RAVIPELAAMISEN MUUTOS JA RAVIURHEILUN MAHDOLLISUUDET

Osallistuin maanantaina 9.3. Forssan raviradan strategiaseminaariin yhtenä alustuspuheenvuoron pitäjistä. Esitykseni tarkoituksena oli kuvata rahapelaamisessa ja hevoskilpailuissa tapahtuvaa kehitystä ja sen vaikutusta Suomen raviurheilun tulevaisuuteen. Tässä on puheenvuoroni pääsisältö vielä auki kirjoitettuna.

Kulutustrendit & rahapelaaminen

Rahapelaaminen ja raviurheilun seuraaminen ovat osa normaalia kulutuskäyttäytymistä. Tämän vuoksi on tärkeää ymmärtää, minkälaisia yleisiä muutoksia ihmisten kulutustrendeissä on tapahtumassa. Kuluttajien käyttäytymisen megatrendejä on aika paljon ja olen poiminut niistä kolme, joilla on varmasti paljon vaikutusta myös alamme kehitykseen.

Digitalisaatio on muuttanut ihmisten kulutuskäyttäytymistä jo paljon ja tulee muuttamaan sitä yhä enemmän. Asiointi on siirtynyt verkkoon ja erityisesti mobiilikanavaan. Tämän kehityksen seurauksena kilpailu on kiristynyt merkittävästi. Aiemmin fyysisellä sijainnilla oli suuri merkitys kulutukseen, mutta nyt esimerkiksi maiden rajat eivät enää ole kriittinen tekijä asiakkaiden valintamahdollisuuksiin. Verkossa on tarjolla satojen, ellei jopa tuhansien peliyhtiöiden tuotteita ja hevosurheilua pystyy seuraamaan monista eri maista.

Toinen merkittävä muutos on osittain sidoksissa digitalisaatioon ja se on asiakkaiden valintamahdollisuuksien kasvu. Tämän seurauksena asiakkaiden vaatimustaso on noussut. Menestyvän liiketoiminnan perusedellytys on ja tulee olemaan asiakaskokemus. Toimija, joka pystyy tarjoamaan parhaan asiakaskokemuksen, tulee menestymään varmasti. Rahapelialalla näyttää olevan menossa konsolidaatio, jossa muilla aloilla perinteisesti toimineet yrityksen ovat tulossa mukaan rahapelitoimintaan. Tällaisia uusia rahapelialan toimijoita on tulossa mm. media-alalta, jossa erityisesti urheilun tv-oikeuksia omistavat yhtiöt ovat jo aloittaneet tai ovat harkitsemassa rahapelitoiminnan aloittamista. Perinteiset rahapeliyhtiöt tulevat olemaan pulassa, jos asiakasdatan jättiläiset Google, Amazon ym. tulevat mukaan rahapelitoimintaan.

Kolmas merkittävä muutostrendi on vastuullisuuden merkityksen nousu. Turvallisuus ja toiminnan eettisyys ovat saaneet kuluttajien silmissä entistä suuremman merkityksen. Olemme saaneet tästä jo hieman esimakua myös Suomessa viime kesästä lähtien. Pidän mahdollisena, että jotkut rahapelialan toimijat voivat tehdä vastuullisuudesta itselleen kilpailuedun, jolla ne erottautuvat muista peliyhtiöistä ja menestyvät sen ansiosta. Pidän varmana, että vastuullisuuden laiminlyönti ainakin ajaa yhtiöt syviin vaikeuksiin.

Hevospelaaminen & kilpailutapahtumat

Paras määre kuvaamaan rahapelaamisen volyymia on pelikate, joka tarkoittaa ihmisten rahapelaamiseen häviämää rahasummaa (pelimyynti – maksetut voitot). Globaalin rahapelaamisen pelikatteen on arvioitu olevan tällä hetkellä reilut 400 000 000 000 eli 400 miljardia euroa. Tästä summasta noin 12 % tulee digitaalisista kanavista. Hevospelaamisen (ravit & laukka) globaali pelikate on noin 25 B€ eli noin 6 % koko rahapelaamisesta. Pelaamisen kasvu tulee käytännössä vain digikanavista ja näyttää siltä, että asiamiespisteissä tapahtuva myynti laskee lähes kaikkialla. Hevospelaaminen kehittyy muihin pelialueisiin nähden heikommin. Tutkimuslaitos H2GC ennustaa hevospelaamisen kasvava tulevina vuosina 0 – 1 % vauhdilla, mikä on selvästi vähemmän kuin muun rahapelitoiminnan kasvu. Hevospelaaminen menettää siis merkittävästi markkinaosuuttaan ja pelaaminen siirtyy nopeasti pois rataympäristöstä.

Ravi- ja laukkatapahtumien katsojamäärät laskevat ympäri maailmaa. Arkikisoissa ei käy enää juuri ketään. Ongelma ei ole siis pelkästään Suomessa. Katsomot ovat tavallisissa kilpailuissa sama niin Solvallassa, Vincennesissä kuin Englannin laukkaradoillakin. Tavallinen bulkkituote ei enää näytä kiinnostavan ketään. Sen sijaan suurkilpailuilla ja erityistapahtumilla näyttää menevän kohtuullisen hyvin ja katsojamäärät ovat edelleen korkealla. Televisioinnilla on ollut suuri vaikutus. Itse kilpailutapahtumat näkyvät paremmin kotisohvalle kuin paikan päällä katsomoon.

Suomen raviurheilun muutos

Suomen raviurheilun kiinnostavuus laskee. Yleisömäärät putoavat ja arkiravien katsomot ammottavat tyhjyyttään. Positiivista on kuitenkin se, että myös meillä suurtapahtumat näyttävät edelleen kiinnostavan yleisöä. Tässä yhteydessä suurtapahtuma tarkoittaa muutakin kuin Kuninkuusraveja. Valtakunnallinen suurtapahtuma on eri asia kuin paikallinen suurtapahtuma ja niille kummallekin näyttäisi olevan tilausta.

