Impact of the Extensive Lockdown on the Lottery Industry and What it Means for its Future
The nowadays situation with international quarantine is nothing similar to what we have previously seen. Almost all business spheres have been subjected to the impact of Coronavirus. The gambling industry is among the ones that have suffered the most. Nearly all land-based casinos have been closed. The major sports events have been postponed or cancelled. In brief, the retail business is experiencing severe decay.
We are all obviously familiar with the impact of the COVID-19 on the lottery industry that is suffering even more. The closure of the sales outlets prevents business owners from offering their services to their clients. Such a stoppage of the industry sees a minor light in the online direction. However, the internet lottery hasn’t been similarly developed as its land-based counterpart.
With such a development of a situation, Rosloto experts decided to study the impact of the extensive lockdown on the lottery industry and define what it means for its future.
The majority of draws were severely hit by massive limitations almost all over the world. The retail part has almost completely seized its activity. But can the online sphere become a viable alternative for the time being? Despite all talking about the digital and iGaming lottery over the last few years, it still makes up a relatively small part of the gross industry sales. So, retail is still massively important.
Nowadays, we don’t hear a lot of lottery venues declare their income due to the lockdown. So, the specific revenue impact is yet unknown. With this in mind, we can only estimate the influence on sales and revenues of the general lockdown situation.
The most notable examples in the US are:
- Massachusetts — $1.3 million during the second week of March;
- Arkansas — $3.6 million from January to February;
- Oregon — estimated between $250 and $500 million during the lockdown.
In Europe, Italy and Spain cancelled all their major draws. For now, only online lotteries are being held in these two countries, shaping up the most dramatic example of the lockdown impact on the industry.
The US safe national lottery expert claims:
The mass closure of lottery offices in the US and changes of some draw procedures are instructed to be just temporary measures. In Kentucky, for example, they have stopped using special machines and started manually putting balls into the drums for the purpose of generating the numbers during the quarantine period.
Unlike the commercial, the national lottery market suffers from a rather severe issue — monopoly status. Nevertheless, in times like this, they probably want to become more creative with some changes they are making due to the tight regulatory processes, not allowing them to react as quickly as they wish.
When we think of a lottery, we usually associate it with massive jackpots. However, we tend to forget about the scratch cards and betting.
The GameWorks lottery-betting expert in Malta shared his opinion:
On the international level, scratch cards make up just over 25% of the total lottery industry. However, if you look at the specific territories of the US, they can reach up to 40-60%. And in certain states, such as Massachusetts, this part is almost 80%.
With this in mind, since the essence of scratch cards is visiting a point of sale, the negative impact on the sphere is devastating in the mentioned regions.
The lottery-betting space had a faster reaction time on the flow of the events. Some operators started to build replica games that bear the same functionality but use the transparent result mechanism that allow you to create derivative content at the same service. The adoption response on these products is really positive, telling a lot about the consumers’ demand for games as long as a familiar environment is provided.
The consumer behaviour from the online perspective standpoint is being driven by the anxiety of the unknown. The customer interaction with the lottery game after the peak of the lockdown allowed seeing the margin of the adjustment to the new situation. The complete suspension of games and the revision of jackpots scaling up (for example, in the US) has definitely had an effect.
Let’s look at the key differences between the retail and internet lotteries and compare them face to face.
The necessity to reach a certain destination to get the desired ticket
Ability to purchase a ticket instantly without the need to commute to the sales point
Long queues in case of a disorganised configuration in a retail outlet
Automatic purchase with no lines or delays to obtain the ticket
The necessity to fill in the paper blank with a pen and wait until the result
A few clicks submit the entry, and the results are sent by email
The winning ticket can be lost, stolen, or damaged that prevents from getting the prize
The winning pool is transferred through secured payment methods to your account
Strict limitation of the gameplay variety
Different gaming opportunities opened by the online possibilities
It may be too early to draw any firm conclusions. However, on a positive note, the fact that the majority of state and national lotteries are continuing their operation shows a certain amount of flexibility from an operational point of view.
As mentioned by the US safe national lottery expert:
The biggest and probably the most important lesson to be learnt is the availability of online as an alternative channel. Even the lottery venues that used online direction devoted minimum resources to acquire extra customers. This is because they just needed to be perceived as multichannel. Therefore, the biggest lesson to learn is the necessity to be truly multichannel in case of such an unpredictable situation like the current lockdown.
The majority of state and national lotteries tend to view digital as a merely different way of selling the games they already have.
Innovative digital solutions give the operators a clear advantage. The examples like in the US, the restrictions they have put into place shows how exposed they are to the retail sales. It provides a clear ground to start treating the online sphere as a fully competitive counterpart of the land-based industry. If you compare the distribution of lottery tickets and scratch cards in the retail and online environment, it’s an entirely different experience.
As a result, people will want to play online more in the future. And on top of that, the younger audience will be particularly eager to engage in innovative digital solutions. So, selling the tickets online is one thing, and adapting the product to an entirely new generation of clients is different.
The betting on the lottery market has caused a lot of hype and created tons of new possibilities. The laws have been changed in many jurisdictions. The result is the ability to create entirely new types of draw games, jackpots, and other aspects.
Online consumers’ attention span is concise. The new products and flexibility make up a genuinely new intersection where you can find innovative solutions. This is what we now barely see in the lottery. The result is the inability to catch a younger audience that will be frustrated and probably never come back after the first time,
— mentions the GameWorks lottery-betting expert in Malta.
The problem lies in the available product. Of course, people have always enjoyed the process of lottery draws, but there must be a constant flow of something innovative that will attract a new audience over and over again.
That is why Rosloto offers you to upgrade your existing software to ensure you get even more traffic from the online lottery. The Golden Race company offers a brand-new approach to the existing gameplay. High-quality products and swift installation process will make any operator excited about the new opportunities of their platform.
It is essential to supply top-notch entertainment to the clients, especially if they truly demand it. Rosloto has been working with the Golden Race software already for a few years and can guarantee the compatibility of products with any existing system. Don’t hesitate to improve your establishment and make people happy. Just contact our responsive support team for further inquiries.
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