Like any other business these days, the future looks more electronic for the Iowa Lottery, and we think it involves sales of our products on personal consumer electronic devices (smart phones, tablets, PCs, etc.).
That is the outcome from a “future-looking” discussion we had with the Iowa Lottery Board this week about how the Iowa Lottery can best position itself to continue providing the proceeds that people count on from us for state causes.
Today’s quickly evolving consumer behavior stands to have a huge impact on the Iowa Lottery as we move ahead. For that reason, we’ve filed legislation for the upcoming 2019 session that we believe will allow the lottery to modernize its operations.
Current state law already would allow the lottery to sell its lotto games online, but we have not yet taken that step. Our proposed legislation would allow the sale of any of our products on personal consumer electronic devices. We believe that for its ongoing success, the lottery must enter the world of e-commerce.
Our proposal also would update the ways that people can pay for lottery tickets in Iowa to include cash, check, money order, debit card and prepaid gift card (all of which can already be used) as well as payments through electronic wallets or mobile applications. I will emphasize that credit is prohibited in the purchase of lottery tickets today in Iowa and that would remain the case under our proposal. The e-wallets would allow players to establish electronic accounts with the lottery and play lottery games online using money they put in those accounts.
This conversation isn’t unique to Iowa: Ten U.S. lotteries already sell products online, and the issue is under discussion in states all across the country.
The Iowa Lottery is currently in a very strong position. We’ve introduced new products in recent years like our InstaPlay games and we’ve enhanced and re-invigorated our long-term product lines to keep our games fresh. But without the ability to modernize our products, we anticipate that Iowa Lottery proceeds will only continue at their current levels for a few more years at most, and then we expect a downturn. The steep, ongoing decline in the use of cash, the ever-increasing trend toward e-commerce, and consumer demand for greater convenience all are factors.
A majority of Americans no longer regularly carry cash. And if they do, nearly half say they keep less than $20 on hand.
As consumers, we’re buying even everyday staples like groceries online. Many times, we don’t go to the store anymore. We have someone else get the items for us and then we want our order brought out to our car or delivered to our home. And a maximum two-day delivery is a normal that we demand for many online purchases.
Because the Iowa Lottery isn’t yet selling its games online, we’ve had to push back against illegal apps that are moving in. Those apps are re-selling lottery tickets through illegal means and there is no way for anyone to be certain that consumers are receiving the winnings they’re due. We’ve taken steps to shut down the apps or prevent them from doing business in Iowa, but they continue to multiply.
Our legislation takes into account these realities, giving the Iowa Lottery the ability to securely move into e-commerce while maintaining strong retailer involvement.
We know there are many ways that retailers can be part of any e-commerce system at the Iowa Lottery. For example, in Michigan, the lottery sells online game cards through its lottery terminals and self-service kiosks in retail locations. Customers can buy those game cards in increments from $10 up to $100 and use them to fund their e-wallets with the Michigan Lottery. The game cards can be eligible for bonuses, meaning that players can win an amount above and beyond what they purchased. The bonus system gives players an incentive to buy the game cards at retail locations and retailers in turn get a sales commission from the lottery. Twenty-five percent of online lottery players in Michigan have funded their accounts with a game card.
The statistics from other states and countries with long-term online lottery sales demonstrate that sales of traditional lottery products at retail increase along with the introduction of online sales. The added convenience creates an “omni-channel” approach to lottery sales.
Sophisticated age-gating and geo-gating technology is used by all U.S. lotteries that offer online gaming, ensuring that players are of the legal minimum purchasing age and that they’re physically located within the borders of that state in order to play.
We’re also impressed by the enhanced responsible gaming opportunities that online sales would bring. It’s nearly impossible to set any type of spending restrictions involving cash, but deposit limits are a standard feature for lotteries using electronic player accounts. And, players have the ability to set their own personal deposit limits that are even lower than those set by the lottery. Players also can electronically self-exclude themselves from playing online for a period of time or even permanently if they’re concerned about problem gambling.
The future will be here before we know it! So here at the lottery, we’re doing our best to be ready.
OMG, I was waiting for that time to come and I’d be able to just buy lottery tickets online from phone and I don’t have to go to the store just to buy tickets, it’d be self-service kiosks on my electronic device.
Posted by: Sabri | December 13, 2018 at 01:04 PM
If you (Iowa Lottery) really want to be serious about online presence, join with Delaware, New Jersey etc with online poker via the lottery....
Posted by: Christopher Parsley | December 12, 2018 at 07:32 PM