Q&A: Lottovate's Peter Paul de Goeij talks US lotteries

eGaming Review (eGR): Tipp24’s US-facing brand Lottovate has been in the making for a long time, how expectant of success is the company?

Peter-Paul de Goeij (PPdG): All of Tipp24’s businesses together include B2B and consumer-facing lottery brands, and Lottovate is a new brand and the division created to offer digital lottery services, and we’ll be focusing on the government and regulated markets. Of course it’s very important and we’re very optimistic and confident the offering will bring benefits to lottery partners in the US. There’s a huge potential in the market out there. Currently there’s a huge potential market out there for digital lottery that isn’t currently being serviced.

eGR: What does Lottovate think it can bring to the US market?

PPdG: Albeit Lottovate is very new, it draws on 15 years of Tipp24’s successful operations in selling lotteries digitally. We bring a very clear focus on digital, the adoption of ecommerce best practices that we have been building on for the past 15 years to deliver superior results for US state lotteries and their customers.

eGR: What do you consider to be the key differences between the US and European lottery markets?

PPdG: The key difference is what’s currently available to consumers. Europe has led the way in digital lottery sales and marketing and proven there’s a demand for these products across new channels. That’s an important one. YouGov’s research has shown there’s a key demand for digital lottery in the US too, not only from existing players but 19.2 million new ones. US lotteries have the potential and opportunity now to reap massive rewards by embracing digital and we’re here to help them do that.

eGR: Is there any one thing that’s key to lottery CRM?

PPdG: Effective CRM requires a lot of elements to come together in a structured and measured way. There’s not a single key, it’s the sum of many parts. On the other side lotteries do have some unique advantages in building player acquisition in CRM campaigns such as jackpot marketing, winner awareness, new games, syndicate options and good causes. These nuggets combined with marketing analytics and campaign management capabilities can be used to generate cost-effective messages that can be tested and evaluated over time to produce highly targeted and optimised communications strategies. Lotteries are already well positioned I would say.

eGR: So is it a case of US operators needing to refine their approach?

PPdG: They already have many of the tools they can use, it’s just a case of being able to use them better and combine them. The digital offering is an important add-on in that respect.

eGR: And what’s the biggest barrier towards success in the US market?

PPdG: It’s difficult to say. The penetration of the internet in the US is up there with European countries in the top 10, so there’s no reason why not. Ecommerce in the US already accounted for something like $260bn in sales in 2013 which is 8% of all retail sales, and it’s growing at a rate of 13% year-on-year so customers are already shopping online massively. Offering the chance to purchase tickets at their own convenience and in their own home is a logical step. There are regional differences, even state to state, but the core game mechanics are consistent and there are many similarities in player usage and attitudes. It’s important to have the skills to evaluate, learn and test strategies in order to deliver a truly local experience – for instance a New York lottery – and optimise business for that lottery over time.

eGR: Are there any states that have adopted to digital lottery sales quicker than others?

PPdG: We all know Illinois for instance has been good in this respect, and we’re following closely what happens and what the results are in other states like Michigan and Minnesota. They’ve been at the forefront of lottery development in the US and there is a big difference between them and states that don’t even have a state lottery yet such as Alabama. It’s a varied picture I would say.

eGR: Are digital lottery sales impacted by some of the anti-online gambling sentiment in the US?

PPdG: Outside of the Federal bill and on a state level, there are always different groups with different interests and not everyone is thrilled by the idea of online gaming, which is nothing different from the rest of the world I would say. Having said that, our survey clearly shows that there’s a massive opportunity to tap into to increase US lottery sales with digital lottery and with that to increase contributions to the charities that those lotteries support.