Rhydian Fisher is CEO of Instant Win Gaming (IWG), the leading provider of instant win style games to lotteries, commercial brands and platforms in the digital lottery and online gaming sectors. Following the launch of the company’s games with the New Hampshire Lottery, we had the opportunity to speak to Rhydian about recent developments at IWG, the expanding market for digital eInstant lottery games, and in particular the US Lottery opportunity.

Gaming Americas: Congratulations on your games going live with the New Hampshire Lottery. For some background, what are digital eInstants and how will they enhance the lottery’s online offering?

Rhydian Fisher (RF): Digital eInstants as they’re called in the lottery world, or instant win games as they’re often referred to in the commercial gaming world, are a category of online wagering games where the interactive fun is the primary focus. In a general sense, whereas online casino games are all about the chance to win with some interactive fun, eInstants are all about the interactive fun with some chance to win. This differing orientation is really the root of it all. Typical casino players are motivated by the thrill of staking money, and the corresponding volatility of winning and losing. On the other hand, typical eInstant players are, first and foremast, seeking some casual entertainment but love the idea that they might just win some money. This difference very much mirrors casino versus lottery entertainment in general.

To players, eInstants are casual in style, and often really simple to play. However, designing games with these characteristics, yet deliver sustained engagement, is anything but simple. Here at IWG, we have a 20-year history of developing exclusively digital eInstants. No one else has been so solely focused on this in the dedicated way that we have. And, when you have the opportunity to devote consistent focus to one category of games over a such a sustained period of time, you get amazingly good at building them. Today, we proud to be able to say that we’re the best in the world at it.

In New Hampshire, we’ve made a strong start by launching a range of eInstants including New Hampshire Cash Expander, a localized title that tailors our popular Cash Expander mechanic specifically for New Hampshire players. Through previous experience, we know that localized games really resonate with players and we’re expecting the latest title to be a big hit.

Gaming Americas: What is the state of the eInstant lottery market today?

RF: We were fortunate to get involved with this category early on, and it’s certainly been an evolution. In the very beginning, circa 2000, a few lottery operators, like Camelot in the UK, were launching online sales, and were looking for digital games that paralleled their retail instant ticket games. Back then, we had no experience in this, but neither did anyone else, so we set-up shop, started imagining how these games might play, and then jumped in and began building them. From there it’s been a continuous process of iteration. We develop a game, we release it, we analyze the resulting data, we apply what we learn, and we develop the next game. We repeat this process over and over – it’s pretty straight forward. But, it’s culmination of 20 years of learnings that make our games authentic.

The lottery market has become our core focus. Today, we provide eInstant games to 23 WLA/NASPL member lotteries around the world. More and more lotteries are setting up ecommerce channels for what has predominately been a retail-only sales model. We expect this trend to continue. In the US, for example, lottery is a $90 billion per year category, and instant games represent more than 65% of this. Therefore, as these lotteries launch online sales channels, it is very necessary that they have digital eInstants to offer their players.

Gaming Americas: How does managing an eInstant portfolio compare to managing a retail instant portfolio?

RF: There are many similarities, but the demands of the internet channel means that everything is accelerated. One of the more obvious examples is the percentage of prize payout. In the US, a typical retail instant game will have a prize payout of 65% – 80%. This has proven to be optimal for a product that can only be purchased by players during their periodic trips to a retail outlet. However, the addition of an internet channel means that games can be now be purchased wherever and whenever. This translates into much higher play volume, and to be fair to players, this higher play volume must be supported with a higher prize payout. As a result, a typical online eInstant game will have a prize payout of 80% – 85% or more.

A less obvious, but equally important example, is frequency of game launches. Lottery players seek out games that are casual to play. At the same time, they are particularly drawn to the newest titles. With retail instants this might mean a roadmap of games with new launches on a monthly basis. In the internet world, the time dimension is much faster paced. A typical eInstant roadmap will plan a two-week cycle between game launches for most of the year, supplemented by weekly launches during peak seasonal periods.

For suppliers, it helps if you have a culture that thrives in complexity. Across the 23 lotteries that we supply around the world, we’ve never ever delivered the same game twice. There are always custom elements required for each delivery which will range from game theme to prize math to style of outcome engine to a myriad of other factors. The bottom-line, in the lottery sector, non-standard is the standard.

Gaming Americas: Certainly, the retail channel is hugely important to lotteries. What impact do eInstants, and in general, selling lottery online have on retail sales?

RF: This has been one of the real success stories as lotteries modernize. Of course, lotteries everywhere are either already selling their games online, or are considering doing so in the future. It is now common for a lottery’s online channel to account for 20% or more of total sales. Along with this, eInstants will often represent 70% or more of these online sales.

At first, the specter of an additional sales channel can be a concern to the brick and mortar retailers who have been a lottery’s exclusive channel partner to this point. However, across the board, selling online has proven to increase retail sales as well. The reason is straightforward. The lottery’s traditional, cash-only, in-person way of selling games has not kept pace with the modern consumer. Long time players might continue to purchase in this traditional way, but new players can no longer be acquired as efficiently. Modernization, meaning adding online sales, opens up the lottery to a far broader world of potential new players. And, when a lottery introduces a player to its games through its online channel, that player becomes a buyer at retail as well.

Our customer the Michigan Lottery, for example, has been selling their games online for more than five years and have seen traditional retail growth of 45% during this period. Our customer the New Hampshire Lottery, in just its first year of online sales, simultaneously, grew retail sales by 16%. The same trend holds true for every lottery in the US that has instituted online sale. Once a lottery begins selling online, they quickly experience a shift in the support they get from their very important retail partners–from concerned resistance to proactive support.

Gaming Americas: What steps are lotteries taking to support their retail partners?

RF: Even in the case of a lottery where 20% of its sales are online, this means that 80% comes through its retail channel. So, lotteries always take steps to include their retail partners in their online sales initiatives. And, there are many ways to do this.

Our customer, the Pennsylvania Lottery, has integrated its traditional retailers into its affiliate program. A retailer earns affiliate fees by signing up players for online accounts.

Our customer, the Michigan Lottery, offers players the option to fund their account by purchasing a prepaid lottery card at any of their traditional retail outlets. The retailer earns a commission on these sales.

Every lottery we work with is innovating on ways to sell online while also expanding retail sales. And, the collaboration is producing great results.

Gaming Americas: What has been the COVID-19 impact on the lottery sector?

RF: I’ve been in contact with many lotteries during the COVID-19 crisis. Of course, their number one priority is keeping their staff safe and healthy. Beyond that, lotteries understand that they serve an essential function during normal times, and even more so during times like now—generating vitally needed funds for their beneficiaries. Therefore, maintaining uninterrupted operations, in a world of disrupted supply logistics and shelter-in-place orders, is more than ever, the day-to-day focus. No surprise, but those lotteries that currently sell their games online have increased their marketing focus on this channel. And, many lotteries not yet online have been asked to immediately explore plans for setting up online sales, to potentially be actioned once we’re beyond the crisis. Certainly, over time, all lotteries will need to modernize to keep pace player preferences. I suspect that the urgency of the moment may accelerate the thinking on when to do so.