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The big balancing act: Tradition vs. innovation in the evolution of the lottery

| By Alice Soule | Reading Time: 5 minutes
Through the integration of technology, lottery games are experiencing a rejuvenation. For Milen Ganev, 7777 gaming co-founder, operators should be capitalising on this previously overlooked vertical or risk missing a trick. From the first recorded lottery draw in 1569, the formation has remained relatively consistent. However, lottery fans are beginning to open up to more innovation in their gameplay, and Ganev believes now is the time for operators to take notice.
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This innovation is spreading on a global scale with a growing trend of players accessing international lotteries that were previously unavailable.  With this expansion of availability, lottery revenue is set to reach $18.38bn for 2024 and achieve an annual growth rate of 5.62% CAGR between 2024 and 2028.

For the lottery vertical, digitalisation has been the pinnacle of this innovation, making it more accessible to a wider audience and bringing it directly to players’ mobile and desktop devices.

Digitalising with innovation

You only have to look at of Allwyn’s reformative plans of the National Lottery following its takeover from Camelot, Flutter’s purchase of Sisal and DraftKings $750m acquisition of Jackpocket to recognise that something impressive is brewing on a global scale. And one thing all of these developments has in common is innovation – digitalising lottery, moving it online and adding dynamism into the traditional format.

7777 gaming recognises this as an important forward step for the industry, creating a wide range of instant win games, including popular title Zeus Quest, that combines a speedy game of chance on a slots style grid.

Ganev explains, “Our mission has always been to be pioneers in innovation, engaging our audience with a wide variety of non-traditional features while retaining the classic match and win lottery concepts.”

The figures back up this ambition, with a global gross win percentage for state lotteries in 2023 reaching 11.5%, and a projected compound annual growth rate of 11.6%.  So why does this vertical’s status remain relatively inferior to its compatriots?

Aside from the potential implementation of digital innovations as lottery becomes increasingly an online product, Ganev believes the answer to be multifaceted. “Lotteries have been slower due to stricter regulations, concerns over addictive behaviour, and the traditional nature of lottery players.”

“In numerous countries, lotteries are operated by state-run monopolies, which have historically faced challenges in their digitalisation, related to bureaucratic challenges and complex procurement processes.”

Moving lotteries into the digital world

Despite these complexities, Ganev feels it is still possible for operators to build a lucrative lottery revenue stream and create a more engaging experience for players while retaining the essence of tradition.

But with opportunity comes challenge, and Ganev is quick to point out that “Transitioning lotteries into the digital realm presents a myriad of challenges for operators.

“Firstly, they must contend with increasing payouts to meet the demands of online players and remain competitive with online casinos, which typically offer higher payouts.

“Operators face technical hurdles in the form of integrating complex systems, such as payment gateways and age verification tools, while simultaneously adapting their marketing strategies to resonate with a digital audience.”

Transparency and trust

A key way in which Ganev believes operators can overcome these hurdles, and encourage a continued migration towards online lottery products, is by instilling trust in their audience. With recent partnerships with the Ukrainian and Azerbaijan national lotteries, instilling a trust in its audience is something 7777 gaming has embedded into its general ethos.

“Our team has extensive experience in organising and managing heavily regulated lotteries for years. We leverage this B2C experience to develop B2B projects, including platforms and games, that prioritise transparency and trust, which are among the core strengths of 7777 gaming. This is beneficial for lotteries as they rely heavily on public trust and confidence.”

For Ganev, this responsibility, combined with competition from other verticals, is the real crux of the problem for lottery operators, but one that must remain for both legislative reasons and the traditional appeal of lottery fans.

“The main challenge for lottery operators lies in striking a balance between generating profits with games featuring lower payouts, which may not be well-received by players, and generating sufficient GGR to support charitable causes.”

Retaining traditional lottery features through hybrid games

“It remains imperative for operators to uphold the timeless appeal of traditional lottery games, striking a delicate balance between embracing innovation and preserving the essence of their offerings.”

To counter the potential lower payouts of digital lottery games, Ganev suggests there may be merit in combining the strengths of two verticals in a hybrid title. Particularly so for an operator who is successful in cross-selling a lottery fan into other areas of a platform. Navigating the complexities of blending game features, initiating speed and dynamism for the digital audience is not something Ganev believes his team shies away from. 

In fact, he feels this is a particularly creative skill of the 7777 gaming team and one of the reasons for their onsite rhetorical question of, “Who knew that players crave for the new and fun, for the quirky and original?” amidst a colourful feed of new instant win titles like Bloody Stakes and Riches, Happy Sheep, and Zeus Quest.

“A specific know-how and experience is required to provide this type of service we offer. 7777 gaming focus on specialised lottery offerings, catering to a niche market with a strong emphasis on lottery-specific features and games.”

“We extend beyond the development of traditional lottery games by incorporating many of these lottery-specific features into online casino games, which we classify as instant win games and scratch card games.

“This hybrid strategy seamlessly transitions players between igaming verticals, enhancing both digital lotteries and online casinos with diverse gameplay experiences.”

Customising platforms to meet player demands in each region

But the target market and region in which a game is launched will determine how far tradition can be blended with innovation. For 7777 gaming, localisation is crucial to meet the needs of different jurisdictions in terms of customisation and regulation. Knowing the acute preferences of a market will only ever benefit an operator.

Ganev explains 7777 gaming’s approach to ensuring accurately targeted content. “7777 gaming addresses jurisdiction requirements by offering customisable game content, symbols, language support, and currency options to meet regulatory standards specific to each market.

Not only is this tailoring to regulatory expectation, 7777 gaming recognises the natural affiliation players have with their native lotteries. For example, the Azerbaijan National Lottery (Azerlotereya OJSC), the Ukrainian National Lottery (UNL), or Loteria Nationala a Moldovei in Moldova. As Ganev explains, his team hones in on what makes those unique lotteries familiar and ultimately localised to a region’s expectations.

“Our loyalty programs, bonus tools, and promotional engines are developed with flexibility to seamlessly adapt to different jurisdictional requirements, including diverse prize structures, age restrictions, and payment methods. We meticulously research and stay abreast of the regulatory requirements in each jurisdiction where we operate.”

With recent success in particular jurisdictions, Ganev explains how the team ensures strategy revolves around fully understanding and embracing cultural preference at a local level. “For example, in Azerbaijan by integrating local themes and symbols into the games, we were able to create an authentic and captivating gaming experience for the players.

“Moldova and Ukraine are another example of our approach where we successfully integrated a coherent and custom-made lottery concept that enhanced players’ satisfaction and fostered a sense of connection and loyalty to the brand.”  

Future trends in lottery markets

While there remains a pull towards the traditional, 7777 gaming believes the route forward is in introducing innovative technologies to enhance popular lottery games. This way, operators can meet the shifting preference of the player as well as the specific needs of legislation.

“The digital lottery segment is expected to see continued growth in the coming years, driven by technological advancements, increased mobile usage, and shifting consumer preferences. Emerging trends such as blockchain-based lotteries, virtual reality gaming, and AI-driven personalisation are likely to shape the industry.

“7777 gaming aims to capitalise on this growth by expanding its market presence, introducing new technologies, and enhancing its game portfolio to meet the evolving demands of players and regulators.”

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