Katsojamäärien laskun lisäksi iso ongelma on hevosmäärien lasku. Hevosen omistajien määrä on laskusuunnassa, mikä on todennäköisesti sidoksissa alan yleisen suosion laskuun. Tilanne on itse asiassa aika mielenkiintoinen, koska juuri tällä hetkellä tilanne menestyvän hevosen omistajan kannalta on parempi kuin koskaan ennen. Palkintotaso on korkealla ja hevosen on helppo päästä mukaan kilpailuihin. Alan tulevaisuuden haasteet tietysti ovat todellisia ja harmaalta näyttävä tulevaisuus ymmärrettävästi vähentää hevosen omistamisen kiinnostavuutta.

Rahapelaamisen suosio on ollut viime vuosina lievässä laskussa. Uuden koko pelitoimintaa hoitavan Veikkauksen pelikate on laskenut yhtiön koko kolmivuotisen toiminnan ajan. Osa vähentyneestä pelaamisesta näyttää siirtyneen ulkomaisille peliyhtiöille. Ravipelaamisen suosio on laskenut jopa enemmän kuin muun rahapelaamisen. Ravipelien osuus ennen uuden Veikkauksen perustamista kokorahapelaamisesta oli lähellä neljää prosenttia, mutta nyt se on enää reilut 3 %. Näyttää siltä, että ravipelit eivät ole kiinnostava tuoteryhmä tilanteessa, jossa asiakas saa kaikki mahdolliset rahapelituotteet yhdeltä luukulta.

Raviurheilun mahdollisuudet muutoksessa

Avainkysymys on, miten raviurheilu pystyy vastaamaan yleisiin kulutustrendeihin. Raviurheilu on osa viihteen ja vapaa-ajan markkinaa. Valintoja ei tehdä siis pelkästään rahapelaamisen sisällä vaan myös muiden viihdykkeiden välillä. Käytänkö torstai-illan katsomalla Lahden raveja vai kenties katsomalla jääkiekon liigaottelua paikan päällä tai tv:n välityksellä vai menenkö vaimon kanssa elokuviin jne.

Pitkän tähtäimen tärkein tehtävä on raviurheilun yleisen hyväksyttävyyden kasvattaminen. Tätä varten tarvitaan aktiivista näkyvyyden ja tiedottamisen lisäämistä. Tätä tehtävää varten on terävöitettävä viestinnän kärkeä. Mitä ala haluaa itsestään kertoa? Mikä on se kuva, jonka haluamme alan ulkopuolisille kertoa? Moni alan harrastaja on esittänyt kritiikkiä siitä, että raviurheilua on markkinoitu liikaa rahapelaamisen kautta. Mielestäni tämä on ollut menneinä vuosina oikea valinta, koska alan rahoitus on tullut hyvin pitkälle ravipelien tuotosta ja hevosen omistajien rahoista. Nyt alan rahoitus ei ole suoraan kytköksissä ravipelien volyymiin, joten muitakin vaihtoehtoja on olemassa. Yksi ratkaisu viestinnän ja markkinoinnin kärjeksi voisi olla hevonen, mutta erottuuko se silloin riittävästi esimerkiksi ratsastuksesta? Oli valinta mikä tahansa, sen tulee olla uskottava!

Raviurheilun haasteena on ollut alan sisäinen erimielisyys. Tästä on päästävä eroon! Ei ole olemassa ratkaisuja, jotka miellyttävät kaikkia. On kuitenkin uskallettava tehdä valintoja ja luotettava siihen, että viime kädessä alan parempi yleinen tulevaisuus hyödyttää lopulta kaikkia, vaikka lyhyellä tähtäimellä hyödyt ja haitat jakaantunevat epätasaisesti. ”Oma pesä” on saatava kuntoon, koska muuten ei voida tehdä uskottavaa viestintää ja markkinointia ulkopuolisille.

Digitalisaatio on alue, jossa Suomen raviurheilu ja erityisesti ravipelaaminen on onnistunut hyvin. Digitaalisten kanavien osuus ravipelaamisessa on paljon suurempi kuin muilla pelialueille. Suomen Hippos on myös ansiokkaasti kehittänyt digitaalisia järjestelmiään ja informaation osalta tilanne näyttää hyvältä. Ongelmana ovat reaaliaikaiset digitaaliset palvelut itse tapahtuman aikana. Raviurheilu ei sovi kovin hyvin vedonlyönnissä suosiota kasvattavaan live-pelaamiseen. Ravilähdön aikana tapahtuvaa livepelaamista ei ole vielä edes testattu ja sen mahdollisuudet näyttävät huolestuttavan pieniltä. Asiakas ei myöskään saa juuri mitään reaaliaikaista palvelua ravitapahtuman aikana. Tapahtumaa ennen ja sen jälkeen digitaalisia kanavia voi hyödyntää, mutta mikä tukisi katsojakokemusta kotisohvilla ja paikan päällä raviradoilla?

Ravialan on ymmärrettävä, että asiakas on kuningas (& kuningatar)! Ketkä sitten ovat raviurheilun ydinasiakkaat, joita pitäisi palvella parhaiten? On pääkohderyhmä ”suuri yleisö”, nykyiset aktiiviset asiakkaat vai kenties lajien harrastajat eli ”tallialueen väki”? Näiden ryhmien tarpeet ovat hyvin erilaiset ja ne vaativat erilaisia toimenpiteitä, joita kaikkia ei voida toteuttaa yhtä aikaa. Suuri yleisö on kriittistä, jos ala haluaa saada uusia harrastajia. Nykyiset asiakkaat puolestaan ovat kriittisiä tässä ja nyt, koska alan rahat tulevat tältä ryhmältä. Lajin urheilijat puolestaan ovat kriittinen ryhmä, jotta ravitoimintaa yleensä on olemassa. Avaintekijä on joka tapauksessa ymmärtää, mitkä tekijät millekin asiakasryhmälle ovat tärkeimpiä tekijöitä.

