Business overview
October 2015
Content
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5 5 5 6 6 6-7 7 7 8 8 8 89-13
9 9-11 11 12 12 13OVERVIEW
EQUITY STORY
Lottoarena is legal and offers secure investment Lottoarena is positioned clearly
Lottoarena becomes leader in quality Lottoarena offers growth potential
MARKET ENVIRONMENT AND COMPETITION
The Gambling MarketMarket environment Overview
Outlook for Germany The E-commerce market
The online lottery market in Germany Competition
Strategy
Years of Experience
On the rout to a modern gambling and entertainment company group
Active marketing Business-services
COMPANY PROFILE
Business modelStrategic approach
Company group structure Shareholder structure Financial planing Managing directors
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MARKET AND COMPETITION
ENVIRONMENT
Online lottery Legal marketmarket (Germany) situation in Germany
Development of revenue generated on the regulated lottery market
Customer expenses
Revenue by Lottery products Commissions of the
The German market
German company Prognosis for Germany 2015-2020 Competitors
Lottoarena cost comparison
EUROPEAN MARKET
The European marketPrognosis Europe 2015-2020
SWOT-ANALYSIS
SUMMARY
CONTACT DETAILS
OVERVIEW
Lottoarena
Online brokerage of licensed lottery products under the brand
State
Market volume of the European lottery market is estimated to a total of 33 Billion € over the next 5 years
An
Scalable
Financing “Lottoarena”.
gambling monopoly in Germany has been overturned the EuGH (European Court),New gambling legislation was
by introduced on the first of July 2012 (Opening of the Internet and advertisement allowance)
experienced Team with extensive industry wide internationally connected network
expertise and a
Focused on the high margin player syndicates Finance and Management holding allows for a adaptation on changing framework conditions
flexible
business model: a high digressive cost development
earnings lever through
of growth authorised shares
through the allotment of already
Key Facts & News
Industry:
Basic Data
Name of the company: Seat of the Company:
Company registry No.: Telephone:
Fax:
Web-Address: Email:
End of fiscal year: Year of incorporation: Management Board: Media / Entertainment Online-Lotteries / Lottoarena Entertainment PLC Unit 205, Clerkenwell Workshops 31 Clerkenwell Close, London EC1R 0AT United Kingdom 07633179 + 44 845 055 8260 + 44 870 622 1782 www.lottoarena-plc.de [email protected] 31.05. 2011
Thomas van Rooij (CEO) Katja E. Fligge (CCO)
Lottoarena is legal and offers secure investments
Lottoarena Entertainment PLC is a financial holding who is active on the provision and brokerage of state licensed lotteries on the internet (www.lottoarena.de) via her subsidiaries. The company group enters on behalf of the customer game agreements for lottery products such as Lotto 6aus49, EuroJackpot, Euromillions, SuperEnaLotto and El Gordo with the respective lottery organiser.
This includes, that this takes place in a legally spotless frame – only in this way a reliable Return on Invest can be achieved. The company aims to position itself as a European provider for lottery products on the Internet.
Next to an existent License for Germany, the company has been provided with a promise for a so-called European class 3 License in May 2015. This is a license which allows to provide sub-licenses to subsidiaries and/or partner companies in order to operate and offer
lotteries Europe wide.
Lottoarena is positioned clearly
The company has positioned itself as a provider/broker of state licensed Online-Lotteries and has developed her structure in the area of marketing and sales accordingly in order to occupy with her core product the EU- internal market.
In markets where it seems sensible, the company will offer complementary products. These are normally player syndicates. Apart from that, the company will offer further elements from the value added chain in the lottery segment as a service (White Label IT-Technology). The brand Lottoarena is to be solidly anchored in many European Markets and known as a reliable and competitive lottery provider.
Lottoarena as a quality leader
The management of Lottoarena Entertainment PLC is convinced that only the best products can push themselves through on the market in the long term. Therefore the company works with full speed, to optimize Products and to offer added value to the customer with new developments. Efficient Marketing will help the company to communicate these benefits accordingly to the market.
Lottoarena offers growth potential
The past years in the European online lottery market have been marked by the ascension of a few companies. The first to mention here are Tipp24, Lottoland (which offer without a German license) and Lotto24 AG (only licensed in Germany). As with Lottoarena
Entertainment PLC, these three providers are so called “pure online players”. The revenue of these providers has grown constantly. These competitors are our role model and at the same time provide the best example of growth potential the market has to offer. We see possibilities and differentiating points in order to challenge the established providers and to win market shares for Lottoarena. If this succeeds, Lottoarena will be able to incite a over-proportional growth.
