Insight for US Lotteries looking to sell online

2004 was a year to remember. I promise in no particular order: the Red Sox finally won the World Series, I spent six weeks touring Australia on a Rotary Exchange, and I had my first child. I still have that bag of Rotary trading pins, wear my ragged 2004 World Series t-shirt proudly, and the child now eats and bickers with her sister full time. But enough about me and my Red Sox; 2004 was also a big year for gaming in Canada. In 2004, Michelle Carinci pulled off a modern-day political miracle by aligning the four Atlantic Provinces to sell existing lottery products over the internet. BCLC was on the same course, and at the time we both felt well behind our European mentors. Indeed, a lot has changed over two decades, and many lessons have been learned. To summarize the outcome in short: no politicians have been unceremoniously turfed out of office, the retail network is still growing, responsible gambling tools are stronger than ever, and the opportunities remain endless in serving players better with evolving technology.  

2004 was a big year for gaming in Canada.

It struck me clearly at a pre-pandemic conference that many US states are currently facing the same stretch of landmines we encountered north of the border over the last 16 years. So here I sit, mulling some of the bigger lessons we Canadians endured along the way. Perhaps it goes without saying that every state will face a unique set of political forces, but one thing is certain: players everywhere demand convenience and entertaining games. The following is nothing more than a little “2020 hindsight” and some food for thought as you ready the quest to commercialize digital relationships. I hope it sparks some healthy debate.

Set realistic expectations with your owners. If you take one thing from this article, this is it: don’t overpromise revenue to get approval to launch. Lotteries have grown quite accustomed to giant bags of loot when launching a game. The internet won’t mirror this truth. How you balance realistic forecasts with risk/reward outlooks will determine how quickly you should shine up the resume. Forgetting the obvious notion of survival (which is an often-over-looked argument for going online), your success online won’t happen overnight so don’t overpromise. Look to Canada and Europe for realistic progressions. This is also so vital to employee morale. There is nothing worse than having a great year of sales but falling short on unrealistic promises and expectations.  

Plan out launch concessions. In seeking approval, you will inevitably concede less than ideal conditions for launching with a bang. Advertising restrictions, cumbersome verification experiences, geofencing, and retailer commissions are typical launch softeners. Better to lose the battle and win the war, right? Agreement. However, be sure to strategize, document, and request future milestone offramps that may allow you to change course down the road without going back for approvals and debate. Ask early. Paying retailers an online sale commission may seem like a great idea to keep the peace, but five years from launch that logic may be fuzzy.  

Don’t wait to engage online. At launch, your biggest asset for selling online will be a foundation of customers you are already interacting with online. This doesn’t need to wait. Things like digital contests, trivia, second-chance programs, loyalty programs, newsletters, and email communication all build trust. The move to full purchase will be a natural evolution. There are also innovative companies like PlayPort who are bridging the gap between mobile and the retail environment with great games bought and validated at retail but played on your phone. You can become a digital force and build known-play databases before ever selling a ticket online. Don’t wait.

Digital contests, trivia, second-chance programs, loyalty programs, newsletters, and email communication all build trust.

Audit and consolidate customer databases. Although you may not be selling online, you quite likely have a multitude of email lists gathered and stagnating from contests and newsletters. Auditing, consolidating, and retiring lists will provide a great jumping point to start a new dialogue with a single focus. Each of these initiatives was in fact the beginning of a digital relationship. Let’s get a fresh start and ensure the CAN-SPAM won’t be knocking on your door. I won’t get into governance of this master list, but it is very important.  

Avoid silos at all cost. Internal silos will slow you down, waste money, dilute focus, and confuse customers. For both employee morale and customer centricity, be sure to carefully embed the new digital force. Resist the urge to seek a unique culture and isolate the digital team. After all, digital improvements should be everyone’s focus. The entire organization should quickly align on this one simple question: Do you care where someone buys the ticket, as long as they buy the ticket?

I sincerely hope your answer is no. Imagine a very likely scenario where one person is accountable for digital Powerball branding and revenue and another accountable for retail Powerball. If you are going this route, I suggest a big bowl of popcorn and a lawn chair to enjoy the ringside show and customer confusion ahead. 

While the corporate focus may be the shine of a digital launch, don’t forget at the outset the person who manages Lucky 7 brings in more bacon in a week than the internet will in the first year. In fact, the most lucrative arena for digital growth will be traditional products. Stop for a minute and consider how many people already play these games. Canadian lotteries have proven that second-chance programs and digital contest extension drive online play. This only works if teams work together. And again, this alignment will ensure you don’t have different teams sending different messages to the same customer. 

