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| Vol. 32 No. 5 --Monday August 1, 2005 |
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Svenska Spel Records Higher Sales But Less Revenue For First Six Months Article By: Göran Wessberg STOCKHOLM, Sweden (July 2005) -- The Svenska Spel group reports higher sales but less revenue for the first half year. Sales were up by approx 1% from 9,805 to 9,888 MSEK (M€ 1,040 ). The prizes for the winners, however, increased by 155 MSEK due to the players´ preference for games with high payout e.g. Oddset and VLTs.
This meant that revenue was down by approx.2% from 2,356 MSEK to 2,304 MSEK (245 M€) The trend with new fast games with a lower profit margin continues to increase, says Jesper Kärrbrink, CEO for Svenska Spel. However Lotto is a positive exception with a growth of 2.2% thanks to the new "Dream Prize," which at the moment stands at more than 100 MSEK ((10.5 M€). Sales at traditional outlets were down but this was compensated by an increase from 357 to 481 MSEK ((51 M€) over the Internet and mobile phones (up 35%). The casinos had a positive development with a net income of 463 MSEK compared to 404 MSEK the same time last year. The VLTs, too, showed an increase of 1.6% with gross sales of 3,526 MSEK. SOURCE: Göran Wessberg, Stockholm, Sweden. Prime Minister Attends Maltco Lotteries First Anniversary Celebration
ATHENS, Greece (July 21, 2005) -- On July 19th, the Honourable Prime Minister of Malta, Dr Lawrence Gonzi, accompanied by the Hon.Tonio Fenech, Parliametary Secretary in the Ministry of Finance, visited Maltco Lotteries, a subsidiary of INTRALOT S.A. During his visit Dr. Lawrence Gonzi, received a tour of the company, was given a brief presentation and discussed with the management of Maltco Lotteries its successful progress and its further development. Prime Minister of Malta, Dr Lawrence Gonzi, attended the reception held to celebrate Maltco Lotteries’ 1st Anniversary, that took place at Palazzo Parisio. The reception also attended by members of the government, political parties, lottery & gaming authorities, journalists and other distinguished guests. The Prime Minister congratulated everyone involved to secure the successful development of Maltco Lotteries. During his speech, Dr Lawrence Gonzi, acknowledged the benefits of privatizing MALTA’s public lottery. He also added that despite the initial scepticism for this change, the results exceeded their expectations.
Finally, Dr Lawrence Gonzi, stated that Maltco Lotteries’ success fosters economic efficiency and plays an important role in the country’s economic growth and development. Finally, Dr Gonzi said that he hoped the company would help the government in its battle against illegal gambling. INTRALOT’s CEO, Mr Constantinos Antonopoulos, praised Malta’s Government for being one of the pioneers in the privatization projects worldwide and noted : “Here in Malta we have undertaken a very important project and have proceeded with an investment of LM 13 million, one of the biggest investments in the country during the last couple of years. We have provided the Maltese Lottery with our cutting edge technology and a complete range of games and modern services”. MALTCO LOTTERIES LTD is established by a consortium where shareholders are: INTRALOT S.A. (GR), Players Group (M) and ASL (M). Currently MALTCO employs 65 people (95% Maltese) with the total investment program of 13 million LM. MALTCO is a modern lottery organization, which operates according to the highest standards in management, marketing, security and quality control fields. The highly qualified workforce of the company has gained valuable knowledge from the transfer of know-how from INTRALOT. SOURCE: INTRALOT (www.intralot.com) media release. For more information please CONTACT: Mrs. Evi Ioannidou, Communications Manager, Phone:+30-210-6156000, Fax:+30-210-6106800, email: ioannidou@intralot.com.
“MDI Entertainment Makeover” - Website Gets a Facelift ALPHARETTA, Georgia, USA (July 22, 2005) – MDI Entertainment, a wholly-owned subsidiary of Scientific Games Corporation (NASDAQ: SGMS), has a new look on the Internet thanks to its revamped website, the company announced today. The previous website designed in 1996 no longer accurately reflected MDI’s business or capabilities. After an extensive review process, MDI opted to begin fresh with an entirely new site design - with technical and design improvements - rather than making changes to its existing site. The new website will launch in two phases, the first of which was completed earlier this month. In the first phase is a new look and new navigation system, which was designed to be more user-friendly. The site was also updated to include the most recent information on MDI’s new and existing brands. Other features added to the site include a full staff directory, an interactive poll, a “facts and stats” area highlighting statistical information about MDI’s licensed properties, and a search function that allows users to view MDI’s broad portfolio of properties either alphabetically or by category, to simplify the process of identifying properties that may be of interest to the lottery.