EQUITY STORY
Investment HighlightsMARKET ENVIRONMENT AND COMPETITION
The gambling market
Latest market research data confirms: The gambling market continues to grow. Seen from a worldwide view, the gambling market belongs to the industries with the highest turnover.
Market environment
The market for the online-brokerage of lottery products can be counted as belonging to both the lottery market as well as as the E-commerce-market. The lottery market includes as part of the gambling markets the products of state operated and state commissioned lottery providers. This includes both active and passive lotteries. While the customer chooses a limited amount of numbers from a finite number row with active lotteries (for example: German Lotto 6aus49), the passive lotteries provide game tickets to the customers with pre-set multiple digit ticket numbers (as with Tickets from the German Klassenlotterie for example).
Both lottery concepts, of which there are also hybrid forms, have the same basis as there is a game plan which determines the participation of the Players on the promised Winnings as well as the calculation of Winning.
Just in Germany, with the present market of approx. 18 million lotto players (per draw) a very interesting market environment is developing. According to our own estimates the turnover from online-Lotto will be at a minimum of 2 billion per year until 2020. Overview
The worldwide gambling market produced in 2013 a volume of approx. 450 billion USD (volume of entrant wagers minus the game winnings) and includes essentially the areas Casinos (31%,) lotteries (30%), Gambling machines (22%), sports and other bets (14%). The forecast for the year 2015 puts the estimates to a total market volume of 500 billion USD.
Since 2011 the world wide market shows an annual growth rate at 6,44%; for the time period between 2011 and 2015 an average yearly growth rate of around 5,45% is expected. From the worldwide gambling market Europe had in 2013 with 29% and a volume of roughly 130 billion Euros (Volume of game wages minus the game winnings) the second biggest part after Asia and the Middle East (EUR 139 billion or 31,2% respectively).
From these numbers the European lottery market took in 2013 around 49 Billion Euros and thus more then 38%. The most important markets are Italy, Spain and Germany, which together represent around 57% of the European market. In Germany the total lottery turnover, according to the “Deutscher Lotto und Totoblock” (DLTB), in the year 2014 was 6.9 Billion Euros.
Forecast for Germany
We expect that the lottery turnover in Germany in the mid term will increase to 8 Billion Euro, owing to the deregulation by the State Gambling Amendment Act (GlüAndStV) from the first of July 2012. It is to be assumed, that this turnover increase is achieved by the easing of the advertisement restrictions and the cancellation of the prohibition of online brokerage of lottery products, without that further influence factors being added.
In the long run, a clear increase of the total lottery turnover to approx. 12 Billion Euros in 2020 and with that a average yearly growth rate of 7,5% is to be expected. This assumption is based upon that the lottery turnover per citizen of Germany is currently very under average in comparison to other European countries. In 2012 the average wager per citizen of Germany was approx. 80 Euros, while in Italy being approx. 350 Euros, in France 310 Euros and in Spain roughly 263 Euros. The discrepancy results by our estimation amongst other things from a less attractive product range by the DLTB and the low advertisement activity in comparison to other countries. By the liberalisation of the German market, an increase of advertisement activity as well as expansion of the distribution channels, especially on the internet and mobile terminal devices, can be expected. In addition it shows that the introduction of new products such as EuroJackpot causes further market increases.
If one calculates the expected total lottery turnover of 12 Billion Euros for the year 2020 over to the turnover per citizen, then Germany would reach in 2020 a turnover per citizen of approx. 151 Euros and thus be in the European midfield.
E-commerce-market
The worldwide market for E-Commerce is first of all determined by the level of the internet usage. Which was in 2014 roughly 79%. From the group of German internet users ranging in the age between 18 and 65 in 2014 around 71% obtained products or services from the world wide web.
Online-lottery market in Germany
The growth of the German Online-Lottery market alone between 2015 and 2020 is predicted with around 30% per year and thus is clearly above the predicted 7.5% of the overall lottery market. This significant growth potential of the online lottery market results in our assumption from 3 considerably factors:
First it must be assumed that there is a catch-up potential, as Online offers from lotteries were completely banned in Germany until the end of 2011 and that this market was opened again in the middle of 2012 and based upon the expressively legal regulation only in Schleswig-Holstein.
