When should you launch Mobile Lottery?

MOBILE LOTTERY…… it seems everyone thinks they can have one.  Let me clarify in the beginning itself that this is not a promotion article, but my sincere efforts to make you aware about the realities of Mobile Lottery in the emerging markets.
When we first launched mobile lottery feature we started receiving some interests mostly from startup lotteries.  This increased multi-fold after we launched SMS and USSD based lottery features.  After personally exploring the opportunity with prospective customers, I soon realized that they are hallucinating.  This way, I discovered certain myths about mobile lottery; let’s visit them briefly.
  1. One can start a lottery on mobile with very little money or investment.
  2. 80% of the country’s population has mobile phones so the market is big and everybody will play lottery on the mobile.  We will be millionaires in few months…..Wow!
  3. Traditional lottery operators are paper-based so, a new mobile lottery will be a game changer and snatch 50% of the market share in 6 months.
  4. Mobile subscribers have minutes (talk-time) in their phone so they will play lottery more frequently…….it seems they buy talk-time just to play lottery and not to communicate with others.
  5. Marketing a mobile lottery is damn easy….just send out SMSes to the mobile subscribers and they will leave everything else to play the lottery. 

I have observed many attempts in the past to launch a mobile lottery in emerging markets.  However, there are not many success stories yet, but that does not mean it is impossible.  Lottery is all about player psychology and perfect execution.  If we invest in these two aspects then mobile lottery can be a big success. 

With my knowledge, I have derived following key factors that identify your readiness for the mobile lottery.

[1] Are you running a land-based lottery?
If so then the odds are in your favor.  One should not forget that lottery is a brand that represents trust and integrity.  Building such a brand without having a history is a herculean task.  Players are unlikely to trust a lottery that is mobile-exclusive and without a history or track record.  A land-based lottery usually has already established a foothold, built trust with the community and properly paid to the winners.  When such lottery launches mobile-based lottery as an extension, players recognize the brand and welcome the initiative.  It is very likely to succeed with the least amount of obstacles.

[2] How will you manage money?
Land-based lottery is a cash business, which is not the case with mobile lottery.  Do give a serious thought how will you collect the money from players who play from their mobile phones.  How will you pay them once they win?  If you think that they will play with their credit/debit cards or you will deduct money from their minutes or talk-time then you might want to introspect.  Majority of the players in emerging markets do not have credit/debit cards and those who have, are unlikely to take a chance in the beginning.  Your telecom operator would not want you to directly touch the minutes or talk-time associated with the subscriber.  It is the most sensitive matter in their business.

[3] Win-win partnership with the Telecom operator?……a nightmare!!!
If you want to run SMS and/or USSD based lottery you must have a partnership with the Telecom operator.  Majority of my prospective customers informed me initially that they have a personal relationship with the CEO/Chairman of the Telco so; they think it is a cakewalk.  Having a personal relationship with the CEO and signing a win-win partnership with the Telco are in no relation with each other.  In many cases, Telcos are not willing to associate themselves with lottery or gambling especially if the lottery is new.  Telcos see this as a big risk to associate their brand with a new lottery because it is vulnerable to fraud.  Secondly, Telcos work with a revenue share agreement ranging anywhere from 20-60% of the sales.  They have the right to demand such a high share of sales as you are using their platform to promote your product and leverage from their vastly built subscriber base.  Unfortunately, lottery cannot survive with this business model.

[4] Privacy and Security
The player wants to be ensured of his privacy and data security especially when it comes to money.  The technology will largely address these issues but one should not be under the impression that these are related only to the technology.  Lottery management has a key role to play in ensuring these values are not compromised.  They have to invest substantially in public relations and image building.  Who says mobile lottery can be started with almost no money???

There are few other factors involved as well, but these are the major ones to be addressed before you even think of starting a mobile lottery.  Mobile lottery is not an easy one to start and is not everyone’s cup of tea either.  I hope my experience and knowledge will be helpful to you.

Please feel free to write me at info@locusplay.com if you have any questions or want to consult our team before starting a mobile lottery project.

This content was accomplished by Rahuldev Rajguru (CEO, LocusPlay) in his personal capacity.  The opinions expressed in this article are the author's own and do not reflect the view of any specific organization or institute.