Operators rally for US national and state lotteries to go digital

Lottery operators across the US are calling for their state officials to digitise the sale of tickets in the wake of the Covid-19 pandemic.

Over the last few months, only a handful of states were able to legally offer digital lottery ticket sales during their respective lockdowns: Georgia, Illinois, Kentucky, Michigan, New Hampshire, Rhode Island, North Carolina, Pennsylvania, North Dakota and Virginia. Many of these states revealed that they experienced a surge in online ticket sales, with New Hampshire registering a 38 percent jump in first-time online players during this period. All other states require players to purchase a lottery ticket in person from a retail outlet, and all saw sales and revenues tumble drastically during the pandemic.

Despite a determination to go digital now being shared by a majority of key lottery figures in the US, state operators still require regulatory changes to take place before they can make the shift. Unless these regulatory changes happen fast, the US market will lag behind the rest of the world, as LATAM, Africa, Asia and Australia all already possess the legal ability to sell online. The online commercialisation of US government and state lotteries is long overdue, and Covid-19 has given those in favour of digitization real tangible data to support their long-standing arguments. State lottery operators’ interest in going digital is now stronger than ever, as the pandemic clearly highlighted the severe limitations of the retail lottery business model.

Barry Pack, director of the Oregon State Lottery, stated that retailers in Oregon lost 70 percent of their customers due to the lockdown. “The recovery from this pandemic is going to force a digital transformation in our industry a whole lot more quickly than we might normally have seen it come,” he said. “When the legislature reconvenes next week, they’re facing a billion-dollar shortfall. Their opinions about mobile gaming will change. I think there will be less resistance.”

Gordon Medenica, director of the Maryland Lottery shares Pack’s views: “We’ve been pushing a digital transformation and online selling ever since I’ve been in this industry, over the past 10 to 15 years,” he said. “In Maryland, they passed a law three years ago banning sales on the internet. I think we’ll see a dramatic change and I’m looking forward to it.”
And in a Lottery Commission meeting, Massachusetts Lottery Executive Director Michael Sweeney said their lottery faced “a significant threat of becoming somewhat obsolete”.

The extreme drop in lottery sales due to the pandemic and shelter-in-place orders was also a key pain point for most participants of the SBC Digital Summit’s lottery discussion titled, “State of Play – US Lotteries During the Coronavirus.” Many state lottery veterans shared the opinion that the pandemic should be a wake-up call for lottery officials and state legislatures, with one participant stating that the pandemic exposed state lottery’s inadequate retail business model and that it might not be sufficient for the new normal. Speaking recently Ade Repecnko, CEO of Spinola Gaming, agreed with that assessment. His company has helped many national lotteries around the world go digital over the past few months, giving them a steady stream of income to sustain their operations during the pandemic.

“Retail operators need to take a look at the post-Covid19 world and its impact on player needs and expectations, and think about what it means for the future of lotteries.” said Ade Repcenko, CEO of Spinola Gaming. “Digital is the way forward and is set to play a huge part in our industry over the coming years. Solutions like the ones offered by Spinola Gaming provide land-based operators with a holistic solution that helps operators make the move to digital, while still maintaining their traditional retail operations through one seamless interface. The software allows operators to monitor all lottery ticket sales and track all online and offline purchases in real-time, complete with a myriad of marketing functions and analytics available at the touch of a button. The system is available across all markets, currencies and languages and is fully customisable.”