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World Lottery Association

European State Lotteries and Toto Association

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XX11 Congreso AILE'98 is brought to you with the compliments of

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XX11 Congreso AILE'98

Delegations from more than 30 countries of the world arrived in Buenos Aires to attend the XX11 Congreso A.I.L.E. '98 last week.

The Congress was officially opened by the President of LOTERIA NACIONAL SOCIEDAD DEL ESTADO, Dr. Fe1ix A. Gaibisso, who stated his deep appreciation to the assembly for Loteria Nacional to hold the XXII Congress.

Dr Gaibisso said he believed that the seriousness with which the speakers would develop their subjects, as well as the information that the delegates would obtain on the latest technological advances offered in the industrial and scientific fields, would serve as enriching tools for the professional development of all those attending the Conference.

He also said, the extra personal contacts that delegates will make would strengthen their relationships and benefit the imminent merger of the two world's most important associations in the lottery industry.

The following is a representative sampling of papers presented at the XX11 Congreso A.I.L.E. '98 in Buenos Aires. More presentations will be added over the coming weeks.

Speaker

Subject

Guy Simonis

World Lottery Association

Ernie O'Keefe

New Games For a New Medium - The Internet

Clifton Dutton

The New Business of Internet Games - Its Not just Lotto

Bruce H. Longhurst

Our Shrinking World

Reidar Norby, JR.

The Corporate Image Strategy of Norsk Tipping

Guy Simonis
President, British Columbia Lottery Corporation
World Lottery Association

The president of the British Columbia Lottery Corporation and also president of Intertoto, Guy Simonis, was one of the first speakers.

He directed his address to the coming next merger of the international organizations AILE and Intertoto.

"At the end of the second millennium, the institutions have spread across the world in terms of products, games and structures, resembling each other more than ever in their history. The rivalries of the past have softened due to the comradeship, the competition was extinguished by amalgamation, the opposition was replaced by cooperation.

And today, those who are new, ask "Why two world organizations? What's the difference?" For years we've answered that the fires of old slurs and slights still smoulder. But today is where we approach our membership to say:

Let us discontinue the rivalry. Let us reach out and become one.

That same voice; those same views; those same sentiments; were spoken by our colleagues at A.I.L.E. At WORLD MEET '96 in Vancouver, we shared the same platform. Discussions took place. Meet ings were held. Committees were formed. Reidar Nordby and Friedrich Stickler from the Intertoto side. Matti Ahde, Michel Ansiaux and Ed Stanek from A.I.L.E. and of course our Secretaries-General. Long discussions and tons of draft papers later we are ready.

Therefore, the Executive Committe recommends that the membership approve the formation of a new single world lottery organization, by saying in effect: "If INTERTOTO says "yes" to a merger at next years INTERTOTO Congress in Norway we, as "A.I.L.E." will say "yes" also, and dissolve ourselves ready for a merger, and the new World Lottery Association will be born. An Association that will reflect the aims and objectives of striving for terrtorial integrity, public order and morality. Those three words sum up the very essence of our existence. With "territorial integrity" being the most threatened of our principles.

The time is right that we begin to establish a formal alliance of a regional groupings. Both world and regional organizations have distinctly different responsabilities.

The North American and European groups are active on the political and judicial level. Atask, a world organization, such a proposed, could not perform successfully. Therefore, our new organization of tomorrow will offer a rightful place and representation to the geografic regions of Asia Pacific/South America/Euro pe/Africa and North America.

To formalize that connection, each of the five regional associations will elect a representative to the new world body, in add ition to 8 persons elected to the Executive Committee by the me mbership at large.

This new opportunity for connecting all alliances is long overd ue. For much too long organizations such as NASPL have been lef t out of the loop of international exchanges.

The membership of the new organization will be restricted to those who operate lotteries as we now know them, sold at retail level. Our member lottery companies may be also in the casino, keno or bingo business, but those who are exclusively in such social gaming business will not find a home with us.

To make all this happen, the Executive Committee asks you to ap prove the resolution to say "yes" to a merger next year if INTE RTOTO says "yes". You should know they have voted "yes" in principle at their Congress in Berlin last year.

