Questionnaire answers on the effects of the COVID-19 pandemic lockdown on the lottery and sports betting sectors from:
Younes El Mechrafi, General Director La Marocaine des Jeux et des Sports (MDJS), Morocco
How has the pandemic and the resulting lockdown affected the lottery and sports betting sector?
Out of responsibility and as a part of its contribution to the national system to control the spread of COVID-19, MDJS chose to suspend all its gaming activities during the lockdown.
Two main reasons explain this situation:
First, since most of sales are concentrated in the points of sales, MDJS wanted to strictly respect contingency measures and not create health risks for customers;
Second, fixed odds betting is the main product of MDJS. Due to the lack of high-level football competitions during the health emergency period, we preferred not to offer risky bets (limited number of bets available every day creating more risk for payout, higher match-fixing risks – regarding secondary championships, and therefore money laundering risks).
What do you believe will permanently change in the lottery and sports betting sector once the pandemic lockdown has been lifted?
It is difficult to assess the future in the current situation owing to the many uncertainties. The duration of the crisis, and the fears of customers are the main factors able to emphasize the situation. Nevertheless, the following factors have to be taken in account: an increased business volume made through digital channels; the potential loss of some gaming habits; lower available income after a huge economic crisis; and better anticipation and preparation in the event of an occurrence of another pandemic in the near future.
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?
Teleworking has been adopted by all the employees. Operations have been fully suspended during the lockdown, but it would have been difficult anyway – for instance traffic between cities during the lockdown is strictly controlled, making the dispatch of the programs nationwide very difficult. Challenges are yet to come after the resumption date with a socio-economic environment that may present difficulties for recovering from the crisis.
Has the lottery sector's fundamental mission of raising funds for good causes been affected by the lockdown?
Sales will be strongly affected by the COVID-19 crisis. They might be lower than 30% of what was budgeted. This means that money for sports – MDJS finances Moroccan sports – might be affected in the same way. Nevertheless, MDJS is currently putting together an action plan with changes able to rectify the situation and limit the losses for Moroccan sports.
Also, MDJS mobilized and allocated DHS 100 million to the Special Fund for the management of the COVID-19 pandemic. This fund has been set up to support the costs of upgrading medical devices, support the national economy in coping with the shock induced by the pandemic, and preserving jobs and limiting the social impact.
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 COVID-19 crisis happened in a period where there is a need to redefine the links between the points of sale and the digital networks. MDJS is currently planning several options in this way (e.g. a mobile app).
A physical network must be involved in the digital transformation of lotteries; the aim being to create as many bridges as possible between the physical and the digital channels. Traditional points of sale should be able to remain digitally active in the event of an another lockdown.
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?
The success of pan-jurisdictional lottery games success is based on high volumes and the highest possible number of players. In such a crisis, there are less players and therefore less “natural” jackpots. To make sure that customers are not disappointed about the level of jackpots, it is necessary to plan for similar situations in the future (possibly with an important reserve fund).
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?
Of course, virtual games can compensate losses generated by classical sports betting games, but virtual sports games are games of chance and fixed odds betting or sports pools games are games of expertise. Moreover, virtual games are less exciting than sports betting and might create higher addiction risks.
ESports betting can also be a very good solution as eSports has a large fanbase and is getting more and more popular over the years, but then with a close monitoring on match-fixing issues, especially if the eSport tournament is online and not an event that takes place in a dedicated space.
Have illegal gaming operators been able to capitalize on the lockdown?
Pure players (100% online) have been able to capitalize on the lockdown. Illegal gaming operators have been in a much better situation than other operators. They offer a higher payout and don’t have to be challenged with retail costs. Their competitive edge has been three times increased: More winnings, no taxes, and no retail issues.
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?
It is almost impossible to protect the responsible business of a lottery in such a crisis. But these measures maybe can help: the promotion of online betting; monitoring of the offer (avoiding offering betting on risky events – money laundering and match fixing); monitoring the strict application of measures in terms of responsible gaming; detection and alerts on anti-competitive practices.
How do you feel the WLA can best help its members in the event of a future lockdown?
The WLA could help by providing some benchmarks about lotteries like the status of each member (full lockdown for the physical network or not, online sports book with the available tournaments open for sports betting) and WLA could also send a report / update on the cancellations and resumptions of championships and tournaments (for sports betting).
A practical handbook about best practices (after the crisis) might also be very helpful for the future.