[Music] oh [Music] hello viewers and welcome to latest episode of the Huddle Timol here editor of gambling Insider and I'm with Nigel barel CEO of lot Land Group uh Nigel thanks for joining us been my pleasure great to join me yeah looking forward to speaking to you all about um the company and The Wider Lottery industry um an opportune time to to speak to you as it was recently 10 years for you as CEO of the group yes a couple of days ago actually yeah it makes me feel very old unfortunately but yeah well I was more aiming to congratulate you rather than to emphasize anything like that but um you know a long time at the company um could you maybe actually to start off with talk about your journey in in the industry um before Lotto land actually yeah well I've been in the industry about 18 years now I started off um well two company man I started off in what is now entain uh so I joined party gaming the back end of 2005 uh kind of the height of the poker boom if you like and couple of months after party itself had listed on the London Stock Exchange at a 4 billion valuation I think when I had my interview it was about 7 and a half billion Sterling um and then um actually had an amazing sort of nine months there at party um my remit was really m&a and I because I came from a a legal and Investment Banking background and then I spent the next seven eight years at a Foy 250 company as a main board director in the media industry so I was hired by the then management team to literally grow party uh from really being a one company one product um item you know poker in us to being multi-jurisdictional multiproduct and of course then you know just we were sort of getting into our stride um using hopefully using the new public company Equity uh uig happened and uh we lost you know 90% of our value so the job became a slightly different spec in terms of the size of deals we were looking at but certainly the challenge remained in terms of you know making what is now ENT I guess into a multi-product multi-jurisdictional company and we certainly did that uh with party later bewin party uh before I moved on in in 2013 so in 2013 I met the founder of losserand gentle by name of David Rosen in jalter where we are headquartered uh introduced by a mutual friend who was a lawyer in locally and I and he he just arrived in jalta having established lost land um a few months before um um initially working out of a villa in Mara which I think was used by One Direction amongst others as as one of their haunts um and then wait while he waited for available accommodation space in jalter and I kind of met him for coffee a number of times to sort of provide some sort of uh sagely advice if You' like on how to navigate the pitfalls of the online gaming industry and then a month or two later he asked me if I become a non-executive director I became the first loand Ned probably the back end of 2013 beginning of 2014 uh that went off for about six months and then he said would you can you come and work fulltime at the time I was thinking of um sort of branching out and becoming a non-executive number of companies which I am actually already uh but I I got sort of got sucked in in May 2014 10 years ago and I'm still here and having having had great fun and a great ride in those 10 years M couple of interesting notes there I think a couple of rights of Passage the poker booom and basically effectively being at at at one brand in the entain family that's something that a lot of people in the industry so a lot of top Executives uh can can can sort of speak to and I I wouldn't have predicted we would have actually fit One Direction into this conversation if I'm being honest that was that was an interesting note as well um obviously as we say 10 10 years a long time um how did you reflect on Lotto land where it started and and where it is today well really was a very small company 20 old employees I think when I joined in we got sort 400 plus now uh you know we were in just in jalta really operating in the German Market only uh we're now in multiple territories um really is a very simple idea for those who don't know lot land it's essentially um Lottery tourism I like to liken it to ability of a a client in one country to purchase a lottery ticket or effectively have access to a lottery um win in another country without having to travel to that country so what we do is we provide a bet on the outcome of that lottery so you can pick your numbers or whatever if you're a Brit in London and you want to play the Mega Millions in the US you can you can have a go on that and what we do is we we you transact with us and we if you win we pay you uh and we cover 99.9% of all those wins through our own resources uh but for the occasional time when there's a massive jackpot um that which actually hits one our customers we use a quite a sophisticated Insurance structure uh to pay out those big wins uh so yeah quite a simple model really um we've certainly developed from the early days where we're just offering that in one or two countries to offering in multiple jur jurisdictions now as I said but also now cross- selling uh into casino games and the like so we start off with like instant win scratch card type games the sort of thing that you know customer buy and use agent and then