Onko raviradoilla enää tulevaisuutta? Kuten jo aiemmin totesin, niin bulkkituote ei kiinnosta enää juuri ketään. Ratojen on kehitettävä asiakkaille elämyksiä ja viihdettä, jotakin erityistä, joka on syynä saapua paikan päälle ravikilpailuihin. On selvää, että kaikki ravitapahtumat eivät voi olla erityistapahtumia. Mielestäni ravikilpailuja tulisi uskaltaa profiloida nykyistä voimakkaammin. Ratojen tulisi hakea itselleen erottuvaa roolia ja keskittyä joihin tiettyihin tapahtumiin ja tehdä niistä nykyistä suurempia. Ravipelitoimintaa varten tarvitaan vähintään yksi urheilullisesti kiinnostava ravitapahtuma per päivä, mutta kaikkien näiden kilpailujen ei tarvitse yrittää olla spesiaalitapahtuma yleisölle. Raviratojen ja ravikilpailujen osalta olisi myös syytä erottaa nykyistä selvemmin ravipelaamista varten järjestettävät kilpailut ja raviharrastamista varten järjestettävät ravit.

Vastuullisuus tai itse asiassa sen puute on tekijä, jolla raviurheilu voi menettää enemmän kuin voittaa. Alan kannalta on kriittistä, että hevosten kohtelu sekä radalla että valmennuksessa on kunnossa. Media on tämä päivänä yhä julmempi ja negatiiviset asiat saavat helposti laajaa julkisuuttaa. Tämän vuoksi on kaikkien alan harrastajien etu, ettei raviurheilu anna aihetta negatiiviseen julkisuuteen. Esimerkkinä ehdottaisin, että Suomessa harkittaisiin Norjan mallista piiskan käytön kieltämistä.

Kaikkea ei tarvitse muuttaa kerralla. Muutos on saatava kuitenkin käyntiin saman tien. Eteneminen voi tapahtua pienin mutta suunnitelluin askelin. Nyt ei ole enää aikaa odotella!

DIGITALIZATION OF LOTTERY BUSINESS

Lottery business has been based on monopoly all over the world as long as I could remember. Lottery games have been run by national lotteries mainly. Those companies have been owned by states, but that’s not the case anymore. There are already many countries where lottery games are operated by private companies which are trying to make as good business as possible. That has changed the lottery world a lot and has caused big differences between different lotteries. Lottery companies used be like state offices in old days and they still are in some countries. At the same time there are modern business companies running those games too. It would be interesting to see what will happen in lottery business if for example Virgin Group will win the UK lottery license…

Because the ownership and business strategies of lotteries are so different, it’s natural that the state of digitalization of those companies varies a lot. We have lottery companies where the share of digital business is something like 50 % of total business and companies which haven’t even started the digitalization of their business. Someone could guess that state-owned companies are in the latter group and private companies are in the first group, but that’s not the case. For example, my former company Veikkaus is 100 % owned by the Finnish State and almost 50 % of lottery business is coming from digital channels. Another similar example is Norsk Tipping.

I have said many times before that gambling, or lottery, business is not specific and separate business area. Our consumers are used to use digital channels to get other services and products. People are using internet and their mobile phones almost for everything and it’s strange if they can’t get their lottery products from there too. Actually, lottery products are more suitable for digital channels than many other products, because there is no need for distribution. Lotteries should be part of normal life and be available in digital channels if customers would like to get them there.

Veikkaus introduced lottery games in internet already in 1996/1997 as the first lottery in the world – sorry my Icelandic friends! I was in charge of that digital business first years and due to that I was visiting many lotteries and events and told about our solutions and experiences. Those days the most of lotteries were afraid of reactions from retail network and weren’t ready to introduce digital solutions. It took surprisingly many years until lottery companies outside the Nordic countries started digitalization of their business. Veikkaus and other Nordic lotteries (Danske Spil, Norsk Tipping and Svenska Spel) have further developed their digital businesses. Someone might say that we are using digital tools even too much and trying to sell more than enough. Digitalization and utilization of customer data enable us to make more effective marketing and product development and that will improve the business results. Lotteries should find out the balance of business and responsible gaming together with regulator, but that is partly another story.

I believe that digitalization will give lottery companies and regulators more tools for responsible gaming too. We get lots of data from digital channels and that make it possible to analyze customer behavior more than it’s possible in retail channels where gambling has been anonymous. Digitalization makes it possible to give better service for customers. We could also offer more entertaining games and services. Of course, it’s important that lotteries understand how far they could go and control their actions. Otherwise there is a risk that gambling problems would increase.

The market situation has also changed. There are nowadays companies like Lottoland operating in lottery sector and traditional lotteries should compete against those modern companies. It’s impossible “fight” if we are not using the similar tools. I think that it’s better way to compete by developing our own business than try to beat those newcomers in courtrooms. I would almost like to thank Lottoland about “wake up-call” for lotteries…

It’s important to understand that digitalization of lottery business doesn’t mean just new digital channels internet and mobile. There are also lots of new opportunities for traditional retail channel. It’s possible and necessary to utilize new technology in retail business too. We have already lots of example of multi-channel products. We have brought digital services to retail network and that has utilized both sales channels. FDJ in France and Danske Spil in Denmark have managed to get excellent business results when they have launched new digital services for their retail network. I have admitted that I believe in omni-channel solutions. I’m sure that lotteries will introduce games where customer could play same game in retail network and continue that game in digital channel or vice versa. I’m also sure that customers will use their mobile phones for gambling when they are physically in retail shops – we have already seen some small examples of that. It might be impossible to say in the future which part of lottery business is digital and which retail business and it doesn’t matter at all. Lotteries should understand that retail business is the asset which the most of other gambling operators don’t have and that’s why it’s important part of the business to further develop!

Marketing of gambling (products)

I just spent long football weekend together with my former colleagues Antti, Erkko and Mika with whom we took care of marketing of sports and horse betting business in ”good old days” here in Finland. We used to have real funny time at the office and we managed to make excellent marketing campaigns. I believe that quite many middle-aged sports fans still remember our ”Maailma on erilainen vakioveikkaajan silmin”-campaign (you could find those Football Pools themed ads with Google or from YouTube…). We didn’t only toot our own horn but also tried to find out ideas for gambling marketing. It’s not easy task at all, but we had interesting discussion about that.

