Lottery Corp CEO Sue van der Merwe says pubs and clubs are peppy
Sue van der Merwe says one part of the economy where she’s seeing good activity is in pubs and clubs, where Keno performance has been strong.
Economy
How would you rate the momentum of the Australian economy as we head into 2025?
Since the start of the financial year we’ve seen a stabilisation and signs of improvement in our base game offer. That’s indicative of some resilience in consumer confidence, although typically the appeal of lotteries endures through different economic conditions. One part of the economy where we have seen strong activity is in pubs and clubs, where the performance of our Keno product – which is largely played in these venues – has been good, with people valuing social venues for connection and as a good-value entertainment option.
Official forecasts have Australia trimming interest rates from the first half of calendar 2025, is that consistent with your view?
Looking at the forecasts, it appears likely that the official cash rate will be reduced next year, although there are differing views among commentators on how soon that’s likely to occur. From our perspective, the bulk of our debt is fixed interest, which reduces our exposure to interest rate movements in either direction.
What are you seeing around inflation in your own business?
While cost pressures have come off their recent highs, they do remain elevated, particularly with technology costs, which are still running above the rate of general inflation. Our cost base is highly variable. It is important for us to maintain a strong focus on efficiency to deliver operating leverage.
Outlook
What excites you heading into 2025?
We are always excited about making people’s dreams come true and creating millionaires. We have such a unique value proposition to all our stakeholders – our players, retailers and their associations, state governments and our employees. I’m sure 2025 will be as exciting as our first two years as a stand-alone company.
Are you likely to increase, hold steady, or trim your investment spend?
Continuing to invest in our systems to deliver enhanced and personalised customer experiences – including through the implementation of a new customer data platform – will be a focus. We are a capital-light business, though, and expect our investment levels to remain consistent with recent history.
Reform
As we move into an election year, in your mind, what’s the single biggest lever that can/should be used to lift Australia’s competitiveness or productivity? This could be across any area from labour market, tax reform, training or other areas to encourage investment.
Having more than 7200 mostly small business partners gives us insight into how vital small business is to the Australian economy. Small businesses employ more than 40 per cent of Australian private sector workers, yet the sector is sometimes overlooked when it comes to discussions about productivity. Initiatives that can support small businesses to further digitise and modernise manual processes can help improve our productivity and competitiveness.
Geopolitics
Will a Donald Trump presidency have a potential impact on your business or sector (tariffs or streamlined regulation)?
The election of President Trump is not something that we foresee will have direct impacts on our business or sector. Many Australian businesses will be closely attuned, though, to how things play out with respect to import tariffs and what that might mean for inflation and global economic growth.
Does geopolitics drive a bigger part of your decision-making?
As the custodian of Australian, state-issued lottery and keno licences, geopolitics is not a primary driver in our decision making. We do recognise that these kinds of events can impact the Australian economy and consumer confidence. Our focus is on maintaining the resilience of our business across the board rather than attempting to address specific geopolitical risks.
People
Has your organisation’s approach to flexible working – including working from home – evolved during the year. Is this likely to change further into 2025?
Our approach is about making our people accountable to achieve agreed outcomes. Some roles require team members to work from the office at all times, or other form of work site. Other roles allow for flexibility. This has served us well operationally, and in terms of employee engagement. Of course we’re constantly assessing our approach and those of other companies to strive for the best operating model.
Technology
Where is your organisation along the AI journey – is it in the developmental stage, or are you now using the technology at scale across your business? If so, are benefits matching the promise?
We’re at the stage where we are using and implementing AI across the business. It is giving us great results in tailoring our marketing to individual customers making it more customer-friendly and efficient. We have used machine learning in developing our models for early intervention to identify customers who may be at risk of potential gambling harm. This technology and approach is useful in monitoring operations and identifying patterns to help us in other parts of our business too. Recognising the potential of AI to support our workforce, we have begun deploying AI code assistants to assist our developers. We are also currently piloting Microsoft Copilot in sections of our workforce.
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