The second phase, the Extranet, which will be active soon, features the introduction of an account management area. The account management system will give MDI’s lottery clients password access to libraries of creative elements and guidelines, as well as past game designs and information to facilitate ticket designs, advertising materials, and marketing campaigns. The system will also allow MDI clients to submit artwork for approval online and will give them up-to-date status on all phases of the approval process. “In making plans to update our website, we gave careful consideration to the needs of our customers,” said Steve Saferin, MDI President. “The new website design represents MDI’s commitment to providing world-class service for our lottery customers by giving them better access to the large variety of assets at their disposal when they choose to purchase one of our licensed properties.” About Scientific Games Scientific Games Corporation (www.scientificgames.com) is the leading integrated supplier of instant tickets, systems and services to lotteries, and the leading supplier of wagering systems and services to pari-mutuel operators. It is also a licensed pari-mutuel gaming operator in Connecticut and the Netherlands, and is a leading supplier of prepaid phone cards to telephone companies. MDI Entertainment, a wholly-owned subsidiary of Scientific Games Corporation, is the worldwide leader in licensed lottery games and promotions. SOURCE: MDI Entertainment (http://MDIEntertainment.com) media
release. Hospitals, Sports, Arts and Charities Share in Record Year for Lotterywest PERTH, Western Australia (July 21, 2005) -- WA’s hospitals, sports, arts and thousands of community groups have been the big winners from a record performance by Lotterywest in 2004/05, Lotterywest Chairman Clyde Bevan announced today. Sales of Lotto, Scratch’n’Win tickets, Cash 3 and Soccer Pools totalled $520.1 million; an increase of $15.1 million over sales in 2003/04. During the year Lotterywest distributed a record $162 million to the Western Australian community; $10 million more than the previous year.
A total of $291 million was won by lottery players during the year and 23 new Lotto millionaires were created. Of the 71 Division 1 Lotto prizes won in the West, 59 were in Lotterywest’s flagship game, Saturday Lotto. 6 OZ Lotto players won Division 1 prizes and two WA players won Division 1 prizes in Powerball. Amongst the winners were 14 people from Royal Perth Hospital who shared in a $10 million OZ Lotto prize in late September, a couple who won $8.5 million in Powerball in December and in early March, a Maylands man who after 20 years playing Lotto struck lucky with a $4.5 million Powerball prize. But Lotterywest’s biggest winners of all have been WA’s hospitals and public health services with $79 million in Lotterywest funds going to the State’s Hospital Fund. WA’s sporting associations, including the WA Institute for Sport, shared $9.85 million in Lotterywest funds. Arts groups including WASO and the WA Ballet and Opera companies shared in $9.85 million. Lotterywest grants to community groups increased significantly; from $57 million in 2003/04 to $65.2 million in 2004/05. Lotterywest made a total of 1,372 grants to groups as diverse as Camp Quality and The Friends of Battye Library. Amongst the biggest grants distributed was a $1 million grant to the WA Red Cross for the establishment of its Rotary WA Cord Blood Bank – the first cord blood bank for WA and a lifesaving initiative that will benefit many West Australians. Announcing the results, Clyde Bevan said that Lotterywest’s performance confirmed its status as one of the most successful and highly regarded lotteries in the world. “Lotterywest has again achieved the highest sales per capita of any Australian lottery and continues to have a very high level of support from the community. “Underpinning this success is Lotterywest’s position as the only Australian lottery to distribute the profits from lottery games directly to the community.” SOURCE: Lotterywest media
release. ALPHARETTA, Georgia, USA (July 20, 2005) - The National Hockey League (NHL®) drops the puck on a new season this fall and U.S. lotteries, after a one-year hiatus, will again have the opportunity to drop an exciting NHL-licensed instant game and promotion into their 2005-06 product plan, MDI Entertainment, a wholly-owned subsidiary of Scientific Games Corporation (NASDAQ: SGMS), announced today.
