Lottery Industry Likely to Face Massive Digital Disruption …and More!

Lottery Industry Likely to Face Massive Digital Disruption …and More!

Lottery Industry Likely to Face Massive Digital Disruption

The Harvard Business Review recently published the findings of a large survey of more than 2,000 C-level executives on the impact of digital technology across various industries.

Although the lottery industry is not explicitly mentioned, it is not hard to see that traditional lottery operators should fear digital competitors:

“Unsurprisingly, the most disrupted organizations were B2C, with media being the most   disrupted and telecoms and consumer financial services close behind. […]

The most disrupted industries typically suffer from a perfect storm of two forces. First, low barriers to entry into these sectors lead to more agile competition. Secondly, they have large legacy business models which often generate the majority of their revenue. These organizations, therefore, have embedded cultural and organizational challenges when it comes to changing at the pace required.

At the other end of the spectrum, the industries that are least disrupted often have perceived higher barriers to entry, and a smaller part of their business that can be digitized.”

Traditionally, two significant entry barriers facing new operators were the need for sufficient capital reserves, as well as a valid local license. While insurance is already, to some extent, replacing the need for capital reserves, an increasing number of business-friendly, offshore jurisdictions offer a way around the requirement of a local license.


“The Fat Years of the German Lotto Monopoly Are Over”

Last month, we already reported on the “slow death of the German Lotto”. As it turns out, respected German daily Die Welt reached a similar conclusion.

“The trend is moving away from lottery tickets and towards online casino games and betting, which means less tax revenue,” the newspaper writes.

Because of the changing gambling landscape, Die Welt is not only urging for the abolishment of the state-owned lottery monopolies, but also for the establishment of an independent regulator with the ability to license privately-owned (online) operators.

“Consumers can only be effectively protected if online gaming is legalized and providers are being subordinated to state control,” according to the German association for information technology Bitkom.

“6aus49, a veritable gem of German small-mindedness with its notarized draws and its blonde-haired Lotto-fairy has lost its innocent charm,” Die Welt concludes.


Lottery Messenger Services Urged to Be More Pro-Active

Speaking in a lottery forum in Sofia, Bulgaria, Isle of Man Gambling Supervision Commission (GSC) chief executive Steve Brennan urged lottery messenger services to be more pro-active and consider forming its own trade association that will demonstrate their ability to self-regulate.

Lottery messenger services offer customers the opportunity to play in lotteries around the world by purchasing tickets in those lotteries on the player’s behalf or by allowing customers to bet on the winning numbers.

Industry experts believe lottery messenger services sector has a bright future ahead, but operators need to start planning for possible increased regulation and interest in the industry.

Earlier, the Isle of Man Post Office already sought to capitalize on the growth of online lottery services.

Meanwhile, the Isle of Man GSC is also looking to facilitate gambling with Bitcoin, or other digital currencies.

“We’re ironing that out so that if the commercial climate in the future becomes less challenging for block-chain based payment channels, it won’t be our law that prevents their adoption,” Mark Rutherford, deputy chief executive of the GSC, said.


New York Lottery Posts Record Turnover

The New York Lottery reported almost $10 billion in turnover in 2015, reinforcing its status as the most profitable state lottery in the US.

Although New York is only the third-largest US state by population (a considerable distance behind California and Texas) its state lottery is nonetheless the most profitable, quite possibly because the New York State Lottery is at the forefront of digital innovation.

Jackpocket, a mobile app launched in September 2015 that lets users play the New York Lottery from their phones, just released a big update to support two additional lottery games.


World Gaming Executive Summit Announces New Lottery Speakers

The World Gaming Executive Summit, which will take place on July, 5-7, 2016 in Barcelona, announced the speakers of its C-level lottery panel:

  • Nigel Birrell, CEO, Lottoland
  • Magnus von Zitzewitz, CFO, Executive Board Member, Lotto24 AG
  • Areti Markou, General Manager, Intralot Morocco
  • Lanre Gbajabiamila, General Manager/CEO, Lagos State Lotteries Board

Lottery content will be spread across the three day agenda, which will allow attendees to hear all about new opportunities in online, mobile and synthetic lottery markets.


Other News

New UK lottery regulation is making non-profit fundraising a little bit easier.


Operator Unibet is claiming that it would be a “clear state aid case” if the Belgian government charged VAT on all gambling apart from lotteries.


Spain’s state lottery is about to spend €7.2 million on new ad campaigns.


The US Powerball jackpot has grown back to $348 million.