Gambling has always been ”dangerous” business, almost like alcohol and tobacco. Now attitudes against gambling have become even more negative due increase and awaremess of gambling problems. That has effected on marketing and communication a lot. Many countries have lots of restrictions for marketing of gambling products. Italy decided to have total marketing ban of all gambling products. There are similar rules for all gambling verticals like casino, sports betting and lottery. It seems that some countries might follow the example of Italy.

Veikkaus has still possibility to use marketing as a tool to promote its business in Finland. Gambling products have been divided to ”green” and ”red” games. Veikkaus is allowed to have marketing campaigns about ”green” games (for example lottery, football pools and scratch cards) which are not so dangerous ones. It’s not possible to have marketing campaigns of ”red” games (casino games, sports betting, horse betting etc.), but it’s allowed to give product information about those games and sometimes it’s difficult to explain the difference between marketing and product information.

It’s good that people understand better the risks of gambling and are aware of gambling problems. I think that regulator should set up guidelines for gambling operators and supervise those rules. Marketing should be one part of those guidelines (rules). I don’t believe that total ban of gambling marketing would be the best solution. The better one would be something like we have in alcohol business where companies are allowed to market ”not so dangerous” products but not at all those heavy ones.

I have said many times before that companies should know and understand their customers as well as possible. That’s the key issue also in marketing. If you know your customers’ main motivations for gambling, you could make better marketing for them. It’s totally different what kind of messages you should give for ”jackpot dreamers” than for people who is looking for entertainment. It’s another question should it be possible to market those entertaining casino games at all…

Sport is the most important reason for gambling for big group of customers. Of course some of them are dreaming to get big money from sports games and some of them are looking for entertainment by watching sports, but I would say that sport is specific reason to play money games. There are at least two quite separate groups inside sports betting customers. Sports punters are keen on gambling and they are trying to utilize their knowledge of sports to earn money. I think that there is no need to have any marketing actions for that group. The other group is much bigger one and it’s sports fans. For them sports at itself is more important than gambling, which is just ”extra feature” to get more excitement from sports.

What kind of marketing we should do for those sports fans? I don’t like ”buy now”- or ”win 1M€”-style marketing adds and especially in sports games area they are ineffective ones. If you would like to reach sports fans, you should concentrate on sports and try to offer them chance for insight. I think that me and my friends managed to do that in ”good old days” when we published for example ad which was copy of famous painting God’s Hand by Michelangelo and we added blue&white stripes and number 10 to that arm. It’s important that customer would get good feeling when he/she is watching those ads. You should also try to offer that same feeling when they are playing your games. If you manage to do that, you could have good but responsible gambling business.

We discussed also about the possibilities of social media, digital channel and retail network, but those ideas will be the theme of my next blog…

Kiitos ja näkemiin!

Kaikki loppuu aikanaan, ei ainakaan tää, ei ainakaan tää… Tiesin, että tämä päivä koittaa joskus, mutta yllättävän kauan siihen on mennyt. Olen työvuosieni aikana ollut useaan otteeseen head huntereiden juttusilla lähinnä uteliaisuuttani. Vajaat kymmenen vuotta sitten eräs head huntereista totesi minulle, että he kutsuivat minut keskusteluun pitkän harkinnan jälkeen, koska on tunnettu tosiasia, ettei se Vähänen sieltä Veikkauksesta minnekään lähde. No, nyt lähtee!

Olen saanut tehdä yli 28 vuotta töitä suomalaisissa rahapeliyhtiöissä isojen ja mielenkiintoisten haasteiden parissa. Noihin vuosiin mahtuu upeita osaavia ammattilaisia, jotka varmasti menestyisivät ja ovat itse asiassa menestyneet muillakin aloilla ja toisissa yhtiöissä. Mielestäni on täysin väärä käsitys, että monopoliyhtiössä ei tarvitse tehdä mitään ja rahaa tulee ”ovista ja ikkunoista” tekemättä mitään.

Minulla ei ole tarvetta puolustella tai arvostella Veikkausta yhtään mistään. Olen vain aidosti sitä mieltä, että pääsääntöisesti yhtiö on toiminut hienosti. Kaikille sattuu virheitä, vaikka ei pitäisi, mutta se on inhimillistä. Kaikista asioista en ole ollut, enkä ole, samaa mieltä, mutta ei kukaan voi aina saada tahtoansa läpi. Joskus tämän asian ymmärtäminen ja hyväksyminen on vaikeaa ja niin se ollut välillä ollut minullekin.

Uskon edelleen olevani yksi Suomen parhaista rahapelialan asiantuntijoista. Tunnen rahapelitoiminnan lisäksi myös rahapelijärjestelmät paitsi Suomessa niin myös monissa muissa maissa. Koen, ettei tälle osaamiselleni enää ole ollut Veikkauksessa todellista tarvetta. Olen ajautunut tilanteeseen, jossa arvostukseni yhtiön ulkopuolella on merkittävästi korkeampi kuin täällä kotikentällä. Ihminen yleensä kaipaa arvostusta ja sitä minun nyt pitää yrittää etsiä muualta.

En ole vielä toistaiseksi tehnyt lopullisia päätöksiä, mitä tapahtuu seuraavaksi. Todennäköistä on, että heittäydyn yrittäjän maailmaan, jossa pääsen toivottavasti tekemään asioita, joita oikeasti osaan ja joista nautin. Rahapeli- ja urheilumaailmat ovat minun kotikenttiäni ja niistä en luovu jatkossakaan.

Kiitos ja kumarrus kaikille nykyisille ja entisille työkavereilleni ja yhteistyökumppaneille. Rahapeliasioissa saa olla jatkossakin yhteydessä. Nähdään myös raveissa!

Terveisin

”rahapeliguru”-Jari

Bye-bye!

