The Business of Lottery – Page 2 – Lottery Management Consulting, LLC

The Age of Lotto

Are classic lottery games like Lotto evergreen– that is, will they continue to thrive indefinitely? This depends on whether the player population can be sustained into the future.There are two schools of thought about this: 1) Lotto play is something a player ages into; young people coming up will sustain it, and 2) Lotto play is a thing of the past; young people will not join. Looking at historical data from Washington, I show that age groups that now account for a significant share of spending played a lot less years ago. However, the low level of engagement of the youngest age classes is unprecedented. The analysis supports hope but certainly not complacency for the future of these games. NASPL Insights February 2018

Engineering Instant Game Prize Structures: Results from Washington State

In lottery games repeat play is very important, and the prizes people actually win are particularly important in maintaining play of instant games. The cost of prizes is our greatest single cost, and tends to be challenged by auditors. Using quantitative visualization techniques described in NASPL Insights December 2013, the Washington Lottery redesigned its entire instant game portfolio and started fielding new-plan games in FY2016. Prize expense was reduced in key categories, yet the winning experience delivered to most players was improved. The financial and operational results were very positive through FY16 and FY17, as I describe in NASPL Insights Oct 2017

Testing Lottery Advertising: Both Wins and Draws Count

How is grand-scale research on lottery advertising like grand-scale research in agriculture? No one does it, who must thrive or fail according to the outcome. With my friend Jade I discuss tests of smaller scale, and we agree that there is usually something to be learned from a well-constructed test of advertising, even if the results are not what everyone wanted. After all, don’t we want to know what not to do? NASPL Insights August 2017

Daily Fantasy Sports: Entertainment, Information, and Gambling

European lotteries have had sports betting for some time, and have had to deal with the predictable problem of match-fixing. Daily Fantasy Sports is a US invention that caught fire in 2016, and that seems to avoid this hazard. The World Lottery Association asked me to write an explanation of Daily Fantasy Sports for a non-US audience. I was fascinated by how the sports-as-entertainment industry and the penetration of the Web changed how people talk about TV sports.This appeared as WLA Fantasy Sports summer 2017.

Shouldn’t there be a measurement for that?

A lottery sales representative, Otto the Beer Guy, explained his view of the business to me. Since some Scratch tickets sell better than others, and it’s a good idea to make the most popular ones easiest to find. To help Otto, I developed a metric that compares games on their current popularity, making it easier for people to see which games may need more space. The metric is based on the retail standard of turn rate. NASPL Insights June 2017

Do Lotteries Exploit the Poor?

Writers claim that lotteries exploit the poor, but how do they know this? Sometimes they show an analysis of lottery sales data, based on locations of retailers. I show that using the zip code as the unit of analysis is a blunder that promotes the least-populated zipcodes to unwarranted significance. Further, the assumption that lottery players buy tickets in the zip code where they live can be as wrong as it is convenient. Many a misleading story has been written on the basis of these two errors! NASPL Insights April 2017

Why Does a Whole Village Win in El Gordo?

I reflect on how the logistics and information technology of 200 years ago (pen and ink, and mules) formed the game. Further, I show how its winning experience and structure support its social aspects. If we want to leverage social networks now in North America, we must find ways that fit our contemporary technologies and social structure. NASPL Insights February 2017

Effects of the January 2016 Record Jackpot on the Outlook for 2017

After January 2016, we saw sales for jackpots in the range $200 to $400 million significantly lower than before. My math models support estimating the effect of these changes on the development of big jackpots in the future. I estimate the likelihood of a jackpot reaching $1 billion in 2017 at about 10%, down from about 17% at the start of 2016. NASPL Insights December 2016

How Many People Play the Lottery?

We are fairly sure that about half the eligible population of the US had a ticket for the record Powerball jackpot of January 2016. But how many people play the lottery on a routine basis, week after week, building up those jackpots that bring in the masses? The answers we get depend on how we ask the question. In NASPL Insights October 2016 I explain some reservations about using survey data to understand where sales are coming from, and illustrate a method I have used to combine survey information with ticket counts to develop a more reliable estimate.

Who You Are is How You Play

Reflecting on what I heard from two different lottery winners, I realized that each played in a way that expressed their big-picture view of the world – and that neither view was compatible with probability theory. But knowing better would not have made anyone happier! Still, lottery professionals need to understand the reality, unintuitive as it may be. NASPL Insights August 2016