where it's responsible to do so we take that customer on a journey into other casino games finally towards you know blackj and roulette Etc if that if that's what they want so so cross- selling those customers which we acquire fairly cheaply under on indust convet industry metrics because everyone knows the lottery and we've got some wonderful IP in the companies we acquire over half our players directly uh and then we could cross sell them into other products and we have a sports book as well but we can cross sell them to other products then you know we can keep our customer for longer and and and each customer becomes more profitable really interesting concept um geographically obviously you mentioned you know part of the appeal is is different territories but in which markets and which geographical markets are which are your biggest or which are you seeing the most business at the moment yeah well the founders German I think started off in Germany so when I Jo a company was 100% Germany but since then now we we've massively reduced our Reliance on Germany so Germany austri switzland region is still very big but the UK Market is important to us sou Africa Market the Irish Market uh we're in Sweden we're in South men South Africa um yeah so we've got a number of of territories Australia is becoming increasingly important for us as well uh you know not as mult as not as um so widespread I think as many of the gaming companies uh because it is quite a unique product and the regulation surrounding that product differs from jurisdiction to jurisdiction and although you know 10 years sounds like a long time it isn't really long time I think we've been trying to focus on our core markets really before we sort of widen our footprint to other markets and sort of do those markets well rather than trying to spread ourselves too thinly but yeah certainly I would say 15 territories now compared with the one when we when I first started MH um you mentioned obviously the 10-year period I mean gambling and technology has changed a lot in that time but would you say that the lottery sector particularly would you say there's been a huge amount of change or perhaps less than other verticals or or more so probably less so I think um what we see ourselves as a A disruptor in that space I think what you've got is lotteries which been going on for several hundred years in some cases you look at El Gordo Etc in Spain um I think Lottery companies by and large are State monopolies uh and therefore haven't had the pressure on themselves to change or to modernize or whatever and we tend to see ourselves as an online only operation therefore trying to attract those type of customers who would not dream of going into news agent frankly and buying a ticket uh you they buy everything online from their newspaper and their food shopping Etc so sort of the Uber if you like or I don't know the Airbnb of the lottery industry so we tried to bring technology to bear on that we own our own Tech and I think we feel it's pretty sophisticated and we're always trying to enhance that Tech and I'm bring in new features to Lottery and Lottery itself is a relatively simple product so unlike say sports betting where you can bring in lots of of different ideas there's a limit probably to what you can do in loty but certainly we brought in enhancements on that where you can protect your jackpot and you can you keep your favorite numbers and that sort of thing but yeah I think um technology is to our Forefront and certainly we we're mindful of those advances in you around the world in other online uh gaming verticals and certainly we can pick up um benefits from those then we will let's say about a third of our business now is in is in Casino uh games and and sports as well so we are you mindful of that as well uh you mentioned Australia in an earlier answer and and obviously we're sort of touching on Innovation and how Lottery the different Lottery offerings um wanted to ask you about kogo in Australia and and maybe to start off with if you introduce that concept well yeah I probably uh T if I may give you sort of sort of History less of our involvement in Australia actually because we had was to some extent a Victorian success I think when we first started we finally got our license in I think it was December 2015 um and we started a soft launch of our betting on lottery product license came from the Northern Territory like many others and we started betting on lottery product in January 2016 which happened coincidentally to com um coincide with a very large Powerball jackpot in the US which I think was running about five or 600 million at the time and then quite fortuitously I guess our our MD in Australia great guy by the name of Luke bril managed to get himself on channel 7 Channel 9 Channel 10 news it cost us nothing to talk about these great jackpots which were happening in United States and you a great Aussie can you know you can have part of that and that jackpot actually went up to 1.6 billion uh at that time which is the largest ever jackpot in the US it's been matched again a couple of times since but that was 2.2 billion Aussie dollars which I think the maximum jackpot in Australia which links into Keno a moment at that point was about 10 million so suddenly the