Lotteries grow 1.8% first-half on first-half; growth in Asia Pacific offset by sales in North America.
Lotteries worldwide improved marginally on their modest start to 2017, with reporting lotteries posting a second-quarter on second-quarter aggregate increase in sales of 2.7%, for a first-half on first-half aggregate increase in sales of 1.8%. As in Q1 2017, positive growth in Asia Pacific was offset by a contraction in sales in North America.
Basel, 11 January 2018—Lotteries worldwide improved marginally on their modest start to 2017, with reporting lotteries posting a second-quarter on second-quarter aggregate increase in sales of 2.7%, for a first-half on first-half aggregate increase in sales of 1.8%. As in Q1 2017, positive growth in Asia Pacific was offset by a contraction in sales in North America. In comparison, at the same point in 2016 reporting lotteries were enjoying a first-half on first-half increase in sales of 4.5% globally, as the attendant graph (right) signifies; the spikes in the graph for 2016 highlight the USD 1.5 billion Powerball draw of January 2016 on the one hand, and the revitalization of the lottery market in South Africa on the other.
Africa: Growth driven by the South African National Lottery
Just edging out Asia Pacific for the strongest performance of H1 2017, reporting African lotteries witnessed an aggregate first-half on first-half increase in sales of 5.6%. As per Q1 2017, all mainland African lotteries recorded positive results. The standout performer was the South African National Lottery, which enjoyed a six-month on six-month increase in sales of 9.2%. As per Q2 2017, the South African National Lottery has stabilized the network with key accounts including long established retailers with a national footprint contributing 64.1% of national sales growth. The introduction of company vehicles to sales personnel has assisted in maintaining in-store consumable deliveries, meaning that when a new product or addition to a product is introduced, stores can immediately roll out their marketing support to ensure ongoing product sales. The debut of the RAPIDO pilot product across 133 stores demonstrated Ithuba’s commitment to localizing the national lottery, adding a new consumer market audience thereby. RAPIDO is a fast-paced game that is drawn every five minutes, with a prize payout of up to ZAR 750,000. This game centers around social gatherings at clubs and pubs, and again demonstrates Ithuba’s commitment to re-invigorating the national lottery games. The introduction of new EaZiWin playcards has also assisted in bringing back lapsed players that used to play the lottery's original scratch cards.
Elsewhere in Africa, the Moroccan lotteries were also in positive territory, with Loterie Nationale Morocco recording an H1-on-H1 increase in sales of 4.3% and La Marocaine des Jeux et des Sports reporting an H1-on-H1 increase in sales of 3.7%. For its part, the National Lottery Authority of Ghana saw its sales rise by 1.9% half-year on half-year. Continuing to operate in a challenging environment, first-half on first-half sales at the Mauritian National Lottery dipped.
Asia Pacific: China acts as the engine of growth
Following hard on the heels of Africa for the strongest performance of H1 2017 were the reporting Asia Pacific lotteries, which also recorded an aggregate increase in sales of 5.5% half-year on half-year. Once again, lotteries in China acted as the engine of growth. Cumulatively, the mainland Chinese lotteries saw half-year on half-year sales increase by 5.5%, or more than CNY 10 billion. Strong sales of sports betting products, which increased six-month on six-month by 14.7%, helped propel China Sports to a half-year on half-year increase in sales of 7.6%. For its part, the China Welfare Lottery recorded an increase in sales of 3.7% for the period January–June 2017, versus the corresponding revenue period of 2016. Commenting on the performance of China Welfare, the lottery said, “The Q2-on-Q2 increase in sales for China Welfare Lottery was 3.9%. In the second quarter, China Welfare Lottery proactively carried out promotions and marketing campaigns to boost the market. Apart from favorable macro-economic conditions, the increase in sales resulted primarily from the growth of draw games (mainly from the quick draw games) as well as VLT games—the two categories accounted for over 90% of the 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.
Latin America: Innovation and change at Mexico’s Lotería Nacional
Reporting Latin American lotteries witnessed an aggregate increase in sales of 3.2% for the period January–June 2017, as against the period January–June 2016. Brazil’s Caixa Econômica Federal recorded half-year on half-year sales growth of 5.1%, besting all other reporting lotteries in the region. Also in positive territory was Mexico’s Lotería Nacional para la Asistencia Pública, where a revamp of the lottery’s products and operations oversaw a rise in sales of 2.1% for the first half of 2017, versus the first half of 2016. During the first semester of 2017, Lotería Nacional set new goals for their regional sales agencies, determining that they should increase their number of retail stores, and maintain growth in points of sale so as to increase the regional coverage of the lottery’s products, resulting in higher sales. Beyond these measures, the traditional lottery product was also revamped to include fourteen additional security measures, resulting in up to 20 security measures overall, giving Lotería Nacional’s customers additional certainty and confidence, as well as a more visually attractive product. Operationally, logistics were reworked to improve distribution to all the end point retailers; the effort to work closely with the lottery’s suppliers aims to ensure traditional Lottery bills will arrive from 7 to 10 days before the draw, instead of 48 to 72 hours, as it was before. Commenting on the transformations taking place at Lotería Nacional, Acting Director General Eugenio Garza Riva Palacio said, “Lotería Nacional para la Asistencia Pública is always innovating with the latest trends in games and drafts, getting closer to younger generations, without ever losing sight of the tradition with which our lottery counts since 1770.”
