues were impacted by social distancing measures, limited opening hours, and a decline in foot traffic.

Although a move to strengthening online channels was expressed by questionnaire participants as desirable, it was agreed by most participants that the relationship lotteries have with their retailers is vital and should be protected. A move toward digital solutions that include and enhance the retail experience is preferred; however, online solutions should be able to stand alone in the event of a lockdown.

Sports vs eSports

Esports and virtual sports could partially compensate sports betting operators for losses should a new pandemic lockdown cause the cancelation of major sporting events. As such, they should be seriously considered as viable alternatives to betting on live sporting events. However, eSports and virtual sports cannot replace the excitement of live sporting events and potentially bring with them a high risk for addiction. Moreover, eSports and virtual sports are games of chance, whereas sports betting games (whether fixed odds or pools) are games of skill.

Community service

Encouragingly, the questionnaire also revealed that lotteries endeavored to support their beneficiaries despite lockdown-imposed austerity. In some cases, participant lotteries additionally donated revenue to help fight the coronavirus and to help protect the most vulnerable during the crisis. Lottery staff also provided valuable community outreach services, as in the case of FDJ employees who donated over 1,400 leave days – the equivalent of EUR 300,000 – in support of medical staff and persons of need afflicted by the crisis.

Likewise, the Hong Kong Jockey Club (HKJC) set up an HKD 100 million emergency fund during the COVID-19 pandemic and donated 100,000 mobile Internet data cards to underprivileged students who may not have Internet access at home.

La Marocaine des Jeux et des Sports (MDJS) also allocated MAD 100 million to a special fund established to support the costs of upgrading medical devices and to help support the national economy weather the impact of the crisis.

And in the UK, the National Lottery directed around GBP 600 million toward charities and organizations to help mitigate the alleviate the impact of the pandemic.

Safety first

All of the lotteries questioned followed strict measures to protect both their players and staff. In many cases, retail Points of Sale (POS) were closed. In those POSs that were allowed to remain open, social distancing and other hygienic safety measures were implemented and practiced to protect players and retail staff from possible infection. Prize claim centers were either closed completely, or remained open with restricted access. Lottery staff worked from at home wherever possible. Home office helped to mitigate disruption of services and ensure business continuity.

Sharing best practices

Questionnaire participants almost unanimously expressed their appreciation for the WLA for providing information and support throughout the pandemic crisis. They called on the WLA to further strengthen their role as a forum for knowledge sharing, disseminating best practices and lessons learned from countries around the world in order to better withstand a future lockdown.