The second factor is the overall increase in demand for services and good obtainable via the internet, which will continue according to the estimates of the company.
The third factor; the company is expecting that the per-head expenditure for lottery products - for example due to the introduction of new products such as “EuroJackpot” - will increase in the future, of which the online lottery market will profit. A comparison with the online part of the business areas, which similar to lotteries also include virtual product ranges, confirm the potential of the online lottery market. In the northern European countries (Finland, Denmark and Norway) the Play slip delivery via Internet is today already over 30%.
According to our estimates it is to be expected in the year 2020, that the online lottery market in Germany will reach a volume of around 2 Billion and with that represent 12.5% of the total turnover of approx. 12 Billion Euros. This expectation is based upon the assumption that following the introduction of the GlüÄndStV there will be no considerably impairments to Advertisement measures and the online brokerage of lottery products.
Competitors
It is the opinion of the Company that there are currently considerable Barriers of Entry for new market participants. In order to enter the market it is necessary to invest considerably amounts of money and time for the build up of the required technology as well as the required knowledge of the lottery market and the areas Marketing and Sales. Also, in this strongly specialised and regulated market an experienced management is not readily available. In addition, the professional and large scale performed lottery brokerage by private providers requires co-operation agreements with the lottery organisers to whom connections must be build up.
Strategy
The lottery business is entering modern times. The, for many things, usual approach of ordering online is now also available for the participation on the lottery via the internet.
The Lottoarena Group has committed itself now for many years to this contemporary use of modern communication devices. Even the 4 year long suspension of our offers (based upon in the meantime non EU conform legislation) was not able to stop us permanently. We persistently continued the development of our business idea.
The desired European orientation of this business idea reflects itself in Lottoarena Entertainment Plc. Hereby we show that we also see potential for this business model in the European Neighbour Countries. Especially the Spanish and Italian markets with their traditionally strong lottery range offer great development possibilities.
The foundation of our business is and remains the German market. Via our 80% subsidiary, Lottoarena Spielsysteme GmbH seated in Neuss, we offer a secure and legal access to the German state lottery. Not only the known and loved Lotto 6aus49 but also the modern Eurojackpot, Super 6 Spiel77, Glückspirale and other lotteries can be played in a comfortable and secure fashion.
Years of Experience
The Lottoarena group brokers various kinds of modern online lotteries based upon the legislative requirements. For this the company relies on highly qualified co-workers which possess yearlong business experience. The combination of comprehensive know-how and a complete product range are a guarantee for the creation of a leading market position in the European Online lottery market.
On the route to a modern gambling and entertainment company group
Lottoarena Entertainment PLC aims to become the leading broker of Lotteries via the world wide web and other electronic distribution channels in Europe. Therefore it is planned to expand the already existing market position in Germany and to extend the business in the EU internal Market. For the penetration in the core business the company plans, to continuously strengthen the marketing activities, to increase the awareness for the brand and to win new customers.
Active marketing
Through active marketing in the target consumer area, the existing network will be expanded with new distribution partners. The main focus of the company are essentially all companies in the E-commerce or Information area with considerable end customer relations. In addition to that the company examines possibilities for the usage of additional media distribution channels such as iTV (interactive television) or mobile communication services as well as Aggregates, which feature the respective clients and technology.
Business-Services
An important pillar for expansion and growth will be the providing of new products and distribution channels through the so-called
“Lottoarena Business Services”. For this the present technical platform, as well as the own rights to the source codes will be extended for existing partners or new partners and used as a further supplement for our White Label IT Technology.
Lottery ticket
Starting page www.lottoarena.de
Lottery field
BUSINESS PROFILE
Business model
Lottoarena Entertainment PLC is, through her 80% subsidiary Lottoarena Spielsysteme GmbH, active as a commercial broker in online brokerage of state licensed lottery products in Germany and brokers via the website www.lottoarena.de the participation of end customers on the gambling games of consolidated state and state sponsored lotteries as well as the country wide EuroJackpot in the German
Lottoblock.
Here the company respectively becomes active on behalf of the game participant and enters in their name game agreements with the respective state lottery organisers. To this belongs specifically Lotto 6aus49, EuroJackpot with a 90 million Euro as the highest jackpot, Glückspirale, Spiel 77, Super 6 and Keno. Another Focus of the business activity is the creation of lotto wager syndicates.
