Scientific Games announced Monday that its German subsidiary Scientific Games Honsel GmbH was awarded two contracts with Toto-Lotto Niedersachsen GmbH, the state lottery of Niedersachsen (Lower Saxony) based in Hanover - one to supply instant lottery tickets, and the other for distribution and consulting services.
The two contracts begin March 1, 2006 and will run for five years, with options to extend for additional two-year increments. Scientific Games Honsel will handle the supply and distribution of instant tickets throughout Lower Saxony for Toto-Lotto Niedersachsen, including shipping, warehousing, communications, and will advise on game design and marketing issues. Revenues to Scientific Games Honsel will be based on a percentage of sales. Lower Saxony has a population of 8 million, about the same as the U.S. State of Georgia and approximately 10 percent of the population of Germany.
"We believe there is enormous potential throughout Lower Saxony for instant ticket sales," said Scientific Games CEO and Chairman Lorne Weil. "In fact, considering how well the German lotteries have functioned in the past few years, and how much money they have returned to the states, we're expecting the games to have an immediate impact on the performance of the
According to Weil, instant tickets account for only 3% of German lottery sales in an 8.5 billion Euros lottery market. This is a sharp contrast to the American market, where instants provide more than half of total sales. Nonetheless, he said, in the past few years since Scientific Games won the contracts in the UK, France and Italy, sales of instant tickets began to grow at a substantially faster rate.
"Partnering with Scientific Games Honsel gives us access to the industry's most sophisticated lottery management tools and a deep pool of lottery experience, especially in the European market," said Rolf Stypmann, Managing Director of Toto-Lotto Niedersachsen GmbH. "The potential sales growth here in Hanover could be enormous."
"This bodes well not just for the lottery, but for the public we serve," added Stypmann, "Without a successful lottery, we would not be able to support the public programs that we currently fund in Lower Saxony, programs that reach thousands of our people every day."
"We've worked well with Toto-Lotto Niedersachsen for many years and these new contracts take that close relationship to a new level, one that will help realize the potential of instants in Lower Saxony," said Klaus Honsel, Managing Director of Scientific Games Honsel.