Asia Pacific and Latin America power global lottery growth during first three-quarters of 2017
The global lottery market grew by 3.2% over the first three-quarters of 2017, as compared to the same period in 2016. Latin America led the way with a 7.4% rise in total sales, with Asia Pacific and Africa following closely behind with growth rates of 6.8% and 6.1% respectively.
Basel, 22 May 2018—The global lottery market grew by 3.2% over the first three-quarters of 2017, as compared to the same period in 2016. Latin America led the way with a 7.4% rise in total sales, with Asia Pacific and Africa following closely behind with growth rates of 6.8% and 6.1% respectively.
European and North American lotteries held steady, with the latter growing by 0.6% during the first nine months of the year. These results masked the reality of the steadily improving market, which saw business pick up during the July–September quarter. Lottery sales in Europe moved back into positive territory with a 3.2% increase on Q3 2016, while North America’s lotteries grew strongly with a 6.7% rise Q3-on-Q3.
However, Latin America was the standout performer during Q3 2017, with a 15.7% boost to the sales figures posted in Q3 2016. Asia Pacific also had a good Q3 2017 with sales up 9.7% on the previous third quarter results.
Africa: Morocco’s lotteries enjoy robust Q3 sales
Morocco’s lotteries continued their vigorous growth into Q3 2017, recording a 9M-on-9M increase in sales of 6.1%. Sales at Loterie Nationale increased 14.8% over the first nine months of 2017, as compared to the first nine months of 2016, while sales at La Marocaine des Jeux grew by 11.3% over the same comparative timeframes.
Each of the Moroccan lotteries’ year-to-date results was bolstered by its respective Q3 performance. Total sales at Loterie Nationale shot up 39.1% in Q3 2017, compared to Q3 2016, while La Marocaine de Jeux was not far behind with a 32.5% jump in sales over the comparable revenue periods.
Loterie Nationale’s growth over Q3 2017 was boosted by the launch of its new ‘TACTIC’ (electronic interactive lottery) games for tablets and by the rollout of virtual greyhound racing in June. In July, the Moroccan national lottery increased the frequency of its ‘TRIO’ 3-digit game draws from three to eight times a day and payout was increased to 66% on KENO, ‘TACTIC’, and the virtual greyhound races. These developments were complemented by a LOTO special jackpot in September.
South Africa’s Ithuba remains Africa’s biggest lottery and has had a steady year to date, with total sales up 2.5% on the corresponding nine months of 2016.
Asia Pacific: China powers strong AsiaPac growth
Overall, Asia Pacific grew at a similar rate to Africa, at a 9M-on-9M rate of 6.8%, with China and Hong Kong proving the standout performers thus far.
For the first three-quarters of 2017, lottery sales in mainland China increased 7.3% over the same period during 2016. The China Welfare Lottery’s sales increased 4.8%, while the China Sports Lottery increased sales by 9.9%.
The biggest driver of growth in the Chinese market was sports betting, which rose 17.5% during the first nine months of the year, and by an outstanding 40.7% in September alone. Over the January–September period, sports betting sales totalled CNY 6.554 billion.
Numbers games also continued to grow steadily, with the mainland Chinese lotteries recording an increase of 7% during the first three-quarters of the year to a total sales figure of CNY 19.274 billion (USD 3 billion).
Sales of numbers games continue to dominate in China. Numbers games accounted for 61.7% of the Chinese market during the first three-quarters of 2017. Sports betting formed the next largest segment of the market, accounting for 21.1% of total sales.
Not to be outdone by the mainland Chinese lotteries, Hong Kong’s HKJC also enjoyed a positive first half of 2017, reporting a first-half on first-half increase in sales of 7.5%, while elsewhere in Asia Pacific, half-year on half-year sales at both Australia’s Lotterywest and Japan’s Mizuho Bank contracted.
Europe: Focus on the Italian gaming market
Sales at Europe’s largest lottery, Lottomatica, held firm over both the year-to-date on year-to-date and quarter on quarter timeframes.
Despite increasing competition, the Italian gaming company confirmed its leadership in the Italian market, with a market share of 28.4% on wagers through September year-to-date and a consolidated share of the market of 37% on Gross Gaming Yield (GGY).