ability to win $2.2 billion for you're a country which has the highest propensity to gamble in the world I and probably twice the gambling drop ahead the next nearest country uh everything went crazy and we the guy beat his budget in three days uh we signed up 250,000 players is one and a half% of the adult population in 72 hours uh and it was crazy but I think unfortunately we attracted the annoyance of the competitor if you like the state Monopoly and they managed to Lobby over a number of years to have that activity curtailed in fact stopped and we then brought it back with a slightly different form they then tried again to have us stopped and we went to the court and actually won a case to allow us to do that but when the opportunity came up for a license in Victoria Kino license 20-year license we bid for that and it was quite a competitive process and I'd say we won it a year or two ago and um and I've started operating kog go in Victoria and and recently in New South Wells and Queensland which were allowed to under under Australian case law but what what should remember about Australia many people listen to this know very well that um Australia you isn't doesn't allow um betting play on Sports so it doesn't allow online casino and doesn't allow online poker either so there's a real itch to be scratched there by an Australian if youd love to have won an instant win if you like in their in their in their gambling and of course Lottery generally doesn't do that because obviously you have to wait till the end of the week or twice a week for the draw so kinogo does that it's a game it's runs every two minutes um you basically Pick 10 numbers out of 20 uh the more numbers you get the more you win we're able to offer um very high jackpots using our insurance infrastructure upside 40 million Aussie dollars right now where our next nearest capacitor probably is averaging about two million jackpots that certainly is attracting attention uh we've already paid out about $60 million in in winnings and we've hardly been going for for very long um it's quite a simple product it really does scratch that itch of you know the instant gaming um and we're you know we're oping to build that very much with our app is now that has overtaken the incumbent in terms of downloads and we want to become the sort of you know the the biggest brand in the lottery space in Australia and we hope very much we'll do that yeah Australia is interesting almost as a bit of a side not in a recent interview uh someone used the phrase the austral ification of gambling in Las Vegas so that that that really points to what you were saying about the the the you know high high rate of high rate of interest in gambling certainly somewhere which shows Spen perhe head and I can't remember the numbers to be quite honestly but the bar chart UK which is pretty big us pretty big they they they're a third probably I think Hong Kong is second with about half as much but it is it is amazing what they like to do and obviously if you've been there you'll know you know they'll bet on two FES running out the wall to be honest yeah absolutely but on that note as you mentioned the the uh when I first found out that online Inplay uh sports betting wasn't allowed I I just thought someone had made a mistake in an article I thought that that just can't be true but but yeah it's uh as as you say you kind of identified um uh a niche or or niche as I think the Australian government or various successive governments because I've had about eight prime ministers nine years I think um I've worried that if they allow in play that it would become you know Australians will get too carried away so I suspect it's a preventive measure probably yeah no certainly um on the note of kind of uh Lottery and gambling I wanted to ask you quite a general question in the sense that um the the two so the way I see as editor of gambling Insider Lottery is part of gambling and the way we're discussing now you know it's you used to work at bwin you from the sounds of it you would consider it to be part of the the same wider industry but some Lottery companies for example um certain certain UK operators in the past would try to distance themselves from the word gambling so much so that emails from our servers would be rejected from gambling Insider because they we're Lottery we're entertainment but we're not gambling as almost a almost a philosophical question for you where does Lottery place within that sphere in terms of gambling yeah I mean I prefer the word gaming to be honest and gambling and have sympathy with the my brethren State Lottery companies but you know I think it is it is on the very softer end of of of gaming or gambling um you know I think addiction issues are much less prevalent you know it's not like to become addicted to winning the lottery when unless you're not that bright you will know that your odds of winning the sort of big prizes are many hundreds of millions to one so it literally is we regard it as an aspirational thing you know it's almost better not to know you've won um I think Camelot used the phrase but got to be in it to win it but it actually is she is that you want to have your ticket to know you're in for the big draw it's almost with trepidation you look on a Sunday in the newspaper