"We believe the tremendous pent-up consumer demand for the return of this venerable, fast-paced sport will carryover to lottery players who have an emotional bond with the NHL brand and its member teams," said MDI President Steve Saferin. Scarborough Research demonstrates the strong correlation between hockey fans and lottery players, with 45% of NHL fans 18+ reporting having purchased lottery tickets in the past 30 days. "For lotteries looking for a high-profile sports theme with a ready-made audience, this is it. And there is still plenty of time to build one of these world-class games into their Fiscal Year 2006 product plan." The original four-year agreement between MDI and NHL Enterprises L.P., announced in September 2003, was short-circuited last year because of a labor-management dispute that ultimately led to a 10-month lockout and cancellation of the 2004 NHL season. The National Hockey League Players' Association and the NHL Board of Governors formally ratified a new Collective Bargaining Agreement this month. The approximately 600-page document paves the way for the start of the 2005 NHL season and clears a path for U.S. lotteries to once again offer their players instant games featuring NHL league and related member team names, nicknames, slogans, logos, emblems, insignia, colors, uniform designs and other symbols associated with the National Hockey League, including the NHL All-Star Game and the Stanley Cup. Promotions developed under the NHL license will feature "Winner's Choice" Grand Prize NHL Experiences such as regular season ticket games, trips to see lottery players' favorite teams on the road, NHL All-Star trips and trips to NHL playoff games, as well as exciting merchandise prize packs.
About Scientific Games SOURCE: MDI Entertainment.
For further information please Pennsylvania Lottery Sales Up 12.5% Over Previous Year PITTSBURGH, Pennsylvania, USA (July 24, 2005) -- Pennsylvania Gov. Edward G. Rendell today announced that Pennsylvania Lottery sales for the 2004-05 Fiscal Year exceeded $2.6 billion - a 12.45 percent increase over the previous year. The Lottery has grown by more than 10 percent in each of the last three years. Under the Rendell administration the Lottery’s sales have increased by a total of $710 million during the last three years, after increasing by just $526 million in the previous 10 years combined. The Governor was particularly pleased during the announcement at Citiparks Mount Washington Senior Center in Pittsburgh because the Lottery’s growth has helped fund a dramatic expansion of Pennsylvania’s nationally recognized PACE and PACENET prescription programs. “Those are not just numbers,” Rendell said, “they are people who are living better, and living longer, thanks to country’s premier prescription drug assistance program.”
Rendell made expanding PACE and PACENET a top priority for his Administration, and in November 2003 signed legislation increasing income eligibility limits for both programs. The new income requirements went into effect on Jan. 1, 2004, and by the end of that year nearly 69,000 older Pennsylvanians had been added to the PACE and PACENET rolls. Rendell stressed that expanding PACE and PACENET was possible only if Lottery sales also expanded to pay for the additional benefits. “PACE and PACENET couldn’t grow unless the Lottery grew, too, and growth does not come easily to a Lottery that’s more than 30 years old,” Rendell said. “I set a goal for my administration and challenged the Lottery to raise enough money to pay for the improvements to PACE and PACENET. I set the bar high, and we responded with one of the strongest Lotteries in the country.” The Pennsylvania Lottery was number two in total growth among all U.S. lotteries in calendar year 2004 and number one in instant game sales growth. Under the Governor’s leadership, the Lottery has increased its sales by listening to players and offering games that respond to their requests, by developing creative marketing tools like Gus, the Second Most Famous Groundhog in Pennsylvania and by reversing a decades-long decline in the Lottery’s retailer base. “The Pennsylvania Lottery is only as good as its retailers,” Rendell said, “yet for decades the number of Lottery retailers had been decreasing. We have reversed that trend, adding more than 300 new retailers a year over the past three years. Today the PA Lottery has more than 8,000 retailers, a milestone that was last reached in 1992.”
