Global growth up 4.6% half-year on half-year; growth buoyed by sales surge in Latin America.
After a sunny start to the year in which sales grew by 8% quarter-on-quarter, growth slowed in Q2 2015, with aggregate half-year on half-year growth coming in at 4.6% globally. Regionally, growth in the Americas strengthened, while growth across the African, Asia Pacific, and European markets moderated.
Basel, 15 September 2015—After a sunny start to the year in which sales grew by 8% quarter-on-quarter, growth slowed in Q2 2015, with aggregate half-year on half-year growth coming in at 4.6% globally. Regionally, growth in the Americas strengthened, while growth across the African, Asia Pacific, and European markets moderated.
The Latin American region was the standout performer in H1 2015, with participating Latin American lotteries reporting an aggregate first-half on first-half increase in sales of 20.3%. Spearheading a very good first half for the Latin American lotteries was Chile’s Polla Chilena, where sales increased by 39% half-year on half-year. Sales at Argentina’s Lotería Nacional Sociedad del Estado also continued to perform strongly, with the Argentinian national lottery reporting an increase in sales of 26.1% for the first half of 2015, as against the first half of 2014. Elsewhere in Latin America, sales at Brazil’s Caixa Econômica Federal grew modestly over the same timespan, while Mexico’s Lotería National para la Asistencia Pública held steady.
Continuing its robust first quarter showing, the North American market also enjoyed a strong second quarter, participating North American lotteries reporting an aggregate increase in sales of 6.6% for the period January–June 2015, versus the corresponding revenue period in 2014. Yet again, the standout performer in the North American region was the California Lottery, which oversaw a first-half on first-half increase in sales of 15.1%. The Kentucky Lottery, Minnesota State Lottery, and the Tennessee Education Lottery Corporation all also performed strongly, reporting H1-on-H1 increases in sales of 8.7%, 7.5%, and 7.1% respectively. Similarly, sales at the Connecticut Lottery and Canada’s Ontario Lottery and Gaming grew by 6.3% and 6.2% respectively over the same timeframe. Framing the series of positive results reported by the participating North American lotteries was the improving U.S. economy, which saw real gross domestic product – the value of the goods and services produced by the nation's economy less the value of the goods and services used up in production, adjusted for price changes – increase at an annual rate of 3.7% in the second quarter of 2015; this according to the U.S. Bureau of Economic Analysis second estimate.
In the Asia Pacific region, the situation was more nuanced. Relative to Q2 2014, sales for Q2 2015 in Asia Pacific moderated, with the result that participating Asia Pacific lotteries recorded an aggregate first-half on first-half increase in sales of 4.6%, down from an aggregate first-quarter on first-quarter increase in sales of 14.3%. The moderation in sales was most notable with respect to the mainland Chinese lotteries, with the China Sports Lottery recording a half-year on half-year increase in sales of 6.2%, and the Chinese Welfare lottery reporting a half-year on half-year increase in sales of 4.4%. The comparatively modest positions of the mainland Chinese lotteries for H1 2015 relative to H1 2014 is apparently attributable to the effect of the 2014 FIFA World Cup, the staging of which led to exceptionally large sales for Q2 2014 at the China Sports Lottery in particular. Thus, for example, sales of Guess Lottery (sports betting) were down by 66.8% in Q2 2015, as compared to Q2 2014. Elsewhere in Asia Pacific, Australia’s Lotterywest saw its sales increase by 4.8% for the first six months of 2015, as against the first six months of 2014, while Japan’s Takara-kuji lottery saw its sales dip slightly over the same timeframe.
The picture in Europe was similarly nuanced. Although participating European lotteries eked out an aggregate increase in sales of 1.6% for H1 2015, as against H1 2014, a number of European lotteries nonetheless recorded stellar double-digit growth. In particular, the Czech Republic’s SAZKA a.s., Poland’s Totalizator Sportowy, and Hungary’s Szerencsejáték Zrt. recorded half-year on half-year increases in sales of 30.1%, 28.5%, and 21.6% respectively. The growth in sales at these lotteries was occasioned by a confluence of factors. At the Czech Republic’s SAZKA a.s., for example, the main engine of growth was the Eurojackpot multi-jurisdictional game, which SAZKA a.s. joined in Q3 2014. An increase in the price point of SAZKA a.s.’s flagship lotto game Sportka also affected sales figures. On the other hand, an incredibly high jackpot of HUF 5 billion on Lotto 5/90 (Ötöslottó) at the end of May 2015 resulted in a high sales income at Hungary’s Szerencsejáték Zrt.; moreover, this very large jackpot had a knock-on influence on other games such as instant games and Szerencsejáték Zrt.’s Joker game. At the same time, relatively high prizes in the January 2015–April 2015 period stimulated the sales of the Hungarian lottery’s Tippmix (sports betting) game. The results from the central European lotteries were all the more impressive given Europe’s continuing lackluster economic performance, which saw seasonally adjusted GDP rising by an anaemic 0.3% in the euro area (EA19) and by a lukewarm 0.4% in the EU28 during the second quarter of 2015 (according to Eurostat). Offsetting these positive results, however, was the performance of Italy’s Lottomatica, the third largest lottery in the world. Sales at Lottomatica contracted over the period January–June 2015, as against the corresponding revenue period in 2014; given Lottomatica’s position as Europe’s largest lottery, this inevitably impacted upon the performance of the European region as a whole.
In Africa, the state of affairs was also quite complex. Overall, African lotteries participating in the WLA Quarterly Lottery Sales Indicator reported an aggregate increase in sales of 1.3% for H1 2015, as against H1 2014. At one end of the scale, Ghana’s National Lottery Authority continued its strong run from the first quarter, reporting a first-half on first-half increase in sales of 33.7%. At the other end, sales at the Mauritius National Lottery contracted sharply over H1 2015, as compared to H1 2014. The performance of the Mauritian National Lottery for the period in question was adversely affected by budgetary measures taken to ban Quick Win cards on the one hand, and by a prohibition of advertising of the lottery on the other, with the ban on quick win games resulting in an exceptional inventory writeoff. In addition, the restructuring of company operations resulted in downsizing that led to an exceptional severance payment. Set between these two extremes was the performance of lotteries in Morocco, with Loterie Nationale reporting a first-half on first-half increase in sales of 7%, and La Marocaine des Jeux reporting a first-half on first-half increase in sales of 6.9%.
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 third quarter 2015 results shortly.
WLA Executive Director
|* Based on sales of participating lotteries. Participating lotteries by region:|
|Ghana: National Lottery Authority||Argentina: Lotería Nacional Sociedad del Estado|
|Mauritius: Mauritius National Lottery||Brazil: Caixa Econômica Federal|
|Morocco: La Marocaine des Jeux et des Sports||Chile: Polla Chilena de Beneficencia|
|Morocco: Loterie Nationale||Mexico: Lotería National para la Asistencia Pública|
|South Africa: Gidani (Proprietary) Limited|
|Asia Pacific||North America|
|Australia: Lotterywest||Canada: Loto-Québec|
|China: China Sports Lottery||Canada: Ontario Lottery|
|China: Chinese Welfare Lottery||USA: California Lottery|
|Hong Kong: HKJC||USA: Connecticut Lottery Corporation|
|Japan: Mizuho Bank Ltd.||USA: Kentucky Lottery Corporation|
|Europe||USA: Minnesota State Lottery|
|Czech Republic: SAZKA sázková kancelář, a.s.||USA: New York State Lottery|
|Finland: Veikkaus Oy||USA: Tennessee Education Lottery Corporation|
|France: Francaise des Jeux|
|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|