Hence we are also asking for in our resolution, that the meetin g in 1999 in Oslo be designated an A.I.L.E. position, will be for one year term until Oslo next year.

The question you may have: "After Oslo, who runs what?"

The respective Executive Committee have Committed that the inaugural members of the new Board Of Directors will be all the sitting members of both Executive Committees of the merging associations.

This means of course the sitting members who are prepared to, continue to serve.

But, elections will not be held until Glasgow 2000.

This means that the activities during the Interim Period from the day of formation of the World Lottery Association through to the Annual General Meeting in Glasgow, 9 months after Norway in June of the year 2000, will be governed by this appointed Executire Committee.

At the same time, the Executive Committee asks that you approve amending the bylaw dealing with the wind-up or dissolution of A.I.L.E. so that the new'organization will become the recipient of A.I.L.E.'s remaining assets.

Both Secretaries General will continue in their respective positions working in close cooperation with President and Vice President to prepare a transition plan upon which the Executive Committee to be elected in Glasgow, will vote.

This nine-month interim period between Oslo and Glasgow will also be intense period for the Regional Associations to elect and instruct their nominees to the Executive Committee. These nominees will take their position at the Glasgow Annual Meeting. Of course, the election of the regular members of the Executive Committee as well as the election of President will be feature of the Glasgow June General Meeting.

The interim period from Oslo to Glasgow will also be a time for both Secretaries General To provide the plans for approval as to "who does what, when and where".


Ernie O'Keefe
Director, Access Gaming Systems - General Manager Interplay Multimedia Pty Ltd - Editor Lottery Insider
New Games For a New Medium - The Internet

The Internet is changing our lives in ways that we could not have imagined just a few short years ago.

Commerce over the Internet is the fastest-growing sector of the global economy, creating a revolution in the way we conduct our lives.

A recent US Government report has revealed that Internet traffic is doubling every 100 days.

With the introduction of fibre optics into our homes and the advent of Web TV, consumers will have a variety of multimedia features at their fingertips.

This new technology will also provide a platform for developers to launch completely new products that will appeal to people who are not currently attracted to traditional lottery products.

And, with the high rate of investment in this medium the current Internet limitations on the speed of data transmission will eventually be overcome. We will then move to a situation where the Internet becomes the most common means by which people source their entertainment and do business.

I don't have to tell you people that many traditional gaming sectors are maturing and experiencing significantly slower growth, some products are actually in decline.

Last year even though the sales of traditional lottery products rose marginally, the lottery industries share of the overall gaming market continued its decline.

The traditional gaming market, as we know it, is undergoing fundamental change. The higher growth sectors appear to be VLTs and Sports betting.

Without the extension of their product mix, lottery organisations cannot realistically be expected to indefinitely increase their annual contribution to Government revenue, particularly in the light of the increasing alternatives available.

Consequently, the lottery industry must move quickly to embrace new technology, such as the Internet, and reduce its reliance on the traditional lottery products, if the Government's revenue stream is to be maintained.

Unfortunately, it would appear that all to often Internet gaming is not understood - or - is seen as a threat by traditional lottery operators.

The truth is, the Internet provides a rich interactive multimedia environment which can be exploited to provide a far higher entertainment content to games than what is achieved today using traditional lottery products.

It is impossible to accurately quantify the size or timing of the opportunities created by new forms of interactive home gambling.

However, a recent Australian report listed interactive home gambling as the second most important source of revenue generation - for broadband service provision to the home. The report placed home gambling ahead of pay TV and video on demand.

Some market analysts tell us that more than $10 billion will be gambled online by the year 2000 as operators take advantage of the huge audience reach and cost savings of the Internet.

Online gambling turnovers have the potential to dwarf those of other interactive services, tapping into an existing traditional gambling market valued at over $700 billion in Europe and the U.S. alone.

In sum, the Internet can replace several mediums of communication and make gambling transactions easier, faster, and cheaper.

You will be surprised to find out just how easy it is to gamble on the Internet. As you know there are many ways to find a particular Internet site.

Once you have contacted the site you will be asked to electronically establish your identity.

You will be asked for a user I.D. and password.

You will establish an electronic account or purse as it is sometimes called, and transfer money from your bank account into your electronic purse.

