By Kristen Pare, INTRALOT
The emergence of state-sanctioned sports betting is one of the hottest topics in today’s lottery industry. With many states passing legislation to legalize sports betting, lotteries have seized the opportunity to offer sportsbooks as an additional revenue stream to support their general funds and public works initiatives. States are relative newcomers when it comes to offering sportsbook services. Industry titans of the private sector have been running sportsbooks in legalized states for over a decade with a focus on mobile platforms, casinos, and retail locations very different to the lotteries’ retailer network location types. So, what can lotteries do to get up to speed and compete with these established giants? One strong (the biggest) advantage held by lotteries is their existing relationships with a populace of dedicated players and the vast network of lottery retailers that serve them.
Sports betting in the retail environment is one of the industry’s fastest growing channels. Contrary to concerns of cannibalizing the player base, analysis indicates that the mobile and retail sports betting channels service different subsets of bettors, with retail players preferring anonymous betting and a social environment. Additionally, players in the retail sports betting environment, compared to online and mobile channels, tend to bet more frequently. This is an amazing revelation for state lotteries looking to get into the sportsbook business. While competing with industry leaders on mobile and online platforms may seem like a daunting endeavor, re-enforcing partnerships with retailers who are already in business with their state lotteries as well as expanding the retailer network, has the potential to present a path of adding a new revenue stream both for the lotteries and retailers and of supporting small business growth in the local communities. Lotteries have existing partnerships with retailers and are already paying out prizes to winners who rely on them for their gaming entertainment. With strategic deployment of the right technology on the proper platforms, states and their retail partners can parlay their inherent advantage to establish themselves in their region despite competition from outsiders.
So how can states and their lottery partners maximize success with sports betting in retail environments? First, start by providing complimentary forms of digital participation that responds to the players’ needs. For example, self-service terminals in combination with the use of mobile apps in bars and restaurants allow players the flexibility to bet while socializing. Second, provide players with the true omnichannel experience by allowing players the ability to combine both the digital and physical worlds. Whether betting at the retail location or participating in a bonus campaign, bettors should have the ability to play whatever, wherever and whenever it meets their needs. Also, utilizing self-service terminals can allow retailers to grow their businesses without additional staffing. Finally, responsible gaming initiatives help retailers keep their licenses while protecting minors in a heavily regulated industry.
Sports betting is a unique new product and revenue stream for local small businesses. By offering on-location sports betting at social sites like sports bars and restaurants, retailers can attract new patrons who will eat, drink, and enjoy the game while hanging out at their establishments. Sports betting has the power to make every game feel like a big-time entertainment event, where the customer typically does not want to leave an experience in which they’re invested monetarily. Bettors are more likely to linger longer, capitalize on the fun, and even place additional in-game wagers. Retailers may receive a sales commission on bets placed, as well as a payout for cashing winning bets for players. Finally, sports betting in retail drives repeat business. Patrons want to keep returning for more winning experiences and fun.
While the competition is undoubtably tough, there is no question that state lotteries owe it to themselves and their betting public to get in the game with confidence that they know their players better than anyone. Sports betting in the retail environment provides something for everyone. Players get betting opportunities in a fun atmosphere, retailers receive new customers and a profit-share, plus it provides additional revenue for state lotteries that benefit public programs. So, while lotteries may sense that they are behind the curve in comparison to the established industry leaders, now is the time to catch on, take full advantage of their market presence, and ride the wave to profits!