Jun 2010 Financial News

New lottery games coming amid sluggish Super Lotto sales

Jun 09, 2010

Two new lottery games are being earmarked to hit the streets by September in a bid, gaming company, Supreme Ventures Limited (SVL) said, to hold market interest even as the firm stares at a big earnings hole left by its underperforming Super Lotto. On the market since the middle of last year, the Caribbean-wide game has fallen far short of the US$100 million or J$8.8 billion dollars in annual revenue it was being relied on to bring into SVL's coffers as in the five months to December last year, following its August launch, Super Lotto brought in sales receipts of only J$277 million (approximately J$2.4 billion), the company said. Now a Pick 2 and a Pick 4 game are being structured for the wagering market amid the roughly J$3 billion yearly revenue shortfall the company faces.

Speaking at the firm's annual general meeting in Kingston late last week, president and chief executive, Brian George steered clear of putting a figure to the expected take from the new games but positioned them as being in keeping with the expansion of the lottery segment of the business.

"We will introduce two new games, Pick Two and Pick Four as an opportunity to revitalise the lottery game portfolio and to leverage the success into further growth," George told shareholders.

No details of the new games were given as the company president said structure and cost were still being determined.

"They are daily games and in terms of the cost, all those details haven't been resolved as yet," George said.

"Pick Two is just pick two numbers, a game in between Cash Pot and Pick Three (while) Pick Four will be a game just above Pick Three, but in terms of actual rules and final structure, we will have to wait a little for that," said George.

While noting that ticket costs have not yet been settled, the SVL CEO said the prices would be "appropriate" when decided.

Committed to new games

He told Wednesday Business that SVL was committed to the new games as a way of providing more choice to consumers in a bid to keep interest in the gaming products even if they did not make huge revenues but did not rack up losses.

So far SVL has a total of seven games in its portfolio: Cash Pot, Pick Three, Win Quick, Dollaz, Lucky Five, Lotto and Super Lotto.

Cash Pot, with a minimum wager of $10 on any one number from one to 36 and paying 26 times the amount bet, has proven the most popular.

Pick Three is a game which allows players to choose three numbers from 0 to nine for winnings of up to $600,000 in each draw. This game, according to George in his presentation to shareholders last Friday, has shown tremendous improvement with revenues of $2.4 billion over the last three years.

While Super Lotto has performed below expectations, due, George said, to increased competition particularly in the Dominican Republic, the company took some corrective actions earlier this year. In March the previous $250 ticket pricing for the game was reviewed and $150 priced tickets introduced under a split system giving the purchaser the option of either ticket price. A winner with a $150 ticket will get a portion of the jackpot, while the full payout still applies to a single winner with a $250 ticket. Should there be simultaneous winners with both ticket prices, SVL said at the time, the jackpot would be split with the larger portion going to the higher ticket price holder. The game's performance will come in for further review, George said last week.

Meanwhile, the gaming company is said to be now in what it described as the final stages of market research for the new games.

"I Just had a meeting two days ago and we always do what we call a disaster check, or some consumer research to see, because typically we always have one and two options that we can provide," George explained.

Meanwhile the SVL boss remained optimistic in his outlook for 2010 despite the business having taken a 25 per cent sales hit from the recent west Kingston flare-up.

"The disruption in west Kingston resulted in some loss in lottery and sports betting sales due to the closure of gaming lounges in Kingston, May Pen as well as financial services in Kingston and Spanish Town," George disclosed.

About 30 per cent of the company's terminals, he said, are located in the areas affected by the gun battles which raged for days between security forces and criminals.

Company officials are buoyed by pending amendments to the Betting, Gaming & Lotteries Act to facilitate the introduction of video lottery terminals and other sports betting initiatives.

A new gaming lounge, Acropolis Portmore in St. Catherine is soon to be opened by Prime Sports Jamaica Limited, an SVL subsidiary.


Source:
Jamaica Gleaner
sabrina.gordon@gleanerjm.com
Wednesday June 9, 2010

http://jamaica-gleaner.com/gleaner/20100609/business/business3.html