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April 20, 2020

Do online lotteries now have a winning chance?

Do online lotteries now have a winning chance?
The outbreak of COVID-19 has caused widespread disruption to the lottery industry, with retail sales hampered by lockdown restrictions and an under-developed online sector now even more eager to take off.

Political circles had generally been opposed to the vertical going online, but according to Gordon Medenica, Director of Maryland Lottery and Gaming, the current crisis has instigated a change in attitudes.

He says the pandemic, which has limited players’ ability to buy tickets in a retail environment, has started to break down the “irrational political resistance” to lotteries selling products through online channels.

“Lotteries, and their vendors, have been prepared for years to offer products through the online channel,” he says. “The barriers are political, not technical.”

Amid the crisis, operators have had to make drastic changes to their internal work processes, moving many employees to teleworking and using other techniques to maintain minimum operations, or even closing front-facing customer service offices.

Retailers, meanwhile, have been instructed to encourage players to limit their time in stores by filling out playslips in advance, using Quick Pick, self-service machines and advance play and subscriptions, with a natural impact on sales.

Medenica predicts that the industry will change as a result of the current health crisis, as lotteries do what they can to maintain sales while emphasizing social distancing and teleworking. "Right now, it's all about public health and safety, as it should be," said Medenica. "Once we get beyond this health crisis, I believe states will take a new look at online sales. It only makes sense," said Medenica.

But he also acknowledged that there will be some casualties: “The lottery industry will survive this crisis and probably rebound in much the same form as existed before.  However, some trends, such as the declining interest in the large national jackpot games, have been exacerbated in the crisis and may not recover fully.”

The future of lottery monopolies is another question that has been brought sharply into focus in the wake of the pandemic. Medenica says that an important element of their status lies in their ability to raise significant funds for the various good causes they support. 

“Protection of that status should be a primary objective for all state sponsored lotteries,” he added. “Nevertheless, lotteries would benefit from state regulatory structures updating and allowing lotteries more flexibility in marketing, game design, distribution channels and procurement. 

“The more lotteries can operate like private businesses, the more successful they will be and the more funds they can raise for good causes.”

Medenica is set to discuss the evolving lottery landscape at the forthcoming ICE North America Digital, which takes place between May 11th-15th. To register for the free-to-attend event click here.

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