2012 may well be remembered as the turning point in European Lotteries ’ history and the first clear indication of things to come in the World lotteries arena.
Throughout Europe it is evident that the negative economic climate, the emergence of Commercial Gaming operators, changing player preferences and the implementation of EU Gaming guidelines are driving States to develop a new Gaming Regulatory framework.
While new regulation is being drafted to protect players and ensure that an “even playing field” exists amongst the increasing number of legally regulated operators within each market; concessions are also being made in order to ease previous restrictions relating to the number, types and distribution channels of gaming products offered within the jurisdiction.
As a result, many State Lotteries have undertaken the process of upgrading their technical and operational capacity so that they can deliver an expanded product portfolio.
2012 could be considered another good year for the EU (27) Lotteries *1 with overall sales increasing by 3.9% following the 10.7% increase for the period 2011/10.
However on closer inspection, it becomes clear that sales growth was predominantly attributed to a number of Lottery operators that invested in the introduction of new gaming products and further developments in their interactive distribution channels.
In as far as the Gaming Categories are concerned, while traditional Draw game sales appear to have adjusted with a decline of -3.6% from the previous year (CAGR 2010/12 of 0.8%) the main drivers of Sales growth were non-draw game products:
Interactive channel sales have almost doubled in the past two years, from €4.9b in 2010 to €9.4b in 2012. And while in 2011 the channel contributed by 8.5% to total Sales in 2012, the channel’s contribution reached 11.5%.
Across the 24 European Lotteries reviewed: 11 increased sales in both distribution channels, 11 recorded a drop in retail channel sales, yet only 2 lotteries experienced a marginal drop in their interactive channel sales.
What was more surprising however, was the fact that while interactive sales in 2011 contributed to the Lotteries’ growth by 21.5%, in 2012 the channel’s contribution accounted for 85% of growth.
While traditional lottery draw games still represent the core of any lottery operation (2012 47% of Total Sales) and the land-based distribution network is still the primary channel (2012 89% of Total Sales), the introduction of market competitive gaming products and methods of engagement has a direct impact on sustainable growth.
Such an investment, not only enables lotteries to appeal to a broader demographic profile of the player base and reclaim players that have been serviced by commercial operators but also creates the foundation for new player participation, assuring future continuity.
*1 Sales performance of the EU27 State Lotteries that have an operational interactive distribution channel since at least 2010. Indicative State Lotteries: Austrian, Belgium, Croatian, Denmark – Danske Spil & Danske Klasselotteri, Estonian, Finish – Veikkaus, French, Hungarian, Irish, Italian – Lottomatica & Sisal, Latvian, Lithuanian, Luxemburg, Netherlands – Staatsloterij & De Lotto, Portuguese, Slovakian, Slovenian, Spanish – ONCE & Del Estado, Swedish and U.K.