National lottery strives for profits

  • 2001-08-02
  • Kairi Kurm
TALLINN - Estonia's state-owned lottery enterprise Eesti Loto posted a record profit in the first half of 2001, which amounted to 3.7 million kroons ($207,000).

Eesti Loto's results have improved significantly since it was re-organized in the middle of last year and the number of employees was reduced by 30 percent down to 52 people.

Eesti Loto Board Chairman Monika Salu said that the company earned three times more profit in the first six months of 2001 compared with the whole of 2000. Eesti Loto was established in 1991 and operated unprofitably until 2000.

By the end of 2001 its sales should increase by 13 percent up to 130 million kroons, said Salu.

In the first half of 2001 the Estonian lottery posted a 66.4 million kroon turnover. It gave out 33 million kroons in prizes and paid 7.9 million kroons in gambling taxes. Salu said that the gambling tax on the online lottery is smaller than that on the scratch lottery, because the fixed costs of online games are very high. Currently 80 percent of the turnover comes from online games.

In 2000 the lottery enterprise made profits of 1.2 million kroons on 115 million kroons in turnover and paid prizes of 58 million kroons. The company paid the state 14 million kroons in gambling taxes, half of which went to support the Estonian Olympic Committee and the remainder for supporting sports, social, cultural and scientific projects. Salu said that only 10 percent of the sales is spent on salaries. The aim of the company is to earn a 5 percent profit on each lottery ticket.

The Estonian lottery controls over 90 percent of the market and pays out prizes over 1.6 million times per year, which gives each Estonian inhabitant the chance to win at least once per year. In the past 10 years 13 people have become lottery millionaires.

Data show that Estonians spent an average of $1.49 in the first three months of 2001 on lottery tickets, while Lithuanians spent $1.61 and Finns $46.20. According to the WLA Sales Report, Norwegians are the most frequent lottery players, spending $51.80 annually.

The average Estonian winner is a 35-year-old, married woman with a secondary education, who lives in a city and prefers inexpensive 10 kroon tickets, which she buys once a week. According to the statistics 60 percent of the winners are female.

Estonians have played lottery games since 1971. Since December last year Estonians could participate in the Scandinavian lottery game Viking Lotto, which resembles the old Soviet sports lottery games. The sales of Viking Lotto reach 700,000 kroons a week.

The Estonian lottery is also planning to create a united lottery area between the three Baltic states and initiate lottery games via the Internet and mobile phones next spring.

"The Estonian market with its 1.4 million people is too small for raising the jackpot. The 10 million people of the Baltic states should give more opportunities for a bigger jackpot," said Salu.

Salu said that international games would accept the Estonian lottery only if it operated profitably and was secure. The Estonian lottery received a security certificate from the Global Lottery Association last year.