“The most lucrative arena for digital growth will be traditional products.”

Multi-channel players are worth more. Have you ever considered a new model of car and suddenly noticed a ton of those cars on the road? Seems as though every second car is the one you are thinking about. In reality, you are just paying closer attention. This phenomenon is mirrored in lottery; the more places it is available, the more you notice. This is why retail sales grow when lotteries go online. It is one of the reasons so many non-players jump on the train during big jackpots. And it’s why the lifetime value of a player who buys in multiple channels is much higher than one who buys in a single channel. Technology can most certainly help facilitate this cohesion. As an example, digital signage and beacon technology from Carmanah Signs can help create a seamless and connected digital presence in store that is mirrored online. No, it won’t be easy to sway retailers that online sales will help them grow as well, but the truth is in the data. The fact is, mobile jackpot alerts and push notifications managed by the digital team are equally likely to prompt a retail purchase. 

Make “simplicity” a motivating battle cry. Once you think you’ve built a very simple user experience, go back and make it simpler. It needs to be the unrelenting battle cry of the entire team.  In reality, the impulse nature of a lottery purchase doesn’t go away because you are selling online. If your launch strategy is selling the same portfolio at retail and online, customers will buy where it is most convenient. It’s your job to make it as simple as possible everywhere. Registration and account funding processes should be user tested, repeatedly, at all cost.  I won’t go into the obvious importance of mobile, but I will say if “no mobile” is one of the previously discussed launch concessions – don’t launch.  

Registration and account funding processes should be user tested, repeatedly, at all cost.  

Leverage existing URL traffic. I am always amazed at how many lotteries undervalue their existing web traffic. I’m guessing it is in the top-five most-visited sites in your state. Fight the temptation to send your commercial efforts to a different URL or create a new web brand because you don’t think your existing site is trendy enough. Instead, build strategies to convert things like winning-number traffic to your commercial efforts. Your customers have been going to your site for years, why send them somewhere else?

Hire the digitally minded. The people who make ecommerce sing tend to be wired differently. They are innately relentless, wildly curious, and actually enjoy knowing that what they learned today will change tomorrow. Find these people, pay them well and give them time to explore and refresh skills. As much as data likes to be talked about, these are the people who commercialize and make it profitable. The search need not start externally. Train rising stars and reassign technical enthusiasts currently doing jobs in the company using 10% of their potential. The lines between marketing and technology are all but disappearing. 

Plan how you will use your data early. Data is often an afterthought in design, but it will be so vital to digital marketing efforts. Plan out how data will be used, accessed, and delivered so nothing is missed in the build. Things like web code trackers, customer segmentations, and automations will likely fall in importance once you pass go. Repeatedly ask “how can you use data to serve our players even better.” Having loads of information on players in itself does not create more sales, but using it to serve customers better does. Understand what you need to do early in the process. 

"how can you use data to serve your customers better?"

Powerball is still Powerball. The real benefit of going online is the vast amount of new content you can leverage to attract new customers. Be sure to investigate the amazing content from companies like IWG. This may be obvious, but expectations will be high for new players simply because games are online. Powerball on the internet is still Powerball. I am not trying to downplay the benefit of Powerball sold online, but don’t expect the game to appeal to a vast new segment because of where it’s played.

Prepare to engage. So now the switch has been turned and it’s go time! I’ve warned there is no overnight bag of money waiting, you’ve assembled the digital savvies, created clarity and harmony, you’re leveraging second-chance programs to convert, actionable data is pouring in, new games are launching… what else is there? Well, the crusade is just beginning. Expect a wild ride of small wins, daily learning, technical speed bumps, changing customer demands, new partners, and of course, endless opportunities. Keep pushing, keep learning, and keep engaging. 

".....keep engaging"

About the Author

Scott McWilliam spent 15 years at Atlantic Lottery (AL) and was there when AL originally launched online. Many of the suggestions presented here were scars from the trenches. As VP Sales & Marketing in later years, Scott was a strong advocate for a single relenting view of the customer. Now VP, Sales & Marketing for Splashdot, Scott continues to spread the importance of engaging the customer with an omni-channel lens. For almost two decades Splashdot has worked with lotteries at various stages of their digital journey to help establish, grow, and strengthen their digital relationship with players. This experience has cemented long-term client relationships with some of the world’s most innovative digital lottery brands.