In the time of COVID-19, land based operations, including lotteries, are taking a huge hit as quarantine and shut down orders prevent people from going out to buy a ticket. But a Spinola Gaming report indicates that this has been a net gain for the online lottery space, and land-based operations better adapt fast or lose out long term.
In China alone, retail lottery sales saw a 43.3% year over year decline in January, as that country began to see how coronavirus would soon affect the rest of the world. Spinola Gaming notes that South America and India are now seeing similar declines.
But while China had the first major problems with COVID-19, the U.S. now leads the world with the most infections. On March 31, a total of 183,532 cases had been reported stateside, with 3,727 total fatalities. As states fight to contain the virus, lotteries have taken a huge hit.
Massachusetts lottery revenues dropped by $1.3 million in the second week of March. Arkansas saw a $3.6 million revenue drop from January to February, and Ohio based lottery terminals are expected to be closed soon.
But customers haven’t stopped gambling. Instead, they are turning to internationally based online lotteries, buying their lotto tickets online, from the comfort and safety of home. While this is good for the industry, it creates a real threat to the social welfare programs that state regulated lotteries support. “In these circumstances, third party online operators become a real threat to the industry as players are turning to them in order to play the lottery games they normally get from the corner stores,” said Ade Repcenko, CEO of lottery solutions provider Spinola Gaming. “This threat, if prolonged, could make players change their habits and stick to online once the virus goes away, which will have long standing ramifications for the industry at large.”
The answer to this problem is for state run lotteries to start leveraging online services, as Lotto Quebec has. The Canadian gambling operator has had to stop retail operations, as many others have, but has emphasized it’s online offering to keep revenue coming in.
Spinola is also offering online webinars to help land-based operators stay in competition. “We want to show operators how we can get them live in a matter of weeks with very minimal financial impact,” Repcenko added. “We have fast, cost effective solutions to allow operators to get back to business in a matter of weeks, with our market leading solutions enabling them to reach players in the comfort of their own home.”
This crisis has shown more than ever that when people will want to gamble, they’ll find a way. Even if they can’t buy a lottery ticket from their usual retail outlet, they’ll find the alternative. State run organizations need to do better if they want to keep fulfilling their mission of bringing in revenue, and helping local organizations.