This blog will be quite different compared to my former ones. This is a personal one and if you would like to learn something about the gambling business, you should wait the next blog and skip this. If you would like to know me better, you should continue reading…

Over 28 years is a long time. Probably some of the readers haven’t even lived as long time. That’s anyhow the period which I have been honored to work with the Finnish gambling operators. I started in the Horse Betting company and spent most of my time with Lottery & Sports Betting operator and now have worked last 3 years in the new Gambling company (lottery, sports betting, horse betting & casino). I could call myself as a veteran of gambling business although I’m not ready to admit that I’m old – mentally I’m still a young guy!

As you could guess from the title of this blog, it’s time to say goodbye for Veikkaus. I have mixed feelings about that. At the same time, I’m excited but also sad. I called old Veikkaus as my own company and that was my honest feeling. It might sound strange when someone is calling state-owned monopoly company as his own company, but that was the feeling I had. The marriage with the new Veikkaus hasn’t gone so well and I have had big difficulties to get that same feeling. To be honest, it hasn’t been even close to that. I have tried, but nothing has helped, and I haven’t been able to give my best.

If I use comparison from my sport, football, I would say that I’m still one of the best players who could play in almost whatever position. But as you know, it’s not only about the personal skills of players but also about the team’s tactic. Sometimes it happens that skillful player doesn’t manage very well when the way of playing is not suitable for him/her. I think that this is the case now with me and the new Veikkaus. They don’t need my style of a player anymore. I have been used to have an important role in the team and lately I have been mainly on the bench. That’s why I have now asked for a transfer to somewhere else.

I’m not 100 % sure what will happen next. Officially I’ll be Veikkaus employee still two months and after that there will be some restrictions where I could work. My “SBC Events friends” Rasmus and Andrew have offered me opportunity to act as their advisor until I could start real working again. It’s good to continue in the gambling business also during my “personal break”.

Of course I have already plans for the future. I’ll probably establish own gambling consulting company together with my partner. I’ll tell you more about that when it’s sure that we’ll do it. Anyhow I’m excited about possibilities to work with other gambling operators and suppliers and other companies related to our business. Although my operational level experiences are almost only from Finland, I’m sure that we could give profitable advices to all gambling companies globally. Let me know if you are keen on having cooperation with me/us. You could contact me via LinkedIn or send me email to: jarivahanen65@gmail.com !

THE FUTURE OF HORSE BETTING IN NORWAY

I’m deep expert on horse betting and I understand horse punters very well, because I’m one of them! I believe that horse betting customers are thinking about the same way globally and that’s why I’m ready to share my knowledge from Finland and try to give views and advices to other markets. But, to be honest, I’m not 100 % sure if I could give good advices for example for Norwegian decision makers, but I’ll try to do it.

There is monopoly-based gambling legislation in Norway. Norsk Tipping is the big state-owned lottery company which is taking care of lottery products, VLTs and sports betting but not horse betting. There is another company (foundation) called Rikstoto which has monopoly for horse betting. Rikstoto is owned by horse racing associations and the profit is going to that industry.

Rikstoto managed extremely well about ten years ago when there were lots of restrictions for the development of Norsk Tipping. The sales of horse betting increased from the level of 250 M€/year to the level of 350 M€ in few years. They almost reached 400 M€ in 2012 and again in 2017. But now Rikstoto has faced big challenges and they have gone down to 350 M€ level and their future doesn’t look like very promising.

Horse betting seems to have global challenges to compete against other gambling areas. There are just few countries where horse betting is still developing well, but mainly that business is suffering quite a lot. I think that the main problem is actually inside the sport, horse racing, and not so much inside the horse betting. When horse racing is not ready to make big changes, they can’t expect good results in the future. Actually, in many cases they are expecting those results which are unrealistic ones…

I don’t know well enough which are the main problems in the Norwegian horse racing and that’s why I’m not able to give advices to that. But I have some ideas what the main challenges in horse betting might be and I’ll tell my views about that. I know that it’s illogical compared to what I just wrote in previous paragraph where I told that the main problems are inside horse racing not in horse betting, but don’t concentrate on that logic too much now.

Rikstoto is using more and more the Swedish horse racing in their horse betting. They are commingling with ATG daily and the role of Norwegian horse racing in horse betting has decreased rapidly. They have reduced the number of Norwegian horse racing events. In principle that’s not bad, but the way how they have done that is not good at all. There are nowadays many days without horse racing event in Norway. Maybe the biggest challenge is that they have taken away some big Saturday races. I know that the reason for that has been to raise the price money in the other races, but from customer/horse punter point of view it is not good solution.

Those Swedish races with bigger turnover and jackpot level are good for the most active horse punters like me. It’s not big problem for active customers to get information from Sweden and it’s easy to follow those races too. Big turnover and higher jackpot make horse betting even more attractive for active horse punters. BUT what that development has meant for normal, not so active, customers and for potential new-comers? The mass media is not following horse racing as much as they used to do before, because from their perspective there is no reason to report on the Swedish races. Local big events would get more publicity at least in local media and that might interest not so active customers too.

One of the key issues is to understand that the needs of customers are not same! It might be a good solution in the short term to concentrate on serving active customer, because they are bringing the most of the money, but that development might cause big challenges in long term. How you will get new customers and activate your average customers? The motivations of horse betting are probably totally different to them than to active horse punters.

Norway seems to take responsible gaming really seriously and due to that they have already introduced the maximum loss limit for the customers of Norsk Tipping. That 2000 €/month limit is high limit for “normal customers”, but it’s low limit for active sports and horse punters. There is a plan to introduce that limit for the customers of Rikstoto too. It was supposed to be there already from the beginning of this year, but now they have postponed that max 2 years. As far as I know the most of Rikstoto’s sale is coming from quite small group of customers. Due to that the max loss limit would be dramatical from business results point of view. The research company Oslo Economics has estimated that due to common development + that new max loss limit the total horse betting market in Norway might fall 27 % by 2026. I think that this is very optimistic scenario. I would make a bet that it will drop much more!

