The largely untapped US online lottery industry could be worth as much as $17.5b in incremental annual sales, one-third of which would come from new lottery players. Lottovate, the new US-facing B2B online lottery platform subsidiary of betting operator Tipp24, has made it its mission to convince US lotteries to go digital. To date, only three US states – Illinois, Minnesota and Georgia – offer the ability to purchase lottery tickets online. Of these, only Minnesota offers anything other than ticket sales, via the Minnesota Lottery’s highly controversial online scratch tickets.
To help alert state lotteries as to the money they’re leaving on the table, Lottovate enlisted UK-based market researchers YouGov to gauge interest in online lottery options. YouGov duly reported that 27.1% of US adults claimed to be interested in playing lottery games via PC or mobile devices. Some 41% of existing retail lottery players were interested in online options, while 8.3% of US adults who currently don’t play the lottery would play if the online option existed. The type of online lottery product dubbed most attractive was the multi-state draw games, whose pooled nine-figure jackpots routinely garner headlines across the US.
Lottovate managing director Zuriñe Sáez de Viteri said the YouGov findings revealed “a clear consumer demand for interactive play and a huge revenue opportunity.” Similarly lucrative opportunities presumably await de Vitieri’s company if more states overcome their fears and embrace their digital futures.
As ever, treat all projections with a grain of salt. Earlier this month, Morgan Stanley analysts were forced to downgrade their expectations for the US regulated real-money online gambling industry’s earning potential. Previous projections had suggested the market could be worth $3.5b by 2017 and $8b by 2020, but teething problems in the three US states currently offering online gambling and legislative inertia everywhere else have convinced Morgan Stanley that the market will now be worth $1.3b in 2017 and $5b by 2020. Even these numbers seem wildly optimistic to Deutsche Bank analysts, who said in April that they don’t expect the US regulated iGaming market to be generating more than $2.2b by 2020.