Ask the expert: How is the UK lottery market changing?

Healthy numbers: Lebby Eyres, CEO of The Health Lottery, speaks to Gambling Insider about the UK’s lottery market, the effect of Allwyn vs Camelot and the impact of the pandemic.

ask expert lebby eyers

To say the past few years have been dramatic for the UK lottery industry would be something of an understatement. First, it was hit by sudden pandemic-induced lockdowns, which led to a dramatic fall in retail sales. While this rapidly accelerated the shift from retail to online, for a vertical that has always been retail dominated, the increase in online sales wasn’t anywhere near enough to offset the retail losses.

Then the Gambling Commission delayed the launch of the Fourth National Lottery Licence tender before extending the timeline for submissions more than once, such that Camelot’s existing licence was extended by a further six months. The hotly contested competition resulted in the first new operator being appointed to run the National Lottery in its almost 30-year history, with Allwyn set to take the reins next February.

With the resulting legal wrangling and takeover dominating lottery news since the decision was announced, it would be easy to overlook the fact the UK has other lottery operators.

Lebby Eyres, the recently appointed CEO at society lottery operator The Health Lottery, gives her take on how the events of the recent past will impact the UK’s wider lottery market going forward.

"The priority of The Health Lottery has always been on addressing health inequality"

How has the Allwyn/Camelot saga affected the market?

Any discussion about lottery is good for the vertical because it puts it front and centre in people’s minds. One good thing about the licence competition was that there was a lot of focus on good causes and I think it reminded people of that element of playing the lottery.

We have had a slightly unusual situation in this country where the brand is the National Lottery, yet its operator, Camelot, has become really embedded in the public’s mind. It is therefore a seismic moment for the country having the contract change for the first time since the National Lottery began.

I hope that might be a good thing in terms of the relationship between the National Lottery and society lotteries; I firmly believe there is space for all of us in the market. It should be a good thing for everybody if the overall market grows as a result of the change of operator.

Have The Health Lottery's aims changed since the pandemic?

During the pandemic, we obviously had to make some changes to deal with the fact many customers were not able to buy tickets at their usual retail outlets and there was a shift in play from retail to online. We rolled out new products at a faster rate than had previously been the case and made changes to our marketing strategy. However, this did not change our goal for the longer term, which is to support both the online and retail arms of the business.

In terms of our good causes, our aim didn’t change because the priority of The Health Lottery has always been on addressing health inequality. What did change in this regard was that this became more relevant to the general public as Covid-19 really shone a spotlight on how health inequality affects people. We saw during the pandemic that people from more disadvantaged areas and with lower incomes were more adversely affected, not least because they were more likely to die from Covid-19. We also focused on isolation and mental health issues, both of which were exacerbated by lockdowns.

We want to build on that increase in public awareness by demonstrating how funds raised through The Health Lottery are helping people pick up the pieces after the pandemic. One way we are doing this is by putting together stories about people who’ve been helped by the charities that receive funding via The Health Lottery. For example, there are groups that help with social isolation, and some people might think, “Oh it’s just a coffee morning” or “It’s a free lunch for an elderly person,” but those projects provide lifelines for people. Part of our aim is to tell those stories and make sure players feel connected to them and understand where the good causes element of their ticket is going.

How have player trends changed since 2011?

There has been a shift, especially among younger players, away from being too focused on the dream of winning a multimillion-pound jackpot; the reality is that happens to very few people. On the other hand, a lot more people win generous mid-tier prizes in lotteries and younger audiences seem attracted to having more chances to win a smaller prize.

However, the most obvious change has been the shift towards more online play. In particular, more women seem to be playing lottery – and gambling generally – online than was the case in the past. Prior to the lockdowns, they might have popped to the shop and bought a magazine and a scratchcard as a form of ‘me time,’ but because they were unable to do that as easily during the pandemic, many started playing online.

Not all of the shift online can be attributed to the pandemic. In line with many other industries, lottery players were gradually moving towards more online play before Covid-19.

"A significant portion of our customers still like going to the shop and making an impulse buy of a lottery ticket"

Does this mean retail is becoming obsolete? 

Definitely not. During the pandemic, any business that had a retail arm was affected because shops weren’t getting the footfall they had previously. However, we are now seeing a positive trend coming out of the pandemic, in that with flexible working people are more rooted in their communities. Many local shops and independents are seeing an increase in footfall so it is very important for us to support local shops and make sure our products are visible.

A significant portion of our customers still like going to the shop and making an impulse buy of a lottery ticket. What we want to do is go down a similar route to other gambling operators with both online and physical outlets and adopt an omnichannel approach, so that we don’t have two separate customer bases.

We have a few initiatives aimed at linking up our retail and online customers, such as tweaking our existing Playcard offering and investigating the possibility of gift cards and a subscription offering.

How do you keep The Health Lottery current in the changing market?

We are becoming a more data-driven company, so analysing what our customers are doing and how they are behaving is a key part of helping us stay current. One challenge is that with online you have clear data that shows who your customers are and what they do when they come to your site. In retail it is more difficult to get this information.

We also keep a very close eye on what our rivals are doing. Even though the National Lottery is not a direct competitor, we are obviously interested in the direction that Allwyn is going to take. From looking at its website, it’s clear online will be a massive focus, along with good causes and safer gambling.

On the product side, people tend to think of lottery as a static product, but there are lots of ways to innovate. All or Nothing, the game we launched late last year, was a big innovation in the lottery market because it moves the customer away from the idea that they have to get five or six balls to win the jackpot. Instead, we’re providing a novel game where players can also win if none of their picks come up. We’ve also got Quick Win, which is another innovative product as it gives people the excitement of watching a draw online every three minutes.

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