More than two years since raising the alarm, the BC Lottery Corp. (BCLC) is still wrestling with the changing gambling and entertainment landscape.
November 13 is the deadline for response to the Crown gambling monopoly’s request for information from consultants interested in helping it in the third phase of its BCLC Lottery Transformation Initiative. According to the tendered document, BCLC wants assistance to “better understand current and future market direction as it relates to retail, technology and omni-channel strategies and trends” and with “the creation of a business plan to formulate a strategic road map for the future which clarifies the technical infrastructure required to implement such strategies.”
BCLC wants better data analytics and customer relation marketing techniques and to explore technology such as beacons and near-field communication (NFC). Beacons involve transmitting messages via Bluetooth to tablets and smartphones; NFC allows electronic devices to communicate via contact or close proximity.
Supporting documents posted on BC Bid, the government’s central procurement website, express greater urgency. The four “burning platforms” identified in an October 15 BCLC presentation under a photograph of a person’s bare feet over burning hot coals are:
•we are not relevant to young adults;
•our core player base is shrinking;
•we don’t know our players; and
•our technology is reaching end of life.
The document said the core lottery player base is aging, “putting revenue at risk, and there is little player insight to inform business decisions currently due to the anonymous nature of lottery play. Retailers, organizations and companies look for increasingly dynamic ways to engage with customers and technology provides ever more means of engaging and connecting people and communities. The result is that the retail and entertainment landscape is far more competitive.”
Little seems to have changed over the last two years.
On August 19, 2013, Business in Vancouver reported that the company sought business transformation consultants and had a corporate transformation department. BCLC claimed between $200 million and $650 million of income was at risk over five years if it did not make significant moves to modernize.
“With the build-out of casinos nearing completion, gambling products that are reaching maturity in their life cycles, an aging player demographic, a potential decrease in player relevance and challenging economic times, sustained delivery of net income to government is at risk,” said the annual report for that year. “Margins are shrinking in some areas. Consumer entertainment choices are growing, and the market is changing more rapidly. BCLC needs to stay relevant in today’s climate.”
A request to interview BCLC CEO Jim Lightbody was not fulfilled by press time.
“I’m glad to see now they’re looking at doing that,” said NDP critic David Eby. “But it illustrates that gambling – which was supposed to be extra money for nice things we can’t afford through our existing tax system – we have become dependent on.”
B.C. is one of many jurisdictions facing challenges. Ontario Lottery and Gaming’s 2012 Strategic Business Review/Advice to Government report recommended becoming more customer-focused and expanding regulated private-sector lottery and gambling options. That report said slot machines and lotteries have limited appeal to people under 45. It forecast that, by 2017, “due to the declining participation of younger adult players, the impact of technology and cross-border competition, annual profit to government could decline by $400 million.”
BCLC sells tickets through more than 3,900 retail outlets and online through its PlayNow.com site. For the year ended March 31, 2015, BCLC reported $1.25 billion net revenue for government coffers, which was $61.5 million better than budgeted and almost $80 million more than the previous year.
The letter from chairman Bud Smith in the 2014-15 annual service plan report highlighted “exceptional performance in high-limit table games in casinos [that] offset lower than expected lottery sales.”
Smith said the business segment could not be relied upon for sustainable long-term growth, because of the relatively small international player base. •
