On the Russian interest in lotteries
There is an opinion that when there are various difficulties, including economic problems, the population rushes to play the lottery and buy lottery tickets. But actually, since the lottery is fun and quite soft, environmentally friendly and cheerful, then of course people have more fun when they are good, calm, relaxed, when they are a little bored. However, we should not forget that the lottery is also a stress relief tool. When the level of anxiety is high, people get rid of anxiety especially by playing the lottery or, for example, some computer games.
In the entertainment segment, we compete with digital entertainment such as online cinemas or online games. Now that Western suppliers, platforms and games have left the market, we hope that the Russians will be able to show more interest in traditional pastimes for us, such as the lottery. Known for its pouch and barrel, one of our flagship products is a unique Russian invention, nowhere else in the world is a lottery like the “Russian Lotto”.
Oddly enough, in our country lottery penetration is not as high as, for example, in Spain or the USA. In the USSR, 70% of the population over the age of 18 played the lottery, now this rate is just over 30%. Also, this penetration has improved since all lotteries became state-owned in 2014. According to the law, lotteries are regulated by the Ministry of Sports and the Ministry of Finance, and control over the conduct of lotteries in our country is given to the Federal Tax Service.
And if it is a way to get rid of stress and get vivid emotions for those who participated in the lottery, then it must be said that for the state it is a source of replenishment of the budget. According to Federal Law No. 138, targeted deductions from lotteries are aimed at supporting sports, funding the Olympic team, and high-performance sports.
At the end of 2021, targeted deductions from the distribution of tickets under the Stoloto brand amounted to 2.6 billion rubles, and the total deductions, including taxes and fees, amounted to 7.5 billion rubles. For comparison, the country spent 7 billion rubles on the participation of the Russian Olympic team in Beijing, and another 400 million rubles went to anti-COVID measures. Therefore, we can safely say that the lotteries have and have made a noticeable, tangible contribution to the replenishment of the budget, the development of sports, and therefore the improvement of the quality of life of Russians.
About moving lotteries online
We see that the share of the Internet is increasing. Because a mobile app or website is a more familiar environment for them than walking to a store near their home, we are seeing a younger audience coming in for whom it is more convenient and more comfortable to buy lottery tickets online. Moreover, this share will undoubtedly continue to increase because even the older generation is starting to use smartphones and various digital platforms more.
I should also say that in the past few months we have noticed a huge impact of the current geopolitical situation because many foreign IT contractors have left the market. At the same time, holding the lottery in Russia today is a very high-tech business. More than 140 IT platforms and systems are connected in our landscape. About 600 wins are made per day and about 500k wins are paid out every day. Can you imagine how much data that is? The system can process up to 800 financially significant end-to-end transactions per second.
Of course, when international payment services leave, we have connected the “Fast Payment System” very quickly and efficiently. It happened seamlessly. Users did not feel any discomfort. I must say the turnaround in IT was pretty quick, thankfully no failures. True, in this case, one should not rely on the Lord God, but on a well-built information platform, well-assembled and well-organized security systems, IT environment, qualifications of specialists.
The main core of the entire lottery system, which deals with holding the winnings, distributing the tickets, paying the winnings, is based on our own developments. No one could have imagined the situation we would find ourselves in. And the fact that this core has been written by insiders who have been developing and maintaining this system for many years is a great achievement. Once upon a time, the right logic was laid at this, which helped to withstand a rather unusual situation of operational change.
We were one of the biggest users of IT systems such as SAP, SAS, Oracle. In three days we transferred everything from Western “clouds” to Russian clouds. This is an enormous amount of data, but everything is recorded. Everything went smoothly, there were no shocks for users. I must say that personal data is always stored only on Russian servers without cross-border data transfer, which, of course, is very helpful in the current situation.
Control over the honesty of the sweepstakes – at the highest level
Trust is very important to the lottery, because if the participants do not trust, no one will buy a lottery ticket. In this sense, our legislation is formed quite competently: control over the holding and payment of earnings, the formation of the prize fund is carried out by the Federal Tax Service. Makes regular checks.
The largest operator GSL JSC and the distributor of state lotteries JSC TC Center are members of the tax online monitoring of the Federal Tax Service. Therefore, it is a multi-level system that controls everything at every stage. You should also remember that you will always receive a check when you buy a lottery ticket. If the check was punched in the financial device, then these data are also sent to the Federal Tax Service, respectively, there is a cross-check. Also, when a check is broken, data about the game combination, the cost of the ticket enters the lottery system. Independent control systems are in the Ministry of Sports and the Ministry of Finance.
The prize fund is created on the basis of revenue from the sale of tickets, so only sold tickets participate in the draw. By law (and this is what separates the lottery from gambling), there is always a winner. The prize fund is always paid out to the winners and is forcibly distributed among the participants if the super prize or bonus has not been withdrawn during the year. In part, the New Year’s Billions show we all know and love was built on that.
By the end of 2021, the total prize fund for the lottery under the Stoloto brand reached 34 billion rubles, and 178 million tickets turned out to be winners. If you calculate for 12 months, this is about 14.5 million winning tickets each month and about 2.8 billion rubles are withdrawn per month.
At the end of last year, 1,399 new lottery millionaires appeared in our country. Also, according to statistics, 26 lottery millionaires appeared in Russia every week. We see millionaires as winners of a million or more. There were winners with huge winnings – one person won 514 million rubles on Sportloto. There were also smaller earnings – 100 million rubles and 50 million rubles, and the amounts are slightly smaller. But, of course, winners with such large sums are far less numerous than those with more modest earnings. And of course, we are always happy for them.
About cyber security
For us, the safety of lottery participants is at the forefront. Together with digital security partners and law enforcement, we are constantly monitoring fraudulent sources that appear to be government lotteries. This monitoring takes place 24/7, 365 days a year. As soon as such sources are discovered, we block them with the help of law enforcement. It is clear that this applies not only to lotteries. Now scammers are impersonating all popular digital resources to steal, if not money, at least personal data.
For this reason, we remind users that they should pay attention to digital hygiene and be careful. These are basic things. When it comes to lotteries, there are two basic rules. Firstly, it is impossible to win the lottery if you have not purchased a lottery ticket, and secondly, Russian state lotteries do not under any circumstances require participants to pay anything to win. For example, tax on a large win is paid by the distributor, and the winner receives the winnings minus tax. If you are asked to make a payment to receive your winnings, they are 100% scam. It is very easy to remember.
By the end of 2021, there were more than 20,000 such blocked sources. Also, if there were about 7,000 such sources in the first half of the year, scam activity increased in the second half of the year and 15,000 were blocked. These are various phishing emails, landing pages, websites, calls, in general, digital tools.
About the future of the industry
Without a doubt, we all act digitally. Undoubtedly, the share of the numbers will increase. We will undoubtedly continue to compete with user experience in entertainment. So here the quality of the content, the quality of the communication and the quality of the emotional pleasure the user receives will be key. The mechanics of the lottery are pretty self-explanatory. But still, we get used to a certain quality of content consumption, visualization and comfort. Therefore, if these factors are not present, the interest rate will decrease.