or whatever to find out that you have one oh gosh I got to go again so it's Lally and in our office Tim he must come around sometime but you know we've got these sort of Lottery balls decorated in in the shape of a Lear jet or or or power boat or whatever so it's that aspiration to take you out of whatever situation you're in right now into a new new reality with a with a boat and and an airplane or whatever so it isn't it isn't addictive I don't think it's um we we do take responsible gambling very seriously not not withstanding that but also you look at other fors of gaming gambling you know could be used money laundering that kind of thing it won't happen in in um in Lottery where you got one 360 million chance of winning the power ball or something whereas you got a 97% return to player in Casino so so there's lots of distinctions really which I think help us as a lottery operator but I say now we're crosslay to casino anyway so we need to have all the all the usual metrics in place with safer gambling policies in place but I I have sympathy with other lottery companies who say that it's not gambling it's more gaming and you know I like to think of it in the way as a sort of fast moving consumer product really you know you could and history goes you go back to your news agent you buy your milk and your newspaper when you you grab a ticket so it is different for sure um and and I think um that's fair a fair enough comment yeah I think that's a representative quite representative of of America because the word gaming is preferred and Lottery is you know across the us but obviously online casino is uh it's only still in spot check seven states I believe it is seven or eight but but certainly not all of them yeah that's right there's only a few States and obviously you know Sports Bing is in 25 to 30 or something so yeah that probably gives you a clue on that and Lotter interesting in the in the US is only in online is only in about six or seven states as well so it's kind of you know it's they're conscious of that even though I say Lottery once again is not that addictive or much of a problem and brings in good Revenue to the states as well yeah um so you mentioned responsible gambling and we've talked about online as well I want to work the two in and maybe bring in a bit of discussion on AI because AI uh I think probably in interview I'm doing at the moment probably in a lot of discussions you're having AI is coming up um I'm often making the joke that I'm I don't need to be here and AI could do it for me hopefully not to the same degree the same personality whatever um but obviously AI is a Hot Topic at the moment and I'm quite interested um from the lottery perspective how much of a of an impact is it having specifically on the lottery kind of gaming side of things yeah we've used um technology let's not say AI technology generally our responsible gaming um activities for the last four or five years now probably you know there many companies dir your interaction with a customer being able to spot the market of harm and then interact with that customer um using S of automatic automated emails initially until the problem maybe accelerates in which case you have more face tof face interaction with that customer but yeah certainly we've embraced AI I everyone's got to frankly it's about over a year ago now we set up a team to develop that I mean to be honest with you it's really manifested itself to us more in the sort of customer service area really uh initially um we launched something in December last year called um lto it's a chatbox um AI products which literally um we launched it in German and Austria initially um but actually allows you to real time customer service I you probably dealt with these when you're trying to book a flight or whatever sometimes can cause a bit of annoyance but for us it's been uh and I know we we we launched in Brazil in February we're going to launch in Australia later this month um you know it's incredible for the operator it T saves so much time um allows to you have a lot more volume of contacts um with the customer um lot of operational efficiency for the customer and importantly for the customer response time we get back to the customer in seconds whereas you he might been waiting on the phone for a minute or two or or several minutes otherwise um we do operate 247 availability in customer service but with with you know certainly the middle of the night you know we won't be to be frank with you don't have many staff on uh and a customer wait a while where with the AI you can get that that phone answered or that message answered IM immediately um great capacity enhancement and allowing those the number of volume of interactions to be speeded up and a great customer experience I mean sometimes when I've used Ai and I'm kind of frustrated when I'm trying to get an answer uh with a you know I don't know an online booking of something I get a bit frustrated but our actual customer satisfaction scores have gone up and we're developing it all the time and and to link to your earlier question on responsible gaming we brought that into play as well um within the AI chat function so that if there are certain keywords Etc which are mentioned uh in the course of that conversation that raises an alert