I’m not saying that this maximum loss limit is bad idea. It’s good solution from the responsible gaming point of view, if regulator could control all gambling – also offshore operations. Norway is trying to keep monopoly-based gambling solutions and that’s why they are doing all needed to maintain that situation. They have introduced internet and payment blockings and are planning to introduce even tighter version of that. It’s logical that they have decided that max loss limit, when the prevention of gambling problems is the main reason to maintain monopoly-based solution. The potential next new feature in the maintenance of gambling monopoly is the merger of Norsk Tipping and Rikstoto. If that will happen, then there would be just one gambling monopoly in Norway.

In that case the max loss limit will effect on horse betting much more than in current situation, because as far as I have understood the max loss limit would be still 2000 € and that would cover all gambling. If there are two separate companies, the max loss limit will be per company. I’m sure that maximum loss limit will cause problems to keep active punters as customers of Norwegian company. There is big risk that those active horse punters will continue to play big amounts and they will find out ways to do that directly to ATG. Actually, that is also the problem when we are talking about blockings. It’s easy to avoid internet blocking and quite easy to avoid payment blocking. Those are good prevention tools for normal customers but don’t work for active customers. So, blocking works among customers who are not using lots of money and don’t work among customers who state is willing to control.

I have already written about our experiences from that kind of merger here in Finland. I would shortly say that the results haven’t been as good as we expected them to be. There are many reasons for that, but is there anything what Norway could learn from our experiences? In big picture that kind of merger would help regulator to control total gambling. It would also reduce competition between existing two companies and that would reduce marketing and gambling at least a little bit. In the best case the merger would help to reduce the cost level, but it will happen in long term. In short term it might even increase the costs due to mainly IT-costs. I would say that the merger of Norsk Tipping and Rikstoto would be good solution if Norway is mainly thinking about responsible gaming.

What that kind of merger would mean for horse betting and horse racing? Here in Finland it has meant decrease of horse betting (about -5 %/year) but more money for horse racing industry (about + 15 % compared to 2016) – in short term at least. We have noticed that horse betting can’t compete against modern type of new games like live betting and online casino games. When all games are in one company, the company can’t pay any extra attention to one specific game group. I don’t believe that it’s possible to get so many new horse betting customers if they are not interested in horse racing. It should be horse racing industry, mainly racetracks, who should concentrate on marketing.

The Finnish parliament decided that the money for horse racing and breeding industry is based on the total revenue of Veikkaus. Horse industry gets 4 % of our total revenue and it has nothing to do with the turnover and profit of horse betting anymore. I don’t like that model, because nowadays there is no motivation for racetracks to think about horse betting. We recognized that risk before the merger but failed despite of recognition. If it would be legally possible, I would develop the “mixed model” where the money for horse industry would come partly from the total profit and partly from horse betting. I think that Norway should try to introduce that kind of model if they will do that big merger. The State of Norway should spend enough time for discussion with horse racing industry to make model which horsemen could really support. Otherwise they will have “some” difficulties ahead.

It’s always dangerous if you decide something without any analysis. When the state is considering changing the gambling legislation, they should analyze all potential alternatives. Hopefully the Norwegian state would also think about license-based model. Of course it’s ok to continue with monopoly if the decision is based on professional analysis. The decision makers should set up goals what they are trying to reach by legal changes and then analyze what different solutions would mean from those perspectives and select the best model for that whatever it will be. It’s stupid to drop some alternative away due to “feeling” reason.

Although I haven’t made any serious analysis of the Norwegian gambling market, I would guess that from the financial point of view the best model for horse racing industry could be license-based model. Of course there are many features which will effect on that – like how good negotiators they are.

CONSOLIDATION OF GAMBLING BUSINESS

I’m used to say that I’m working in lottery business and/or in sports betting business. After our big merger I have used gambling business which includes also casino business. I have noticed that quite many lottery experts use word “gaming” instead of “gambling” but to me gaming is mainly casual and social games – not real money games which we are offering. I know that the reputation of word “gaming” is much softer than “gambling” but that’s not the core issue.

In which business we are working? That’s still relevant question! But the reason for that is not those words gaming and gambling. It’s important question because we have to know what our core business is, and we should know who our competitors are. We are used to think that other gambling companies are those competitors and they still are, but nowadays there are many other companies too. I would say that we are part of the entertainment business! That has been obvious for physical casinos already long time, but I’m not sure about lotteries and sports & horse betting companies.

I have said this many time before but I say it again: the most important feature for success is to understand your customers and their needs! You could serve them much better if you know their real motivations for buying your games. That motivation is not always the same and could vary from time to time. I believe that the main motivations for gambling are dreaming, spending free time and following sports.

We have already noticed that some quite big companies which are used to operate in other businesses have entered to gambling business. The first change happened when gambling technology suppliers moved to operation side. Those companies were used to operate games on behalf of lottery operators for example in US market. Probably technology suppliers noticed that there were bigger profit opportunities available if they have gambling licenses by themselves. Anyhow they have managed to get gambling licenses from some countries, but at the same time they are still taking care of their core business and selling tech for gambling companies. So, those companies have moved to gambling business but haven’t left their original business. That has caused slightly difficult situation for gambling companies when their technology partner is their potential competitors.

As I already said, we are competing in the entertainment market and traditional entertainment companies have realized that too. I know that big media companies are considering how they should react on gambling business. Especially the opening of sports betting in US has put more speed on that kind of analyzes. I wonder if there is any media company which have TV-rights for sports which is not planning their strategy for sports betting? I’m not saying that those TV-companies should move to gambling operations, but they should understand how they could utilize their rights in sports betting business. The entrance of big media companies will affect on gambling business a lot because those companies have lots of customers and they understand their needs. It’s always easier from customer point of view if you could get all services from one place.