The site will provide software for you to download to your PC so that you can play games or make bets on sporting events.

Having established your identity, opened an account, deposited money in the account and downloaded the software - you are now ready to play the games or make your bets.

You will either win or lose.

Depending on which of these two outcomes happen during your session, you now have the choice of topping up your account, playing some more games with your winnings -or- ask for your winnings or original stake back (which will be electronically transferred to your nominated bank account).

That's what will happen if you choose to play at a government licensed operation.

However, there is a DARK SIDE

Today's Internet gaming market consists mainly of operators situated in remote locations not found on many maps.

Many of these operators have merely sought to buy so-called integrity from these jurisdictions.

For online gamblers, it is difficult, if not impossible, to gauge the credibility and soundness of these operations. How can players be sure that they are placing bets where they think the casino is located. Is it really operating from the jurisdiction where it is licensed or is it somewhere else.

Players currently have no protection from unscrupulous operators.

Net folklore abounds with stories of players who never receive their own stakes back, let alone their winnings. And of course these issues are not the only ones a player should be concerned with.

What degree of comfort does a player have that the games are being conducted honestly.

In games where chance is an element how does a player know that the random number generator within the host's micro-processor is not rigged to cheat the player.

Finally how secure is the operators Financial Transaction System.

What is the answer to combat the DARK SIDE, well its certainly not Prohibition, all prohibition will do is encourages the development of underground markets and organized crime.

In any event the horse has already bolted. As of early this year, there were approximately 35 online casinos that accept real money transactions and an equal number of online sports-books.

So - having raised the question of integrity in connection with online games and the systems that support them, what should an Internet Gaming System for a lottery look like, what should it do and how should it all work ?

Such a system should consist of a suite of software programs for both the player at the front end and the operators at the back-end which work together in a high performance client server architecture.

The front end games should be:

  • written in a language, such as Java, which allows them to be ported to different platforms;
  • work with standard Microsoft and Netscape Internet browsers;
  • be very entertaining and a lot of fun to play; and
  • should come with a games development kit which allows game developers to develop games for the platform independent of the vendor.

The Back-end systems should be:

  • Secure, reliable, high performance, auditable gaming systems - based on a high volume transaction processing operating system such as Unix;
  • record all transactions in an industry standard database scuh as Oracle;
  • flexible and secure payment systems to avoid repudiation risk (e.g. SET (based on Mastercard/Visa standard));
  • provide the highest level of security available including 128 bit key encryption, sophisticated operator access control, comprehensive software system testing to protect against the system being compromised and, as no Lottery wants to be a trail blazer, such a system should preferably already have undergone a rigorous testing and certification process.

At this point I would like to introduce you to just a few of the games that we have developed at Access for this new medium.

What are the issues for established lottery operators entering Internet gaming. You can see some of these on the slide behind me, however, leaving out the issues of security which could be the subject of an entire presentation in its own right, I believe the three main social issues, are:

  1. Cross boarder gaming - It is virtually impossible to prevent other operators coming into your jurisdiction. As I said before, Prohibition is not the answer, it only ever encourages the darker side of our community to flourish at the expense of society as a whole. Legislation is the better way, it delivers the taxes to the state and regulation protects the players from corrupt operators;
  2. Under age gaming - This can be solved thoughts the use of digital certificates which would be obtained by players via banks or other approved agencies after providing 100 point identification. This player authentication process ensures that under age gaming does not occur. It sets a much higher standard for prevention than what is currently employed by land based operators in trying to prevent minors from playing gaming devices in their establishments; and
  3. Problem gaming - Internet gaming operators could be made to limit the loss that any individual player can make in any one month to say $1,000. If players have to use digital certificates to play then this rule can be easily enforced by the operator. A central on-line limit clearing system could be put in place to prevent players from simply moving from one gaming site to the next spending $1,000 in each one per month. This type of process to prevent problem gaming would almost be impossible to implement in the real world. In summary Internet gaming allows for much more control over players through the use of technology to accurately identify them and measure and control their gaming habits.

However, there are numerous other considerations to be understood and resolved before you can go forward. For instance what is the government's position in your jurisdiction? Will it be proactive and insist that interactive home gaming be subject to strict licensing and regulatory conditions. Or, will it attempt to enforce an unrealistic and unworkable form of blanket prohibition.

