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A Look Inside EuroMillions, the World’s Largest Multinational Lottery Game

Q&A with Alex Kovach, Managing Director of Camelot Global Services

 

There has been considerable work on the development of a “world game” to involve the North American lotteries. Understandably, there are many special challenges in the creation of multinational game. For a look at one such game, Insights reached out to The Camelot Group, operator of the UK National Lottery and one of the founders of EuroMillions. Speaking for the company about EuroMillions was Alex Kovach, Managing Director of Camelot Global Services. Kovach has an extensive background in the global betting and gaming market, previously serving as CEO of International Development with Ladbrokes plc. He also helped create a Hong Kong-based Chinese lottery company.

 

What was the genesis of EuroMillions?

 

As part of our bid commitment for the second lottery license in the UK, Camelot proposed to launch a multinational game code-named Euro Game. On assessing our bid, the UK regulator didn’t believe a European multinational game would be possible, so discounted it from the assessment. Following the award of the second license in 2001, Camelot began work with La Française des Jeux and Loterias y Apuestas del Estado on a Euro Game, and we were able to dispel our regulator’s reservations.

 

The game was launched in the United Kingdom, France and Spain as EuroMillions in early February 2004 and held its first draw on February 13, 2004. In October 2004 the game was extended to six more countries and seven additional lotteries, including Austria, Belgium, Ireland, Luxembourg, Portugal and Switzerland, making it, at the time, the world’s biggest multinational lottery game by player population with over 215 million citizens.

 

Please describe the general features and operational mechanics of the game, including the choice to include a jackpot cap.

 

EuroMillions is a coordinated lottery game played across 10 lotteries in nine countries (both Swiss lotteries, Loterie Romande and Swisslos, operate EuroMillions) offering cash jackpots. Each operating lottery of EuroMillions has a license from their authorities to operate the EuroMillions game. As part of the game’s setup, a central services company was incorporated – Services aux Loteries en Europe SCRL (SLE). SLE provides draw and administrative services to the EuroMillions lotteries and also owns the brands and trademarks of the EuroMillions game. All EuroMillions lotteries are shareholders of SLE.

 

As for the game itself, it is currently played off a 5/50 and 2/11 double matrix. The main EuroMillions game costs €2 for Eurozone countries and the equivalent in non-Eurozone countries.

 

The EuroMillions jackpot is not allowed to exceed €190 million cash (about $254 million). Once the jackpot has reached the €190 million cash cap, it can only roll once before it must be won. This means that if the jackpot is not won on the first draw when the cap is reached, it will stay at the level of the cap for the next draw. If the jackpot is not won in that next EuroMillions draw, the entire jackpot prize fund will roll down to the next prize-wining tier. The jackpot has been won once at the maximum level of €190 million, in August 2012, and as of mid-June has never had to roll down to the second tier.

 

Camelot and its EuroMillions partners can change the level of the jackpot cap at any time subject to the appropriate regulatory consent. The jackpot cap was introduced to protect against jackpot fatigue and to allow for sustainable future jackpot rollovers.

 

EuroMillions, like all lottery games, is a game of chance and therefore everyone who plays has the same chance of winning. There have been notable winners outside of the three big lotteries.

 

What have total annual sales been in recent years?

 

Total annual sales in 2012 were €7.4 billion (about $9.90 billion) making EuroMillions the world’s largest multijurisdictional big jackpot game by sales. The UK currently contributes over a quarter of this annual game sales total. The game has grown by €4 billion (about $5.35 billion) since 2005, its first full year of operation, when sales were €3.4 billion (about $4.45 billion). Over the past three years, the consolidated annual growth rate over all jurisdictions has been 13.8 percent; the growth rate in the UK of EuroMillions for the same period was 36.5 percent.

 

Per capita sales for the total EuroMillions community in 2012 were about $46.01, while in the UK they were about $56.29 and growing.

 

As American lotteries ponder the potential of multinational lottery games, tell us about the unique issues faced due to differing currencies, languages, cultures and laws, and how they are addressed.

 

There were numerous obstacles that needed to be overcome when we set up EuroMillions. From the outset it was important to get a full, comprehensive understanding of all the different political and cultural values of the countries and the laws that govern them. During the setup we endeavored to use the expertise and values from all of the lotteries involved to create a truly multinational game. All lotteries are represented on the EuroMillions board and all lotteries own a share in SLE.

 

The game is played in Euros, and non-Eurozone countries are liable for their Euro contribution in every stake wagered in their jurisdictions. Non-Eurozone countries fix their currency using an exchange rate mechanism termed Lottery Exchange Rate (LER). The LER is the fixed amount of local currency that meets their Euro liability. If the actual exchange rate is over or under the LER, then the local prize fund either meets the obligation or benefits accordingly. In simple terms, if you pay more in the UK (a non-Eurozone country) you receive more back in prizes; if you pay less you get less back in prizes.