Third and the most important and interesting “newcomer” would be GAFA companies (Google, Amazon, Facebook & Apple). Those giant companies have based their business models on customer data and in principle they could run whatever business with that excellent capability. I don’t have any “inside information” how actively those GAFA companies are in gambling area, but I would be surprised if they haven’t made any survey around that business area. If they, or just one of them, would enter to gambling business, it would mean dramatical change. To be honest, I’m not sure how well current gambling companies would succeed against them. I would say that we should hope that they won’t come or at least won’t act as operators! Probably they are not willing to take the risk of losing their brand when the reputation of gambling business is not so high…

That consolidation would also mean something else than just new companies entering to our business. We have already noticed that some gambling companies have started other businesses than just gambling. We have example even from lotteries where some big companies have moved partly to technology direction. For example FDJ from France and Camelot from UK have invested quite a lot to technology development and are nowadays trying to sell their solution to other operators. Some other lotteries like SISAL (Italy) and SAZKA (Czech) have tried to utilize their gambling solutions in other business areas like selling different kind of tickets and give payment services. I know that many gambling companies are looking for solutions where they could link gambling and casual games and offer something totally new which wouldn’t be gambling as we have used to define it. I believe that we shall see consolidation even more in near future.

I think that consolidation of different businesses would happen and succeed if there are possibilities to utilize your current competences somewhere else than you are used to do. If you have lots of information and understanding about your customers, you could use that almost in all possible business areas and that’s the main reason why those GAFA companies have managed so well. It’s much more difficult to enter in totally new area where you don’t have any expertise, capability or assets. That might be possible for start-ups, but for big existing companies it would be stupid risk. You should understand where your strengths are and try to find out new ideas where you could utilize them!

THE CHINESE GAMBLING MARKET

It’s well known fact that Macau and Hong Kong are the leading areas when we are talking about physical casino business (Macau) or horse betting business (Hong Kong). But how much we know about the Chinese gambling market? I have now visited some times in Beijing and tried to understand more what is situated in there and what might happen in next few years.

It’s obvious that when the country has about 1,4 billion inhabitants, there is huge business possibilities in all business areas and that’ the case of course in gambling business. But the State of China has prohibited gambling actions and is also controlling that quite closely. Anyhow it has said that the illegal market in sports betting and casino business is huge in Asia but it’s that the case also in China? According to estimates the illegal interactive gambling business in China is just about 1,5 B€ (GGR) which is not so much compared to the size of the country.

There is a general level prohibition on gambling activities in China, but there are few exceptions to that. There are two state-owned lotteries which have licenses to operate lottery games and limited numbers of VLT machines (video lottery terminals). They are only allowed to run lottery business in retail channel, so digital online business is not allowed – at least yet. As I already said, the Chinese state is actively fighting against illegal gambling activities and especially against cross-border operations. There are quite heavy punishments in they legislation for illegal gambling and I’m sure that they will use those tools if they manage to catch illegal operators.

Ministry of Finance has approved two licenses for lottery operations – the other one is for China Sports Lottery (CSL) and the other one for China Welfare Lottery (CWL). In fact, there seems to be a little bit strange duopoly situation in that market. As far as I know, those two licenses are almost the same. If the other lottery would get permission to introduce something new, the other one would probably get the same kind of permission. The only difference is now in sports games area where Sports Lottery has license to have some lottery style sports games.

It’s not big surprise that CSL and CWL are the two biggest lotteries in the world. Now CSL is slightly bigger than CWL but they are about the same size. The sale of both lotteries seems to be at the level of 30 billion euros a year – the total sale is about 60 B €/year. The development of sales in last ten years has been huge but now both lotteries have faced big challenges. Their businesses have suffered a lot this year and decrease has been so big that the Chinese state should consider some changes to help that business.

What kind of big changes there might be? I’m 100 % sure that China will continue with monopoly (duopoly) based system, so there won’t be any other licenses although the local governments have had and still have quite big role to decide practical level issues. Based on my knowledge the role of local governments won’t become bigger in gambling area but rather will decrease. I believe that the Chinese state will try to control even more the gambling business than they have done until now. It might mean two changes – either huge merger of CSL and CWL or tighter integration of those two companies and their local organizations. I don’t believe that this huge merger will happen very soon. That’s why I think that both CSL and CWL will have new organizational structure where central company will have bigger and more important role than they have at the moment.

The other big change which I expect to see soon is online lottery business. Online purchase of some lottery products was allowed for a while in 2015 but lotteries had to close that operation quite soon. The Chinese state released online lottery directive already in 2016 when they suggested that online lottery sales would be allowed, but nothing has happened in practical level after that. I guess that now when both lotteries have faced problems in their businesses, the government will give them license to have limited offering in online channel. I believe that the legislation will change next year and CSL and CWL could start online business in 2021. Chinese people are using mobile payment more than I have seen anywhere else and that’s why I believe that mobile lottery might be big success in China.

The third potential big change might be sports betting. CSL is running some football and basketball sports games but there is no real official sports betting in China. There would be huge business potential available in sports betting, but the Chinese politicians might consider sports betting as “too heavy gambling” and that’s why I don’t believe that fixed odds sports betting would be allowed very soon. CSL and CWL might have chance to get more wider license for lottery style sports games (pool-based games) in next few years.

As a short summary I would say that there will be some big changes in the Chinese gambling market, but it won’t open big business opportunities for foreign companies at least in short term. The State of China will keep tight control on that and will help their own companies to develop their businesses. Some good gambling technology suppliers might have business possibilities if they managed to establish joint venture companies together with Chinese operators.

ABOUT US SPORTS BETTING MARKET AGAIN

I wrote blog about US Sports Betting 7 months ago. I’m probably too short-tempered when I’m going to write about the same issue so short again, but I’ll do it. If you remember the previous US blog well, I would say that not so much has changed yet, but I have got some new information and ideas after that.

I start with the regulatory situation of US Sports Betting market. Now, or actually few weeks ago, there are 13 states which have already started Sports Betting. That’s some more than it was in spring 2019. There are also 6 states which have passed the legal process and where Sports Betting would be legal but where no one has started it yet. If I have understood it correctly, there are also something like 5 states where the legalization process is actively going on and where Sports Betting will probably be legal at the latest next year. So, it seems that Sports Betting will be legal in half of states quite soon. There are still some big states like California missing from that list.

