The New Age of Lotteries in Germany

NordwestLotto, Germany's second largest lottery, is finding huge success on the Internet.

Last month, the company began offering Lotto and sportbooks options through its website, and the response from its client base has been overwhelming.

"We are delighted that we can now offer our main product--Lotto and Oddset--to our customers via the Internet," said Dr. Wortmann, CEO of NordwestLotto.

To make the jump to the Internet NordwestLotto teamed up with fluxx.com and its acclaimed Internet Lottery System.

Access Gaming Systems was also tapped in order to develop and design games to meet the demand of the German players.

The companies are tapping into a burgeoning market of online lotteries, with Germany being on the cutting edge of technology and regulation.

Fluxx.com, which saw 12 million Euro ($11.2 million) in lottery wagers in the first nine months of the year 2000, aligned itself with NordwestLotto and is the exclusive distributor for online lottery tickets in Nordwest's territory.

There are 16 other lottery companies in Germany, comparable to state lotteries in the United States, fluxx.com is the first company to secure such a deal for online tickets.

"Until today lottery companies themselves did not try seriously to enter the online arena," Fluxx.com spokesperson Stefan Zenker said. "The reason is clear: none of the companies want to cannibalize their traditional distribution."

This fear is understanding, considering there are over 24,000 lottery shops all over Germany. Zenker said the dilemma facing lottery retailers is nothing new for the Internet.

"Lottery companies have the same channel conflict that any other consumer good company has when it comes to e-commerce."

In addition to distributing the tickets, fluxx.com also runs the NordwestLotto site.

Zenker said the site does have its limitations.

"Only residents of the respective Bundesland are able to take part in the lottery and access the site," he said.

NordwestLotto has been able to carve a niche, even if it is only in one territory, by offering its services online.

According to Zenker there are 60 land-based casinos and 120 bookmaker stores in Germany. None of them are licensed to operate on the Internet; law in Germany prohibits online casinos.

NordwestLotto, Access Gaming Systems and Fluxx.com, meanwhile, will continue to strengthen their positions as being trendsetters in bringing lotteries online in Germany.