The iLottery industry is on the rise in the United States.
Maybe not in the number of states participating, but in terms of sales where they exist.
However, some of the leaders of the industry are concerned by threats that could impede its progress.
As sports betting and iGaming expand in the US, as well as lottery couriers, states with online lotteries feel like they are fighting somewhat of an uphill battle.
During the La Fleur’s 2024 Raleigh Conference, an iLottery panel was held featuring some of the top names in the industry. There, they discussed what can keep online lotteries from growing.
Lottery courier services challenging online growth
One of the biggest concerns for state lotteries is courier services.
Companies like Jackpocket, Jackpot.com, and Lotto.com are adding more states to their inventory. These third-party vendors provide online lottery sales of retail tickets. They operate mostly in states without iLottery.
In some cases, they were established before a state-run legalized online lottery.
That was the situation in Washington, D.C. Frank Suarez, Executive Director of the DC Lottery, discussed the challenges caused by having couriers in its jurisdiction:
“So, the couriers, they do exist, and we actually had Jackpocket in DC, they were there before we launched iLottery. A sale is a sale, right? So, I’m glad to sell the tickets. But I think the challenge is when I look at their volume, they’re selling as many draw games or tickets as we have sold online. So, that in a year or so, it sort of tells me I’m missing something there. There’s several players that I’m not converting to things like EInstants that I could be converting. So, I think that’s a challenge. Also, we launched our mobile app, so there’s confusion in our market about whose app is the official app.”
On top of taking away players from the official online product, states are also dealing with customer complaints that occur with the courier services and can’t provide assistance.
That’s one of the main issues for Kelley-Jaye Cleland, Chief Product & Program Officer of the New Hampshire Lottery:
“Couriers, I agree that they have a place and the sales come back to us regardless, but I find it is challenging sometimes for customer service. That is a threat, because we want to make sure we can help our customers at all times. It’s confusing for the customer to call, and we can’t help them.”
Overall, 16 states offer courier services, along with Washington D.C. and Puerto Rico.
Sports betting, iGaming sucking up advertising dollars
Nearly half of the states have legalized sports betting.
While online casinos aren’t nearly as popular, in just a handful of states, they still both have an impact on online lottery.
Competing against these industries for consumer dollars is hard enough. But, as Suarez notes, advertising becomes a greater challenge in states with sports betting and iGaming:
“For the advertisers out there, sports betting drives up your costs like you wouldn’t believe. Now that sports betting has launched it is incredible how much (operators) bought, they purchased (in advertising). So, it just adds to the challenges that we already have from a lottery perspective.”
During the conference, many state lotteries addressed the need for advertising improvements, both in retail and iLottery.
With online sportsbooks and casinos taking up most of the space, these lotteries are struggling to find the right avenues to push their products in a crowded online gambling industry.
According to the American Gaming Association, $1.4 billion was spent in 2022 on advertising by sportsbooks in the US. That number was at $1.2 billion in 2023.
Rob Wesley, VP of North America Customer Development at NeoGames, believes the online lottery industry will have to adapt to this challenge in order to succeed and grow:
“Trying to operate an online business and ecommerce business the same way you operate a traditional business is going to be problematic. You cannot compete against the competition that we have today. You can’t compete with them on budget. The one differentiator we can try to do is be a little more agile in the way that we work.”
Photo by lucadp via Shutterstock
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