International lotteries embraced a cashless future in 1996 when Veikkaus Oy launched its self-service OnNet system in Finland. This was followed by quick succession with online launches in Iceland, Austria, Germany, Denmark and the U.K.

“The lotteries and sports betting sector is strongly integrated into two types of networks—retail and digital,” explained Jean-Luc Moner-Banet, CEO, Loterie Romande. “As far as digital is concerned, cashless payment methods are already very developed and the applications of operators who are authorized to sell their products digitally integrate all the possibilities such as mobile wallets, wearable devices and even peer-to-peer apps in a near future (for example, in Switzerland, Twint).

“As far as the retail network is concerned, due to the ancillary nature of our activity in relation to the core business of our retailers, we are dependent on the policy of the distribution chains with regard to cashless payment,” added Moner-Banet. “That said, most of the major European chains are actively developing cashless payment in their outlets.” Loterie Romande offers payment on its digital platform by vouchers, credit and debit cards and very soon peer-to-peer (Twint).

FDJ believes that lotteries must indeed adapt to digitalization and reduction of cash at POS. “Payment is of course a very important topic for FDJ and part of its medium-term strategic thinking,” said Raphaël Botbol, Head of Strategy & Corporate Development, FDJ. “This is key to provide us better insights about our customers by encompassing multiple issues (product adaptation, fight against fraud and responsible gaming.”

FDJ is partnering with The Western Union Company to offer digital money transfer on FDJ terminals at POS across France. “This large-scale technological collaboration between FDJ and Western Union makes it possible to reach more than 26 million FDJ clients who will have access, through the FDJ physical network, to 200 countries and territories in the world,” said Bothol. “The objective is to enable FDJ retailers to diversify their activity in the money transfer market, to potentially increase the flow of customers in their points of sale and to access an additional source of revenue.”

Even lotteries in monopoly situations should realize that they need to be open to cashless payments. “Digital transformation is a very trendy and frequently used expression nowadays, but for a reason,” said Anita Uveges, Head of Fraud Department, Szerencsejatek Zrt. “Without connecting to the flow provided by financial companies and other digital solutions, lotteries can lose a significant customer base to the competitors and experience other disadvantages.”

Uveges also stressed that new regulations will make alternative cashless transactions required for merchants. “There is the fact that banking, as we know it, will soon change too as the new Payment Service Directive (PSD2) becomes effective. Even banks will be forced towards more innovative, digital solutions because of it,” she explained.
The Hungarian Lottery currently offers many cashless payment methods, such as bank card deposits, wire transfer, mobile payments and PayPal. “The preparation work has started in order to be able to offer even more payment options to the customers, e.g. Skrill and Neteller,” said Uveges.

In Denmark, it is already more common to pay with credit cards and mobile wallets, such as mobile pay from Danske Bank, Google Pay, Paypal and Apple Pay. Only 23% of consumers use cash on a daily basis. As of January 1, 2018, Danish retailers can reject cash payment from 10 p.m. to 6 a.m. This initiative protects store staff from potential robberies at night.
“It means that we as a state lottery are obliged to look into making our ecosystem cashless,” said Pernille Wendel Mehl, CEO, Danske Lotteri Spil A/S. “Therefore, through a partnership with Dankort and Nets, we made it possible to have your winnings paid out directly to your credit card. The next step we are looking into—and aiming for releasing end of 2018—is plugging a credit card device onto our digital retail solution for Lottery and Betting, so that the consumers can pay instantly and without store staff handling the transaction.”

Danske Lotteri Spil also launched its Lotto app, where a player can choose his Lotto quick pick coupons or select his Lotto numbers and then pay directly via his credit card. “At the same, time the consumers can use the app to check their winnings, but of course we make sure to tell them that they have to go to the retailers to get their winnings. This has been a huge success,” said Mehl.

“No doubt we are moving into a pure digital world (Mobile First) for lotteries. We need digital gaming and payment methods to be able to generate new revenue streams, especially from young consumers and also to make handling more smooth for store staff and protect them from robberies. In Denmark, more than half of the young target group from 18-39 years state that they can live without cash (source: Nationalbanken/The National Bank),” added Mehl.

Norsk Tipping AS is a state-owned (national) lottery. It has the sole right to operate lotteries, sports betting, online casino games and VLTs in Norway. It is regulated as a monopoly.
Norsk Tipping requires mandatory registration of all its customers. “Norsk Tipping’s strategy is to follow the payments trends in the population for both physical and digital sale channels,” said Thorbjørn Unneberg, EVP Customer & Market Operations, Norsk Tipping. “The most important thing is to identify the customer, which is a 100% requirement at Norsk Tipping. When the customer has been identified, all possible payment methods can be used, because we address the risk, limitation and responsible gaming through the ID of the customer. New payment methods, such as mobile payments, wearables and new providers, could easily be integrated into Norsk Tipping’s customer journeys when a substantial amount of Norway’s population is using the new payment method.”

