Online lotto sales set to soar but National Lottery may lose out

While global lotto industry is booming, incumbents face an unexpected challenge

Websites like Lottoland and Jackpot.com are  offering consumers the chance to select numbers both for the Irish lottery  and for the monster draws in the US  where jackpots frequently hit $1bn billion without buying a ticket. Photograph: Getty Images

Websites like Lottoland and Jackpot.com are offering consumers the chance to select numbers both for the Irish lottery and for the monster draws in the US where jackpots frequently hit $1bn billion without buying a ticket. Photograph: Getty Images

 

The internet is proving a boon for lotto operators, with an increasing number of players plugging in online. This boosts ticket sales and leads to bigger jackpots, which in turn leads to further ticket sales. It’s what the industry likes to describe as a virtuous circle. In Ireland, jackpots above €10 million tend to trigger an acceleration in sales.

According to a new study by digital research firm Juniper, the wagers placed on online lottos globally are expected to soar from $29 billion in 2017 to $76 billion by 2022.

However, as in other industries, the digital age has brought with it unexpected challenges, and the traditional lotto model is facing a big one from a new wave of disrupters known as bet-on-lotto operators.

Websites like Lottoland and Jackpot. com are now offering consumers the chance to select numbers both for the lottery here and, perhaps more enticingly, for the monster draws in the US – where jackpots frequently hit $1 billion, without buying a ticket.

If a player hits the right numbers the companies pledge to pay the equivalent prize money, relying on a complex formula of hedging and insurance.

These new pirates of the industry are eating into traditional lotto sales, garnering as much as 20 per cent of the market in some jurisdictions, and prompting calls from incumbents for a clampdown.

After highlighting the likely growth in the market over the next five years, the Juniper research goes on to note the constraints on traditional providers.

“The rise of lottery betting providers will concern traditional players: Juniper calls attention to Lottoland, which saw revenues of $320 million in 2016,” said research author Lauren Foye.

The National Lottery here recently labelled Lottoland a “parasite”, warning of a potential fall off in good causes if it was allowed to flourish.

Lottoland says it is doing nothing illegal, and last year saw a 200 per cent jump in customer sign-ons. It recently paid out €220,000 to an anonymous winner of a EuroMillions secondary draw in Cork.