Mark Michalko, Executive Director, North Carolina Education Lottery
“Inflationary impacts on Lottery is relatively unchartered territory, given the modern day lottery portfolio has not been tested by inflation. Lower price point games are becoming more of a commodity for us, meaning that the difference in one game’s performance versus another is becoming less and less. Players buy the price point more than they buy the game. Over the pandemic, I believe that we had a large portion of players that played scratch-off games consistently enough to understand the true value of the different price points. They have a better understanding that they have much better chances to win meaningful prizes as they go up in price. I don’t see that trend reversing itself, but I do see players reducing their lottery budgets to accommodate increased costs throughout the rest of their lives, which we are beginning to see at the $5 price point in particular.
I believe that the lower price points have a role in the portfolio, but the important thing for the industry to figure out is what that role is and how it plays into some of the more intangible elements of portfolio performance like the operational impact of merchandising slower moving larger packs of lower price point games.”