The foundation of the business model is based upon the expiration of the state gambling contract at the end of 2011 in Germany as well as the postponement of the new gambling legislation, which became active on the first of July 2012 and contains amongst other things the opening of the internet for lotteries.
Lottoarena brokers in Germany the participation in the important products of the state lottery organisers via the Internet directly to the end customers. In comparison to the traditional stationary distribution of lottery products via acceptance offices, which are especially operated in newspaper and tobacco shops, Lottoarena offers the customers additional services. Game tickets can be comfortably be entered via the PC at home or at work on the website www.lottoarena.de. The regular game participation is made easier through a subscription service. Within the framework of this subscription the customers can comfortably change the once tipped numbers online, which is not possible with the conventional lottery subscriptions.
The messaging function informs the customers about upcoming Jackpot payouts. The game tickets are stored virtually and winnings are automatically accounted to the customer accounts. If wished, the customer can be immediately notified via Email and/or SMS about winnings and the winning amounts. The processing via the Internet allows in addition - as opposed to the participation in the local acceptance offices – the anonymity for the player.
Strategic leverage points
The company intends to become the leading broker of lotteries from state, respectively state commissioned lottery organisers via the internet in Europe. The brand “Lottoarena” will in the future stand for responsible online gaming with the highest technical and content standard, always in perfect harmony with the respective country legislation. The market entry or respectively further market penetration as well as customer generation is above all fuelled by marketing activities, which aim at the creation and increase of awareness for the brand “Lottoarena”. Hereby the service aspect is always highlighted and advertised. The company currently does not intend to generate more lottery players, instead it focuses on those who already play Lotto and presents them the advantages of the service.
Its the aim, on the one side to increase the registered and active customers as well as on the other side increase the transaction volume per customer. The last mentioned is especially dependent, next to the attractiveness of the offered product range, upon the efficiency of the customer loyalty measures.
For the planed market penetration new distribution partners will be gained , next to expenses for the marketing, and basically all companies with noteworthy end customer relationships in the online area are considered, for example E-commerce and information providers. The possibility of additional distribution channels, such as ITV (interactive TV) and mobile communication systems, is generally considered.
Within the framework of this growth strategy, the high scalability is to be noted. With only a small effort, the offered products can be marketed through new distribution channels. This is due to that the brokerage of lottery products only requires very little manpower and does not require any logistics and storage capacity. In addition, one sole technical platform can operate various different distribution channels. Thus the marginal costs for additional transaction volumes are limited essentially to the costs for the payment processing and data transfer. The in comparison low costs, which increase in a proportional or volatile way with the revenue, lead accordingly with the increase of revenue to an improvement of profitability.
The classic value chain in the lottery business reaches from the license issuer (public hand) over the licensee (game organiser), the seller (acceptance office or broker) to the customer. Lottoarena positions itself as a independent broker for the game agreements of here
customers towards the lottery organisers.
With this positioning the company gains the advantage to have access to their own customer relations in the brokerage business, even though the game agreements are made with the lottery organisers. As the control over the technical processing is largely in the hands of Lottoarena, the company is able to offer its customers additional services, for example the sending of winning and jackpot notifications via Email and/or SMS, in order to fully use the cross-selling-potential.
The company uses a specifically developed processing system, so that with the usage of modern technology the processing of the game agreements and the complete herewith connected effort (from placing the order, the payment processing and the forwarding to the lottery organiser up to the pay-out of the winnings) is almost completely automated. The maintenance and the required care of the platform is realised by a highly specialised and qualified team, which is also capable to provide required new functionalities in a timely manner. With this the effort for the remaining core personnel can be minimised.
The complete internet connectivity as well as the co-location operation (Server Hosting) is done by Lottoarena's own IT services. The security of the data exchange between Lottoarena and the final customers via the website is achieved by data encryption. Against attacks from the outside (such as Hackers, Viruses, Denial-of-Service) state of the art Firewalls, Hard- and Software are installed for the protection of the system. The security system is constantly updated to actual requirements. The payment process takes place, if the customer does not choose the bank transfer, via direct debit or credit card payment. For the direct debit Lottoarena uses a business bank and for the processing of credit card payment external service providers are used, which take over the processing of the databases and the payment authorisation and organise the payment process with the credit card companies.