If you manage to procure the Government's approval, what business model will your organisation pursue:

  1. Will you restrict selling to you existing jurisdiction and introduce all the controls necessary to enforce the policy;
  2. Will you consider a Multi - jurisdiction model with the benefits of tax sharing and cost reductions; or
  3. perhaps you will go international and sell to the world.

Who will you allow to play?

What Games will you offer:

  1. traditional lottery games;
  2. new multi-player games;
  3. VLTs.

What will your Marketplace strategy be:

  1. defensive;
  2. offensive.

I would advise you now to consider the issues and take a pro-active approach in your jurisdiction to establish your agenda rather than have someone set it for you.

Which games have the most player appeal to Internet users.

At the Intertoto technology conference, in Quebec earlier this year, people from the lottery industry gave us the benefit of their opinion. As you can see, not many thought that traditional lottery games would be all that appealing when played on the Internet.

Our own experience suggests that the Internet player will demand games that deliver interactivity and instant gratification. Traditional lottery Games like Lotto and Keno will need to be significantly enhanced to satisfy these requirements.

Lottery operators will also need to give careful consideration as to whether they should integrate their internet games with their existing systems.

The positive side to integrating the two systems is that you will be able to link to your existing large jackpots, this would be very attractive to online players.

The negative side is that integrating existing systems will increase the security risk to those systems, and, require much longer development lead times. In addition, the existing system may not be suitable for delivering the new type of interactive and multi-player games that the internet market will demand.

Given players demand for interactivity, Instant lotteries or scratchies are an ideal product for the Internet. They are environmental friendly and hot topical themes can be introduced very quickly. Any number of price points can be offered and, there are also no inventory issues associated with Scratchies.

Also, there is virtually no limit to the number of games an operator can have on the market at the one time. They also allow marketers to try out new ideas and concepts without incurring large costs.

So - for the last 15 minutes we have had a very quick look at the Internet commerce and gaming markets, considered some of the issues, saw how players establish accounts and play games and we have even looked at some games that have been developed especially for this new medium.

But what stage is Internet gaming at to-day, will it all happen this year, next year or when.

Well I can't answer that question for the rest of the world, but for the next few minutes I will try to tell you where Internet gaming is in Australia as of to-day.

In Australia today it is almost impossible to pick up a paper or magazine without some article heralding the imminent arrival of interactive home gambling.

Australia has taken a leading position in legal, regulated and taxed Internet gaming.

Earlier this year a conference called "Gambling Technology and Society" was held in Sydney. It was attended by over 130 participants from Operators, Regulators and Government.

It led to a new industry association called the On-Line Gambling Association of Australia being formed to promote a regulated and responsible industry.

As of right now, a significant number of established Australian gaming operators have either applied for, or, have already been granted a license to implement money based Internet gaming. How have they been able to do this.

Well a few years ago the Australian State and Territory Governments decided that a cooperative approach is the only effective means of regulating interactive home gambling products and ensuring that there is no erosion of their gambling taxation revenue.

The legislation that has already been introduced in five jurisdictions seeks to minimise the impact of products provided from overseas or illegal sources by maintaining (and creating) obstacles to their advertising and marketing and by providing alternative products where the entitlements of players are protected.

The state Governments did not seek to introduce prohibition. The legislation does not propose that the Federal Government attempt to block the entry of overseas products delivered over the internet or by foreign satellites.

To sum up, the objects of the legislation that has been introduced includes:

  • facilitating the offering of interactive home gambling products;
  • protecting the rights of players;
  • enabling free access to the National market; and
  • Promoting competition and quality of services to players.

The legislation also seeks to ensure:

  • the integrity of industry participants;
  • honest conduct of interactive home gambling;
  • minimise the incidents of harm caused by problem gambling; and
  • allow for the proper accounting of taxes.

As our time has now run out, I will try to quickly sum up our discussion today:

  • Internet gaming represents an enormous business opportunity for Lotteries to arrest their declining market share;
  • There are a lot of new factors to consider including different customer demographics, new types of games and new forms of marketing;
  • There are many Government, legal, probity, social, economic and technical issues to be understood and resolved;
  • Take a pro-active approach in your jurisdiction to establish your agenda rather than being on the receiving end; and
  • Make sure you choose your partners with the right probity and experience.

