Lotteries today are challenged to find new ways to increase revenues and fulfill their missions.
The Colorado Lottery faces this revenue challenge and continues to identify innovative proposals that will allow the organization to generate the needed revenue to meet the Lottery’s increasing statutory funding requirements for its proceeds beneficiaries. Technology is advancing and the Lottery needs to stay relevant with players of all ages and demographics. In order to engage and entertain players into the future,
the Lottery must bring distinctiveness to its product mix, distribution channels and sales strategies. The Lottery does not face this challenge alone. In order to move forward the Lottery enlists the support of the Lottery Commission, legislators, proceeds beneficiaries, retailer partners, trade associations and players. These constituents help the organization raise awareness of the revenue challenge and garner the support that is needed to successfully deploy various innovative solutions.
The Lottery is committed to meet its mission of maximizing proceeds for the great state of Colorado. The Colorado Lottery provides 50 percent of net proceeds to Great Outdoors Colorado (GOCO), up to a $35 million cap in 1992 dollars that adjusts annually with inflation. The Colorado Lottery is the only funding source for GOCO and in FY2017 the GOCO cap has grown to $64,463,929.
As the GOCO cap continues to increase by an estimated $1 million annually, the Lottery must generate an additional $10-13 million in revenue each year in order to meet the statutory proceeds GOAL, (C.R.S. 33-60-104 (2).Today Jackpot game sales are experiencing fatigue, the population is aging and technology evolving. The Colorado Lottery must innovate business strategies and diversify with new Lottery products in order to rise to the revenue challenge. The Colorado Lottery is a mature business established in 1983 with committed core customers. Like any business the Lottery must grow and change with consumers.
The player from 1983 is very different from the player in 2017.Coloradans have many options when it comes to spending entertainment dollars. Other entertainment options are direct competition for the Lottery. The world has changed and it is time for the Lottery to change in order to compete with player's options.
The Lottery was lucky in FY2016 and so were Lottery beneficiaries. The historic $1.5 billion Powerball jackpot spiked sales for all Lottery products. Colorado sales of Powerball tickets for the week ending January 9, 2016 shattered the previous weekly sales record set in December 2012 by nearly $9.5 million. Part of the revenue challenge is that luck sometimes helps the Lottery. Sales for FY2016 met and surpassed all goals because of the Powerball surge. To sustain funding for Lottery beneficiaries, the Lottery must adapt its business model to meet the changing demographics and technology use of today’s player. Innovation through new distribution channels and enhanced products will provide the foundation to sustain funding for Lottery beneficiaries.
Lottery Innovations To Increase Revenue:The following innovations do not require statutory change:
- Play-At- The-Pump
- Digital Play
- Subscription Play
- ATM Sales
- Monitor Games
The following innovations require statutory change:
- Credit Card Sales
- Online Sales
Evolution of
technology vs.
lottery games
In 33 years, technology has dramatically changed, but how players purchase and play Lottery games has not technologically evolved.
The player from 1983 is very different from the player in 2017.