Via the connection to the IT Infrastructure of the lottery organisers the hand in of the game ticket takes place as well as the reception of the acceptance note. This is then forwarded to the customer of Lottoarena via Email.
Company group structure
Lottoarena Entertainment PLC acts as the finance- and management-holding and leads the operative business, which is to be operated though the intended international expansion by the respective country subsidiaries. Each of the subsidiaries are legally independent and Lottoarena Entertainment PLC determines the strategic orientation and provides management, financing as wells as name- and platform licenses against a fee for her subsidiaries.
The biggest advantage of this company structure is its flexibility, as each subsidiary develops its field of business by their own
(decentralisation). Therefore the closeness to the markets and the flexibility of the companies are maintained with the respective capital power, which in end leads to a considerable market presence of Lottoarena. Hereby it is possible to quickly react to market changes and resource allocation can lead to an increased total efficiency.
The operative subsidiaries will apply and hold the required licenses and allowances in the respective countries. They subject themselves fully to the national legal requirements and only offer allowed lotteries.
For the already existing operations in Germany, Lottoarena Spielsysteme GmbH is responsible.
Lottoarena Austria GmbH Lottoarena Spielsysteme GmbH (Germany) since 2011 Lottoarena Netherlands B.V. Lottoarena Belgium B.V.
Nat. gambling license Local language adaptation
Lottoarena Malta (in foundation
)
Hosting Services EU gambling License Lottoarena Entertainment Plc Lottoarena Management CompanyLottoarena brand license Platform license
Capital provider
Operatively active
Family Faerfers and Family van Rooij – 60,12% Shareholder structure
Financial planning
Revenue is generated primarily by the group through the brokerage of game tickets and ticket fees (commissions). Furthermore the company generates revenues through the initialisation of player syndicates.
In the pure brokerage business the company calculates at the moment with commissions in the amount of 6,5 -10,5 % of the revenue generated. In regards to the revenues from the organisation and the distribution of the participation in syndicates, it can be assumed in accordance with the legal requirements and based upon current fee rates that additional earnings of up to 33% of the revenue can be achieved. Different to the new introduction of a new product or a service, a new market has been created almost over night with the adoption of the new gambling legislation in Germany, in which it is important in the first years to create the foundation for the build up of market shares.
Advertisement expenses are for the large part used for the acquisition of new customers. Aside from that a small part is used to maintain the care of existing customers. The acquisition costs per customer will influence in the mid term the profitability of the company. They are dependent upon the price rate of the advertisement market, the chosen marketing index as well as the efficiency of the chosen marketing measures. As a target size, the company aims at around 40.000 registered and playing customers for 2015/2016.
Next to the development of the registered and active customer amount, the transaction volume per active customer is important for the business success of the company. The transaction volume per customer is mainly influenced by two factors: The attractiveness of the offered product range by the company in combination of attractive Jackpots as well as the efficiency of customer loyalty measures. As only Lottery tickets are brokered and no own draws are initiated, there is no costly jackpot pay-out required, which would impact the revenue.
In order to finance the growth of the company, it is intended to place in total 5.775.000 authorised shares. The resulting proceeds in the amount of approx. 12 million Euros (2015-2020) will serve completely the build-up of the operative business in the EU countries.
Free Float – 39,88%
Securitized Shares: 25.875.005
Katja E. Fligge (CCO)
Mrs. Katja Fligge has been working now for more then a decade in consultancy organisations, in part also as CEO. Following her graduation in the German Abitur and her first entrance into the gastronomic industry, she quickly took over initial leading tasks in the short term.
In 2004 Mr. Katja Fligge switched to a Private Equity company and after a short incorporation she took over the task as managing director of a connected consultancy company.
Within the frame of her work, she provided amongst other things consultancy services for Lottoarena AG. Since 2009 she has been active for Lottoarena AG itself and thus has gained extensive specialist knowledge in regards to online-gambling. In 2010 she became the managing director of the German branch office of
Lottoarena AG. Mrs. Fligge is a co-founder of Lottoarena Entertainment PLC and has been a member of the Thomas van Rooij (CEO)
Mr. Thomas van Rooij has been active for more then 3 decades as an entrepreneur in the areas of telecommunication, company financing, private investment, M&A and cross-border mergers.