Clifton Dutton
Vice President and General Manager UWin, GTech Corporation
The New Business of Internet Games - Its Not just Lotto

To maximize the value of the Internet to government-sponsored 1otteries, it is useful to learn from the success of the non-lottery Internet games industry. This talk will focus on key learning from that industry to provide a framework for growing value in the Lottery industry. The talk address the following issues:

Internet games history

A background on the evolution of non-1ottery games on the Internet. The emergence of multi-player games and the transition of the Internet from an information-driven medium to an entertainment-driven medium will be presented.

Multi-player games - examples-Game style trends

Multi-player games are a new class of games that could be offered by the lottery industry. The demographics of multi-player game players are highly attractive to the lottery industry. They are younger than typical lottery players and have significant disposable income. By attracting players from this demographic, lotteries can expand their player base, increase revenues and mitigate the current trends in lottery player demographics. To achieve this, however, we in the lottery industry need to expand our concepts of the nature of a game. Examples of successful multi-player games will be presented, along with a brief description of how they are played. Common functions in Internet games such as "Chat", "Virtual Identity," and player-ranking systems will be discussed. These functions are key to successful Internet games. They cannot be provided in a traditional retail point-of-sale environment.

Business trends

The way to pay for games in the non-lottery market continues to evolve. Lessons from the pay-per-play, subscription, and advertising-driven businesses of current Internet game publishers will be discussed.

Internet Games as Entertainment

Internet gamers are spending more time with their computers. The time that they are spending, time they previously spent with other entertainment media, such as radio, television, or movies. The quality of the game content on the Internet is rapidly improving to address this trend toward use of the Internet for popular entertainment.

Impact of new games on the Lottery Industry - Lottery-sponsored Internet games will have to compete well in the marketplace of highly interactive, graphically rich entertainment produced by the leading entertainment companies. It will not be sufficient to simply extend existing core lottery products onto the Internet


Bruce H. Longhurst
Vice President, International Sales & Marketing Scientific Games International
Our Shrinking World

I don't know if any of you have noticed lately, but our world is shrinking. It's getting smaller. It's becoming more crowded. There are more people, more businesses, and whole lot more competitors. Some folks might say, too damn many competitors. But I guess that is all a matter of perception.

Did you ever go back to visit one of your old school rooms? a room in which you may have spent hours as a youngster? If so, you probably have the feeling that everything seems to have shrunk. The desks in which you once sat, now look tiny. In fact, so me of us would have a little trouble squeezing into them today. The chalkboards don't seem as large and imposing as they once appeared. And for that matter, neither do the teachers.

Well, that schoolroom has not changed. It did not shrink. It is not compressed. It is you and I that have changed. We have grown mentally and physically since those childhood days. And as we have adjusted to our gradual growth, our past environment takes on a much different appearance and meaning. Our perception changes as we grow and develop.

And so it is in our Lottery World. Our world is not really shrinking. It just seems that way. What is really happening is the fact that we are growing. We are expanding as individuals, as organisations and as an industry. We are growing in our experience; our knowledge and our capabilities. By any measurement, we are bigger, stronger and better.

The globalisation of the lottery industry occurs for the same reason that it occurs in other industries. Our communication is better today than it was five or ten yeras ago. Thanks to confefences like this, we are able to meet face-to-face to discuss common challenges and become aware of new opportunities. We read the same trade magazines and become informed of one another's successes and, in some cases, failures.

Of course the Internet offers even more communication possibili ties as well as the potential for expanding our marketplace. We can now talk, ask, inform, debate, distribute and sell at the click of a few computer keys, to even the most remote areas of the world. Truly, our world is shrinking.

But the changes that we at Scientific Games appreciate the most , are the changes in our customer's attitudes. Resistance to change and national isolationism is also shrinking. The "not-invented-here" syndrome is fast disappearing, and is being replaced with more openness and global interest. Our North American customers are now willing to travel to Europe to see some of our new concepts in gaming systems. Our European customers are more open to new marketing techniques and technology from North America and other parts of the world.

