The lottery format is thousands of years old, and it has survived for good reason. These games are versatile and transformative. They’re designed for profit or for charity; they change individual lives and the lives of entire communities; they fund films, arts programs, and entire nations. When you factor in the technological advances of the next few years and the hunger for innovation in the lottery start-up space, the industry’s potential looks limitless.
To make it a reality, however, will take some work. Promising companies require funding, mentorship, and business acumen – and many financiers only provide two out of three. And even when you have all three, it’s far from an easy ride.
So last year, I decided to launch ZEAL Investments with the intention of finding the most interesting, radical digital start-ups operating in the lottery space – and giving them the support and funding they need to establish themselves and truly thrive. The market is in desperate need of fresh blood and new ideas. As the investment arm of ZEAL Network SE, we are looking for inventive, ambitious, customer-centric companies; companies that aim to upset the status quo and reshape the lottery industry in their own image.
A new wave of digital transformation has changed the way that we live: Technology is disrupting how we interact with people and companies around us. Quite possibly the best example of a disruptive technology is found in the taxi industry: Uber. This smartphone app has changed how people get around – whereas before they had to phone up an operator to book transport, they can now do it from their smartphone.
Companies like Uber, Transferwise, Netflix and Airbnb have completely changed their industries and the way consumers interact with them. None of this would have been able without the aid of this disruptive technology.
The opportunity in this market is huge: only 5% of the current worldwide lottery industry, which is worth $300bn, is played online. Businesses who are able to fully digitise and build an online and mobile presence will be able to capture a large majority of this market and dominate.
The main issue with the market at the moment is the regulations: it’s not what they are, but how many there are. Every country has their own set of rules and regulations for the industry, meaning it’s been very difficult for any particular lottery business to get a majority of the market share.
LEARNING FROM EXPERIENCE
However, to fulfil these ambitions, these companies will have to overcome certain challenges. For example, a common – but overlooked – issue is attracting the wrong kind of investor. A lottery financier can’t simply provide money; the industry’s quirks and regulations require legal and strategic understanding. In effect, they need to understand how to design a lottery business, to work towards short-term milestones and lay the foundations for future growth.
As a seventeen-year mainstay of the lottery industry, ZEAL Network SE is uniquely placed to offer this kind of partnership. The company has survived and thrived since the early days of the lottery boom thanks to its understanding of the three pillars of gambling – putting money in, taking a chance, and possibly winning a prize – and, more importantly, its understanding of how to subvert them.
Businesses that partner with ZEAL Network SE benefit from its regulatory expertise, its considerable database of existing players, and its unparalleled knowledge of global lotteries.
Our parent company’s example is an excellent one for any would-be disruptor to follow – and part of my role as head of ZEAL Investments is to help them follow it. I was selected to lead this division due to my experience as a lottery entrepreneur: the lessons I learned during my time running my own business were occasionally painful, but they’ve always been worth learning.
FUNDING THE FUTURE AND DIRECTING INNOVATION
What new start-ups need, but so often lack, is a relentless focus on the end-user, and this – as much as the money – is what ZEAL Investments is all about. Certainly, we will provide capital, resources, and everything else you’d expect from a typical lottery financier. But the key advantage we offer a new lottery business, is a peerless understanding of the industry and its consumers.
Funding isn’t hard to come by in the lottery market, but a knowledgeable backer can be a company’s winning ticket. If they don’t understand the quirks, regulations, and the decades of entrenched traditions and practices that have come to characterise the industry, a financier can be more of a hindrance than a help. Our role at ZEAL Investments is both advisory and financial; our aim is to help start-ups tweak and challenge the three pillars of gambling – money, chance, and the promise of potential rewards – without losing sight of the end user.
We aim to stake out new territory and harness untapped markets, and our strategy wasn’t created with a particular kind of company in mind. We will certainly be looking at new games, but we’ll also examine marketing platforms, payment solutions, and anything that might give existing organisations a competitive edge. Above all, the idea is to work with businesses bursting with creative, customer-centric energy. Their product or service doesn’t even need to be designed for the lottery industry – they just need to have a product or service that’s applicable to it.
The lottery industry is in desperate need of game-changers; of Ubers, Deliveroos, and Airbnbs: big, mountain-moving, plate-shifting ideas. Despite solid efforts from some entrepreneurs, we haven’t quite got there yet. But other entrepreneurs will – and when they do, at ZEAL Investments we will ensure they have the funding and the support systems in place to make a success of it.
The concept of a lottery has been around for years: it can be traced back to the Chinese Han Dynasty around 200BC. In Homer’s Iliad, there is also a reference to lots being placed into Agamemnon’s helmet to choose who would fight the Trojan warrior, Hector.
Since its inception, the concept of a lottery hasn’t really changed. Someone picks a unique identifier, and if that identifier is drawn, they win. Typically, money will be required to pick your unique identifier, and if you win, you get a reward. What is missing is a game-changing way to play the lottery that will both unite and capture the market.