How big is the unregulated US Sports Betting market now? I’m afraid that no one really knows, but I trust on H2GC research company. H2GC estimates that the handle of unregulated Sports Betting market is 196 billion $ and gross gaming revenue (GGR) of that is about 10 B$. So, we are talking about huge market and market potential for newly regulated companies. I don’t know how big share of that the regulated companies are supposed to get from that unregulated market, but I believe that it will be big share anyhow.

H2GC has also given estimates for the growth of regulated US Sports Betting. They are expecting it to reach the size of 9 B$ in next 10 years. That would mean almost 1 billion dollars growth every year because it’s now a little bit less than 1 B$. It seems that there will be 24 states which have legalized Sports Betting in 2020 and there will be more states which will do that later. According to estimates there will be 38 states where Sports Betting will be legal until 2024.

It’s obvious that US market is not working in the same way than European or Asian Sports Betting market. We have noticed that at least now when some big Europe based companies have entered to US market. US Sports Betting is based really much on US Sports and different bet types than we used to have here in Europe. The three main sports in US Sports Betting markets are basketball (about 29 %), baseball (26 %) and American football (18 %). The most popular bet types are “Las Vegas style” bets. As I already wrote in my previous US Sports Betting blog, I think that it will be hard and almost impossible to beat Las Vegas bookmakers in those sports and bet types. The new companies should introduce something else.

The share of digital channel(s) has been quite small, but I’m sure that it will increase a lot in the future. H2GC has estimated that after ten years from now the size (GGR) of online Sports Betting will be about 6 B$ and landbased about 3 B$. As you know it’s easier to utilize skills in data and customer areas in digital channels than in landbased business. At least until now the Las Vegas based Sports Betting operators have concentrated on business which they have used to run. That might be “weakness” where the new legal operators should try to hit?

I don’t have much new information about the Sports Betting plans of big media and technology companies. They actions might change the whole Sports Betting market, not only in US but also globally. It’s not sure at all that they are going to act as Sports Betting operators, but I believe that at least those media (TV) companies who have Sports TV-rights will utilize those rights somehow in Sports Betting business too. There is already one interesting example. Score is offering maybe the most popular live results service of sports events to tens millions of customers. They introduced own Sports Betting offering in New Jersey some months ago and business results of that seem to be good ones. I’m keen on seeing what will happen if even bigger media companies will do the same…

It’s not sure what the State Lotteries will do. There are just four lotteries (Delaware, Oregon, Rhode Island and West Virginia) which have started their own Sports Betting operations. Last week I heard from Patricia McQueen from NASPL that there are few more states where lotteries have already license to start Sports Betting, but which haven’t yet done that. As far as I understood right, Montana will be the fifth one quite soon and probably New Hampshire and District of Columbia will follow later. Tennessee will also start Sports Betting quite soon, but there lottery will act as a regulator which sounds to me really strange…

The business model of existing Sports Betting lotteries seems to be mainly based on casino model where they are offering Sports betting in casinos and/or at the racinos (race track casinos). Just Oregon lottery has introduced mobile based model and probably New Hampshire lottery will do the same. I’m not sure how well that casino-based business model could serve the potential customers? I’m afraid that lotteries won’t succeed in Sports Betting competition if they won’t develop more modern business models. They should concentrate on utilizing their wide customer base. It’s of course easy to say but I would be keen on doing that also in practice if there would be need for help…

WHY WE NEED INNOVATIONS?

That question was asked from me two days ago. I’m not 100% sure what I answered to that, but I’ll tell you what I would answer now.

European Lotteries (EL) organized Innovation seminar here in Helsinki this week. My company Veikkaus acted as a hosting company and I believe that our team managed very well. The Innovation working group of EL did also excellent work when they planned the seminar program. We managed to get well-known keynote speakers like Dietmar Dahmen and Dave Caygill to our seminar. I’m not sure if I learnt anything specific from their presentations/shows, but at least I’m even more sure that we really need innovations! I had great opportunity to open that event and suddenly I was also asked to say the closing words and there my colleague Suvi asked the question in the heading of this blog.

The world is changing all the time. Consumers, and our customers, have more opportunities available. The competition has become tougher than it has ever before been and I’m sure that it won’t be easier anymore. I think that lottery companies have trusted that monopoly situation will secure them from the competition – I’m afraid that there still are many lotteries which are thinking that way… I’m sure that consumers don’t think that there is separate business area called lottery business or not even gambling business. Consumers just decide how they are going to use their money and lotteries and other gambling companies are in the middle of that “battle”.

If company would like to succeed in the competition, it should offer something special and different which customers would like to buy or pay for. If you are offering just an average product you could compete only with price which should be lower than the other companies have. It’s obvious that lotteries don’t have the lowest prices or the highest payout percent. If you can’t compete with the price, you should have something different compared to other companies. That’s why we need innovations!

I think that it’s already clear from my previous blogs that in my mind the customer is the King (or Queen)! We must always think about what the best solution for our customers is. It won’t help us, if we manage to develop excellent technical solution but consumers are not interested in that at all. Consumers are used to use service from great companies like Google, Facebook or Amazon and we should be at the same level than those giants are. How we can do that when we don’t have as much resources than they have? Cooperation might be the way to do that. Companies should utilize start-ups and their innovation capabilities. We should also find out good business partners, because we can’t do everything by ourselves. Companies should concentrate on areas where they are good and have strengths and let the partners take care of other issues.

The difficulty in innovation is that you don’t know what you are going to get there, or will you get anything. The scope of innovation work should be 2 – 5 years. If you are looking for something quicker innovation is probably not the solution. By improvement and development you could get something new quicker, but then the result won’t be so radical. Companies should allocate resources to all those three areas (improvement, development & innovation), because we can’t wait years to get something totally new.

Dietmar Dahmen spoke lots about customers and trust. That sounded very familiar to me. It’s extremely important that your customers would trust on you! It would be great to innovate products, services and above all business model which would responsible but at the same time profitable. I’m not sure how to make it, but I’m so keen on trying to do it. The result should customer oriented, personalized, easy, fun, modern and profitable solution for gambling business. Let’s innovate and try to make it happen!