In particular, Lottomatica’s figures were strong compared to the overall market for Lotto, which saw wagers decline by 7.1% over the course of the first nine months of 2017, as against the first nine months of 2016. The decrease in Lotto sales across the market was fueled by significantly lower late numbers activity than the previous year.
Other highlights for Lottomatica included strong growth in 10eLotto and Scratch&Win products. Scratch&Win growth was driven by the Miliardario game category, top performing tickets, and product relaunches. The positive trends across both 10eLotto and Scratch&Win confirm innovation as a key driver for long term growth.
Machine gaming service revenue was down in constant currency because of higher gaming machine taxes. However, this was partially offset by improved VLT performance. Lottomatica’s VLT performance was again strong compared to the overall market, which remained flat. Lottomatica’s share of the market also increased with respect to AWP (Amusement With Prize) machines, despite a slight dip across the market.
Currently, sports betting and interactive are the segments driving the Italian market in terms of wagers. Lottomatica’s improved customer relationship management and growing product portfolio helped boost revenue in line with the marketplace, which saw sports betting revenues increase 39.9% during the first nine months of 2017, as against the first nine months of 2016. Total interactive gaming wagers were up 23.0%.
Overall, the Italian marketplace grew 6.5% in terms of wagers and inched up 0.3% in gross gaming yield (GGY). Growth was driven by product innovation and continued legalization, especially in sports betting. For the breakdown of wagers in the Italian market by sector, see Figure 1 below.
Elsewhere in Europe, lotteries have had a comparatively modest 9M-on-9M, with some exceptions.
Hungary’s Szerencsejáték Zrt. has enjoyed a good 2017 and an excellent third quarter. Sales for the year to date are up 14.6% on the corresponding period of 2016, while Q3-on-Q3 2017 sales shot up 16.1%.
The Hungarian lottery’s dynamic growth was largely driven by the rise of sports betting and instants. Beyond this, draw-based games also recorded strong Q3 2017 sales revenue owing to continuing rollover jackpots.
The Czech Republic’s SAZKA is also having a strong 2017, with total sales for the year up 7.6% on 2016. The Czech national lottery’s growth trajectory is continuing upwards as the year progresses with Q3 2017 showing a healthy 13.1% increase on Q3 2016. SAZKA will also be buoyed by the news that it has received regulatory approval for its acquisition of 34% of Casinos Austria.
Switzerland’s Loterie Romande and Greece’s OPAP also enjoyed double-digit growth during Q3 2017. OPAP is beginning to see a return on a series of technology investments it is making, with strong growth in sports betting and a good return from new video lottery terminals, which are being rolled out throughout the country.
Latin America: Brazil flourishes while Argentina closes Loteria Nacional Sociedad del Estado
Latin America has enjoyed a strong 2017, despite difficulties in certain segments of the market, with total three-quarter on three-quarter sales rising 7.4%. As in other parts of the world, the Latin America lotteries also enjoyed a strong third quarter, with Q3-on-Q3 sales shooting up 15.7%.
Brazil was the star performer with total 9M-on-9M sales up 10.7% and Q3-on-Q3 sales rocketing up 21.4%. Over the periods in question, Timemania, Mega-Sena, and Lotomania recorded the highest growth among all lottery products, as a result of accumulated sequences across these game categories.
In 2017, Lotomania offered its three biggest prizes in the history. The special draw of Lotofácil of September 2017 celebrating Brazil’s Independence Day (September 7) was responsible for 27% of total revenue, occupying first place in sales and surpassing Mega-Sena, the lottery “flagship”. This outstanding performance was due to a special main prize of BRL 88.5 million. More than BRL 150.3 million was paid out to more than 11.3 million winning bets.
The news was less rosy for Argentina’s Loteria Nacional Sociedad del Estado, as the Argentine government passed a decree dissolving the lottery, after deciding that it was no longer viable for the state to operate the business.
The decree, signed by Argentinian president Mauricio Macri and his cabinet ministers, stated that there are no legal reasons for the continuation of the lottery, and that it is no longer “appropriate” for it to operate, because it no longer has the territorial and jurisdictional scope in which to carry out its mission.
