Questionnaire answers on the effects of the COVID-19 pandemic lockdown on the lottery and sports betting sectors from:
Lynne Roiter, President and CEO of Loto-Québec, Canada
How has the pandemic and the resulting lockdown affected the lottery and sports betting sector?
Concerning sports betting, it has forced us to adapt our betting offer by adding new leagues and new sports. Since the return of some European football leagues we see our sales increasing. At the worst moment of the situation we were reporting less than 5% of our projections. We are now around 30% of our projections. It is not going to come back to normal until North American sports come back.
A key factor was to be able to maintain the discussion with our players on social networks so even if many of them were not betting, they kept in mind our brand It was a great adaptation.
As for the lottery, in Quebec retail stores were closed for six weeks (22 March until 4 May). During that period, we shifted our focus to online sales. Since 81% of population plays lottery games in Quebec, and that the jackpot was at its highest level during stores closing, not everyone had a chance to register. But we did increase substantially the number of online registration, active players and online lottery sales.
What do you believe will permanently change in the lottery and sports betting sector once the pandemic lockdown has been lifted?
First, the situation may have convinced online reluctant players to convert to this channel.
Second, sports betting operators will make sure not to rely only on a few sports and may expend their offer.
And third, the omnichannel experience will become essential. By connecting the virtual and the brick-and-mortar environment, we will be helping the retailers with online tools for instance (ex. online ticket checker).
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?
The closure of our establishments for several weeks now has had an obvious effect on our operations. We have already implemented new ways of doing and working. Of course, Loto‑Québec will continue to follow the recommendations dictated by Quebec’s Government. To date, it is legitimate to believe that Loto-Québec will have no choice but to continue to encourage teleworking as much as possible, as well as to sensitize people to the respect of the sanitary measures conveyed by adapting its establishments accordingly. Furthermore, rotational work should certainly be expected in the event that a gradual return to the establishments is implemented.
Has the lottery sector's fundamental mission of raising funds for good causes been affected by the lockdown?
The lockdown has not changed the fact that we continue to remit 100% of our revenues to the government. Loto-Québec maintained 100% of its commitments towards sponsorships to support festivals and gatherings that have been canceled, as well as to support scholarships for sports athletes. In addition, it is important to note that since the lockdown, Loto-Québec donated $1 million to the food bank Moisson Québec, which was distributed equitably among its 19 organizations. Also, the kitchens of the Casino de Montréal and the Casino du Lac‑Leamy have been reactivated to produce, each week, more than 50,000 meals to support the most vulnerable people during the pandemic. Loto-Québec also donated various types of products to the Ministère de la Santé et des Services sociaux, including more than 30,000 N95 masks.
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?
The shopping experience has changed a lot. Retailers are promoting security and hygiene measures. Plexiglas is now installed everywhere near the cashier, so the lottery products are harder to see. Retailers are also reluctant to manipulate money to pay cash prizes or to verify the lottery tickets. We definitely need to monitor the changes and adapt to this new reality.
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?
This is a difficult question to answer. These games are based on a high volume of sales to be profitable. Being too conservative on the prize structure would make the games less appealing and we cannot hold funds in case a situation like this happen again.
The key is a close monitoring of the games. Some small adjustments to the games’ features and structure can be made, but if the sales are close to the break even, an interruption of the game could be considered.
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?
Yes. Operators need to think about how to survive in such situation. Esports and virtual sports are among the options to look at if it was not already part of their offer. The ability to quickly add new competitions, new sports, and novelties if possible is also part of it. Most important, it all has to be done keeping in mind the importance of sports integrity and risk management. But whatever addition an operator makes, it won’t compensate for the lack of major live sports events.
Have illegal gaming operators been able to capitalize on the lockdown?
We observed that illegal online gaming operators have intensify their advertising and communications. On the other hand, unlike Loto-Québec, we also noticed that some of them seemed to have disabled phone customer service support due to the crisis to focus only on chat and e-mail. As indicated above, Loto-Québec saw online gaming on lotoquebec.com increase significantly, presumably as a reason of the retailer’s shutdown. We expect future market study to further understand the impact of the lockdown.
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?
For sports betting, we don’t see regulatory measures or contingencies, other than those mentioned in my previous answers, to be put in place for a future crisis.
For the lottery, online gaming and betting and the omnichannel experience should be developed as much as possible.
How do you feel the WLA can best help its members in the event of a future lockdown?
In light of all the information received by its members, it could certainly be helpful for WLA to provide them with the best practices which emerged from this study, in particular, which could give support to its members in the event another situation like this one would arise in the future.