Lotteries make modest start to 2017; growth in Asia Pacific / Latin America offset by lower sales in North America.
Lotteries worldwide got off to a modest start to 2017, with reporting lotteries eking out a first-quarter on first-quarter aggregate increase in sales of 0.9%. Solid performances in the Asia Pacific and Latin American markets were counterbalanced by a marked decrease in sales in North America, where, in comparison to the first quarter of 2016 – which saw the record-breaking USD 1.6 billion Powerball draw of January 2016 – the absence of a strong driver of growth was missed.
Basel, 2 August 2017—Lotteries worldwide got off to a modest start to 2017, with reporting lotteries eking out a first-quarter on first-quarter aggregate increase in sales of 0.9%. Solid performances in the Asia Pacific and Latin American markets were counterbalanced by a marked decrease in sales in North America, where, in comparison to the first quarter of 2016 – which saw the record-breaking USD 1.6 billion Powerball draw of January 2016 – the absence of a strong driver of growth was missed.
Africa: Innovation at Morocco’s Loterie Nationale
The African region accounted for the strongest performance in Q1 2017, with reporting African lotteries enjoying an aggregate increase in first-quarter on first-quarter sales of 9.4%. All mainland African lotteries recorded positive results. Leading the pack was Morocco's Loterie Nationale, where sales were up by 11.2% quarter-on-quarter. According to a spokesperson for Loterie Nationale, the increase in sales in the first quarter of 2017, as compared to the first quarter of 2016 – and more generally since the third quarter of last year – was achieved thanks to regular promotions, especially on KENO games (where players could double their winnings on certain predetermined days) and LOTO (where there was a special jackpot of the end of the year). Loterie Nationale hopes to continue this positive trend through the launch of new games (in particular, games specially designed for tablets) and through virtual greyhound racing, which was launched last month.
Elsewhere in Africa, other results were almost uniformly positive. Year-on-year, sales at Morocco’s La Marocaine des Jeux and Loterie Nationale were up 19.5% and 9.2% respectively, while at Ghana’s National Lottery, sales were up 7.6% year-on-year. For its part, the Mauritian National Lottery essentially held its own in 2016, thanks to a strong last three months of the year, which saw Q4-on-Q4 sales rise by 13.5%.
Latin America: Building on growth at Loteria Nacional Sociedad del Estado
In Latin America, reporting Latin American lotteries enjoyed a first-quarter on first-quarter increase in sales of 5.8%. Underpinning the positive results of the Latin American market was the performance of Argentina's Loteria Nacional Sociedad del Estado, which reported growth in sales of 22.2% for the first three months of 2017, as against the corresponding revenue period of 2016. Also enjoying a robust performance was Chile's Polla Chilena, which reported a first-quarter on first-quarter increase in sales of 12.5%. Also in Latin America, Mexico's Loteria Nacional reported a first-quarter on first-quarter sales increase of 5%, while Brazil's Caixa reported an increase in sales of 2.5% over the same timeframes.
Asia Pacific: Off to the races with the Hong Kong Jockey Club
In the Asia Pacific region, sales were up 5.4% over the first quarter of 2017, as against the first quarter of 2016. Dominating the Asia Pacific market were the results of the Chinese lotteries, such as in Hong Kong, where the Hong Kong Jockey Club enjoyed a first-quarter on first-quarter increase in sales of 7.5%. The strong performance was mainly driven by an impressive 10.1% growth in racing, thanks to multiple growth levers including additional racedays and the continued growth of customer base and commingling, which underline the growing attractiveness of Hong Kong’s world-class horse racing. In mainland China, meanwhile, sales at the China Sports Lottery grew by 6.6% first-quarter on first-quarter, while sales at the China Welfare Lottery grew 3.5% over the same comparative time period. The growth in sales at the mainland Chinese lotteries was driven by sales of numbers games and sports betting products, which were up 5.4% and 15.5% respectively quarter-on-quarter. From January 2017 to March 2017, numbers games, sports betting products, and instant tickets respectively accounted for 63.7%, 17.5%, and 6.7% of total sales, while over the same January to March period, a total of 22 Chinese provinces saw their lottery sales increase. Standout performers included the Jiangxi, Chongqing, Hubei, and Gansu provinces, which saw sales grow by 50.1%, 32.1%, 24.4%, and 19.8% respectively quarter-on-quarter.
