EuroMillions ban to allow other alternative lotteries to thrive?

While secondary lottery operators may be up in arms about today's ban on taking bets on non-UK EuroMillions draws coming into force, Camelot will still face competition from providers offering consumers cheaper and more accessible ways to play these draws, writes Joanne Christie

For companies such as Lottoland, today marks the end of the previously lucrative business of taking bets on EuroMillions, a practice which had seen bet-on-lotteries firms in the UK thrive thanks to their ability to undercut National Lottery prices.

In November the Department for Digital, Culture, Media and Sport (DCMS) announced that it was to ban secondary lottery operators from offering bets on non-UK EuroMillions draws and the prohibition comes into effect today.

But while affected operators are up in arms about the move and have threatened a judicial review on the matter, there are others – along with Camelot, which is of course very happy about the decision – that see it as an opportunity.

Online syndicate providers such as Lotto Social, for example, see it as a chance for its business model to gain traction among customers keen to play EuroMillions but unwilling to fork out the £2.50 National Lottery has been charging since September 2016.

Almira Mohamed, director at Lotto Social, says of the ban: “Whilst this is a win for the National Lottery and the significant work it does for Good Causes, we also need to recognise that consumers are demanding alternative and more cost effective ways to play the National Lottery, particularly in these times of austerity.

“£2.50 for one chance at the EuroMillions is not affordable by all. What the betting companies have been doing up until now was discounting this price — which of course there was a demand for.

Lotto Social offers players the chance to play more games for a lower cost by putting them in syndicates. For example, for £4 per week a player can be part of 10 EuroMillions lines.

In the case of a win, their share of the winnings would be dramatically reduced due to the number of players, but Mohamed says this suits some players.

“Meeting consumer demand with other ways to play, where you get more value and more ways to win — such as playing in syndicates — is the way forward.

“We need to focus on innovation in this sector, which has been severely lacking for some time. With the demise of betting on the EuroMillions, we predict syndicate play will grow to at least 25% of lottery play, up from the one in five jackpots which are currently won by syndicates.”

Jackpot.com, which offers both betting on and syndicates on its site, says so far the latter model is proving popular for the operator, a relatively new entrant that launched in August 2016.

“The syndicate model that we offer is a very local model in the UK and it is going very well for us,” says Yariv Ron, the company’s co-founder.

Syndicates are nothing new of course – offline they’ve been around for a very long time, but the new breed of online syndicate management service providers is pitching them to consumers in a different way that aligns with other types of entertainment they are subscribing to.

“For example we launched a £9.99 model, a Netflix-type model, and it is going very well because people can see it in other industries,” says Ron of Jackpot.com’s new EuroMillions syndicate, which it is promoting as providing 96 chances to win for £9.99 per month.

“All these types of business models, subscription models, multidraw, that we do — these are all things that the incumbents could have done 20 years ago but it is not in their culture. And I think this is why we have all these disrupters, because I think people are getting more value.”

From a legal point of view, running a syndicate management service falls outside the scope of the DCMS ban, nor does it require a licence from the Gambling Commission.

For the time being, messenger services are also outside the scope of the ban, with the DCMS consultation saying: “The issues of lottery messenger services fell outside of the remit of the consultation.

“We have passed comments along to the Gambling Commission as it is currently looking at this area, and will consider taking further action if significant issues arrive.”

Both syndicate providers and messenger services — which buy tickets for individuals rather than syndicates — typically see themselves as less vulnerable to attacks from monopoly providers, politicians and regulators as they physically purchase tickets and therefore there’s no argument they are taking funds away from Good Causes as there is with betting on operators.

With monopoly providers increasingly wielding their influence to drive their betting on competitors out of the market – Camelot was the driving force behind the DCMS decision and in Australia monopoly operators Tatts spent more than $5m on a marketing campaign to get rid of Lottoland — it’s likely we’ll see more synthetic lottery providers broadening their business models to cater for consumers looking for cheaper and more accessible ways to play lottery.