Lottoland Denounces Australia’s Bill to Ban Secondary Lotteries

Posted on: March 27, 2018, 02:00h. 

Last updated on: March 27, 2018, 11:51h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

Australia’s federal government on Tuesday said it would introduce legislation to prohibit secondary lotteries, such as Lottoland, which let customers bet on the outcomes of lotteries across the world rather than having to buy a ticket for the draw.

Australia to ban Lottoland
Lottoland chief Luke Brill has called Australian’s plan to ban secondary lotteries “misguided and unnecessary.” The legislation follows an orchestrated campaign by traditional lottery giant Tatts to blacken Lottoland’s name. (David Geraghty/The Australian)

The concept is disruptive and has ruffled feathers among traditional lottery operators and ticket vendors, who have accused Lottoland of threatening their livelihoods and robbing them of customers, thereby sucking up funds that would have gone to good causes.

A campaign, funded by lottery giant Tatts and various industry groups representing newsstands and corner stores even launched a high-profile campaign, dubbed Lottoland’s Gotta Go, which featured television spots and full-page advertising in newspapers.

 Bill Misguided Says Lottoland Chief

 It seems to have worked. But Lottoland’s chief executive, Luke Brill, in an official statement on Tuesday, criticized the proposed bill, while pointing out that his company had already stopped taking bets from Australians on Australian lotteries in response to the campaign.

“Our offering does not have a direct impact on newsagents,” he said, referring to the catch-all term in Australia for newsstands and corner shops.

“On the contrary, we want to work with newsagents to provide customers with greater choice and even better services, which have the potential to be highly beneficial for individual newsagents,” he added. While we understand the concerns expressed by some newsagents, the proposed legislation is both misguided and unnecessary.”

Lottoland has been described as “the Uber of lotteries” because it poses a similarly disruptive threat as the digital taxi service. The company, and secondary lotteries like it, allow customers to engage with foreign lotteries by proxy.

But How Does Lottoland Work?

You buy-in online (for slightly less than a real ticket), choose a lottery from any number across the world, pick your numbers and watch the real draw take place. If your numbers come up, you will win the same earth-shattering prize offered by the real lottery without having interacted with it at all.

Lottoland may not have the volume of these traditional lotteries, but they operate by hedging and are backed by something called insurance linked securities. These are a kind of insurance policy usually taken out by governments to protect against unlikely catastrophes, such as earthquakes. Instead of earthquakes, Lottoland is insured by up to $123 million per year against massive lottery wins.

It’s a pretty clever idea, which is perhaps why politicians hate it. Communications Minister Mitch Fifield, who is to introduce the bill, told parliament that secondary lotteries had undermined the “longstanding community acceptance of official lottery and keno products.”

“These products enjoy community support as they generate an income stream for small retail businesses and make a significant contribution, through licence fees and taxation, to the provision of public services and infrastructure by state and territory governments,” he said.

“Online service offering products that involve betting on lottery outcomes … have generated considerable community concern.”