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If content is king, why are we all but ignoring a large percentage of the lottery’s content catalog by focusing our innovation energies on instant games? Players love instants, so I’m by no means suggesting the ROI is not worth the effort, but when your category with the highest margins is struggling, the answer should be to fix the problem, not ignore the product. We see a hole in the marketplace here which is why EQL Games has evolved into a company with a focus on improving the draw game category.
Why are draw games struggling when the scratch product is surging? It comes down to three factors:
1. Odds of Winning
2. Content Variety
3. Immediacy of Results
Odds of Winning
While some draw games are designed to give frequent winning experiences (Hoosier Lotto and its 6 to 1 overall odds as a great example), many don’t give players a chance to win on a regular basis. Our flagship games – Powerball and Mega Millions – are among these culprits. In fact, the version of Win Place Show that we launched through the Kentucky Lottery had a gaudy 20 to 1 overall odds of winning. That’s simply not good enough to create an entertaining product that brings players back for more. The one exception appears to be classic numbers games such as Pick 3 and Pick 4. I was fooled by these games which often have as much as 60 to 1 overall odds of winning which was the basis for the original Win Place Show design. (For lotteries interested in that game, our new design brings odds down to 5 to 1.)
This is not the same thing as players not responding well to smaller jackpots so that more players can win a top prize. We’re greedy by nature and when it gets into millions of dollars, who would want to share THAT prize? But you have to create a reason for players to come back for more. That can be best accomplished by giving them odds that make a winning ticket happen with some frequency. How do I know the draw of winning is so powerful? You simply have to look at lottery sales when a state lottery offers a $30 or even $50 instant ticket. Why do players play those instant games when they could buy 3 – 5 $10 tickets instead? Top prize is important, but the overall odds of winning are often so good that players cannot resist these tickets.
Content Variety
Have you ever noticed that instant games are constantly switching in and out of the ticket case on the retailer countertop? If you go there today and then the same time next week, you are likely to see new instant games available for play. But when you look at the draw game catalog for a state lottery, you are hard pressed to find anything new.
Offering the same games for many years (decades, in some cases) might work well for long-time lottery players. But we know that those players are loyal and will continue to buy lottery products. What we are missing is adding new players. Sure, some non- or infrequent players might buy a Powerball or Mega Millions ticket when the jackpots are high. But as soon as someone wins and the jackpot resets, we lose many (most?) of those players. And we don’t have the complementary draw games available to keep them playing.
What are the impacts of having the same catalog of draw games for 10+ years?
– Complacency: Current players fall into patterns that inhibit growth
– General lack of interest: Possible new players have nothing to attract them to the category
– Revenue shortfalls: Draw games are the most profitable category of product. Lack of growth robs lotteries from opportunities to grow revenue and diversify revenue gains
One of the successes of casinos is that they offer something for everyone – slots, craps, card games, roulette. Taking a cue from casinos, lotteries should look at bringing an array of products to draw games. The draw game category must be able to rotate more frequently to stay competitive with other forms of entertainment, not just casinos and online gambling.
Immediacy of Results
On the whole, draw games will always struggle to compete with the immediate gratification of instant games. While the Fast Play-type games stand as the current exception, if draw continues to include traditional numbers, jackpot, and lotto games, longer play style will always be a part of the draw game category.
In fact, the draw category should not run from this differentiator completely. Powerball, Mega Millions, and Lotto games are fun to play largely because of the time you have between draws to dream about a big win. Numbers games are about ritual and tradition. I would be suspect of an instant win numbers game with the same winnability as the current retail product, often in the range of 60 to 1 overall odds. There are games that work in the traditional retail draw category that are counterintuitive to today’s trends. These are important games to any lottery’s portfolio.
But the live event element of draw games can make this category about something more. Imagine a draw game you could buy at retail or on mobile based on quarters in an NBA game. Could you deliver a game that bases its results on every play of an NFL game or every pitch of an MLB game? Which players are you leaving on the table by not offering lottery action tied to the most recent episode of The Bachelor? Or who will win the Oscar for Best Picture?
Draw games do not have to be constrained by the old rules of lottery. The Stanley Cup Finals, the Daytona 500, the Winter Olympics, March Madness, and America’s Got Talent can all be the focus of great draw games. And that is how lotteries will attract new players, particularly the coveted younger players of the future.
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