Analysing how to compete against state lotteries - EIG 2017

Analysing how to compete against state lotteries - EIG 2017

Tuesday, November 7, 2017 Posted by Michael Lawson
The debate took place at last week's conference in Berlin

State lotteries often find themselves with a hegemonic grasp of the lottery industry, leaving digital competitors trailing and bringing in new legislation whenever competition is perceived to be too fierce.

At last week’s Excellence in Gaming (EIG) conference in Berlin, this was one of the topics of debate, with panelists evaluating the best way for companies to maximise profits when competing against state lotteries.

Robert Lenzhofer, Co-founder of Glück Games, gave his views when asked if state lotteries were essentially stopping lottery companies from operating fully. He said: “I think it’s a problem, but I think that it’s an expected problem.

"National Lottery is state-owned, effectively, and they don’t really want to open up to competition.

“The way to work around it is to talk to someone who is not in charge of the lottery, so perhaps the finance minister, or the culture minister, and tell them, ‘yes, the national lottery will probably shrink if you allow competition, but the sector as a whole might start going again because you might allow something more innovative’”.

Michael Bogie, Lottoland Director of B2B, highlighted some of the benefits of the simplistic lottery model. He said: “Everyone knows how to play [the lottery]. It’s the simplest point of entry in terms of placing a bet, and everyone knows how to use this product.

“Add this onto your sports betting or bingo platform and you see the conversion rate, the uptake rate is extremely high. It’s a low stakes, very quickly consumed product. Low stakes, high margins, and the ability to offer huge jackpots.”

Totally Gaming says: For digital lottery providers, competing against the state-run behemoths is always an uphill struggle. When these companies are perceived to be making decent leeway, the state can then move the goalposts by bringing in new laws, as Lottoland recently witnessed in certain regions of Australia. Nevertheless, Michael Bogie makes some valid points about the simplicity of the lottery, and perhaps the best way to utilise this is by placing it alongside a betting or bingo platform.

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