Luck, Be a Lady, Madame, and Senora


By Rachel Tiplady and Ellen Groves Viviane Leconte isn't one to bet on the ponies -- too complicated to be much fun, in her view. But two weeks ago, Leconte, a 58-year-old receptionist in Paris, finally found her gambling Valhalla with the launch of EuroMillions, the first pan-European lottery, and won $400 on her first try. "It's so easy," she beams.

After more than a decade of research, three national lottery companies have finally rolled out the game they're betting can match the success of U.S. multi-state lotteries. It's a Continental trifecta of sorts. Britain's Camelot has joined forces with France's La Française des Jeux and Spain's Loterias y Apuestas del Estado in hopes of swelling their coffers, as well as those of lucky winners like Leconte.

Terri La Fleur, publisher of La Fleur's World Lottery Almanac, thinks "the time is ripe for a 'mega' European lotto." The reason: Europeans are already the world's biggest lottery spenders, forking out $60.5 billion in 2002, 21% more than the U.S. and Canada combined. And preliminary estimates suggest that the figures for 2003 will follow suit.

NATIONAL DIFFERENCES. To increase their chances of success, the lottery's designers studied U.S. multi-state, six-figure jackpot games like Powerball and Mega Millions that draw on huge player bases to create ever-mounting winning sums. "But it wasn't as easy as simply copying America," explains Caroline de Fontenay, head of strategy for EuroMillions at La Française des Jeux. "We had three languages, three different legal systems, and two currencies to deal with." Clearing those hurdles took time.

Tackling the various culture clashes was no mean feat, either. British bettors have come to expect large cash prizes from games in which jackpots are rolled over for weeks at a time. Yet the French are more accustomed to smaller payoffs, says de Fontenay. To please both camps, the consortium designed EuroMillions to offer higher odds of winning the jackpot than its U.S. counterparts -- and higher odds of winning smaller cash prizes than the existing national lotteries.

Of course, the big winners will be the companies running the game and the national governments that take a hefty tax cut from them. For the state-owned Spanish group, these two are one and the same. For privately owned Camelot and the part-state, part-private French operator, the two governments are still set to earn millions of dollars a year. In Britain, the state takes a 12% slice of Camelot's sales, which averaged $160 million a week in 2003.

BRITISH RESERVE. With a base of 90 million players, the EuroMillions bid seems like a sure bet -- although, as any gambler knows, it's never that simple. The French wing of the megalottery got off to a strong start, with humorous ads spoofing the Gallic love for protests and demonstrations. But the Spanish and British campaigns were slower out of the gate. With parliamentary approval given to the Loterias y Apuestas del Estado only on Feb. 6, Spain failed to advertise the new game before the first draw on the 13th. It finally kicked off a series of radio and press ads a week later, just before the second round.

In the run-up to launch in Britain, lottery managers had to answer media reports that Britons would pay more in pounds for a ticket than their European neighbors would in euros, thanks to fluctuating currency rates.

Three days before the draw, news broke that a billboard with a EuroMillions ad had crashed down on three vans in Birmingham, causing tens of thousands of dollars worth of damage. And on the launch day itself, the new game's $19 million jackpot was overshadowed by the $32 million double rollover of the Britain's existing national lottery. To cap it all, only one British player scooped a six-figure sum.

LUCKY STARS. Then there was the consortium's choice for the first draw's date -- Friday, Feb. 13. While of no significance in Spain, Friday the 13th is widely held as unlucky in Britain. It used to be thought of as malchanceux in France too, until the national lottery turned that tenet on its head by holding superjackpot draws on the date. And France's luck held out for the first EuroMillions, which gave that country the jackpot winner and several second- and third-tier prizes.

The consortium is closely guarding its initial sales figures. But according to British lottery expert and economics professor Ian Walker, the game's design seems sound. It's simple to play, with punters picking five numbers and two "lucky stars" for weekly jackpots of at least $19 million. "The trick is in having enough rollovers so that people stay interested, but not too many that they think there's no chance of winning," Walker explains.

Perhaps the most important element of a successful lottery -- evolution -- was written into EuroMillions' design from its inception. Most games face times when players loose interest, forcing the designers to change the rules or risk losing sales. With the new lottery, other European countries are expected to join over the next two years, continually spurring growth, adding sales -- and edge -- to the game, backers figure.

BACK FOR MORE. "We've had interest from nearly every lottery operator in Europe, and they're keeping a close watch on how the game goes," Camelot Chief Executive Dianne Thompson says. "With new countries, we can increase revenues in a controlled way and should get growth in the game for years to come."

This formula has worked well in the U.S. Mega Millions started out as The Big Game back in 1996 with just six states, and today it boasts 11. On Feb. 20, one player from Virginia bagged $239 million in the draw. For Europeans, used to national jackpots that languish around the $10 million mark, these sums are astronomical.

This week's EuroMillions rollover jackpot is $24 million. O.K., so that may be peanuts to your average American player, but not to those like Leconte, whose win has turned her into a confirmed gambler. "This Friday is a rollover? You bet I'll play again." For the lottery companies, that's just the ticket. Tiplady and Groves are editorial assistants in BusinessWeek's Paris bureau


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