 

EuroMillions is a multi-lingual game. Player facing documents are in their local languages. All meetings are conducted in English and all official SLE documents are in French.

 

The legal framework follows the civil code – something that all continental European countries follow. All legal documentation is produce in full form following the Anglo-Saxon legal system – this ensures greater transparency.

 

Each lottery is responsible for marketing their own licensed EuroMillions game in their own territory. The EuroMillions brand is owned by SLE and is sub-licensed to each operating lottery. The EuroMillions trademark appears in multiple languages across the community. The language and cultural differences of each country comes out in their marketing of the brand

 

How often has the game changed since its inception?

 

The first ever EuroMillions draw took place on Friday, May 13, 2004. Since its launch there has been one major change to the overall game –on May 10, 2011, a Tuesday draw was launched to accompany the Friday draw. At the same time a new increased matrix and associated prize structure changes were also introduced.

 

Each participating lottery is able to run add-on games to the main EuroMillions game. In the UK we launched the UK Millionaire Raffle in November 2009 via a 33.3 percent price increase – which guarantees that one cash millionaire is created in the UK every draw. The UK local addon game was the first of its kind, as it is a mandatory play unlike many of the other lotteries who operate traditional Plus/Joker style games.

 

There is a mix of very large lotteries (three of the world’s largest, in fact) and very small lotteries. Based on population, statistics would favor most players and winners coming from the larger countries, but how have the smaller countries fared? Are there special features in place in each country to encourage play?

 

EuroMillions, like all lottery games, is a game of chance and therefore everyone who plays has the same chance of winning. There have been notable winners outside of the three big lotteries. A player from Ireland won £79.4million ($120.7 million) in July 2005, and in March 2011 two winning tickets, one from Belgium and the other from Portugal, shared a jackpot of €138.2 million ($190.6 million).

 

As mentioned earlier, by running add-on games, the individual lotteries may create more opportunities for their local players. Tell us more about Camelot’s guaranteed UK Millionaire Raffle.

 

On November 7, 2009, Camelot launched the UK Millionaire Raffle. For every EuroMillions line purchased, a unique Millionaire Raffle selec-tion is also generated. The UK Millionaire Raffle selection that matches the one drawn every Tuesday and Friday wins £1 million cash ($1.52 million) – guaranteed!

 

When we launched UK Millionaire Raffle, the EuroMillions ticket price in the UK was increased from £1.50 to £2 – that is because Euro- Millions and the UK Millionaire Raffle are played together in the UK and Isle of Man, and entry into the UK Millionaire Raffle is automatic when you play EuroMillions. EuroMillions costs £1.50 to play and Millionaire Raffle costs £0.50 to play. However, as they cannot be played separately, the total cost of playing is £2.

 

UK Millionaire Raffle is now being considered by other members of EuroMillions and some jurisdictions have other add-on games – for example, in the Republic of Ireland you can play EuroMillions Plus.

 

Can you give us an idea of how important EuroMillions is to the member lotteries? Where does it rank in the overall product mix of each lottery?

 

EuroMillions is a very important draw-based game for all member lotteries. As a big jackpot game it drives brand demand and often drives brand reappraisal. EuroMillions drives news and traffic into retail and on the interactive platform. In most jurisdictions EuroMillions is one of the two biggest draw-based games. In the UK we have found that once the EuroMillions jackpot hits around £70 million ($106.4 million), player penetration increases as more and more people start to play.

 

Players from around the world can play Euro- Millions by purchasing tickets online through euromillions.com, so long as this activity is not illegal in their home countries. Can you provide some information about Internet sales?

 

It would be wrong of me to comment on other countries’ Internet sales. In the UK we do not break down Internet sales per draw-based game. However, Camelot performed strongly across its direct channels, with interactive and subscription sales increasing by $222.3 million to $1,802.7 million over the last financial year. Leading the field of digital lottery innovation and e-commerce, Camelot operates Europe’s largest online lottery in terms of sales. With over six million players, national-lottery.co.uk is one of the top e-commerce sites in the UK.

 

We encourage UK players to play EuroMillions through the official UK National Lottery website – this is because in many countries it is unlawful for anyone to purchase a lottery ticket for any overseas lottery which is not authorized there, including the UK National Lottery, and subsequently any payment of prizes would be unlawful.

 

EuroMillions is a very important draw-based game for all member lotteries. As a big jackpot game it drives brand demand and often drives brand reappraisal.