We met Johann Schembri to learn about the first year of operation of National Lottery plc, the new lottery operator in Malta that took over from Maltco Lotteries Limited who had been operating the national lottery since 2004.
The first year of operation is always a special year in the lifetime of a new company. How special was it for National Lottery plc at the helm of the national lottery of Malta?
Taking over the operation of the national lottery of Malta was by no stretch of the imagination a small feat. We had been working relentlessly for over 2 years before commencing operations. We had two very clear goals when we took over, first to ensure a seamless transition from the previous operator; and second to effectively rekindle the affinity of the Maltese society towards the national lottery games. We have worked tirelessly to ensure that we meet both goals in the shortest time possible. I am very thankful that through the close collaboration of all stakeholders we have managed to attain both goals in record time.
For the first time since the privatisation of the Lottery service in Malta, a Maltese-owned company is now in charge of operating the national lottery. What would you say was the impact of this on the lottery market throughout this year?
You may recall in our launch that we promised to bring the national lottery closer to the local public, this by acknowledging the need to delivery a compelling product offering sold under a brand that is truly local. We also studied ways of adding value to the market by undertaking tangible changes to the most popular lottery products. Through these changes and our relentless effort to communicate these changes we have seen the distribution of record prizes over the past 12 months with over 107.14 million euro paid in prizes since July 5. Our Maltese roots enable us to better understand the traits of the market, and finding the right solutions to deliver a product that best suits the market demand.
Can you give us some examples of the changes undertaken to help fuel the demand for the national lottery products?
The best possible example to give relates to the game of Lotto. Despite being a game that enjoyed strong demand emanating from its 100-year tradition, the changes we implemented in the market have been the main reason for the robust growth in Lotto sales throughout this year. For the first time since the launch of Lotto in 1923, we introduced the Tuesday draw. We also eliminated the capping on winnings, a practice that the previous operator had adopted and that essentially skewed the game and redirected players to the informal market. Allowing players to take home 100% of their winnings creates a new perception in the game and restored confidence in players.
Should we expect more changes in the coming months?
Our approach from the very beginning was to undertake those necessary changes to continue to fuel the interest of the market. To this end we have a series of planned changes to look forward to. Central amongst these, is the launch of the first Friday Super5 draw that is earmarked to take place on Friday 21st July 2023. The Friday draw will also include the 2 other games that form an integral part of the Super5 family of games, namely Super5 Plus and Super5-4-3-2-1. It is clear from comprehensive research that we’ve undertaken, that the market yearns for the opportunity of winning a sizeable jackpot more than once every week.
Earlier in the year you also introduced ScratchiZ, an Instant Scratch Card Product Series offering top prizes of up to €150,000. What are your aspirations for this product category?
Instant Scratch Cards are one of the most interesting product categories for a lottery provider. In the most advanced markets worldwide, Instant Scratch Cards make up even 50% of the total value generated by lottery operators. In Malta, these products have only contributed marginally to the industry. We are adamant to change this as we have embarked on a plan that will position this product at the very top of our product portfolio. Our Instant Scratch Card product which we have branded under the ScratchiZ name, is set to take the market by storm, on the strength of our commercial policy towards this category. For starters we have designed a series of scratch cards that have strong appeal, we have created a prize structure with very high pay-out rates, and we have included very lucrative top prize jackpots to allow players to dream big. These product elements, coupled with favourable terms offered to our agents to push these products augur well in our bid to get people scratching and winning. We also have plans to make these products available through extended distribution, another important source of success for this product category.
And what about online lottery?
Ever since we launched our services a year ago, we have been inundated by requests from all walks of life for online lottery. Finally, the wait for online lottery is over. Our lottery ecommerce site has been launched under the domain. Our product team have delivered an online ecommerce portal aimed at delivering clear benefits to all those that have a preference in availing of the lottery service through digital means. We are very excited about the prospects of this channel and are looking forward to seeing how the market will react to the first omnichannel experience of its kind in the local lottery market.
As the first year of operations ends, what do you consider to be the upcoming opportunities and challenges for the business?
The national lottery operation provides our Group with unprecedented growth opportunities, yet also presents itself with several challenges, most of which are intrinsic to the realities of the local market.
Malta will always remain a relatively small market in absolute terms, so prioritizing the sizeable capital-intensive investment decisions over time remains a challenge. Operating a market like Malta however allows us to build a wealth of knowledge in an industry that may present internationalization opportunities. The natural progression for our Group is to eye investment opportunities abroad to leverage our knowhow across international markets.
We are also very keen to leverage the opportunities brought about by a wider and more efficient local distribution network. We would like to meet the benchmarks set by the European Lottery Industry in terms of points of sale in the market through a diversified distribution network. Our first step towards this strategy is our launch of online lottery earlier this month.
Finally, we would like to stress the importance of having all industry stakeholders come together to curb the illegal distribution of gaming products, especially those that offer fixed-odds pay-outs such as lotto and sports betting. Millions of Euros are exchanged in underground practices each year to the detriment of public coffers and our communities.