Developing universal principals for the Lottery community Smart Tech New York 2013 The transatlantic dialogue forum by Philippe Vlaemminck

EU Council conclusions of December 2010 on lotteries THE SUSTAINABLE CONTRIBUTION OF LOTTERY AND RELATED SERVICES TO SOCIETY 13. RECALLS that all EU Member States have different types of state lotteries or lotteries licensed by the competent state authorities, providing lottery services. (…) 15. RECOGNIZES that contributions, in particular from state lotteries or lotteries licensed by the competent state authorities play an important role for society, via for example the funding of good causes, directly or indirectly where applicable. 16. AGREES that this specific role should be recognized in discussions at the European level. Is this not a universal question?

Problems and issues, although somehow addressed in a different way, are common to Lotteries around the world Problems often started in the EU, EU Lotteries & US Lotteries have today comparable discussions on state competence in relation to Internet gambling The EU-US FTA negotiations require to keep a close eye on this issue New threats emerge which can have a global impact : -Manipulation of sporting events, corruption, ML and TF -The globalisation of professional cybercrime -Lotto gTLD ICC dispute of EL/WLA against Afilias Ltd -Banalisation of CSR through remote gambling industry The facts (-)

Lotteries around the world: -operate in comparable ways -share in practise the same goals & values - could therefor benefit from universal standards to be used in the various political arenas to promote their model - create societal benefits The facts (+)

The European Lotteries Resolutions ( ) as an example (Istanbul 2009) Lotteries are: Characterised by unity in diversity, (…) and despite differences (…) share the same fundamental values and act on them Placing social and public order concerns over purely economic interests Advocating an active approach founded on cooperation between members Making a long term commitment to the public interest

The European Lotteries Resolutions ( ) as an example II (Barcelona 2010)Lotteries: Affirm that the only basis for a sustainable policy is a national authorization system whereby the internal consistency has to be defined at national/subregional level Advocate that a coordinated approach is necessary to tackle illegal operators and guarantee law enforcement Affirm that the practise of off-shore licenses is abusive Advocate that changes require a cautious approach (Helsinki 2011) Lotteries: Affirm the need for a common framework to address security, fraud & fight against ML and a world wide dialogue to regulate sport integrity

The Lottery Partnership Pact : is there space for a universal approach? Can we promote a new sustainable partnership pact with: society, other lotteries, suppliers/vendors How could we benefit from such approach?

partnership with society : Embedded in the state ( the EU principles of conferral & subsidiarity) It should be borne in mind that, in the specific area of the organisation of games of chance, national authorities enjoy a sufficient measure of discretion to enable them to determine what is required in order to ensure consumer protection and the preservation of order in society and – provided that the conditions laid down in the Court’s case ‑ law are in fact met – it is for each Member State to assess whether, in the context of the legitimate aims which it pursues, it is necessary to prohibit, wholly or in part, betting and gaming or only to restrict them and, to that end, to lay down more or less strict supervisory rules (Garkalns, paragraph 38 and the case- law cited). ( CJEU, 24 January 2013 Stanley Bet v. Opap, C ‑ 186/11 and C ‑ 209/11,§44) Solidarity ( benefit society) Integrity ( no compromise on values) Active precaution (RBA, monitoring, IA, education) Active precaution (RBA, monitoring, IA, education) the public service obligations the public service obligations

partnership with other Lotteries The cooperative model vs. the competitive model It is also common ground that, unlike the introduction of free, undistorted competition in a traditional market, the presence of that kind of competition in the very specific market of games of chance, that is to say, between several operators authorised to run the same games of chance, is liable to have detrimental effects owing to the fact that those operators would be led to compete with each other in inventiveness in making what they offer more attractive and, in that way, increasing consumers’ expenditure on gaming and the risks of their addiction (see, to that effect, Case C-203/08 Sporting Exchange [2010] ECR I-4695, paragraph 58). ( CJEU, 24 January 2013 Stanley Bet v. Opap, C ‑ 186/11 and C ‑ 209/11,§45) Lotteries do not compete against each other, but look for ways to cooperate in improve their offer and keep the consumers in a safe harbor Bookmakers and internet gambling operators compete with very high, addictive, pay out ratios and aggressive direct marketing

partnership with suppliers/vendors Lotteries need to be able to continue to respond to changing demand/desires in the market to execute their PSO, but also to improve the fight against illegal offers, to look at the broader societal impact and to respond to legislative changes ( like AML). This requires a.o. a “controlled” expansion of their activities and an ongoing dialogue with their suppliers to search for the proper answers for business, the community and regulatory developments “It is possible that a policy of controlled expansion in the betting and gaming sector may be entirely consistent with the objective of drawing players away from clandestine betting and gaming — and, as such, activities which are prohibited — to activities which are authorised and regulated. As the Belgian and French Governments, in particular, have pointed out, in order to achieve that objective, authorised operators must represent a reliable, but at the same time attractive, alternative to a prohibited activity. This may as such necessitate the offer of an extensive range of games, advertising on a certain scale and the use of new distribution techniques.” ( CJEU, — Joined cases C-338/04, C-359/04 and C-360/04, Placanica, e.a.)

How could we benefit from such approach ? In various jurisdictions there is a fierce political debate on liberalising Internet gambling and short term profits This could result in important losses for society ( both taxes and contribution to good causes) and undermine public and social order Understanding the “universality” of the Lottery model and the common strenght of Lotteries around the world: could have an important impact on the political dialogue and, could have an important impact on the political dialogue and, contribute to overcome the transnational problems ( like manipulation of sport events, ML & TF, off shore gambling) contribute to overcome the transnational problems ( like manipulation of sport events, ML & TF, off shore gambling) It is not just another set of principles, but a real partnership pact = a common commitment to defend the cause of Lotteries and promote the value sharing of Lotteries around the world

“Companies must take the lead in bringing business and society back together” “The solution lies in the principle of shared values, which involves creating economic value in a way that it also creates value for society by addressing its needs and challenges” “Shared value is not social responsibility, (…) but a new way to achieve economic success. It is not in the margin of what companies do but at the center.” SHARED VALUES beyond CSR (Porter, M.E. & Kramer, M., Creating Shared Values, Harvard Business Review, /2011, p.4)