Rendell noted the Lottery is not just a funding source for programs that help older Pennsylvanians; it also plays a vital and growing role in supporting business. As Lottery sales have grown, so have the commissions the Lottery pays to its retailers. During the 2004-05 Fiscal Year, Lottery retailers earned commissions totaling nearly $140 million. That money creates jobs, Rendell said, and can have a significant impact on the bottom line of a small business. “The Pennsylvania Lottery’s turnaround has made a big difference in the lives of older Pennsylvanians,” Rendell said, “and in a very real sense it’s made a difference in the lives of all Pennsylvanians.” Rendell noted that Lottery sales are expected to increase in the 2005-06 Fiscal Year by nearly $170 million, or approximately 6 percent. The Pennsylvania Lottery is the only state Lottery in the country that dedicates all of its proceeds for older citizens. The Lottery pays for PACE and PACENET, the Property Tax and Rent Rebate Program, the Shared Ride Program and for programs and services provided by Area Agencies on Aging and Senior Centers throughout the state. SOURCE: Pennsylvania Office of the
Governor (http://www.state.pa.us) media
release.
Lotería Nacional de la República Dominicana Extends Oberthur Contract Until 2013 MONTREAL, Canada (July 27, 2005) -- Oberthur Gaming Technologies (“Oberthur”) is pleased to announce that the Lotería Nacional de la República Dominicana and its agent CONAFRA have decided to extend until 2013 their exclusive printing contract that was originally signed in 1997 with Oberthur.
Ing, Ramón Rivas, Director General of the Lotería Nacional de la República Dominicana, said, “Oberthur has played an essential role in our Lottery’s success. Thanks to Oberthur marketing advices, we have been able to maintain one of the highest per capita sales in Latin America as we have increased our sales over the years; we are definitely looking forward to work on new projects with Oberthur and introduce new play actions in our market.” Buenaventura de Jesus Vilorio and Norberto Taveras of CONAFRA said, “Oberthur has always backed their product with outstanding service and quality, and we are pleased to have been able to extend our working relationship through 2013.” “It has always been a real pleasure to collaborate with the Lotería Nacional de la República Dominicana. We have been serving the Lottery since 1992, considering it was served by Dittler from 1992 to 1997, and we are absolutely delighted with this contract extension,” added Joaquin Casajuana, Vice-President, International Sales at Oberthur. “We couldn’t hope for a better proof of recognition on the quality of our products and services.”
About Oberthur Gaming Technologies (www.oberthurgt.com) With more than 35 years of lottery-specific expertise and over a century's experience in the security printing industry, Oberthur Gaming Technologies is the world’s leader in the printing of innovative instant lottery tickets. Comprehensive services include strategic game planning and innovative conceptual design with OGT’s Dream Team™, mobile gaming, Cyber Games™ as well as state-of-the-art Global Operations and Lottery Distribution System (GOLDS). OGT currently supplies a full range of high quality and innovative products and services to 100 clients in some 50 countries. The company has production units and offices in Montreal, Canada; San Antonio, Texas; Atlanta, Georgia; Philadelphia, Pennsylvania in the U.S.; Paris, France; Vienna, Austria; and Sydney, Australia. SOURCE: Lyse Trudel, Communications
Officer, Oberthur Gaming Technologies, (+1-514) 254-3600, ext. 101, Email:
lyse.trudel@mtl.oberthurgt.com.
DES MOINES, Iowa, USA (July 25, 2005) - The Iowa Lottery achieved record sales in its latest fiscal year and raised more than $51 million for state programs. Preliminary figures released Monday show that lottery sales totaled $210.7 million in fiscal year 2005, which ended June 30. That was up about 1 percent from FY 2004 sales of $208.5 million and marked the highest sales total for the lottery in its 20-year history. Unaudited figures show the lottery raised $51.2 million in revenues for state programs during FY 2005, a decrease of about 8 percent from the previous year.