Already with the age of 23 he headed his own company with over 1400 Employees. The company was operative in 23 countries and generated three digit million revenues.
In October 2013 Mr. van Rooij took over the management of Lottoarena Spielsysteme GmbH and became a board director of Lottoarena Entertainment PLC with the responsibility for the operative area.
In August 2014, Mr. van Rooij took over a stake of 5% of the shares on Lottoarena Spielsysteme GmbH and in October 2014 a stake of 35% of the shares on Lottoarena Entertainment PLC.
Management
For the build-up and expansion of the company, Lottoarena Entertainment PLC has two important and experienced directors amongst their numbers, whose knowledge, especially due to market knowledge and industry specific connections, represent an important foundation.
.
Development of revenues in the regulated lottery and gambling market per provider in million € Euro in Germany: Time period 2005 - 2013
Commercial lottery brokers – Expense per customer in million € Euro Time period 2005-2012
Lottery 2014 2013
Lotto 6aus49 4 Mrd. Euro (4 Mrd. Euro)
Spiel 77 1 Mrd. Euro (1 Mrd. Euro)
EuroJackpot 604 Mio. Euro (493 Mio. Euro)
Super6 424 Mio. Euro (458 Mio. Euro)
GlücksSpirale 224 Mio. Euro (233 Mio. Euro)
KENO 127 Mio. Euro (131 Mio. Euro)
Plus5 13 Mio. Euro (13 Mio. Euro)
Revenue figures of lottery products of DLTB 2014, which Lottoarena offers (in brackets: Comparison figures 2013)
Source:Deutscher Lotto- und Totoblock (DLTB)
Commissions with respect to the Germany company
The German market
- Approx. 6,9 Billion Euro gross turnover in the German market (2014)
- Expected fall of the German state monopoly in the lottery industry until the end of 2017
- The average lottery player spends 600 € per year on lottery products.
Prognosis 2015-2020 in Germany in millions €
Own estimate
Competitors
German competitors
Main competitors of the company in Germany are essentially the stationary lottery acceptance offices, the online distribution channels of the state lottery operators as well as the private on- and offline distribution. The acceptance office licenses are only allocated to independent retailes in the newspaper- and tobacco market. The financial incentive from the sales commission for lottery products is for these mostly irrelevant, the acceptance office function is more intended from the operators as method to generate steady customers. The main competitors of Lottoarena in the online-brokerage segment are on the one side the state operated lottery companies with their own internet portals, which are accessible via a central website of the Deutsche Lotto- und Totoblock (DLTB), as well as the private online brokers.
Competitors Germany www.millionenchance.de www.einfachlotto.de www.jumbolotto.de www.lotto24.de www.Lottohelden.de www.lottowelt.de www.lotterie.de www.faber.de www.lottobay.de - Burda Direkt: EDM Berlin: -- Jumbo Interactive: - Lotto24 AG: Lottohelden - GmbH: Lottowelt AG:
-- Lotterie.de GmbH & Co. Norman Faber: Lottobay GmbH: KG: -Competitors Paneuropean
There is currently no company known to Entertainment PLC, which plans to go to
the management of Lottoarena Europe to offer state licensed online lottery products.
Although there are two companies, which operate as so-called secondary lotteries.
Zeal Networks SE:
Lottoland (Gibraltar) Ltd: www.tipp24.comwww.lottoland.com
Lottoarena and her competitor (Lotto24 AG) in a cost comparison
Costs per Customer (CPC) Accomplishment of a Break-even per customer in K:
Key features of Lottoarena:
-Break-even with a minimal market share
- Unique low costs per customer (CPC) plus limited share of 30-50% on the commission.
- Own developed lottery platform, service costs, upgrades, updates as well as adjustments are fixed costs
- Lean technical as well operative structures require in comparison to the competition a significantly lower workforce. - Confidence in the affiliate marketing and co-operations with important media houses.
- Only state licensed lotteries are offered and operated within a secure legal framework. - Additional security for customers through the Maltese license (EU- legislation)
- No risk for the company and her subsidiaries, as Jackpots and winnings are paid out by the respective lottery organisers.