with our responsible gaming team who can then go in and look at the interaction and see whether that's something which needs to be uh looked into so I think it's you know for us it's relative in our emphases we've been have about a year um and the launch has only been over six months and we're learning all the time and you educ the AI function to do more for you um and I think it's it's going to be a bit of a game changer in terms of a sort of cost base Etc but also our accessibility and our interface with our customers so yeah I'm quite excited by I think noty per se is any different to any other vertical I think it's the same you have that customer interaction sign on issues the likes um and I think um you know it's no real different for lottery I was going to going to say two very interesting use cases you put there and I think another one that I've heard or been told a lot in in this industry is just when there's uh huge amount of data and a human can can input that data and it would take them hours but but it's no particular skill to the job an AI can just do that you know in well I'm not sure seconds or minutes comparatively so um knowing what customers like uh what customers you know which for years we've been doing that really Le sophisticatedly you know so I know a likes Powerball it doesn't particularly like the euromillions you can Target that customer when the jackpot gets over a certain size because you know who only likes it when it gets over 100 million or whatever and that that's always been there really with well not always the last few years been there but with AA that's getting much more simple and you don't it has the benefit of not bombarding customers with too many emails or too many texts or whatever which you you get fed up with that so literally only knowing when you want to know that there's a big jackpot which you like to play coming up so yeah on that the front end of it as well is very important yeah um another topic I wanted to ask you about a slight switch from AI um the UK National Lottery really interesting to to follow and and cover that for for a number of uh well I guess it's overall that stretched over a couple of years to have Camelot had it all win then took it and then all win then took over Camelot uh just as a a member of um you know of the industry of the lottery sector I wondered what your kind of thoughts and overview was of of how the UK has sort of uh is and has transitioned to uh to OLN yeah well from a l land perspective don't really have much for com because you know we aren't allowed to offer National loty products euromillions and a national loty in the UK and and we don't um so we we don't have any Crossover with them uh we have a good relationship with them in a number of um areas um I think just from a more personal perspective I guess that you know ow a great company I know the Well from a number of aspects and I guess you know cam had the opportunity to run it for 25 27 years whatever it was um and you know politically I think there was a lot of pressure for a change uh with the hope I think that a new company running it will be able to bring in new technology new techniques new ideas to therefore grow the the lottery which had have been growing be fair to cot it's still been growing but perhaps um the government were looking for or dcms were looking for a little bit of a a SE change in there and hopefully build on that what's already been set up very well by camot before to give even more money to good causes Etc so yeah I'm just an interested Observer but I say we don't really um cross sord them on a business perspective yeah hypothetically I guess do you think that that kind of thing is inevitable in the sense that if if someone's been running something for 20 25 years do you think whether they are getting the most out of out of that market or not that the perception is just going to be that yeah might be time for change well it's a state mandate isn't it so I think you know it's usually driven by political uh reasons and I think after a while the probably the lack of potentially credible or acceptable um Alternatives in the past allowed Camelot to win a couple of those bids and they were always quite happy to go to court to make sure they they did win it um but I think um you know I think there was just a time for a change so our our aspects actually we look at that around the world where we compete with State monopolies and you know and Europe in particular Monopoly is is illegal um and so we we challenge the fact that the states have the right to have that monopo and what we say it's for the consumer's benefit bring in competition because then the consumer has a lot more choice you know I say we slightly operate in the different way to a state lottery where we're trying to focus online probably trying to focus on a younger type of audience you know Millennial or generation Zed or Y EXC but we said you know we should bring that competition on because that actually is good for the state lotteries as well there's probably no surprise why Camelot now all win a probably the most sophisticated lotteries in the world with a huge proportion of their turnover coming from online they've had pressure from other other avenues not on the particular product they offer which is a