The global lottery market is expected to grow at a CAGR of more than 9% by 2021, according to the latest market study released by market research firm Technavio.
“The regulations on lottery markets across the world are evolving with many countries legalizing different forms of lottery. The change in regulations, especially in countries like the U.S. that have a high potential for growth, will drive the growth of the market during the forecast period,” said Ujjwal Doshi, lead analyst at Technavio for gaming research.
The terminal-based lottery market, which include draw-based or numbers games like Lotto, EuroJackpot, EuroMillions, Mega Millions and Powerball, is expected to grow at a CAGR of close to 10% during the forecast period. This segment, according to Technavio analysts, accounted for the largest market share in 2016. One of the major reasons for the growing popularity of the segment is that several users enjoy the anticipation that is ingrained in these lotteries. Furthermore, the prize money of these lotteries is significantly more than the prize money of other types of lotteries.
The U.S. and parts of Europe such as the UK, Germany and Spain have recorded notable jackpot records in the period 2011-2016. As of January 2016, the U.S. Powerball created the largest jackpot history with a prize money grossing more than $1 billion.
Meanwhile, the scratch-off lottery market is forecast to grow at a CAGR of more than 12% during the same period. The low cost of the lottery ticket and the instant chances of a win are the major factors driving the growth of this market, according to Technavio.
Even though their prize value is not as high as that of other lotteries such as Powerball and other terminal-based lotteries, scratch-off cards have a high consumer retention as they are low-risk lotteries as compared with other lottery games. Betsson and Bet365 are the biggest scratch-off lottery vendors in the market as of 2016. These companies integrated NeoGames scratch games in 2009 and have been gaining profits since.
“The growing demand for the online lotteries is also helping the market to grow. Online lottery gaming vendors have started using the latest innovations to attract more customers,” said Ujjwal.
Online lottery, which started off with the sports segment, has become one of the popular online sports games. In this game, gamblers predict the winners from the involved teams and the highest number of correct predictions for the select matches decides the winner.
Sports lotteries are popular among sports enthusiasts as they are won depending on the gambler’s knowledge about the sport. This segment is highly popular in Europe as it hosts several football matches every year, according to Technavio.
Aside from football, betting on horse racing and greyhound racing are also popular.