Own estimate
The European market
The overall European market showed in 2014 a turnover of approx. 54 billion Euro € per year, of which the online share was roughly 5% (2,7 billion Euro €). Market researchers expect that in the year 2020 the online share will be at around 45% and thus that the online lottery turnover will be
approx. 33 billion Euro € per year. Europe: State licensed lottery and gambling providers
Per-Head-Turnover Lotteries (in €)
EUROPEAN MARKET
Prognosis 2015-2020 in Europe in millions €
SWOT - ANALYSE
Chances
Risks
Strengths
Weaknesses
- State gambling monopoly has been overturned by the EuGH; New gambling legislation came into effect on 1. July 2012
(Opening of the internet and advertisement allowance) - Development of an own “state of the art” lottery platform,
with rights to the source code for the entire EU internal Market, with the core piece being a flexible lottery ticket Pilot, which can integrate all German as well as European lottery tickets and variations, quickly and without effort - Established brand “Lottoarena”, as well as an already
proven business model in the past
- Operative business is still in build-up
- Financials for the implementation of the business idea have not been completely secured yet.
- High scalability of the business model based upon a low fixed costs basis and thus digressive cost development. - Focus on the margin strong wager syndicate business. - Industry invigoration through “EuroJackpot” based upon
the very high pay-outs
- International Expansion in the whole of the EU internal market
- Risks due to changes of the legal frame works
- Liberalisation of the lottery market could lead to entrance of further competitors
- Absence of extraordinary profitable lottery events could lead to a decrease of the player incentive and thus result in decreases of revenues and results.
Summary
LOTTOARENA ENTERTAINMENT PLC -
Six correct numbers on the InternetThe easiest way to play lotteries is the internet. Around 30% of all European grown-ups play lotteries on a regular basis (Lotto, EuroJackpot, Euromillions, El Gordo etc.) and makes Europe on of the biggest markets in the world and the lottery market into an important industry.
The overall European Lottery market showed in 2014 a revenue of approx. 54 billion Euros. From this the online part represented around 5% (2.7 billion). Market analysts expect for the year 2020 a total European lottery market revenue of approx 71. billion Euro, where the online segment will increase to 45% (33 billion Euro) – a catch-up potential the company intends to profit from.
Lottoarena Entertainment Plc is attractively positioned in its value chain of the one lottery business: The Company will broker Europe wide lottery products via the internet through her subsidiaries and receives for that brokerage commissions from the lottery organisers. By this revenues are generated without carrying the risks of an organiser.
As a European broker, Lottoarena Entertainment Plc profits from years of experience in marketing, technology and management in the telecommunication and online lottery segments, which represent significant success factors in the competition. The company want to grow especially through the deployment of focussed marketing measures for the generation of new customers. In addition to that the company intends to continuously expand its product portfolio.
The business model also assumes long term relationships with the state lotteries (and possibly other lottery providers) and a high
expansion possibility in regards to the increasing business volume through increasing customer numbers and the expansion of the product portfolio.
Finally the business model is based considerably on the fact, that the company offers already established products, which do not require to be introduced and accepted by the customers. Through the enabling of an easy game processing and the offer of mostly cost-free
additional services, Lottoarena Entertainment expect a high degree in customer loyalty and with that a securing of stable revenues. The main strengths of the company are in the competence in marketing, the deployment of (by own estimates) leading technology, the experience of its management, her brand and Internet domains, as well as the regulatory knowledge and networks. In the view of the company these competitive strengths will add to the establishment in the online lottery brokerage market of lotteries and to the growth of the company.
Currently the company offers her customers the participation on the German, state licensed lottery products Lotto 6aus49, Spiel 77, Super 6, Eurojackpot, Glückspirale and Keno, where the company becomes active on behalf of the game participant and in their name enters game agreements with the respective game organisers. The products and services are already known in the market and based upon their attractiveness – due to simply game processing and cost-free additional services - are readily accepted.
The medium Internet is becoming more and more important for the end customer. The company wants to use this market potential as the foundation of its business.
Lottoarena Entertainment Plc Unit 205, Clerkenwell Workshops 31 Clerkenwell Close
London EC1R 0AT, Great Britain. [email protected] www.lottoarena-plc.com Contact: Lottoarena Entertainment Plc Branch Germany Vockrath 3 DE-41472 Neuss Tel.: +49 (0) 2131 7600-449 Fax: +49 (0) 2131 7600-488 Mobil: +49 (0) 157 8620 1700 E-Mail: [email protected] www.lottoarena.de
Your contact person: Mr. Thomas van Rooij
