Maryland Lottery Bidding Controversy Shines Light on Incumbent Supplier Advantage
Despite launching a competitive tender, the Maryland Lottery awarded a $263 million IT contract to its incumbent supplier Scientific Games, even though the latter’s bid was the most expensive.
“The technical merit of the first-ranked technical offeror was considered to outweigh its higher price, and was therefore determined to be the most advantageous offer to the state,” the lottery’s procurement officer, Robert Howells, wrote without elaborating further.
Losing bidders Gaming Innovations LLC and IGT Global Solutions have lodged official complaints claiming a tainted bidding process, a necessary first step before a challenger can bring a case before the Maryland State Board of Contract Appeals, an independent agency with the authority to overturn procurement decisions.
Further illustrating the institutional preference for incumbent suppliers among lottery operators, the South Dakota Lottery recently announced that its present supplier, Scientific Games, “has once again been selected […] as its primary instant game provider,” continuing a 29-year relationship.
Likewise, earlier this month, the Florida Lottery signed a 10-year contract with its incumbent supplier, IGT, and immediately exercised the first of its three available three-year renewal options.
In Europe, German state lottery SACHSENLOTTO recently renewed its supply contract with Scientific Games, the only supplier the lottery operator has used since its initial launch in 1990. “The other firms that entered into the competitive tender will have done so with realistic expectations of failure,” Totally Gaming commented at the time.
Ontario Government Scraps Lottery Privatization Plans
Bucking international trends, the Ontario government has decided that it will not privatize lottery operations in the province.
“After a period of due diligence and consultation with globally-experience proponents, OLG has determined that the selection of a single service provider would not provide sufficient value for the Province,” the Ontario Lottery and Gaming Corporation said in a statement.
Stephen Rigby, OLG’s president and CEO, added that “in order to unlock the full potential of the business, our approach to lottery modernization is evolving.”
OLG will seek to enhance capabilities in technology and innovation through partnerships with the private sector, Rigby said.
Loterie Romande Launches Scratchcard Combining the Real and the Virtual Worlds
Swiss operator Loterie Romande has launched an innovative new paper scratchcard that is played in combination with a smartphone app.
“This new scratchcard combined with an app represents a technological leap forward that finds us responding to evolution in the marketplace and to changes in consumer habits; we are addressing that section of our clientele that is always more connected,” explains Jean-Luc Moner-Banet, Managing Director of the Loterie Romande. “This game unites the real and the virtual worlds without reducing footfall in the sales outlets.”
The Impact of Digital Transformation on Business Strategy in Today’s Lottery Sector
Digital Transformation as a market force is having a major impact on our daily lives. For instance, every single hour, more data is being collected than the total amount of data which was electronically stored worldwide in the early 1990’s.
But what does this mean for business strategy development, in particular with regard to state lotteries, which are still to a large extent dependent on offline retailers?
Lottery CEO and investor Marcus Geiss is looking for an answer to this question:
“But what is the real impact of Digital Transformation on recognized analytic models like Porter’s five forces, his generic strategies or other analytic frameworks? Can these still be applied, do they need to be adapted or are new models needed to analyze the level of competition within an industry, or to define business strategies?
Has Digital Transformation changed the forces? Are there new forces like Disruption, Customer Access, Speed of Change and Market Share? How do these forces influence competitiveness and business strategy? What is the role of pricing strategy and monetization in the age of Digital Transformation? Do we need new differentiating strategies and new valuation models?”
Christmas Lottery Coming to Germany
The Navidad Foundation, a Hamburg-based non-profit organization, announced today that it was granted a license to run the Christmas Lottery in Germany. The new lottery is based on the most successful lottery concept of the world: the Spanish Christmas Lottery, also known as “Loteria de Navidad,” or “El Gordo” (“The Fat One”).
El Gordo collects more than three billion euros every year for just one single draw.
The lottery is considered to be one of the most equitable lotteries in the world: instead of a single jackpot, it pays out prizes of around a hundred thousand euros to more than 1,000 winners each, making whole villages rich.
Marcus Geiss, CEO of the new lottery, said: “We are very excited that after three years of preparation we received the license for this fantastic lottery. Currently we are issuing RFP’s for the various service providers that will help us make the lottery a success. The first draw will take place during Christmas 2017. Additional information will be released shortly.”
A Bavarian punter won half a million euros after entering the daily draw’s winning keno numbers on the website of Lotto Bayern.
Spanish operator ONCE launches a new ticket series that is dedicated to the country’s regional parliaments.
According to Thai lottery players, their country’s state lottery is “not worth playing.”
China’s lottery market recorded its fifth consecutive month of year-on-year growth in July, with total sales climbing 20 per cent to RMB32.40bn (€4.35bn).