5 Reasons why an Online Lottery Business Could Fail!
Some of the “obvious” mistakes Online Lottery Business have made or continue to make, would make for a good case study on how to tread carefully in this business to avoid pitfalls and succeed in what is otherwise a lucrative business!
Today, a prospective Online Lottery Operator has enough material to draw conclusions on what ailed those who have trodden the path earlier and fallen by the wayside.
Let us look at 5 of the most glaring errors, prospective Lottery Operators make. The same is being captured here, in no particular order:
Is it the right Online Lottery Game?
When a new Lottery Operator enters the market, he sometimes makes the fatal error of trying to bring in an altogether new Game that the people of his State/Country have not played before. The hope is to bring in excitement with a new Online Lottery game offering, which incidentally would also call for a lot of marketing spend. What actually transpires on the ground is that people start viewing the new lottery game from a new operator with some ignorance (they may not be clear on how to play and win this new Game) and even suspicion. They usually would like to keep safe and tend to skip the opportunity to pull out their money to experiment with a new Online Lottery game! Common sense dictates that the new Operator starts off with the accepted and proven Game first and then adds new game offerings, once his business stabilizes.
Is it the right Technology Provider for Online Lottery Business?
An Online Lottery Operator has to do some groundwork to ensure that he selects an experienced technology provider who has delivered the same or similar Game based solutions, in a timely manner in the same or similar markets. The Technology Provider has to know the popular lottery games of his Country, Distribution Channel structure, Report requirements, typical credit policy framework for channel partners, etc. The Technology Provider has to be one who is flexible in terms of addressing changing requests during project deployment phase, without inflicting too much of red tape or instance-based costs on the Operator. If this choice is made wrongly, it can have a severe impact on delivery timelines and also on how the user experience is in terms of interface and reliability.
Lottery Terminal density has to be right for Lottery Business.
Many a time, one encounters new Lottery Operators making one or both of these fundamental mistakes: Firstly, they think that they can start off with just a few hundred Lottery Terminals on the field during launch phase and then ramp up when sales start picking up. This premise is usually quite wrong, as the lower number of Terminals will only result in lower ticket sales per day and restrict build up of volumes. It is also dangerous to have low sales volumes in a fixed odds game, which can suddenly throw up a large winner. Also, a lower number of Terminals means lesser brand awareness and recognition amongst the playing public. Secondly, once key market areas are identified it is important to build and maintain a dense presence in terms of Agents selling the lottery tickets through their handheld Lottery terminals. A thinly spread terminal network will do no wonders to ramping up lottery sales. The Lottery Operator has to make a very educated plan to populate his licensed territory with Terminals, so that daily sales maintain healthy volumes and values.
Improper Fund Management.
In this context, the primary concern that a new operator has to encounter is that of maintaining a healthy fund flow, both in terms of ticket sale revenues, collections from Distributors/Agents and payout of commissions and winnings. Delayed commission payouts to channel partners and delayed payouts to winners, can do immense damage to the brand’s reputation and impact business in the long run. Also, a history of delayed winning payouts can result in Channel partners encouraging winners to discount winning tickets with the Channel partners themselves for an immediate payout. This is not a good business practice and can further lead to Channel partners generating and selling their own tickets on the Operator’s draws.
Wrong Marketing plan.
A good lottery operation can be stymied by a poor or ineffective marketing plan, which lacks in reach and/or depth of message. Retail-based lottery operations depend a lot on initial brouhaha created in the market by a good and sustained marketing campaign. Many a lottery business have failed because they were either not able to create that initial excitement or have not been able to build further on the initial grand marketing splurges that they may have indulged in! It is very important for a new Lottery business to create a multi-channel short and long-term marketing plan that sticks to good marketing fundamentals and can help create and sustain credible brand recognition amongst the people, whom the Operator hopes to address.
The above stated potential pitfalls are only indicative but do represent the typical “costly” errors that a new Lottery Operator has to avoid.
About Dusane Gaming
We are expert in technology solutions for the Online Gaming Industry with more than 12 years experience and turnkey implementation of gaming solutions in 25 countries across 4 continents. We provide comprehensive, robust and integrated consultancy services to our clients for lottery operational setup and roll out. Recognising the potential of Africa, we have a specialization in this area having worked in almost all the countries where gambling is prevalent like Chad, Ghana, Kenya, Mauritius, Nigeria, South Africa, Swaziland, Uganda, and Zimbabwe. Dusane’s Online Keno System is built on its proprietary BATS Betting System and has been successfully implemented for several satisfied clients.