4. Operators

4.1 Compania Nationala Loteria Romana S.A. (www.loto.ro)

4.1.1 History

1999

In 1999 by an Emergency Government Ordinance No. 159 Compania Nationala Loteria Romana S.A (CNLR) was established, replacing the communist-era Loteria Nationala.

At the beginning of September of that same year a new gaming product was launched, under the name “ORA UNU A VENIT” (One o’clock is here). This new product actually binds three concepts: the instant lottery, the simple ticket draw and the game involving directly the player in the draw, by means of a TV show.

Each ticket represents a multiple gaining chance: either instantly, within the instant component of the game, or by winning the right to participate in the draws, taking thus part in all the draws organized for a specific issue.

The draws were hosted by a family show, taking place each Sunday and produced together with the TV chain TELE 7 ABC. The simple draws offer money prizes, of 10 or 20 million leu. In the draws involving the viewers, the owner of the ticket is called by telephone, then she or he picks a number between 1 and 16 on a video-wall. Each number hides a prize: either a car or a money prize of 10 up to 50 million leu. If the telephoned person doesn’t pick up the phone or the player does not answer, the assistance in the TV studio pick a number for the winner.

The instant tickets were produced by ROMPAC SRL in sequential issues of 2 million pieces and their sale price was 3,000 leu/piece.

2000

In September the new product “Joker” came on the deck.

In the last week of December, 2000, the CNLR said it had signed a $100 million deal with Greek lottery systems firm and operator Intralot, listed on the Athens Stock Exchange since 1999, to develop a nationwide network of video-lottery games.

“The $100 million investment will help us build a modern network of video games across Romania over the next 10 years,” CNLR’s spokesman General Manager Nicolae Cristea told Reuters.

Intralot, a subsidiary of Intracom, added that the agreement would cover the installation of an informatics system and terminals, as well as the organization, operation and promotion of new games.

Cristea said the network would be operational within two years. The project would create 5,000 new jobs, he added.

The total number of video terminals was expected to reach 15,000. The U.S.-based company International Game Technology (IGT) would supply the equipment. Intralot said the project would be the first national network of video-lottery games in Eastern Europe.

2001

The Romanian Government decided in 2001 to proceed with the extension of the existing on-line lottery network for regulating the market in order to reduce the illegal gaming through CNLR’ s launch of video lottery games. This project is expected to increase the revenues for the Romanian State, as well as, to control and abolish the illegal gaming.

2002

January

The traditional ‘New Year’s Eve’ Lotto 6/49 was successful. The January Lotto 6/49 had ‘Special Drawings with main prizes 12 billion ROL and a 3 room-apartment.

February

In February the break-open ticket “Sansa Ta” was launched. Joker has a new prize of over 1.2 billion ROL plus a car.

March

In March the special “Spring” drawings for Lotto 6/49 was organized. The prizes were a.o. money, apartments and cars. Loto 5/40 and other games are on an ascending trend.

April

In April “Loto-Prono” weekly magazine celebrated the no 2,500 issue with a circulation 2,124,000. “Lotozodiac” game was launched.

May

May brought the biggest prize ever at Loto 6/49: over 27 billion ROL, plus a 3 roomapartment. “Noroc” break-open ticker was introduced, offering instant prizes and supplementary drawings.

June

In June three extraordinary “Pronosport games (Toto) were organized for the final round of the 2002 Korea-Japan Worl Championship Football. Joker hits a new record: 20 billion ROL plus a 3 roomapartment.

July

July was the month where a new series of “Auto” instant tickets took off.

August

In August the last ‘on the beach” Noroc drawing took place.

September

September is the “Romanian Lottery month”:

October

In October CNLR’s receives from the Romanian and Bucharest Chamber of Commerce and Industry awards the first prize in the Top-IX.

Famous Nadia Comaneci shoots of the “Roman Lottery Cross Race” , with over 20,000 participants. And of course a special lottery was organized around this race.

November

In November the broadcasts of drawings are relaunched at Romania 1, the channel with the highest ratings. The “National Lottery headquarters” move to a new high-tech-like building. Loto 6/49 is another record breaker: 31 billion ROL plus a 3 room apartment.

Following a 13-year agreement with CNLR, Intralot has undertaken the supply and all related services for the operation of the video lottery system, which has been officially launched in November 2002. The
agreement provides for the installation of up to 15,000 on-line VLT’s, connected online real time with a central system, at CNLR retail outlets and additional points of sale that will be established by Lotrom, Intralot’ s subsidiary in Romania.

Lotrom has also undertaken the development of an on-line satellite communications network based on VSAT, which has been fully operational since early 2001. The installation of the VSAT terminals at selected agencies was completed in 2002 and has already reduced substantially CNLR’ s operating cost.

December

In December it looks likes that “September is the Romanian Lottery Month”, should be renamed into: “December is the Romanian Lottery Month”. Watch this:

Already 500 video lottery terminals (VLT’s) have been installed by Intralot in 2002.

2003

The in total 2,000 video lottery terminals will be installed in 2003. The games offered currently are:

The net income of the VLT’s exceeds the anticipated income, thus contributing significantly to CNLR’s revenues.

The Romanian VLT on-line operational model has been in the spotlight and has become a role model for other state lotteries. The launch of VLT’s not only has contributed significantly to CNLR’s revenues, but at the same time the lottery’s on-line games (lotto and numbers) have experienced an increase of 130%.

It’s worth mentioning that the state run VLT operation by using an on-line system and supporting progressive jackpots, has managed to compete successfully the private slot machines operators in the country.

* Bingo was introduced by CNLR and became a national mania when also TV companies, started to broadcast the ‘housewives’ favorite gambling pastime’. “Antenna 1” was the first channel to understand the power of Bingo on TV. On December 26, 1999, then the biggest prize in the history, $1 million, of all Romanian game shows was won. “Pro TV” was the following television company, coming with a Bingo TV Show. “National Television” was the third broadcast operator trying to eat a piece of the Bingo cake. In collaboration with Liberty Oradea, “TV Romania 1” got also a significant market share with its National Bingo Liberty on Sundays. CNLR countered this competition with higher money prizes and 3 room apartments. The gaming market raised continuously, proofing once again that this industry flourishes in economic good times and in bad times.

4.1.3 First five months 2003 financials

Compania Nationala Loteria Romana (CNLR) has recorded a sharp increase in sales for the first five months of 2003. Sales totaled $50.1 million, compared to $25.4 million in the same period last year, a remarkable increase of 97.2%. Sales for the whole year (May 2002 - May 2003) reached $89.3 million, a year-on-year increase of 58.9% over the period May 2001 - May 2002 ($56.2 million).

4.1.4 Financial Information 1998 -2002 (million ROL)

Products Results (in million ROL)

4.1.5 Products in 2002

Traditional Games:

Instant Lottery:

New Game:

Others:

Its retail network has 1,659 points of sales.

4.1.6 Good causes

Sponsorships are in the following category:

Casinos