The New South Wales government is planning on banning secondary lotteries, as exemplified by Gibraltar-based Lottoland.

Lottoland’s Luke Brill says NSW is a smear campaign organized by Tatts

New South Wales threatens to ban Lottoland and its ilk but the company’s chief executive Luke Brill has hit back, claiming it’s all a smear campaign has been orchestrated by Tatts to “protect its monopoly.” (Image: ABC.net.au)

The government said in an official statement it was “considering options to restrict betting on these lotteries.” It follows the lead of the Victorian government, which has also vowed to overhaul its gambling laws in order to protect Tatts’ semi-monopoly over the digital innovation of companies like Lottoland.

Lottoland has been called the “Uber” of the lottery sector, in that it represents a similarly disruptive force to the lottery sector as Uber has to taxis. Ultimately, though, it is not part of the lottery sector at all, but the online gambling sector.

What the Hell is a Secondary Lottery

Secondary lotteries, or “synthetic,” or “fake,” lotteries as they are known to their detractors, allow a customer to “bet” on the outcome of any number of major lotteries from around the world.

Players are not participating in that lottery, in the real sense, but instead interacting with an exact duplicate version. But the results are the same. Secondary lotteries offer exactly the same ticket prices, odds of winning and staggering prizes of the “real” lotteries they are mirroring, despite having far less player liquidity to build up the prize pool.

Lottoland achieve this by using a system called insurance linked securities, which is a kind of insurance policy usually taken out by governments against unlikely but potentially catastrophic events, like earthquakes and hurricanes. It provides Lottoland with a collateralized jackpot fund worth €100 million in annual coverage.

Meanwhile, the punter is afforded the convenience of online lottery sales, which many state-backed lottery companies have been slow to adopt, for pretty much any lottery anywhere in the world. 

No wonder the dinosaur lottery companies and short-sighted politicians hate it.

‘Smear Campaign’

“Synthetic lotteries do not have the same level of consumer protection as domestic lotteries,” complained NSW Deputy Premier John Barilaro, ignoring the fact they are backed by the same insurers that protect governments from catastrophe.

“Our concern is that many customers buy tickets in a synthetic lottery, believing they’re entering a lottery, when in fact they are betting on the outcome of that lottery,” he added, which doesn’t say much for his faith in average Australian consumer.

Meanwhile, lottery retailers are up in arms and have launched a media blitz under the slogan, “Lottoland’s Gotta Go.”

The newsagents believe they are losing revenue. But Lottoland chief Luke Brill on Thursday dismissed Lottoland’s Gotta Go as a “smear campaign” organized by Tatts to “protect its monopoly”.

“The reality is we are just under 1 per cent of the market,” said Brill. “The deficit they are talking about in their numbers simply doesn’t add up.

“The majority of our customers have never stepped foot in a newsagent’s,” he said.  “They are predominantly sports betters … we have tapped into a different type of consumer.”