One of the comments that we used to hear so often when visiting the lottery was, "oh, but that technique would not work here. You see, we are different here." Right! How different are you? Do we cross a border and suddenly see people with two heads and three eyes? I don't think so.

Individual wants and desires are not that different, regardless of a person's nationality. A fartmer in Iowa has the same concerns as a farmer in France. They both worry about the weather; about their crops or their animals. And they worry about prices. But they also like to relax occasionally, and they turn to various forms of recreation. That certainly could include the put chase of a lottery ticket. And if you can sell lottery tickets to farmers in Iowa, you can sell them to farmers in France. Yes , there are differences, but there are far more similarities. And those similarities become the basis on which globalisation grows. It helps account for our shrinking world.

Our economies have also become intertwined. We can no longer dismiss a crop failure in some remote part of the world as being inconsequential to our domain. It affects all of us, regardless of where we live. The recent difficulties in the Asian financia1 markets have created more than a small ripple throught he world market. They have produced a global tidal wave of economic chaos and concern.

Our lotteries are also intermixed. When a breach of lottery security makes headlines in one place, it affects us all. It casts aspersions on our entire industry. When a U.S. Gaming Commission attacks American lotteries, it is really attacking lotteries worldwide. It has a negative impact on the abilities of lotteries everywhere to raise revenues for good causes.

Conversely, when lottery successes occur, we all benefit. We sh are in these positive experiences and profit by the creative talents of others. We are able to avoid pitfalls and marketing landmines. We capitalise on achievements regardless of the point of origin.

Unfortunately not all lotteries are yet tuned to the global bandwidth. These lotteries profess an interest in worldwide lottey activities. But they still cling to old, obsolete practices o f nationalism. They sometimes put politics ahead of good business. They sacrifice economy and proficiency to avoid criticism from the self-serving local intersts. Like the ostich, they bury their heads in the sand and hope outside ideas and technology will go away.

They have yet to learn that good business is good politics. Business today is a global enterprise that cannot be restricted by archaic policies that demand only domestic solutions. No others need aply. Today, our community is the world. We stand together with common goals and ambitions. And when we limit ourselves to local solutions, we inhibit our chances of continued success.

Yes, the world is shrinking. Boundaries are blurred. Territories are enlarged. People travel more and communicate better. Suspicions and distrusts have given way to global partnerships. WE in the lottery industry are no longer afraid to import techniques and technology from afar. On the contrary, we welcome it.

We will see more globalisation in the next millenium. More meetings like this. More sharing of ideas and expertise. And I for one believe that it will not only make for a better lottery industry, it will make for a better world.


Reidar Norby, JR.
President And C.E.O. Norsk Tipping AS, -The Norwegian National Lottery
The Corporate Image Strategy of Norsk Tipping

Introduction

What are the characteristics of a traditional state owned or state controlled company, like the National Telecom Company, the National Post Office, the National Railways, in some countries the National Alcohol Distribution System, -and the traditional National Lottery?

They were all traditionally monopolies with heavy organisations, managed by strict rules and regulations rather than objectives. Flexibility and competitiveness with the customers in focus could hardly be called the characteristics of these kinds of businesses. Now all these monopolies are broken, and the national lotteries are probably the only monopoly left. This is logic, because we are national fiscal instruments, but at the same time it leaves us with some challenges. We must prove to the politicians that we deserve our positions and run efficiently without free competition, and we must develop a similar trust with the public.

The establishment of Norsk Tipping

Norsk Tipping was founded in 1948, in a time when these monopolies were very strong, and many decades should pass before customer orientation started coming into the business cultures.

This means that the image of the lottery from the start was influenced by its monopoly situation; it was generally prohibited from marketing, and it was run by strict rules and regulations. There was an age limit of 18 years to participate, and players even had to fill in their business title on the bet slip! And of course we have to admit that a business environment like this would have to influence the entire organisation.

Such a situation is comfortable and was working as long as there was a real monopoly situation. But as soon as competition started to develop, we could have been in trouble. Therefore in the eighties, we put our own image on the agenda, realising that we had to be more customer oriented, and we had to get prepared for a tougher competition, not only with other lotteries, but also with entertainment generally.

But first of all, why is this important?

