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| Photo: James Oakes |
There are probably a few things that you don’t know about the lottery industry. For example, at $300bn annually, it is bigger than the music, video game, and cinema industries combined. But, perhaps even more surprising, is that after being essentially unchanged since the Han Dynasty used a lottery to fund the Great Wall of China, right now it is on the cusp of a revolution.
An industry in steady decline
You might ask how an industry that claims 50% of the population as its customers could be in trouble? The answer lies in taking a deeper look at the demographics. Whilst overall lottery sales continue to rise, this masks the fact that the millennial generation has stopped playing almost entirely. To give just one example, a 25-year-old in Germany today is 50% less likely to play Lotto than a 25-year-old was in 2010. Such statistics are mirrored almost everywhere around the globe.
So what is going on? The simple fact is that millennials demand an entirely different kind of lottery experience, in much the same way that they have come to demand entirely different taxi (Uber) and hotel (Airbnb) experiences. Much like those industries, lottery is defined by excessive out-dated regulation and the active suppression of competition. This has the short-term effect of stifling innovation. In the long-term, however, it causes creative entrepreneurs to fundamentally re-think lottery, in just the same way that taxis and hotels were re-imagined.
Disruption from the very core
To redefine something, you first need to strip it back to its core. For lottery this core has always been about giving the player the opportunity to dream. Realistically people know that they are not going to win the jackpot – but, they just might. This possibility fuels many a lunch-break fantasy of a totally transformed life. Importantly the nature of that dream is different for the millennial generation.
Less exciting is the enormous lump of cash that allows them to clear the mortgage, as they can’t even buy houses anymore, and give up work - which they don’t want to do. More exciting, for example, is the possibility to have a once-in-a-lifetime experience, that will live long in the memory and can be shared with their friends. A number of exciting startups such as Omaze are already creating products that, whilst not traditional lottery per se, plug into that millennial dream and offer incredible experiential prizes such as hanging out with A-list celebrities.
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Source: IDG Connect
