Product Diversification Key in $300bn+ Global Lottery Market

Lotteries across the globe are seeing an ongoing transition in customer demand to high-payout, high-frequency betting and gaming products, increasingly via digital sales channels.

Lotteries hold a distinct position in the global gambling market, offering products often regarded as “light” gambling and remaining largely state-owned or operated, with profits funnelled to good causes and government coffers.

According to the latest edition of the World Lottery Association’s (WLA) global lottery data compendium, lottery and sports-betting sales across 142 contributing WLA members grew by 8.4 percent in constant currency to $306.5bn in fiscal 2018, up from growth of 3.5 percent a year earlier.

Including turnover from 25 NASPL-affiliated lotteries in North America and the Caribbean that are not members of the WLA, the association “conservatively” estimates that global state-regulated lottery sales totalled $327.4bn over the 2018 reporting period.

Asia-Pacific remains comfortably the largest region in terms of lottery-operated gambling turnover, generating total sales of approximately US$129bn during 2018. The Chinese Sports and Welfare lotteries make up a sizeable minority of the regional total, with the Hong Kong Jockey Club and Japan’s Takara-kuji also being notable contributors.

North American WLA members represented around 21 percent of the global lottery market, or US$63bn, in 2018, while the much smaller and less mature markets of Latin America and Africa collectively accounted for 3 percent of the world’s lottery market, with only US$8.9bn of total sales.

Africa’s comparatively immature lottery sector maintained double-digit growth for the third consecutive year, experiencing 14 percent year-on-year growth to US$1.9bn, in 2018. Latin America’s total sales have surged by an average of 7 percent since 2012, only mitigated somewhat by a temporary fall of 2 percent in 2016. Meanwhile, Europe has begun to stagnate, with low single-digit growth of only 3 percent since 2013. This contrasts with Asia-Pacific’s surprising positive performance, rising at double the rate it was in 2017.

Lotteries are increasingly pivoting towards digital channels to capture new audiences and repackage current products. Countries in the Asia-Pacific region are at the forefront of digital sales, as 16 percent of overall sales are completed online and worth US$21bn for 2018. This helps explain the relatively low growth rate of only 8 percent from 2017 to 2018, although in absolute terms is US$1.6bn and larger than all the other continent’s increases for that year combined. Latin America and North America are displaying early signs of capitalising on e-channel investment, achieving sensational growth of 77 percent and 54 percent respectively over the same time period.

Numerous lottery providers have been expanding the products they offer, such as scratchcard “instant games”, or utilising their brand awareness to develop betting games. Africa has adopted this approach towards pari-mutuel (PM) games, generating US$652m in PM sales for 2018, through an average compound growth of 28 percent since 2013. Latin America and North America’s total PM sales roughly equalled a third of Africa’s PM sales at US$218m in 2018, although both are seeing positive trends.

Yet, Europe is experiencing mixed fortunes towards such games, encountering consistent single-digit growth for instant games sales, while facing volatile PM sale growth, which skyrocketed by more than 100 percent in 2018 to US$2.7bn. It’s likely these developing continents saw spiking betting activity off the back of the 2018 FIFA World Cup, where such growth may flatten in future years.

Stay informed and check out our in-depth curated World Lottery Association data report with more than 39,000 data points, detailing 150 lottery operators across 85 countries.

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