The global lottery market is expected to grow at a CAGR of 9.44% during the period 2017-2021 and yet it faces significant challenges.
One of the major challenges faced by operators in the lottery market is jackpot fatigue. Lottery is a game of chance and players know that they have limited chances of winning a jackpot.
Complementary entertainment is one solution, effectively making the jackpot only part of the lottery appeal, but innovation in this sector has more challenges than most. To explain why it is important to understand that the lottery industry is tightly regulated in order to protect public interest, ensure that the revenues collected are appropriately redistributed to players and the society for good causes. It is the operator and platform providers obligation is to ensure that the games are fair and transparent and are provided through the channels permitted by law. Taking into account that innovation flourishes in an unstructured and creative atmosphere this level of freedom difficult to achieve in an environment where regulation usually lags innovation. This poses a critical issue for the industry, though there are jurisdictions where regulators are more proactive than others. One such location in is Jersey (Channel Islands) which is one of the reasons we based our businesses there, the home state regulator, The Jersey Gambling Commission, demonstrate a proactive approach to innovation which enables businesses to quickly establish whether or not to pursue projects early in their development life cycle. This approach is appealing to innovators and those in fast moving markets, making the jurisdiction attractive not just to the lottery sector but to the egmaing the industry as a whole.
This is important because traditional (physical) lotteries are being gradually replaced or augmented by other technologically advanced solutions which allow greater entertainment value and crucially create the opportunity to develop a personalised relationship. As such the interaction between lottery providers and players is slowly becoming multidimensional (omni channel), giving the players multiple options for providing entertainment driven by innovation. Innovation has always been considered a tool towards success this has never been more true than today as advances in technology provide a wealth of opportunity to differentiate and entertain thereby increasing the value of existing players and enticing new ones.
Mobile devices and social networks have created new trends and habits which change the way people communicate, are informed and influence purchasing choices, the lottery industry has to embrace this. As Virtual Reality matures this will have a major impact on the eGaming market as a whole but it has a particular place in the adjacent and growing complementary lottery games market.
Finally we are witnessing a trend of blurring the lines between games of chance and skill which is driven in part by the Millennial generations preference for games of skill. If the industry is to be successful it has to increase its appeal across the generation as well as access into new markets and target demographics.
The lottery industry operates under a tightly regulated environment, the industry has to evolve to maintain relevance in the new online world and enable a blended omni channel environment for players. The catalyst for this change requires new thinking in regulatory approaches and compliance to encourage and enable innovation. This trend has started, though there is significant scope for innovation and disruption with new player centric providers enabling new lottery experiences.