Norsk Tipping’s goal is to support the best, easiest, and most relevant payment methods for every sale channel. “The introduction of Open Banking and PSD2 can potentially give some interesting innovations in the payment market which Norsk Tipping should offer to the customers in the future,” said Stein Midtmoen, Head of ID & Payment, Norsk Tipping. “Peer-to-peer payment is not relevant for Norsk Tipping today, but can be relevant together with the development of new type of products and services, eg. social gaming.”

Norsk Tipping has its own omnichannel wallet that can used to buy games sold by Norsk Tipping. In addition a player can use cash in stores, debit cards, credit cards and bank wire.
“Mobile payment methods are under development and will probably be released at the end of 2018,” said Midtmoen. “In physical stores, Norsk Tipping integrates with the payment solutions in the stores, which means that Norsk Tipping supports contactless and mobile payment (eg. Apple Pay) when this is supported in-store.”

European lotteries report widespread usage for cashless options. “We’ve all seen the exceptional growth in mobile and cashless payments, such as Apple Pay and PayPal,” said Orla Roche, Head of iLottery, Premier Lotteries Ireland and Camelot Global.

The Irish National Lottery accepts debit and credit “albeit offering gaming on credit is one to be viewed carefully under our responsible gaming strategy,” said Roche. “However, other ways to pay such as cash ‘tops up’ in store or paying through Paypal are definitely aspects we are investigating.”

It is difficult to predict if multiple cashless payment options will proliferate, or one option will be preferred by consumers, such as mobile wallets. “I am sure that cashless payments via smartphones and wearables will play a huge role in the future of retail business,” said Alexander Labak, CEO, Austrian Lotteries. “The question is, will there be many or open platforms that succeed or will we see ‘a winner takes it all’ scenario? Peer-to-peer solutions are a bit more far away on the roadmap.”

Austrian Lotteries offers all types of common payment possibilities via payment service providers. Players can also top-up their wallets.

Australasian Trends

According to research conducted in 2018 by Colmar Brunton, cashless payments are becoming a more popular choice across all channels: “Research indicates that the trend away from cash will only gather pace. This is more than a passing fad. This is the way of the future. As a result, 60% of Australians admitted that they carry no or limited cash, whilst 90% of businesses readily accept electronic payment. The fact that 57% of the population uses less cash than five years ago indicates that Australia is potentially already heading towards a cashless society in the future.”

Lotterywest stores are set up to process cashless options (payWave, Apple Pay and Android Pay). An e-wallet service is available to registered customers. Players can load funds into their app and online accounts (via Paypal, credit and debit cards and electronic funds transfer).

“Cashless payments appear to hold a range of benefits for the lottery industry by offering our players ease and convenience, and helping the retailers selling our products to provide a reliable and efficient service,” said Lotterywest CEO Susan Hunt. “Cashless payments offer us an opportunity to engage with a wider audience and to increase our customer following, which certainly benefits our lottery business.”

Sue van der Merwe, Managing Director, Lotteries & Keno, Tabcorp, reported The Lott players have a number of cashless options. At retail, they can purchase using paywave (RFID tag in credit card) or EFTPOS (debit card). When purchasing via the website or app, they can transfer funds into their account via credit card as a cash advance, BPay or transfer funds directly from their bank account.

Lotto NZ is committed to providing a great experience every time customers play its games, both in-store and online. “While we do not currently have plans to introduce additional cashless payment options in the short term, we will continue to closely monitor trends in the international gaming industry,” said Chris Lyman, Chief Executive, Lotto NZ.
Lotto NZ ensures EFTPOS facilities are available in all Lotto stores, allowing customers to buy their tickets in-store by debit card. There are two payment options for Lotto NZ’s online sales channel, MyLotto: top-up by debit and/or credit card, or by online banking.

The Future

As to the more futuristic cashless world, some lotteries pointed to virtual currency. There are pros and cons.

“An acceleration is inevitable with virtual wallets converging into the real world in-store but, more significantly, I believe blockchain and cyrptocurrencies are ones to watch for the future,” said Premier Lotteries’ Roche.

“The usage of public cryptocurrencies is currently limited, due to low transaction rates and even more due to currency fluctuations, which we try to avoid in our business,” said Austrian Lotteries’ Labak.

But in the final analysis, lotteries must be cognizant of how consumers want to make purchases so the organizations remain relevant. “This trend towards cashless payments obviously plays a significant role in the future of lotteries extending across our players, retailers and online channel,” said Lotterywest’s Hunt.