Joonas Karhu from Bojoko looks at why lottery products are not a good fit for online casinos and how brands can offer the best player experience without draw games.
Aiming to cater to a wide range of audiences all with different tastes, online gambling operators build out their sites to include many categories and game types. Traditional casino games, sports betting, live casino, esports betting and more – each arm of the business is built and optimised for specific audiences and to also drive cross-sell.
A category that many casino providers offer yet struggle to get right is lottery. Despite being one of the oldest forms of gambling in history, the immense popularity of lotteries in the gambling and general population fails to translate when added to an online casino.
Casino sites routinely struggle to garner engagement and activity for their lottery offerings, which begs the question of whether there’s a suitable return on investment. And it comes down to a poor product fit for the audience.
It’s a different audience
It’s no question that lotteries are incredibly popular – it’s why you have enormous national lotteries in many countries. For most people, including those living in mature betting cultures, buying a ticket for the next lottery draw is a common activity.
Recent research from José Antonio Gómez Yáñez at the University Carlos III of Madrid found that almost 85% of the population in Spain participates in gambling activities – with a significant portion of that being participation in national lotteries. It’s estimated that roughly 75% of the Spanish population purchases a ticket or a share of a ticket in El Gordo, Spain’s Christmas lottery.
In a similarly mature culture like Australia, across online and land-based activity, 68% of gamblers participated in a lottery. But the key stat is that amongst Australian lotto players, only 11% of them place an online bet.
This speaks to the heart of the matter for casino operators regardless of their jurisdiction.
Casino brands offer a lottery product based on a fundamental misunderstanding of their audience. Most lottery players don’t play online; when they do, they prefer to play their own national lotteries. Players coming to your casino, on the other hand, are there to enjoy slots, table games and live dealer, while sports bettors are there for specific matches.
The evidence for successful cross-selling just isn’t there, so your product is really only serving a niche within a niche. Which compromises one of the key ingredients of any successful lottery: volume.
Low-margin by design
The main reason why national lotteries are successful and sustainable is that lottery is a low-margin product by design. Lottery is enticing because of the relatively low buy-in. To make money you need massive volume.
Looking back at Spain, El Gordo garners almost 26 million players, the El Niño Lottery 14.5 million and the Primitiva Lotteries 14 million. In Australia, lottery tickets are picked up with the morning paper, are a popular source of entertainment particularly for retirees and are generally treated more favourably compared to other forms of gambling.
National lotteries can get away with low margins because of the sheer mass of players. Casinos are not afforded the same luxury, nor do their lotteries have the same history and tradition. Without the mass of players, casinos are running lottery products with small player bases on low margins – not exactly a recipe for success.
What matters more is making sure the bread and butter of your casino is running well, and that your players are well looked after.
Player experience should come first
Instead of wedging in a low-margin product that’s only scooping up a small number of players, casino operators should be focusing on what they know. A successful, fine-tuned core product offering will always trump a site spread thin with too many different product types.
To continue driving growth, casino operators should commit resources to creating a compelling, enjoyable player experience – from sign-up to deposit and beyond.
This looks like good player bonuses, not just for creating an account but throughout a player’s lifecycle including major events or times of year. But acquisition bonuses are a big draw and act as a powerful driver of layer acquisition. At Bojoko, we find that no deposit bonuses are especially effective, which you can explore here.
Operators should make sure that within their core casino offering they have a wide range of games to choose from, be it different types of slots, roulette, dice, card games and more. Providing localised payment for your operating jurisdictions is another key means of smoothening the speed bumps a player might run into when they want to play. Supplement this with good, responsive customer support that can solve player problems in a timely manner, and you’ve got a winning combination.
All of these measures focus on player agency, giving them the freedom to choose how and when they play, removing friction from the processes surrounding play while maintaining compliance and safer gambling standards.
Instead of focusing on low-popularity, low-margin categories like lottery products, devote resources to what matters. Get the basics right, look after your players and your casino site will flourish.