This is my first column for this great new website and as such I’ll keep it positive! I know that coronavirus has caused many deaths and dramatic business problems for many companies, also for lotteries. But I believe that there have been some positive consequences too, at least in the short term.
In many countries lotteries don’t operate in the way that normal commercial organisations do. The explanation is that state-owned monopolies shouldn’t do that because they are somehow different compared to private gambling operators.
That might be partly true, but in real life where state borders are not as valid as they used to be, customers have so many other options where to buy their gambling products. That’s why it’s extremely important to understand the main reasons behind how and why customers make their shopping decisions.
The first lesson we can take from this pandemic is understanding the importance of customers. Lotteries have now learnt that without knowledge of the customer it is difficult to make good business and especially make quick changes where needed. Lotteries will now put much more effort into their customer databases, analyzing tools and utilization of that new knowledge.
Lottery business has traditionally been based on retail channels – that is the background of all lotteries globally. Some of the foremost lotteries moved to digital many years ago, but in most cases the share of digital sales is really low or even zero.
Due to Covid-19 many retail shops were forced to close and there were no places to buy lottery tickets if no digital sales channel was available. Now lottery operators understand that they must have something other than just retail. They know that they have to introduce digital via internet and mobile as soon as possible and after that continue towards an omni-channel solution.
The first and second learnings are linked together. The basic principle of successful business is as simple as ‘let your customers decide what, where and when they are willing to buy’! Lotteries have discovered that it is old-fashioned practice to expect customers to come to their shop and find their products just because they are used to doing that and/or they don’t have any options available.
Those good old times are over – they have been for many years. But it’s only now that lotteries have realized that.
The third learning from Covid-19 time is exactly ‘what’ customers are willing to buy. It is always dangerous for a company to become dependent on one or two products. Unfortunately, many lotteries are in that situation. They have just a basic Lotto game and variations of that and some scratch cards.
Lotteries have now learned that the product portfolio should be wider than it used to be. They are now ready to introduce new gambling verticals to their product portfolio. There are many new potential options like sports betting, horse betting, bingo, keno, casino games available. If lotteries wish to offer ‘softer’ games compared to gambling operators, they can launch more new pool-based games. They now know that it is possible to find legal ways to do it and if needed get help from legal advisors for that.
The state-owned, monopoly-based and highly regulated nature of many lottery operations has led to them accepting everything their respective owners tell them to do. That will no longer be the case. Lotteries have woken up to the fact that they have more expertise on lottery and gambling than their regulators and owners have. That’s why lotteries will become more active players in gambling related discussions and decision making globally.
The last thing we can take from the Covid-19 period is the need for cooperation to help achieve all of the above lessons which would be difficult and expensive to undertake in isolation.
That’s why lotteries now understand that the only way to make it happen is to have cooperation not with other lotteries but also with technology suppliers. Lotteries have also learned that there are service providers who could help them to make it happen. They shouldn’t have all those resources in-house, but they should be in control of those processes.
Jari Vähänen
Jari has enjoyed a long and successful career in the gambling sector, having cut his teeth in the horse racing and betting business. He has spent the biggest part of that time with Veikkaus, the Finnish national lottery and gambling operator, where he was responsible for horse and sports betting business. While there he started digital sale channels, introduced the first customer based strategy and took care of international relationships and businesses. Having resigned from the lottery in spring 2020, he established The Finnish Gambling Consultants Ltd and is now helping lotteries and other gambling operators and suppliers to further develop their businesses.