Dr. Ed Stanek, Chief Executive Officer of the Iowa Lottery Authority, said that two main factors affected the lottery's 2005 profits: the cost of equipping Casey's General Stores locations in Iowa to sell lottery products; and a decrease in Powerball sales. Stanek said that the lottery was pleased to welcome Casey's 350 Iowa convenience stores to its retailer base in fiscal year 2005, but the addition meant an expenditure of about $2 million by the lottery for satellite communications equipment, ticket-vending equipment and point-of-sale material for those locations. All of that cost fell into one fiscal year, but the long-term benefits to the state will more than offset that, Stanek said. “The addition of all Casey's locations in Iowa to the lottery's retail base creates more opportunities for lottery fun in the state and bodes well for long-term benefits to both the lottery and Casey 's,” Stanek said. The lottery began installing equipment in Casey's stores in mid-September and completed installations in late January. Iowa Powerball sales in FY 2005 were down more than 17 percent compared to the previous year. And, although sales of other lottery products more than made up the difference, those other products had a lower profit margin. Changes announced in Powerball that will take affect in August are projected to positively impact the game. Beginning Aug. 28, the guaranteed starting jackpot in Powerball will increase from $10 million to $15 million. Another change will double the prize for those players who match the first five numbers but miss the Powerball. They'll win $200,000 instead of the current $100,000. Two white balls will be added to the first pool of numbers in Powerball drawings, meaning players will chose five numbers from 55. Players will continue to select the Powerball from a pool of 42.
Stanek, one of Powerball's co-inventors, said that other strategic planning on the state level has continued the Iowa Lottery's pioneering approach to product development. In its latest fiscal year, the lottery became the first in the world to begin selling an electronic version of the instant-scratch game. The new product, known as the electronic game card, is battery powered and loaded with dozens of plays on each card. The first game card, called “Quarter Play,” sold strongly in a market test that began in October, and the lottery went forward with statewide sales in May. “We believe our continued focus on player entertainment through innovation positions the Iowa Lottery for ongoing success,” Stanek said. Sales of instant-scratch tickets, the lottery's traditional sales leader, again led the way in FY 2005, with sales in the category increasing by more than 8 percent to $103.3 million. Sales in Hot Lotto made the biggest increase among the lottery's traditional products, jumping nearly 23 percent to more than $2 million. Hot Lotto is a multi-state game that is played like Powerball, but with easier odds and jackpots starting at $1 million. Throughout FY ’05, the lottery also continued its partnership with small businesses around the state in the deployment of monitor vending machines, which add video and sound to the process of dispensing a ticket. Net sales from the machines, which are marketed under the brand name TouchPlay, totaled about $6.4 million for the year. Iowa Lottery revenues are deposited in the state general fund, where they are used to pay for a variety of programs. Some of the programs that receive money from the general fund include education, natural resources, health and family services and public safety. Since the Iowa Lottery's inception in 1985, nearly $1.9 billion has been awarded in prizes and more than $935 million has been raised for state programs. SOURCE: Iowa Lottery media release.
LOUISVILLE, Kentucky, USA (July 25, 2005) -- The Kentucky Lottery Corporation (KLC) has closed the books on Fiscal Year 2005, showing ticket sales of $707.3 million. This is the second only to the $725.3 million achieved in FY 2004, and is $41.5 million more than expected. The KLC board of directors today learned that the biggest driving factor of these increased sales were scratch-off tickets. There were $385.1 million in scratch-offs sold last year, shattering the sales record set in FY 2004 by $28.1 million (or 7.8%). Sales for the KLC daily games Pick 3 and Pick 4 also achieved record-breaking levels. Pick 3 sales for the year were $130.3 million, an increase of $4.3 million (or 3.4%) from FY 2004. Pick 4 sales finished the year at $35.7 million, $1.9 million (or 5.7%) above last year’s total.
