Playtech: Big Data – Should it matter to Lotteries?
Any Google search these days on the subject of Big Data will produce a flood of articles and references to the latest and greatest books, papers, presentations and cases studies on Big Data and why it is “the next big thing” in technology. We are told that Big Data is changing the world in ways that were previously unimaginable, and that Data Scientists are now the unicorns of the IT recruitment world. One of the most famous of these is Dr. Jeff Jonas, Data Scientist, Former IBM Fellow, and Serial Entrepreneur, who presented on the subject of Big Data recently at the World Lottery Summit in Singapore . For Dr. Jonas, the derivation of hitherto unattainable insights through the linking of previously unrelated pieces of information, is the holy grail of successful big data strategies.
But there is an inescapable feeling when absorbing all these communications that Big Data remains something of an enigma to those of us mere mortals who do not qualify for the hallowed sobriquet of “data scientist”. It feels somehow that to grasp the true notion of Big Data, you need to have a brain at least the size of Jupiter, and to have worked in the IT industry at a cerebral level for an eternity.
And I wonder why that is?
After all, is it not true to say that the Lottery industry is one that is built on data, being purveyors of mathematically-derived opportunities to win games of chance? The perfect intangible product; the dream that we sell; it’s all just data – isn’t it?
Well, that is of course an almost blasphemous statement for the lottery industry, because this is an industry which is populated by people who are masters at turning that data into very real products which translate into very real revenues and funds for Good Causes. And it’s an industry which generates A HUGE QUANTITY of data in the process of its daily activities.
Thus one could be forgiven for thinking that to begin to examine the subject of Big Data is to embark upon a journey into a Pandora’s Box of mind-numbing complexity at a terrifying scale. And yet, happily, it doesn’t have to be like that.
Gartner has been a great pioneer into the subject of Big Data, and since 2001 has been contributing greatly to the topic. Indeed, it was Gartner who identified the “3 V’s” of Big Data – Volume, Velocity and Variety – that are to this day still the primary determinants of Big Data definitions. “Big data is high volume, high velocity, and/or high variety information assets that require new forms of processing to enable enhanced decision making, insight discovery and process optimization.” (Gartner 2012)
The Volume relates, self-evidently, to the large amount of terabytes, petabytes and exabytes that make up the data set; the Velocity points to the real-time or near real-time speed with which the data can be delivered, processed and analysed; and the Variety refers to the range of different sources that the data is coming from.
More recently, others have built upon this foundation. Earlier this year, Oracle added to this definition by overlaying an element of dynamism into the definition to indicate the fact that Big Data is a constantly evolving concept: “Big Data is commonly defined as data that contains greater variety arriving in increasing volumes and with ever-higher velocity.” (Oracle 2016)
Oracle also added a fourth “V” – Value. The thinking behind this addition, is that the whole point of Big Data is to derive value from the insights that can be derived from processing the data.
So now we have a construct with which we can begin to determine, through simple tests, whether the organisations we work in are indeed deploying Big Data, or are on the threshold of doing so. In this author’s case, the organisation concerned is Playtech, and it proved to be an interesting exercise to determine the company’s state of evolution in the world of Big Data. The methodology employed was to identify a snapshot in time, in this case the single calendar month of September 2015, and to analyse all the data that went through Playtech’s servers during that period of time, to try to determine if the company would qualify as being a Big Data practitioner. What we found was interesting: during that single month, Playtech’s servers handled:
- 86 million casino game sessions, incorporating more than 14.6 billion game spins;
- more than 222 million hands of poker played in tournaments, and a further 135 million hands played at cash tables;
- and in the sports area, almost 10 million bets were placed, featuring 30 different sports and 37,000 different sports events.
Playtech services then include a Business Intelligence service that works with customers to provide near real-time processing of that data, to provide our customers with revealing insights into player behaviours, thus helping those operators to develop deeper, richer relationships with those players with which they drive revenue growth. So in conclusion I think it is fair to say that Playtech has a Big Data operation which achieves a positive score when tested against the 4 V’s.So why does all this matter to the Lottery industry?
In short, it matters because it is the future of our industry. To be able to deploy Big Data means to be able to derive what Capgemini calls “Insight-Driven Transformation”, which they define as follows: “…Leveraging the power of data analytics to achieve step changes in the efficiency of your business; transforming capability, technology and process to deliver sustainable business benefits.” (Capgemini 2016)
Hence it can be argued that it should be a priority for Lotteries to get themselves into a position where they can achieve this insight-driven transformation – leveraging the very data that is the daily output of the industry. And yet, according to La Fleurs World Lottery Almanac, in 2015, all the Euro currency Lotteries combined achieved just 11.2% of total sales through the online channel, meaning that the vast majority of total transactions are retail and anonymous. This in turn means that despite having enormous amounts of data, the Lottery industry of Europe is unable to relate that data to the very people who are generating them – their players. This 11.2% average figure disguises a wide range of performance in this area, with some Lotteries achieving around 50% of total sales via the online channel – but this of course also means that there are many Lotteries, which are still generating only single-digit percentages of online transactions. So whilst Big Data strategies can truly unlock insight-driven transformation, the Lotteries must first engage with technologies which enable registered transactions linked directly to known players, as the norm not the exception.
And this isn’t just theory. Examples exist within the industry which show that Big Data strategies are indeed being deployed with transformational effect. One such shining example is Veikkaus of Finland, which saw 65% of its 2015 business as registered player transactions – that is to say, lottery purchases that are linked directly to a known player. That is impressive in itself, but what is really transformational is the added facts that while 43% of the business is coming in through the online channel – 57% is retail and of that no less than 40% is registered play. And by the end of 2016, Veikkaus will have reached almost 70% of their total transactions as registered play, linked directly to a known player. And the reason Veikkaus is driving its Big Data strategy? The answer is found in their 2015 Annual Report, which states: “Our goal is to serve all our customers by offering them an extensive range of products and more personalized service.” (Veikkaus 2015 Annual Report)
So there we have it – it’s all about delivering a more personalized service to players – and that is why Big Data is the future for the Lottery industry. With a clearly-defined Big Data strategy, a Lottery organisation can realise previously unimagined insights into their players’ desires, preferences and motivations, which in turn can drive transformational growth in revenues and contributions to Good Causes. It’s time to move from just 11.2% registered transactions to a new future where Lotteries truly connect with players. But don’t take it from me…just ask Veikkaus.
For more information, contact Robin Bowler, Government Markets Director at Playtech plc. firstname.lastname@example.org . Robin was a panel speaker at the recent World Lottery Congress in the parallel session entitled “Big Data, Big Impact – Fact or Fallacy?”.
Author: Robin Bowler
This content is offered by Playtech plc. For more information visit www.playtech.com.
 Dr. Jeff Jonas’ presentation is available for download to WLA members at https://www.world-lotteries.org/index.php?option=com_content&view=article&id=2274:world-lottery-summit-2016-convention-and-trade-show-singapore&catid=44:convention-reports&Itemid=%20443
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