Elsewhere in Latin America, a reorganization of the gaming market in Argentina saw the creation of Lotería De La Ciudad De Buenos Aires S.E., the lottery of the city of Buenos Aires, and the reorganization of games at Lotería Nacional Sociedad del Estado. A more detailed report on transitions in the Argentinian lottery sector will be forthcoming in a future edition of the WLA Quarterly Lottery Sales Indicator.
Europe: Success for Central Europe’s lotteries
In Europe, reporting lotteries essentially held steady, recording an aggregate contraction in sales of 1% for the period January–June 2017, compared to the period January–June 2016. The outstanding performance in the region over these time frames came from Hungary’s Szerencsejáték Zrt., which saw its sales grow by 13.9% half-year on half-year. According to the Hungarian national lottery, Q2-on-Q2 games sales grew across all game categories, especially instants and bookmaker-type games. Growth in instant games was due to the introduction of popular new instants and related special offers, while the growing number of sports betting events resulted in an increase in sales of bookmaker-type games. Beyond this, lottery games also reached strong Q2 sales revenue owing to significant ongoing roll-overs. Also in central Europe, the Czech lottery SAZKA saw its sales grow by 4.8% half-year-on half-year, mainly thanks to the launch of on-line sales of lottery products according to new legislation in March 2017, and the continued strong growth of games in the instant lotteries product category.
IIn contrast, performance in Western Europe and Scandinavia was more muted. In Greece, for example, OPAP reported an increase in wagers of 2.7% half-year on half-year, and an increase in gross gaming revenue (GGR) of 1.4% over the same comparative timeframes. Commenting on the performance of the Greek lottery, CEO Damien Cope said, “OPAP delivered a solid operational performance in Q2 2017 with revenues only slightly down on last year despite tough year-on-year comparables and the persisting macro-economic challenges in Greece, which continue to affect the disposable income of our customers. Under these circumstances OPAP’s overall performance is commendable”. In Scandinavia, meanwhile, Sweden’s Svenska Spel witnessed a first-half on first-half increase in sales of 1.5%, while Finland’s Veikkaus Oy held steady.
North America: Loto-Québec, BCLC, and Florida Lottery shine
In North America, reporting lotteries saw sales decline by 2.2% in aggregate over the first half of 2017, as against the corresponding revenue period in 2016. While reporting Canadian lotteries enjoyed a positive first half of 2017, seeing H1-on-H1 sales rise by 3.1% in aggregate, reporting U.S. lotteries languished by comparison, seeing H1-on-H1 sales decrease by 3.2% in aggregate. In Canada, Loto-Québec saw its sales rise by 10.5% half-year on half-year, capping a successful beginning to 2017. At BCLC meanwhile, sales rose by 3.5% for the period January–June 2017, versus the period January–June 2016. Indeed, for the first six months of 2017, BCLC’s lottery revenue increased by CAD 13 million over the previous year. This was largely driven by the new national lottery product “Daily Grand”, which was introduced in October 2016. In addition, sales for traditional Scratch & Win and Keno products continued to grow year over year. This successfully mitigated the risk of having fewer major Lotto Max jackpots than the previous year.
In the U.S., lottery sales were generally down half-year on half-year, as previously noted, although there were bright spots. Of particular note was the Florida Lottery, which had a remarkable start to the first half of calendar year 2017. In February and March, Scratch-Off sales set an industry record with two consecutive weeks above USD 100 million as the lottery went on to record its second-highest first calendar quarter of all-time, behind only the record setting USD 1.5 billion Powerball jackpot first calendar quarter of 2016. With momentum stimulated by a strong line-up of top-selling scratch-off products and the addition of new draw games, the lottery went on to record its best second calendar quarter of all-time; setting record marks for the months of March, April, May, and June. As a result of this strong performance, which accounted for more than USD 3.2 billion in total ticket sales, the lottery transferred more than USD 874 million to the Educational Enhancement Trust Fund between January and June 2017. The 2017 first half results capped off a stunning end to the fiscal year for the Florida Lottery, which saw it break its all-time fiscal year sales record, achieving the highest sales year in the lottery’s 29-year history with more than USD 6.16 billion in ticket sales and contributions to education of USD 1.66 billion. Commenting on breaking the sales record, the lottery remarked, “we are maintaining our commitment to sell tickets and generate additional funding for education in Florida. For the past 29 years, lottery dollars have benefited Florida's students and schools, and we are confident that this year will be our highest total in contributions yet.”
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 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.