Corporate image, profile, position, impression, reputation, -a beloved child has many names. And even if these expressions can be interpreted somewhat differently, they cover the same reality. And that is what we think, feel or mean about someone, whether it is a person, a company or an institution.

In an increasingly competitive market, you have to penetrate a lot of visual noise to be seen. Technology changes are also influencing heavily, and with digitalisation of media, we can only imagine how purchase patterns will be changed in the future. Even the need for entertainment and games will be different, when people get used to get all kind of entertainment on demand into their living rooms.

In our lottery, approximately 25% of the turnover is generated purely by impulse purchases, -that means the customer has not decided to participate in our games when he or she enters into the store. Therefore it is of the greatest importance to give the customer the right impulse in the moment of purchase.

Establishing a visual corporate profile

Therefore, we started off by looking at our visual appearance, which was not very good. We had a rather diffuse appearance at the retailers, where our different product logos, -which at that time had no family resemblance-, made up our retailer signs. Our new corporate visual identity programme was launched in 1990, coinciding with the presentation of the new name of the top division soccer in Norway, Tippeligaen (The Betting League). By this strategy, we were able to develop a strong visual sign uniforming the entire retailer network, and at the same time have all top division soccer fields uniformed with the same sign. And this would be continuously shown on TV every with Saturday's soccer match. And of course this also helped strengthening the awareness of the close links between Norwegian sports, Norwegian soccer and Norsk Tipping.

Consumer surveys quickly showed us that this was a hit. Within a year we were rated among the best known logos in Norway, alongside the Post Office and the Red Cross.

This was a very important goal, since an eye-catching visuality is very important if you are to succeed getting your message across. As an example I can mention that the volume of printed information in the World is doubling every 5th year, and an average consumer meets approximately 3 000 commercial messages every day!

Another practical reason for this work was that we knew that we were transforming from offline to online technology in 1992, -from being a document processing company to being an IT company. This would open better possibilities for product development, end we needed one visual identity, rather than one identity for each game.

Building a corporate image

But an image is not at all only visual. It is a composition of many different aspects. And in our three year running Business Strategy Plan from 1992, we stated the importance of building a solid corporate image. Our target was, and still is to be among the ten best companies in Norway with respect to image.

In our strategy plan, which every employee feels an ownership to, we state that:

  • The corporate profile is developed through our appearance, our visual form of expression, our communication and the quality of what we deliver.
  • Our profile shall be formed by the values the company wants to be associated with, responsibility, security, advanced technology, willingness to change and creativity.
  • Our work shall be characterised by a responsible and positive attitude towards the internal and external environment. It is important to continuously develop our corporate culture.
  • All our marketing and other communication shall support the corporate profile. All product marketing shall also include the corporate logo.
  • Tasteful and comprehensive design with origin in our corporate design program shall extensively be used as a strategic competitive tool.
  • Changing values like more emphasis on moral and ethical values in our society shall be reflected in our communication.

The way we linked up to Norwegian soccer through the Betting League (Tippeligaen) gave us important experience to continue this path. We therefore made an extensive programme on how to link up to our beneficiaries in the best possible way. During the last few years, we have mounted high quality brushed stainless steel and enamel plaques at all sports buildings and arenas in Norway that have received funds from the lottery. This work has been done in co-operation with the regional departments of the National Sports Federation. The result has been a wide understanding of the company's role in the society, and more than 90% of the public now supports the way our profits are allocated! That is an important loyalty declaration!

But to make sure that our image was not only on the surface, we have been working steadily on communicating other aspects of our business than just the games and beneficiaries. Our security has been high on the agenda, and we are of course very pleased to have been the first lottery to be approved according to the Intertoto Security Control Standard.

Strong image survey results are image-building The annual image surveys are addressing several target groups: consumers, financial institutions, media and the business community. Therefore it is important to make sure that all these groups are aware of the company, hopefully with a positive impression.

Building media trust

But everyone knows that you will never be able to obtain 100% security, although you can get very close to it. And that we experienced in February 1995, when we were unfortunate for the first time in 47 years to send out a wrong result to the public. This was a major news story at that time, and Wars, earthquakes etc. were wiped off the media picture.

