Lottoland punter in Germany wins GBP 90 million

Gibraltar-based secondary lottery Lottoland will be relying on its insurance policies to help pay-out a record GBP 90 million win secured by a Lottoland punter in Germany this week.

Lottoland said that the prize will be paid out through the firm’s insurance model, with the Fortuna PCC that accesses efficient risk capital through a series of financial instruments including ILS and collateralised reinsurance, alongside traditional re-insurance, the vehicle bearing the claims.

The lottery betting provider renewed its Fortuna re-insurance or insurance-linked securities (ILS) transaction at an upsized Euro 120 million last year, making it the largest such re-insurance deal in gaming industry history.

Lottoland set up its own insurance company in Gibraltar, Fortuna Insurance PCC Limited, to provide its own issuing vehicle for future collateralised re-insurance and ILS transactions.

In a statement Friday Lottoland CEO Nigel Birrell said: “This record Euro 90 million win is a break-through moment both for our business and the industry as a whole, as it is the largest jackpot pay-out ever across the online gaming and lotto industry. We look forward to breaking more records in the future.”

The company confirmed this is the largest jackpot pay-out in Lottoland’s five-year history.

Inevitably, the impact of such a large pay-out will flow through to the investors backing the Fortuna collateralised reinsurance ILS notes, which are structured into four layers of lottery jackpot risk and feature expected losses in a range from 2 percent to 14 percent, while the pricing multiples range from 1.6 to 2.1 times the expected loss.

Some of the Euro 90 million jackpot will also fall to traditional insurance markets that additionally back Lottoland.