Seoul in talks to export lottery system next year

Nanum Lotto CEO Yang Won-don explains Korea’s lottery business during an interview with The Korea Times in Seoul last week. / Courtesy of Nanum Lotto

By Choi Kyong-ae

Nanum Lotto, Korea’s sole lottery operator, said last week it was in talks with partners in emerging countries to export its Lotto system next year.

“Emerging countries such as Vietnam, Myanmar and Thailand have shown interest in our online lottery system due to competitive prices and functional stability compared to systems developed by advanced countries,” Nanum Lotto President and Chief Executive Yang Won-don said in a recent interview with The Korea Times.

Seoul is expected to export the Lotto system, starting next year, to these countries which have struggled with illegal gambling and are moving to shift some of their gambling population into the legal Lotto system, he said.

The online lottery system market has been dominated by three major lottery players, G-Tech from Italy, SG from the United States and Intralot from Greece.

The three majors already account for the lion’s share of the lottery market in advanced markets and they are stepping up efforts to make inroads into China, the world’s most populous country, the CEO explained.

“Given this, we are targeting emerging markets which cannot afford to introduce lottery systems from the top three players due to high purchasing and operating costs,” he said.

While looking overseas, Nanum Lotto said it was campaigning to promote public awareness of the lottery business. Lottery is still regarded as part of illegal gambling by many local citizens despite its positive functions.

“Some 60 million Lotto tickets worth 65 billion won ($57 million) are sold every week. Seven to eight people win a jackpot ranging from 1 billion won to tens of billions of won every week. Koreans buy Lotto tickets worth less than 10,000 won per person for the whole of a year,” Yang said.

Korea currently has a 3.2 trillion won lottery market which showed an average of 3 percent to 5 percent growth a year in the past 10 years. The current government cap on total lottery sales volume is 3.5 trillion won as of 2015, according to Nanum Lotto.

“To help foster the domestic lottery market size to 5 trillion won in the coming years, the government needs to progressively ease the current sales limit over the next five to 10 years,” Yang said.

As for the positive functions, he said 41 percent of Nanum Lotto’s overall lottery sales are funneled into public funds to help financially-troubled Korean veterans, underprivileged people, lower-income families and multicultural families.

Fifty percent of the total sales are redistributed as lottery payouts and the remaining nine percent is shared by Nanum Lotto and its business affiliates in commissions. Nanum Lotto is an affiliate of Eugene Group, a logistics-to-finance conglomerate.