ONLINE LOTTERIES IN INDIA

By
Mitesh D. Shah
II Year MBA
Symbiosis Institute of Business Management
Pune
E-mail :
mitesh_rock@sify.com

ONLINE LOTTERIES IN INDIA

Lotteries in India are as old as in any part of the world. The first reference to lottery was in year 1799 in the diaries of the then Chief Secretary of Madras, Mr. Alexander Flakner. The lottery games offered in India were draw games of passive forms mostly consisting of 5 digit and 6 digit draw games. The tickets were sold under various series with the prizes ranging from Rs. 1 Lacs to Rs. 1 Crores. Most of the lotteries in India are operated by the State Governments. The figures estimated for the total market by various organizations, including Lottery Federation, are pegged at Rs. 60,000 crores or US$14 billion.

RELEVANCE

Lottery, though always traditionally been compared to gambling, has over a period of time evolved as a most accepted form of social past-time  and recognized world overas an entertainment option. Lottery has been and is operated by the Government recognized body of the Government, where the revenues generated from it are used to fund other projects of Government. Over period of time, lotteries have funded number of Government and charitable projects across the globe.

PAPER LOTTERY BUSINESS

The paper lottery business is estimated to be in the vicinity of 60000 crores. There is no doubt that the players in this business have distributed it well but its success in the last few years has been hampered for the following reasons

  • NO BRAND DIFFERENTIATION
  • NO TECHNOLOGY SOPHISTICATION
  • NO PRODUCT CREDIBILITY
  • LACK OF TRANSPARENCY
  • UNORGANISED PLAYERS

To counter the reasons stated above ONLINE lotteries have taken over. Online lotteries seem to cover the drawbacks of the paper lottery system.

CURRENT SCENARIO OF ONLINE LOTTERY BUSINESS IN INDIA

In the two years since e-gaming entered India, at least half-a-dozen corporate names are vying for operator licenses in the 13 States that allow lottery. The corporates are of the opinion because of the technological revolution the time has come when the Indians are following the path of the Brits and the Americans, Singaporeans etc. and expect that the lottery business will grow leaps and bounds in the years to come. Neither the negative image of lotteries nor litigation that seem to be part of the game seem to daunt these corporates.

MAJOR PLAYERS AND DIFFERENTIATION STRATEGIES

PLAYWIN was the first to enter the bandwagon. It has positioned its lottery as a `Game of Fortune'. Playwin wants to do away with the lack of transparency associated with paper lotteries in the country. Providing transparency, the lots are drawn and shown on the group's own channel (ZEE TV) and also on other channels such as Sun TV, Udaya TV and Asianet, giving audiences the thrill of witnessing the draws, live.

The company is also attempting to draw in new segments of the population into the game, especially the upper middle class , which has stayed away from lotteries. Thus, it will look at achieving volumes through distribution, which will be the key to reaching out to the masses. Playwin intends setting up at least 30,000 terminals across the country.

The company has also hired SAATCHI and SAATCHI to develop the brand. Using Playwin as the mother brand, separate sub-brands (for the various games in each State) under names such as Super Lotto (for Sikkim Lottery), Maha Lotto (for Maharashtra) and Lucky Lotto (For Karnataka) are likely to be developed in time.

In December, the Ruia-promoted Essar group launched its Fortune online lottery in a modest way with 15 retail counters in Nagaland. Essar is dipping deep into its pockets and will spend Rs.250 crore (Rs 2.50 billion) in short order. Essar plans to use its mobile phone company's marketing network.

Other players like steel giant Ispat have shown keenness to pick winning numbers by making ambitious bids for state lotteries. In December 2001, Ispat bid for the Maharashtra state lottery but was piped to the post by Essel which promised the state a guaranteed Rs.100 crore (Rs.1 billion) annually for the next 10 years.

Even the Modi Group reckons it has a network that can reach out across the country.

Lalit Modi, who is masterminding the company's foray into lotteries, hopes to utilize the distribution networks controlled by the group's cigarette company, Godfrey Philips' and Modicare. Besides that he hopes to utilize TV channels Hallmark and Fashion TV that are marketed by the group.

The company also feels the key management team [ the team that launched the U.K. national lottery , the most successful online lottery] will be instrumental in its success.

The list of corporates entering the business is increasing day by day. The amount of keenness and the resources spent by these big players signifies that the online lottery has huge potential and is here to stay.

STRATEGIES THAT I WOULD USE

The drawbacks that the paper lottery business had gave way to the online lottery business. I would like to cover all the drawbacks of the lottery business and add distinguish features to my brand of lottery which will enable my brand to establish a brand equity and help in differentiation.

Live Draw on TV:  

To ensure complete transparency and credibility the Online Lottery draw, will be shown live on TV. This will also enhance the thrill associated with the lottery which is primarily missing in the paper lottery business.

Prompt prize payment:  

All prizes will be disbursed promptly to the winners. This will help in restoring faith in the minds of the people. The lack of CREDIBILITY associated with most of the lottery players will be taken over.

Huge Advertising Budget

I will see to it that a substantial amount is spent on advertising. This is essential as through advertising I would try to create awareness in the minds of the people regarding my product thereby helping me in the differentiation of my brand.

The Mass appeal:  

Online Lottery will appeal to all kinds of consumers, ensuring widest availability and therefore maximum lottery sales.

Immediate reimbursement of prize money:

All winners will be reimbursed with the prize money immediately. In fact, winners of prize money upto Rs.5000 can collect the money from the retailer himself. Needless to say, the retailer is also reimbursed immediately. This will make the brand more credible.

Dealer initiatives

Each retailer will be provided with a trained, dedicated sales person at the retail point. Daily commission could directly be deducted on sales and the balance could be remitted on a daily basis. This will enable us to maintain good relationship with the dealers and dealers would promote our lottery, as the commission they earn would be instant.

Innovative games

Innovation in the product offering always can be a key differentiating factor. New interactive and innovative games will add to the entertainment factor and will help in changing the negative image associated with the word lottery. It will also attract newer segments of population.

Technology

The world of business is driven by technology and as such the onus is on the promoter that is us to use technology to improve the product offering. I would tie up with a technology provider with companies like editech etc. to ensure quality in the terminals.

Online lottery --> FMCG

The company will attempt to draw in new segments of the population into the game, especially the upper middle class, which has stayed away from lotteries, thereby hoping to make the online lottery business akin to the FMCG (fast moving consumer goods) business with similarities such as quick repeat purchases due to the low value of the products. Thus, just like the FMCG business, it will look at achieving volumes through distribution, which will be the key to reaching out to the masses.

Mitesh D. Shah
II Year MBA
Symbiosis Institute of Business Management
Pune
E-mail :
mitesh_rock@sify.com

Source : E-mail November 27, 2003

 

 

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