Mobile Lottery… A Hype or Reality?

If you are a lottery operator then probably this is not the first time you are reading or have come across something about the mobile lottery.  I am sure you would wonder that is it some kind of a hype that is created by technology providers or is it a reality or soon going to be a reality.  Let’s explore this phenomenon together both from a lottery operator’s as well from a player’s perspective.

I am neither going to bombard you with facts and figures nor going to quote references of any research finding.  Instead, I am taking you with my individual experience and my interactions with people and players associated with the lottery.  Off late, I have experienced that mobile lottery is becoming a de-facto discussion point whenever I happen to meet either a lottery provider, a supplier, a consultant or even a player.  I guess everybody wants to follow what they think is the direction where lottery technology is heading to, but I have seen fewer initiatives towards implementing or making it a reality.  You would wonder why is it so?

Majorly, there are two types of lotteries or say rather three types.  The first type is the one in developed countries like US, UK etc., where either law prohibit mobile lottery or they are already ahead of the game.  The second type is the one in emerging markets like the Caribbean, Africa etc., where the lottery is still paper-based with some of them adapting to technology lately, mainly for their retail operations.  The third and most interesting type is the one that is going to start or a startup lottery.  Let’s talk about the second and the third type as they are not very big compared to the state lotteries in the US or a national lottery in the UK, but they have a huge potential to beat the market in terms of growth rate.

The lotteries that mainly run paper-based operation have a modest but steady growth rate, but they find it difficult to keep the cost of operations down due to two reasons – high inflation and ever-increasing winning payouts.  Some of such lotteries are seriously exploring the ways to go mobile as that not only brings them back on high growth track but also helps them bring down the operations cost significantly.  A mobile lottery will fetch them a segment of players that are not comfortable going to a retail outlet and buy a lottery due to several obvious reasons.  This is really a big segment of the emerging market, which many lotteries have ignored so far.  This is the growth that I would be very much interested in.  This will not only bring more money to the table but will also account for a much larger spend on per ticket transaction.

The third type – new or startup lottery, are they willing to start with a just retail-based operation and invest heavily just to be “one more” player in the market?  The other serious aspect for them to consider is that they are up against an established lottery player who has deep pockets.  A mobile lottery is a right strategy for them for multiple reasons.  They need to be innovative and the first one to bring a change when they are competing with the established lotteries.  They need to look for a market segment that is not captured by their competitors.  Who does not know a better way to do this when the competitor is still complacent?  Last but not the least, they need to keep both the capital investment as well the cost of operations in check with the fact that they have to offer better winning payout than their competitor.  They have the right opportunity to catch others napping by launching mobile lottery with a significantly lower capital investment and lower cost of marketing.  This is a big market where traditional lotteries are still under the belief that disruption is impossible.

There are for sure a few innovative thinkers in both the types of lottery that I have explained earlier.  But for them, the biggest question is still unanswered to a greater extent.  Is there an availability of a genuine technology for a mobile lottery?  Is it really a “so-called” low capex initiative?

- Rahuldev Rajguru

Co-founder & CEO