FY 2005 will go down as the “Year of the Player”, according to KLC President and CEO Arch Gleason. A record-breaking $457.7 million in prizes were paid. As a result, the FY 2005 payment to the Commonwealth came in below expectations at $169.3 million. The state had been expecting dividend transfers of $180 million for the fiscal year. The biggest culprit was the KLC’s Pick 3 game, which paid $12.4 million (or 15.8%) more than anticipated. This was due to an unusually high number of triple digits being drawn as winning numbers. Gleason said players wager heavily on these combinations, and when they hit, the prize payment can reach up to $3 million per drawing. Statistically, triple digits should only be drawn every other month, but in FY 2005 they hit 11 times. Pick 4 prize payments were $5.9 million more than anticipated as well. “We exceeded our expected dividend payments last year by more than $11 million, and we’ve exceeded expectations in other years as well,” said Gleason. “Our players were quite successful this year, and that had a negative impact on our bottom line. However, our sales are still very strong, and we anticipate reaching our dividend goal for FY 2006.” The Commonwealth is anticipating dividends from the KLC of $166 million during FY ’06. Any additional profits made by the KLC during FY ’06 will be paid to the state either during the fiscal year or shortly after the end of the year. The KLC was able to once again reduce operating expenses for the second consecutive year. 5.6% of sales (or $39.3 million) was spent, which is $1.1 million (or 2.6%) less than FY 2004. The efforts made by the KLC to reduce operating expenses continue to yield positive results, according to the KLC’s Senior Vice President of Finance & Administration Howard Kline. He said this is the first time since FY 1998 that operating expenses have been below $40 million. Sales in FY 1998 were $122 million less that what was achieved in FY 2005, yet the KLC was still able to operate this year with less overhead, according to Kline. “Given the fact we’ve lost $43.4 million in Powerball sales and faced increased competition from Tennessee yet only fell $18 million short of last year is unbelievable,” said KLC Board Chairman George Demaree. Other highlights of FY 2005 included:
In other action, the board approved a 4-year extension of a contract with Scientific Games for scratch-off game production and game concepts for 9 new pull-tab games and 7 scratch-off games. The next meeting of the KLC Board of Directors will be Friday, September 23rd. The meeting will begin at 9:30 a.m. ET, and will be held at KLC headquarters at 1011 West Main Street, Louisville. Committee meetings will begin at 8:30 a.m. ET. SOURCE: Kentucky Lottery media release. National Lottery Commission Launches Second Discussion Paper on
Competition LONDON, United Kingdom (July 29, 2005) -- Since launching its first discussion paper A Lottery for the future, in January, the Commission has been talking to a wide range of groups interested in the next Lottery licence. It has received 20 responses to the document and has met over 150 interested parties. It has held a briefing for professional advisers in the City, and hosted two roundtable discussions to seek the views of leading economists. This second discussion paper sets out the areas that need further work to ensure the competition takes place on a level playing field. These include:
Robert Foster, Commissioner and Chairman of the Project Board responsible for overseeing the competition process said: “ We are determined that to have a fair and hard fought competition on a level playing field. I am delighted by the number, and the quality of responses, we have received so far. We are pleased that the market believes that we have identified the right areas for debate and the views coming in have been extremely helpful in shaping our thinking. “However, there is still a great deal of analysis for us to do over the coming months before we make critical decisions about the structure of the next competition and I strongly welcome comments between now and September.” Some of the areas for further debate are more straightforward e.g. the proposed timetable that respondents considered reasonable and the costs of bidding which most respondents believe should not be paid. However, the Commission will carry out further analysis before it reaches a final view on any of these issues. The Commission is asking for responses by the beginning of September. Copies of the summary paper, A Lottery for the Future, are available on the website www.natlotcomm.gov.uk/competition. For a hard copy e-mail the communications team at publicaffairs@natlotcomm.gov.uk For further information please contact: Sarah Hanratty, Head of Communications, Phone: +44 (0) 207 016 3430 or Michelle Lewis, Communications Officer, Phone: +44 (0) 207 016 3431. NZ Lotteries Employee Takes Rookie Marketer of the Year Title NEW ZEALAND (July 29, 2005) -- The Manukau Institute of Technology Rookie Marketer of the Year for 2005 is Rosa Jacobsen, assistant product manager – Lotto Suite and Keno – at New Zealand Lotteries. In what judges described as a closely fought category, Rosa Jacobson took the Award ahead of two other finalists for her strategic abilities as much as her strong implementational skills.
At New Zealand Lotteries, Jacobsen is responsible for devising and overseeing lottery product promotions aimed at keeping the offerings fresh and player numbers high, something which she has achieved with great success. A specific example is the 2004 Lotto Christmas promotion, the largest the organisation has ever undertaken and which returned a massive 47 percent increase in sales over previous period highs. Appreciation of and respect for her abilities within the organisation are such that Jacobsen is now a member of a wider company group that develops and sets overall strategic direction for the organization. Judges described Rosa Jacobsen as an insightful marketer, wise beyond her years and contributing significantly to her business. Rosa Jacobsen took out the title of Rookie Marketer of the Year from two fellow finalists, Monica Gitts, assistant brand manager - chocolate biscuits, Griffins Foods, and Todd Wackrow, assistant brand manager – Export Gold, DB Breweries. SOURCE: Press Release Marketing Magazine
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