Europe: Reorganization of the Finnish gaming market
In Europe, reporting European lotteries held steady, recording an aggregate decrease in sales of 0.9% first-quarter on first-quarter. Strong gains at Hungary's Szerencsejáték Zrt. and Poland's Totalizator Sportowy were counterbalanced by poorer results in the UK. In Hungary, Q1-on-Q1 sales were up by 16.7% in total. Quarter-on-quarter, sales of draw-based games at the Hungarian national lottery were up by 6%; sales of instant games, where a new scratchcard was launched, were up by 15%; and sales of bookmaker-type games such as Tippmix and Tippmixpro were up by 28%. Enjoying similar success was Poland's Totalizator Sportowy, which saw its first-quarter on first-quarter sales increase by 12.2%.
In other developments in Europe, the beginning of 2017 saw the reorganisation of the Finnish gaming market. The previous three operators of games in Finland – Fintoto, Finland’s Slot Machine Association (RAY), and Veikkaus – merged into a single gaming company owned by the Finnish State, and also called Veikkaus. The new Veikkaus Oy started its operations at the beginning of 2017. The games on offer fall into three major categories: Lucky games, slot machines and instant games, and skill games. The Finnish system is based on the exclusive rights principle, with the purpose of operating games responsibly and mitigating the possible risks involved in gambling. The system secures the legal protection of those engaging in gambling and prevents gambling-related fraud. Commenting on the reformation of the Finnish gaming system, the President and CEO of Veikkaus, Mr. Olli Sarekoski, commented, “The to-do-list of the merger has been enormous – and all of it in addition to keeping the business running. The first three months have been successful and some of the crucial projects, such as the launching of the new brand, have been accomplished. The company is in an excellent position to continue the work in the years to come.”
North America: Hangover from the USD 1.6 billion Powerball draw of January 2016
In North America, reporting North American lotteries recorded an aggregate decrease in sales of 7.2%, on the back of the USD 1.6 billion Powerball draw of January 2016. The record-breaking draw, which offered the biggest jackpot seen to date of anywhere in the world, resulted in a bonanza first quarter 2016 for US lotteries, as the attendant graph (right) depicting the spike in US Powerball sales for the January 13, 2016 draw indicates. Without a drawcard of similar magnitude, sales across the US suffered in comparison during the first quarter of 2017, contributing to the overall decline in sales indicated. Participating lotteries in the US were down across the board, in some cases by double-digit margins. In Canada, however, it was a different story, with first-quarter on first-quarter sales at Canada's Loto-Québec up by 19.8%. Said Isabelle Jean, President of Lottery Operations at Loto-Québec, “Loto-Québec’s record number of jackpot winners in the first three months of 2017 generated added exposure for lottery products, thus triggering additional sales. We also benefitted from the introduction of two new products.” In fact, 2017 got off to an incredible start for Loto-Québec, with two Lotto Max jackpots of CAD 60 million and one Lotto 6/49 jackpot of CAD 25 million. In connection with the new products introduced, a permanent terminal-based draw lottery called Grande Vie brought in CAD 20.3 million in additional sales, while a limited-time high-end scratch ticket ‘100 $ ULTIME’ alone raked in CAD 39 million.
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 second quarter 2017 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: Ithuba Holdings (RF) (Proprietary) Limited||Mexico: Pronósticos|
|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|
** From Q1 2016 onwards, Lotería Nacional Sociedad del Estado is reporting only on sales of products marketed directly by the lottery; sales from concessions are no longer being reported. The change in reporting measures is due to a change in management policy.