monopoly but many other areas like postcode Lottery Health Lotter other other gaming verticals are coming in and apply pressure to them so they've had to up their game as well if you look at countries where the state monot Monopoly is very well protected they're pretty basic and um you know they haven't really been forced to modernize because there's no competition from D yeah I got a couple of final topics for you uh looking ahead very much so if I were to ask you um which region you think we'll see the most geographical region and it doesn't have to be a one country could be more continent even uh we'll see the most growth in the lottery sector in the next few years is there any one that comes to mind for you well there's two for me you knowed States is going to grow significantly only because it's so far behind I think the average uh online Lottery penetration in the world is currently running about 6% uh you compare that to you know sports betting which is around about 65% it shows a long way to go you compare to the United Kingdom Camelot before and I win now where I think they've got 50 odd or 60% online penetration so the US is about two or 3% I believe so I think a huge way to go there um I think the other area I'm particularly interested in is Latin America and obviously like many other gaming companies or gaming executiv or interview in Brazil has become an exciting Market down there a few weeks ago looking at the potential there um two areas really one the whole new online regulation which should be allow us to do our better Lottery and hopefully Kier Lottery product as well but also I think the fact that the state Monopoly kaisha uh is is potentially going to be allow allowed to uh bring competition into the various states around Brazil and we have in the past been looking at um sou Pao Province for instance which doesn't sound very exciting but it's best part of 50 million people so it is in itself is a a huge exciting opportunity so um political it's become a bit of a political football so there's nothing actually happening on that the front at the moment but I think over next year or two we're going to see a lot of deregulation and opening up of that Lottery market and certainly we're also going to be seeing the ability online with the new regulation to be able to operate there so Brazil initially I think and then hopefully that will spread to other parts of Latin America I think the propensity for Lotter is very high there uh and therefore it'd be an exciting prospect for us absolutely uh staggeringly low numbers in the US as as you mentioned there and and yes I I can I can concur Brazil is uh currently writing and and and talking a lot about Brazil and uh yeah for good reason um my last question it might sound easy at first but if I were to challenge you to maybe tie everything we've spoken about together and if I were to ask you if you could sum up where where is the lottery sector going in the next few years might sound easy at first after I thought mightbe a bit more challenging but that that's the that's the final words I want to leave you with a chance to give us well lot is massive ubiquitous and it's bigger than Sports Bing uh around the world is probably just slightly smaller than Casino when you fact all landbased casinos everyone knows Lottery everyone plays it or most people play it so to actually attract customers easier so I think it's um going forward as long as we're allowed to do what we're allowed to do in a number of countries around the world then to bring you know the Next Generation onto online to buy their tickets and have that ability to dream and win is what we want to do we're all about that trying to modernize Lottery uh and I think um you know L be there for a long long time to come it's been there for several hundred years it was originally founded number of countries to fund Wars Etc so it's going to be around uh and perhaps the interesting aspect is how it will then link with other veral of gamings I think the average Lottery player is probably quite different to the average sports betting guy who wants to do an AER on football or whatever so it's question of can we bring um more customers in a responsible way to play our Lottery and then perhaps play some our other games on there like instr win and scratch car so you know Lottery everyone knows that it could be a biggest entry point I think to on gaming as more people get used to using um online sites rather than landbased and everyone knows Lotter and the ability to internationalized lottery I think is particularly where we focus you the ability to bring those big jackpots which are being played for around the world every day but you don't know about it because you're in Britain or you're in Germany or you're in Sweden to bring those to you and allow you to have access to those and and to dream to win big basically one of those big and in the US you know they up to 1.6 billion or whatever that's crazy money so you know your chance to win it pretty low but if you do win it well yeah absolutely well Nigel um really enjoyed speaking with you thank you very much for your time and uh best of luck with uh for everything at lot land Tim great to talk to you thanks very much for your time thank you and to our viewers thanks for watching as well