Jason Lisiecki, Vice President of North America at IWG, highlights why lotteries must evolve to stay ahead of the competition and grow their business.
It’s no secret there have been many disruptors to how we shop for every day goods. How many of us shop for groceries online, or have subscribed to a service that has changed how we consume goods or media? New technology is changing how we live, and if you personally have not jumped into these new forms of consumption, chances are you know someone who has. Even more importantly, there’s a 100% certainty that a sector of your customers has grown accustomed to new technologies that improve the way they consume goods and media.
Recently I made the switch to YouTube TV and cannot see myself going back to a traditional TV subscription. I save significant money per month, get all the channels I really watch and I can quit at any time. Turns out, I’m not alone in this shift to cord cutting. Analysts predict that in 2018 traditional TV subscription providers will lose $5.5 billion in revenue due to cord cutters, while it is estimated that 50 million people will have dropped cable or satellite TV by 2021.
The traditional cable companies, who long held monopolies for something that appeared untouchable a decade ago, are now facing competition from the likes of YouTube TV, Hulu and Netflix. These so-called disruptors provide consumers with choice, freedom and an opportunity to save on monthly costs, all the while offering better product and service. What’s frightening to the traditional TV companies I’m sure is that each disruptor can invest millions of dollars to provide the best product, user experience and attract top personnel to drive the business and win the entertainment dollar market share.
“…we are susceptible to competition threatening our share of the entertainment dollar.”
While those disruptors are likely to be non-threatening to our space, it does mean we are susceptible to competition threatening our share of the entertainment dollar. As technology evolves, so will the gaming landscape. Before you know it, you may find yourself competing with product propositions that change the way your players spend their discretionary income.
There are several tactics lotteries can deploy to protect and drive their business to the next level.
Cold Call Your Vendors
One approach that worked well during my time with the Michigan Lottery was to reach out and cold call vendor partners for an issue or challenge that I was facing. Often it led to quick wins that did not require software updates and drove business quickly. In my current role at IWG, a lottery partner recently reached out and asked us to quickly launch more content under tight deadlines. While the deadline was tight, and the QA window had passed, we were able to come to a solution and place new graphics on top of an existing game, move it to the top left of the games lobby and reenergize players like a new game launch. It’s critical to be able to move fast and challenge your partners to find solutions that allow you to move quickly, something your players will notice and appreciate.
While competition is looming in the gaming space, you still hold the cards. Embrace your competition, as there may be opportunities that are beneficial to both parties. No matter the state or province, the power of the local lottery is massive. Perhaps there are opportunities out there you have not considered but engaging in discussion with competition may provide a launching pad for both parties. Of course, careful consideration needs to be undertaken before taking such a leap, but you may be surprised how willing other parties want to work with the state lottery. Taking a proactive mindset and initiating this conversation could pay off as a simple idea, product, promotion and partnership come to fruition.
“Embrace your competition, as there may be opportunities that are beneficial to both parties. No matter the state or province, the power of the local lottery is massive.”
Disrupt Your Own Business
I tip my hat to the lotteries who have chosen to launch online. By doing this you have chosen to disrupt your business before competition comes in and does it to you. Even better, this disruption you applied to your own business has paid off. These lotteries are not taking lottery sales from the retail vertical and shifting them into the internet vertical. In each instance iLottery has launched in the U.S., there has been zero cannibalization of retail business, which continues to grow alongside the new online channel.
There are several examples where products and promotions cross-sell retail and online players, driving traffic to each sales outlet. Both channels need each other to provide a full suite lottery experience. What does retail offer that online cannot achieve? A Lot. For one, the liquidity that a retail prize structure offers with total prize pool and top prizes is hard to achieve in the internet space. The fact is, thousands of retail outlets, years of brand equity and a shiny physical ticket will continue to have a lot of value even as iLottery grows and evolves.
“I tip my hat to the lotteries who have chosen to launch online. By doing this you have chosen to disrupt your business before competition comes in and does it to you..”
This fall marks a gubernatorial election year which will result in new leadership for many state governments. No better time than now to invest a little of your time to learn about the internet lottery landscape. Reach out to internet lottery suppliers, consultants and your contacts at other lotteries who have gone online. There is a lot of information out there and you never know, you may soon be asked, “How can we disrupt our business?”