Paul’s Take2 Blog April 4, 2021

Hits: 174

 

The news this week, and in recent months, abounds with reports of increasing lottery sales and legislation authorizing new games and new channels of distribution.  Team Lottery’s commercial partners are working overtime to deliver new products, new player experiences, and innovation of all kinds to keep up with the demands of a highly dynamic market-place and changing consumer tastes and preferences.

It wasn’t long ago that I was concerned that disruption in the games-of-chance industry would not favor government Lottery.  The reigning market-leader typically has more to lose than to gain in a competitive landscape that values fresh, new, and innovative over constancy, scale, and even hard-earned brand value.  The pandemic combined with civil unrest and crises of confidence in the integrity of governmental institutions, democratic process, and societal leaders is more than enough to qualify this as a time rife with potential for severe market-place disruption.  The consumer has been forced to call on untapped resources of resilience and flexibility to change behaviours and try new products and brands and methods to shop.  How could this be good for the established leader of an industry experiencing an explosion of new products like sports betting? 

Some of the reasons for the success of Lottery over the past year are obvious.  In a world where social distancing impinged on the ability to enjoy other games-of-chance options like casino gaming, and impinged on the ability to travel and enjoy many other forms of recreation – the ability to stop in at your local convenience store to play the lottery (or play the lottery online) remained, and this constituted a welcome respite from all the other restrictions placed on everyday life.  But what if we could identify and tap into other underlying drivers of the continued appeal of Lottery?

On the one hand, we have been forced to adopt new behaviours and try new products.  On the other hand, maybe the uncertainty of these times stimulates another response.  A natural reaction to being forced out of our comfort zone might be to appreciate the constancy of the few things that we can depend on.  Being forced to sever relationships with activities and brands that we were most familiar and comfortable with is perhaps causing us to bond even more tightly with those that we can preserve.  The personal and commercial relationships that have not been disrupted may become even more valued than ever.  Maybe we can’t get on a plane, maybe we can’t visit with friends, maybe the CPG brands we are used to buying in the store aren’t available online, maybe we can’t do many of the things that brought us happiness or at least satisfaction.  But there is one thing we can continue to enjoy just as we have always enjoyed and that is playing the Lottery.  Maybe I can’t trust the bedrocks of society that made me feel secure and confident in our future – but there is at least one thing I can trust and that is Lottery.  I am being told to boycott either Georgia, Delta Airlines, or Major League Baseball and am losing track of the whole storyline and am feeling overwhelmed by the endless controversies and so it makes me very happy to know that there is one thing I can still enjoy without ambivalence and that is playing the Lottery.  Maybe these underlying threads of meaning can guide us towards the strategies that will sustain the long-term appeal of Lottery.  

See the stories about Lottoland and Flutter Entertainment.  Lottoland is an object lesson in how a company can go from start-up just five years ago to being valued at least U.S. $1.4 billion today.  (That is the amount referred to as the “stock market float” being considered.  The article does not indicate the percentage of equity that is being sold to the public.  The actual market cap is likely higher than that.)  Lottoland basically sells bets on the outcome of lottery draws.   

Flutter Entertainment is a large online gambling operator which acquired the Stars Group which owned Poker Stars.  Poker Stars was the largest online poker operator in the world until “Black Friday” (April 15, 2011) when the U.S. Dept of Justice shut down operations of companies like Pokerstars which were operating illegally in the U.S.  The Kentucky Supreme Court fined Pokerstars/Stars Group $870 million for ongoing violation of regulatory laws, and for damages caused to Kentuckians who lost money to Pokerstars.  Originally filed eleven years ago, this case would appear to be an object lesson in how litigators fighting to defend the interests of the people can sometimes win their case and hold the perps accountable.   Now let’s see if a company with an onerous judgment against them will be allowed to continue to operate in the U.S. or be black-listed as further consequence and disincentive for operators to violate regulations and laws governing games-of-chance in the future.