Lottery must act to protect its market share, or risk losing it

The lottery sector must stick together to protect its market share and fight off the existential threat caused by global lockdown, according to Spinola Gaming CEO Ade Repcenko.

A small number of retail and online providers currently drive the industry from a technology aspect. In most cases, a lottery will only utilise one provider and they are locked into long term agreements which prohibit the use of external or additional technologies. These restrictive agreements make it harder for state-run operators to get online and continue to generate revenue, as their existing providers don’t have the appropriate technologies or capabilities to get clients online quickly.

Repcenko explains how this has to change for the industry to survive the existential challenge of Covid-19 lockdown. “In a time when people are keeping their distance, it’s important that we stick together to make sure lottery survives, not dies,” he explained. “It’s time for the lottery sector to unite and join forces, to help each other and our clients for the greater good by working together on utilizing technologies that enable all of us to add value to our existing relationships, which helps our clients continue to raise funds and generate revenues for good causes. Most importantly, we cannot let alternate options become more attractive to players than the games they are used to playing every week.”

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As the global lottery sector faces its biggest ever challenge, the solutions provider CEO believes the industry is being forced to make the shift online earlier than planned. For many, it would have been an inevitability over the next 3-5 years, but with retail now unable to sell tickets, that process has to be accelerated. Most operators are backed into a corner through long term retail relationships, with such relationships being the cornerstone to sales for the past decades, but now that model has to adapt.

“Operators could take a leaf out of the online casino business model that treats affiliates in the same way that retailers are to lotteries. The affiliate model is easily implemented, requires no new forms of technology or advanced development and allows both operator and retailer to take advantage of the current situations,” suggested Repcenko. “At the same time, operators need to appeal to their existing software providers to look at ways in which they can remain active during these troubled times and will require a level of compromise from both sides. Operators need to look at new forms of revenue sharing to allow for the affiliate model to work and software providers need to open up to working with new and modern forms of technology to be able to provide the level of service that these state run operators very desperately need right now.”

The online sector has proven to be much more resistant to the current climate than retail, as is shown by the growth of third-party operators. However, to compete with these companies, there are many innovative digital lottery solutions on the market to help national operators and their software providers get online quickly. As lottery players begin to adapt to the global lockdown by moving online, the traditional lottery sector must do the same to keep their market share, or else it could be gone by the time retail reopens.