Lottery sales could grow 40% in the next decade, but only if they evolve to meet the needs of millennials and Generation Z. So says Allwyn Entertainment, a global lottery operator, which recently published its analysis of the industry and its future. According to Allwyn, the key is making further investments in live-streaming technology and making the social benefits of lottery revenue more transparent.
The company’s report, titled The Future of Lottery: A Game for Change, points out that lottery operators are well-positioned to meet consumer expectations by 2035. However, it also highlights the importance of adapting to younger generations of players who have grown up in an online world and have different priorities than older traditional players.
Technology Will Play a Higher Role in Lottery Sales
Younger generations, raised in a digitally-connected world, will play a more significant role in the future of lotteries. Citing a prediction by Bank of America, the Allwyn report says that by 2030, Gen Z will hold more than a quarter of the global income.
Even those opting for traditional ticket purchases are demanding more technology in their experience. The research shows that half of consumers under 35 in the UK want to see more digital technology in their local convenience stores.
Lottery technology providers are starting to address some of these demands. For example, after a recent contract extension with the Kentucky Lottery, International Game Technology promises various upgrades through its new system to improve the lottery experience for consumers and retailers. These include cloud integration, user-friendly features, and new hardware.
Another vertical that is supposed to benefit is Kentucky’s online lottery. The state was among the first to legalize online sales and has tripled the number of draw games it offers.
The adoption of online lottery sales represents one way to attract younger players, who are used to doing everything online. Besides Kentucky, eight other states have legalized full-featured online lottery games, including instant win games.
Meanwhile, several others offer only draw tickets. While not offered through the state lottery, players can still purchase tickets online in many states. That’s possible through lottery courier services like the Jackpocket app. Jackpocket is available in over 17 states, demonstrating the popularity of online purchases.
Live Streaming Could Increase Engagement
One specific application of new technology is for lottery operators to address the declining interest in live draws. As TV viewing habits evolve and players opt to check lottery results rather than watch drawings, lotteries can implement new ways to engage consumers. One solution is live streaming, which could turn lottery draws into anticipated social gatherings.
Lotteries can bring players together by combining live draws with real-time engagement features and localized offers. Moreover, allowing viewers to participate actively in challenges and predictions can enhance engagement and create a sense of community.
The popularity of live streaming platforms like Twitch, particularly among younger demographics, underscores the potential of this medium for lottery engagement. This interest extends beyond entertainment. Live-streaming shopping has been very successful, as 46% of US Gen Z consumers have participated in live-streaming shopping events, according to Statista.
In iGaming, a related industry to the lottery, live dealer table games are experiencing rapid growth, indicating a broader interest in real-time interactive experiences. The popularity of streaming could also lead to the ability to bet during live slot streams.
Market projections by Market Research Future suggest that the live-streaming sector could reach $247 billion by 2027. That highlights an opportunity for lotteries to join the trend. Allwyn also suggests that in addition to streaming, collaborations with cultural institutions, sports teams, and other entertainment entities could increase interest in live lottery draws.
Lotteries Must Meet Evolving Consumer Priorities
In addition to technological changes, lottery operators must meet evolving consumer priorities. That means addressing issues that weren’t as important in the past but matter to younger consumers like transparency and purposeful play.
The latter is critical to younger players. Citing data from McCann Worldgroup, the Allwyn report shows that 69% of Gen Z say they’d be willing to pay more for a product brand if it supports an issue they care about.
With more information about the world accessible, social values are changing, and younger generations are holding businesses more accountable. Unsurprisingly, 77% of consumers say brands should be transparent about their commitments and promises.
Lotteries have an advantage over other industries thanks to contributions to good causes like education. While that puts them in a good view, the report suggests that lotteries can do more to show transparency and impact engagement:
- Actively promote the idea that every player contributes to the greater good. Potentially, lotteries can enable each player to link their contribution to a specific cause.
- Provide detailed reports on how and where funds are used. Allowing players to see a tangible difference that they’re making can increase the feeling of fulfillment and community.
- Provide details on the net-positive value of participation to each player. That includes showing their positive impact on an app, website, or even the player’s ticket.
- Replicating successful models from wider social media, like the platform WeAre8. The platform guides users on how to make a positive impact via daily actions like uploading content and watching ads.
- Provide real-time updates via links and dashboards for each player purchase. Real-time interactions can immediately show players their impact on local community initiatives.
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