Co-operation within the Group

When Casinos Austria took over the Austrian Lotteries’ shares from BAWAG-P.S.K., the two companies Austrian Lotteries and Casinos Austria were drawn together even more closely.

The two companies co-operate within the group in order to strengthen their position in the Austrian gaming market. The year 2008 was characterised by structural changes and the relocation of the Casinos Austria Headquarters to the third district of Vienna. Previously, the two companies had already cooperated very closely in the areas of Responsible Gaming, IT, internal audit and communication.

Participations

Glücks- und Unterhaltungsspiel Betriebsgesellschaft m.b.H.

This company is a subsidiary of Entertainment Glücks- und Unterhaltungs-spielgesellschaft m.b.H., in which the Austrian Lotteries and Casinos Austria hold a share of 50% each.

The purpose of the company is the operation of video lottery terminals. Whilst they look like classic slot machines, the gaming mechanics are different; the video lottery terminals offer electronic lotteries, which under sec. 12a of the Austrian Games of Chance Act are defined as gaming contracts entered into via electronic media. The decision about winning or losing is brought about centrally.

The brand name for the video lottery terminals is WINWIN. WINWIN stands for a combination of gaming, entertainment and hospitality, thus reaching a new customer segment.

win2day Betriebs- und Entwicklungsgesellschaft m.b.H.

The year 2004 saw the formation of win2day Betriebs- und Entwicklunggesellschaft m.b.H., a subsidiary of Entertainment Glücks- und Unterhaltungsspielgesellschaft m.b.H., in which the Austrian Lotteries and Casinos Austria hold a share of 50% each.

Its purpose is the development and operation of electronic lotteries offered on win2day, the joint gaming platform of the Austrian Lotteries and Casinos Austria. The electronic lotteries on win2day.at are games embedded in a multi-channel platform with an integrated wallet function so as to enable gaming via the Internet. Sec. 12a of the Austrian Games of Chance Act stipulates that electronic lotteries are games based on a contract concluded via electronic media. The decision as to who loses and who wins how much is taken centrally. Immediately after participating in the game, the player will obtain information on that decision.

win2day combines the technological implementation of Internet and mobile telephony. Players access the same electronic games with a uniform brand get-up, no matter which transmission medium and terminal equipment they use. Internet or mobile phone – win2day.at is the uniform umbrella for the range of games and information. In 2008, “Mega Brieflos” (“Mega Break-Open Ticket”) was added to the range of lottery games. “Würfelpoker “ (dice poker), the slot machine “Wild Fruits”, the video poker game “Double Draw Faces” and the card game “Red Dog” were launched as new casino games. “Dolphin Star” was added to the mobile Java games. The virtual poker room, which was launched with “Texas Hold’em” and “Five Card Draw” on 7 February 2008, was complemented by “Omaha” and “Seven Card Stud” on 30 September 2008.

Russisch Österreichische Lotterien Holding Gesellschaft m.b.H.

The Russisch Österreichische Lotterien Holding Gesellschaft m.b.H., of which Austrian Lotteries holds a majority stake, operates the Ural Loto Gesellschaft m.b.H in Bashkortostan.

During formation of the operating company, Ural Loto in Ufa, Austrian Lotteries is able to rely on its own experience in Austria as well as on dependable partners: Linz-based KEBA AG, long-standing partner of Austrian Lotteries in Austria, was commissioned to manufacture the online terminals. The requisite local expertise is assured through acquisition of the successful entrepreneur Vadim Pletnev, owner of VPB Beteiligungsgesellschaft mbH.

The framework for implementation of a lottery draw and other types of lottery games in Bashkortostan by Ural Loto was arranged in the investment agreement between Austrian Lotteries, the Russian Austrian Lotteries holding and the Government of the Republic of Bashkortostan in December 2008.

In December 2008, the operating company, Ural Loto, received approval for the scratch-off ticket 'Glückliche Herzen (happy hearts)' and in January 2009, approval for implementation of the lottery draw Lotto '6 out of 40' in the Republic of Bashkortostan. Work on establishing the distribution network and creating the technical and organisational infrastructure was carried out at the same time.

Lotto '6 out of 40' was made available to the public on 14 September 2009. Some 800 retail outlets, in which people can participate in Lotto '6 out of 40', were established throughout Bashkortostan. The first draw took place on Sunday 27 September 2009 on Bashkir TV channel BST and was broadcast live.

In line with the legislation of the Russian Federation, the appropriated taxes from the lottery are used to fund socially important facilities and measures as well as for charitable purposes. On the basis of its successful business activities, Ural Loto is committed to providing funding for social, cultural, sporting, tourism-based and scientific projects as well as financial support for matters of general interest. For example, revenue from the 'Glückliche Herzen (happy hearts)' scratch-off tickets, which have been available on the market in Bashkortostan since December 2008, has already been used to fund a social project: Hospital No. 8 in the capital, Ufa.

The market potential which the Austrian Lotteries have in Austria is largely exhausted and will reach the limits to growth. For this reason, the Austrian Lotteries have started to offer know-how and services in other markets to strengthen their economic performance with sustainable effect.