But at that time, we probably made the most important single image-building effort ever. The way we handled that situation gave us the approval of the whole nation, and all the media honoured us for a responsible attitude. And our advertising agencies estimated that this event was worth millions of dollars. Probably they were right, but to us it was only important to protect the trust to the public, through openness and responsibility, and that we did.

Openness with financial and business matters Openness has also been a key word in other contexts. In earlier times, information from the company such as financial results etc. were kept confidential until approved by the Ministry. But during the recent years, as a part of tour Image strategy, we have been very open about these matters, and we make sure that the commercial business papers are getting these kinds of information very early. So today, it is part of our image to be among the first companies in Norway with annual results in the pink press.

Relations to the business community

The Norwegian business environment is a new target group for our company, not as players of course, but as part of our image strategy. We want all major businesses in Norway to understand our role as a financial instrument, and among other things, we send our annual report to the 100 largest companies. And the annual report itself is made with lots of efforts, to make sure it belongs among the best rated in the country.

Responsibility to problem gambling

Over the years, we have seen negative debates on the effects of gambling coming up. That could be limiting of top prizes, compulsive gambling or under-age gambling. When these debates occur, we try to be active, and preferably pro-active, so that we can not only defend our position, but also take part in the debate as a responsible resource. When the political discussion on top prizes started to come in Norway in 1992, we had already made a scientific study of the effects of winning big prizes. The study was made by the two most recognised professors in Psychology at the University in Oslo, and it killed this debate very efficiently. And it contributed to build our image as a responsible company.

Exposing company skills and potentials

Another field we have been focusing on with respect to image building is the area of technological and product development. When nearly half the population are your customers every week, it is no wonder that they get a feeling that the lottery is operated by sophisticated technology as long as the system works and you are giving the satisfactory service. And launching a new game every year also helps building the image of creativity and good prospects for the future.

Quality television

Having a weekly TV game-show on the main TV channel in the prime time every Saturday evening, also helps building the image if it is done right. We have been extremely fortunate in finding a very good TV concept with a very attractive hostess, and the fact that we through our registration system can find the winners and actually get them into the show, also adds to the impression of high technology.

Common to all our communication is that we are demanding to ourselves. We shall always put quality first, both in marketing and in other communication. The way we communicate is the single most important factor that builds our image. It is always a challenge to keep up your image.

Just imagine how devastating a scandal could be to such a company. Therefore it is important to have business continuity plans, and always try to be ahead of the developments of possible threats.

Attitude to environmental questions

Such an example could be our development of a new environmentally friendly paper in the early 90's for our coupons, that were bleached naturally, and which the environmental organisations would recognise. Now, all our hundreds of millions of bet-slips are produced on this paper, and all our instant tickets are produced on recycled and recyclable paper. And to present our new environmental position, we chose the 25th Anniversary of the World Wide Fund for Nature in Norway, where King Harald was the founder, and he therefore received the first new tickets at a reception hosted by the WWF. And the next tickets were given to Prince Philip of Great Britain, who has been the World President of the WWF until recently. Our message was that we were saving the environment and costs, since these new raw materials and processes were actually cheaper than the old ones. And if we had done nothing, we could sooner or later have expected an unpleasant confrontation on these issues with the environmentalists.

What has been the result of all this, so far?

In 1990 we were rated number 44 among the best corporate profiles in Norway.

In 1994 we had improved to no. 11, in 1995 we improved further to no. 10 and in 1996 we improved to no. 5.

And in 1997 we climbed right to the top and became no 1. And in 1998 we became no 1 for the second time.

As a closing remark, I would say that of course we are proud of this result on behalf of the company and all our employees, from the switchboard to the sales reps. But at the same time, I keep reminding myself that it is still more important to stick to our strategy plan and be among the ten best on a permanent basis, rather than being number one only for once or twice. We have now two possible ways to go: sideways or downwards. I am not very concerned about that. To me it is most important to see that we will belong to the top ten corporate images also in the years to come. In that way we are best capable of keeping our company and services on top of the customers mind in a positive way, -with a high purchase rate and a good player loyalty as the result.

We shall meet the digital age with internal values like competence, creativity and capacity. But just as important is that we have the trust from the public and the trust and support from our politicians when we move towards our future goals.

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