Last year, management of the National Lottery was passed to the local government of City of Buenos Aires. Each of Argentina’s 23 provinces has its own lottery, with Buenos Aires overseeing the newly created Lottery of the City of Buenos Aires.
The Lottery of the City of Buenos Aires has assumed responsibility for the operation of the Palermo horseracing track, the casinos located in the ships in the port of Buenos Aires, and some other products such as La Quinela, Lotus, and La Solidaria.
North America: US lotteries feel the Powerball effect all over again
US lotteries continue to feel the effect of the record-breaking USD1.5 billion Powerball jackpot run of Q1 2016. While year-to-date total sales are roughly flat, sales in Q3 are looking positive with a 6.7% sales rise across the region.
The CT Lottery provides a case in point. It experienced flat year-on-year sales growth during the first three-quarters of 2017, despite realizing healthy increases of 2% and 7% in Q2 2017 and Q3 2017 respectively.
Sales for Q3 2017 were boosted by the launch of two new scratch games: Foxwoods High Roller, highlighting a local casino partner, and Quarter Million Large, a USD 20 game with a unique top prize and a design featuring special holographic paper. The former was the lottery’s fastest-selling USD 10 game ever and sold out in just 16 weeks.
While the 2016 Powerball run made for a tough comparative year, August 2017’s Powerball boosted the sales performance of many US lotteries when the second-largest run in its history produced a USD 758 million jackpot.
The Kentucky Lottery followed the general theme with a seemingly slow three-quarters disguising an 8.5% leap in sales between July and September, thanks to the Powerball run and a healthy rise in scratchcard sales. Commenting on the Q3 2017 results, President and CEO Tom Delacenserie of the Kentucky Lottery said, “In Kentucky, layered on top of this Powerball run was a strong performance for our instant products as well. Scratch-off tickets showed the largest dollar increase, up USD 7.7 million or 5.6%. We’re looking to build on this success with the deployment of new ticket display arrangements at retail which are bearing fruit, and better executed sales plans that are paying dividends.” Mr. Delacenserie continued, “With nearly every one of our games exceeding or nearly exceeding last year’s sales measures, we’re on our way to a successful year. Lots of young people around Kentucky are counting on us to fund their college scholarships and grants, and our strong performance benefits them.”
The WLA will continue to track the progress of global lottery sales in future editions of the WLA QLSI.
Once again we thank all WLA member lotteries participating in this initiative, and look forward to bringing you the fourth quarter 2017 results shortly.
|* Based on sales of participating lotteries. Participating lotteries by region:|
|Ghana: National Lottery Authority||Brazil: Caixa Econômica Federal|
|Mauritius: Mauritius National Lottery||Chile: Polla Chilena de Beneficencia|
|Morocco: La Marocaine des Jeux et des Sports||Mexico: Lotería National para la Asistencia Pública|
|Morocco: Loterie Nationale||Mexico: Pronósticos|
|South Africa: Ithuba Holdings (RF) (Proprietary) Limited|
|Asia Pacific||North America|
|Australia: Lotterywest||Canada: BCLC|
|China: China Sports Lottery||Canada: Loto-Québec|
|China: Chinese Welfare Lottery||Canada: Ontario Lottery|
|Hong Kong: HKJC||USA: California Lottery|
|Japan: Mizuho Bank Ltd.||USA: Connecticut Lottery Corporation|
|Europe||USA: Florida Lottery|
|Czech Republic: SAZKA a.s.||USA: Kentucky Lottery Corporation|
|Finland: Veikkaus Oy||USA: New York State Lottery|
|France: Francaise des Jeux||USA: Tennessee Education Lottery Corporation|
|Hungary: Szerencsejáték Zrt.|
|Italy: Lottomatica S.p.A|
|Norway: Norsk Tipping AS|
|Poland: Totalizator Sportowy Sp. z o.o.|
|Spain: Loterías y Apuestas del Estado|
|Spain: Organización Nacional de Ciegos Españoles|
|Sweden: AB Svenska Spel|
|Switerland: La Loterie Romande|
|United Kingdom: Camelot UK Lotteries Limited|