Internet Lottery Games for British Columbians

British Columbia Lottery Corporation last week rolled out its PlayNow Web site (www.sportsactionbc.com), becoming the second Canadian lottery operator in the last two months to launch real-money Internet games.

The new site is accessible to all BC residents 19 or older and offers four BCLC sports games: Sports Action Point Spread, Oddset, Over/Under and a new Football Pool.

Kevin Gass, vice president of corporate communications and marketing, said the Internet has changed the way society works, communicates and plays, and it was important for BCLC to stay ahead of the curve.

"More consumers are choosing to use the Internet to shop, bank and access government services," Gass explained. "By offering select lottery games on the Internet, we are providing an alternate way for our players to buy their favorite games."

That said, BCLC had to address important legal and social issues before taking on Internet sales. The group's legal department had to conduct a full probity check to ensure the operation would be in compliance with Canadian law. Jim Lightbody, BCLC's vice president of lottery gaming, stressed that BCLC is in full compliance with the law and can offer the online lottery games because it is the provincial Crown mandated to conduct and manage gaming. With its government mandate, he said, BCLC is the only organization that can lawfully offer Internet gaming in British Columbia.

Moreover, BCLC had to tackle the issue of problem gambling, and the solution was to set a limit of $70 per week. Additionally, winnings are capped off at $10,000; anyone who wins more than that on the site has to claim his prize at one of BCLC's offices within a year. Further, PlayNow has a set of stringent safeguards as well as a code of conduct for all Internet players and numerous checks in the registration process to keep underage gambling in check.

With protective measures in place, BCLC turned its focus to content, and the group is expecting a boost from the addition of the new football pool to its Sports Action lineup.

The game, available exclusively through the PlayNow Web site, features a menu of 15 football weekly games, with each game assigned a point spread or line. The player predicts the outcome of all 15 games for $5 and can win prizes by picking 12, 13, 14 or 15 games correctly. There's a guaranteed weekly jackpot of $10,000 (win or share) that grows until it's won.

More games are on the way. "Over the next three years, we plan to offer more of our most popular lottery games and interactive play products on the PlayNow site," Gass said.

As for design issues, BCLC's No. 1 concern was security.

"We focused on system integrity and security," Gass explained. "As a result, customers can feel confident they are purchasing lottery products in a regulated online environment they can trust."

Naturally, a user-friendly interface was important as well, and Lightbody is confident they achieved that.

"Everything is easy to use," he said. "Just point and click."

The Big Picture

BCLC is the second provincial lottery in Canada to go online; Atlantic Lottery Corporation (ALC) was the first with the launch of PlaySphere on Aug. 24. The two groups are North America's only licensed Internet lottery operators.

North America's traditional lottery operators have been slow to embrace the Internet, but Gass sees that trend changing.

The future in this sense could be dictated by the success of ALC's and BCLC's Internet lottery ventures.

Despite the potential, Gass expects Internet sales to represent a small portion of BCLC's revenues in the short term.

"The experience of many European jurisdictions that currently offer lottery games through the Internet and within their jurisdiction shows that sales revenues are relatively modest," Gass said. "The online portion usually represents 5 to 8 percent of their total lottery business, and we are hoping to hit that mark within the first year or two."

But even if Internet sales represent only a single-digit percentage of total sales, he said, the company predicts that revenues for the PlayNow site will reach $22 million in its fist fiscal year of operation.

He added that revenues from BCLC's Internet sales will combine with revenues from BCLC's traditional lottery, bingo and casino gaming to benefit British Columbians. Last fiscal year, $720 million in net income was returned through government programs for health, education, social, community, charitable and municipal purposes.

Lightbody, meanwhile, is stressing that the move to the Internet doesn't mean BCLC will scale back its production of traditional lottery products.

"We're committed to our traditional lottery retailer networks and will continue to work with them to provide new promotional opportunities and innovative games, " Lightbody said. "We plan to spend $30 million over the next three years in new point-of- sale terminals, customer transaction display units, self-service technologies and new game developments."