P.E.I., Lotto Corp. still supporting geo lottery, despite poor U.K sales

Teresa Wright twright@theguardian.pe.ca
Published on February 15, 2014

The Opposition Tories have asked the auditor general to launch an investigation into the P.E.I. Lotteries Commission over concerns regarding the province’s $4 million stake in the online lottery game GeoSweep.

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A British reincarnation of the failed GeoSweep game appears to be struggling, but both the Atlantic Lottery Corporation and P.E.I. Finance Minister Wes Sheridan remain confident their investment in the game’s future remains sound.

GeoSweep was re-launched in the U.K. recently as GeoLotto – the third time the geo-based lottery game has been attempted.

Recently, GeoLotto announced on its website it plans to move from a daily lottery draw to a weekly draw in March.

This move follows reports the game has not been doing well.

On Friday, it did not appear many of the over 59 million squares, or geos, available on the lottery map had been purchased.

Sheridan said Friday the game is not selling well yet because it is only a beta version of the game and has not been promoted yet.

“They’re just trying out the new platform, they haven’t it yet, there’s no marketing associated with it yet,” Sheridan said.

“We’re just waiting for that re-launch and, of course, hoping that all of the new marketing that they put in place with the new investors from Germany will pay dividends.”

Atlantic Lottery lost millions on its version of the game before scrapping it last summer. But it still believes online geo lottery has a future.

ALC currently has an $8.7 million investment in the game’s parent company Geonomics Global Games Ltd.

Prince Edward Island and New Brunswick are backing this investment. This means, if the game does well, P.E.I. and N.B. will benefit from any profits. But it also means these provinces will be responsible for potential losses.

P.E.I.'s share in the game is $4.3 million, but it is also responsible for yearly interest payments on this investment.

A German company called Tipp 24 has also purchased £10 million pounds worth of shares in Geonomics and will be a key player in the fully marketed re-launch of GeoLotto in the coming months.

Sheridan says despite the poor sales so far in the current soft launch of the game, he is confident it will eventually be profitable.

“We’re hoping that this new reinvigoration of the game and the platform will be the solution to this game,” Sheridan said.

“ALC has a great track record and we’re hoping that his is another one of the good ones.”

In October, ALC president and CEO Brent Scrimshaw appeared before P.E.I.’s public accounts committee to answer to concerns being raised about the province’s investment in the failed GeoSweep game.

Scrimshaw firmly defended the investment and noted ALC must offer more online games, as revenues for traditional gaming offerings are dropping.

But Opposition MLA James Aylward says his concerns have been far from allayed, especially in light of the poor sales of the latest British version.

“We simply have a game that is not catching on,” Aylward said.

“It did not catch on with Atlantic Canadians, it has not caught on with the players in the U.K. What are they going to try next?”

He said he does not believe the province should be investing in online gaming, especially in a time of fiscal restraint.

“If you’re counting on your revenues to run a province on the backs of people who are gambling, I’m pretty concerned about where our government is going and where our province is going.”

ALC voiced no concern over the changes being made to GeoLotto in the U.K.

“The team at Geonomics has been making adjustments based on live player feedback and ongoing market research; this is standard practice in game development,” said ALC spokesperson Courtney Pringle-Carver in an email statement to The Guardian this week.

“Once the game is fully optimized, out of beta form, and supported by a marketing effort, we’ll be watching how it performs. There is no change to the status of our investment.”

twright@theguardian.pe.ca

Twitter.com/GuardianTeresa