As we see global jackpots continuously increase, we wonder if there is such a thing as too much money. We’ve seen lotteries around the world making division-one jackpots rarer, but bigger and are now questioning whether large, attention-grabbing jackpots actually result in people buying fewer lottery tickets in the long run.
On September 19th Australia’s Powerball draw was at $150 million, the largest draw ever. Its operator, Tabcorp, predicted half the population (gambling age) would buy a ticket. While the draw gained a lot of publicity and high sales, what was the residual outcome in the Australian market?
J.P. Morgan, Donald Carducci, said the jackpot needs to now be at least $70.5 million to excite players (irregular players, in particular). Previously at $42 million jackpot was the FOMO (Fear of Missing Out) point. While FOMO drives ticket sales ahead of big draws, over time people become desensitized to big prizes and so larger pools are necessary.
‘Record-breaking jackpots significantly move the FOMO point higher, requiring increasingly larger prizes to lure non-frequent players to purchase tickets,’ he said.
We saw the early stages of it in the US years ago where a $317 million Powerball jackpot brought in sales that were about four or five times above average. When another $317 million Powerball jackpot rolled around, sales plunged by 25%. It just wasn’t enticing enough.
How to combat this?
Reconsider thinking about the lottery, the balls and the numbers chosen. As we’ve seen, these measures only provide temporary relief to a long-term issue.
Think outside the retailer
Retailers have long been allies in the industry, but consider the importance of reaching your potential players on the devices they use and the places they socialize in.
Experience over jackpots.
Fewer millennials play, resulting in demand retreat. What can your lottery do to appeal to them? Consider games that are aligned to their values, the devices they use and the lifestyles they lead.
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