Can lottery operators capitalise on a big opportunity?

During the Covid-19 pandemic, with social distancing in place and the majority of sports being cancelled, sports betting operators’ revenues have been hit hard. Yet, customers have shown they still want to gamble and have been pursuing other online gambling services, such as virtual sports and games.

This has been a major driver for operators to prioritise different products that can be easily accessed remotely, even setting up the Virtual Grand National, which was recently broadcast on TV. Of course, responsible gambling is even more important than ever and any operator strategy at this time needs to be sensitive to the difficult economic situation that many customers face.

Is lottery a good contender to sports?

One of the biggest opportunities at the moment could be for lottery to gain momentum. YouGov recently reported a surprising analysis that showed the consideration for lotteries as an alternative to sports betting is a lot lower compared to online casino.

It’s surprising that lotteries aren’t considered more by punters given they are the third largest sector within gambling in terms of gross gambling yield (GGY) – the two ahead of them are retail betting and remote gambling overall. Known brands, such as the National Lottery, The Health Lottery, Lottoland and many others, should be getting more engagement during this time.

We expected more uptake for lotteries, especially as it’s a low-skill game and customers simply need to pick a few numbers. Perhaps this could be too low-skill for the more avid punters who still want something challenging, and are therefore going for table games.

On the other hand, customers often only bet on a lottery ticket once and don’t play for another day or week. In addition, there are no immediate results, so it doesn’t have the same emotional impact like casino or sports betting.

Supporting good causes

Lotteries worldwide have always maintained a ‘cleaner’ and more aspirational brand image than casinos, which is why so many people buy scratchcards, bet on the lotto and take part in different lottery draws. Prizes like EuroMillions or Set For Life also appeal to so many demographics, which makes the reach of lotteries a lot wider than specific sports.

There are many lotteries that are supported by the government or those offered by regulated providers across a number of countries. Lotteries are a great tax income for them, as well as being contributors to many different charitable and community causes.

For example, the National Lottery has raised over £40bn since its launch in 1994, helping sports, arts and heritage, as well as health, education and the environment. And now, it announced it will donate £300m to support the fight against coronavirus in the UK. The New York Lottery in the US has raised over $68bn since its launch in 1967, with funds going towards education.

Lotteries have a great attraction in that they help their local communities, and customers love to hear a great success story. During this time, everyone is looking for positive news and things that they can look forward to. This is why it would be a great time for lotteries to gain momentum.

Adapting to online-only services

Just like every other industry that has so far relied on the customer footfall in their shops in addition to online, lotteries now need to focus on their online services more than ever. While some offer both, many smaller or emerging lotteries will need to move their operations online or improve their existing online offering.

Customers can buy virtual scratchcards, play simple draw games, keno and slingo, as well as taking part in national jackpot games. While it’s only a developing area for many state-run lotteries, online services are now key for them to thrive.

One thing operators need to keep in mind is that the lottery is very different from sports or casinos. It’s more aspirational and there is no instant gratification, however, the prizes are a lot higher. Operators need to focus on how they can leverage that and design user journeys which encourage customers to return more frequently to continue playing at typically low stakes.

The digital user experience will need to be smooth for them to start playing without any delay or obstacles, including being able to access their account, check tickets and results, as well as claim their winnings. Expanding the existing brand and adapting it to the digital environment could bring the entire customer experience together and boost engagement. Highlighting all the great causes and success stories that the lottery supports will only help create a more positive image of the brand and encourage more customers to play.

Even when we go ‘back to normal’ in the future, by combining retail and online services, lottery operators will be able to create a comprehensive platform for their customers to engage with from different points. Whether they like to play online or purchase a scratchcard from their local branch, lotteries will be able to capitalise on this customer journey.

Chris Benstead has been supporting emerging digital projects for over 10 years. Previously working for Hewlett Packard supporting large enterprise-level financial and customer service projects, his background is in the identification of customer’s core business requirements and understanding how and where value can be added to a proposition through the use of digital. Benstead facilitates many of the discovery and product design sprint services offered by Degree 53.