Betting USA spoke with Jackpocket CEO Peter Sullivan about the impact of the Coronavirus (COVID-19) pandemic on state lotteries, and how his company could help mitigate the impact.
The Coronavirus outbreak has sent retail-focused industries reeling across the US. Small and large businesses alike are getting creative and embracing modern technology to keep their heads above water, and gaming should take notice and start embracing online delivery channels.
Yesterday, the American Gaming Association warned that the COVID-19 crisis caused 94% of the country’s commercial casinos to close their doors.
The AGA warns that would have a potential impact on the US economy of $21.3 billion in direct consumer spending if the shutdown lasts eight weeks.
The same issues are also impacting state lotteries.
Lotteries are Already Feeling the Pinch
With the country effectively shut down, the number of people purchasing lottery tickets has plummetted. That’s highly problematic, as states rely on lottery revenue for all manner of public funding.
In Massachusetts, lottery revenue (around $1 billion annually) is sent to local towns and cities.
In Pennsylvania, lottery revenue is tied to senior programs, something desperately needed to battle the effects of the Coronavirus outbreak.
As noted in a column yesterday, online gambling is picking up some of the slack where it’s available.
And according to Peter Sullivan, CEO of Jackpocket, an online lottery courier service, the same could be true for lotteries.
Jackpocket Lets People Buy Lottery Tickets From Home
Steve Ruddock: The COVID-19 outbreak introduced the term social distancing into the lexicon. Your product seems to be the perfect way for people to do just that, without disrupting their usual lottery habits.
Peter Sullivan: Exactly, Steve. Jackpocket is allowing lottery players a safe alternative to play the official state lottery games they know and love like the Powerball and Mega Millions from the comfort of their own homes.
Additionally, players don’t need to leave their house to redeem their winnings, which can be instantly sent to their bank accounts or used to play again.
Sales Have Increased Since the Lockdowns Began
Steve Ruddock: Lotteries across the country are seeing a sharp decline in brick & mortar ticket sales as people self-isolate. What has Jackpocket seen during the COVID-19 outbreak?
Peter Sullivan: Contrary to traditional retail sales, Jackpocket is actually seeing a significant increase in sales week over week. We’ve already witnessed a 14% increase in this Tuesday’s Mega Millions sales and anticipate this to continue.
One interesting statistic is the fact we’re seeing saturation levels increase to record highs. It’s indicating that our sales are driving a very large proportion of overall state sales (and increasing rapidly). We believe Jackpocket can be a powerful partner for state lotteries that are looking to stabilize their overall sales during this critical period of social distancing.
Jackpocket Can Help Maintain Lottery Revenue During the COVID-19 Crisis
Steve Ruddock: States have far more important priorities at the moment, but lottery revenues are often tied to education, seniors, and other essential public funding. Have you been in touch with lottery boards in states where you’re not active yet, considering there’s some speculation that this could drag into the summer and possibly beyond?
Peter Sullivan: Great question! As you mentioned, we completely understand that key government stakeholders’ objectives might not be focused on lotteries, but we also need to recognize that state budgets are in peril right now.
The ongoing uncertainty will have negative long-term impacts on the organizations they support, so it’s important to try to generate as much incremental revenue as possible, while not requiring states to spend their own additional resources to do so.
To that extent, I have been reaching out to several different lottery directors from around the country letting them know we can offer a safe alternative that fits within their current lottery regulations. The response has been positive, but we think there’s an opportunity to expedite the implementation of this new distribution model, to help stabilize their dropping sales quickly, while also providing a proven turnkey alternative for their player base.
How Fast Could Jackpocket Launch in a New State?
Steve Ruddock: And how long would it take for you to get Jackpocket up and running in a new state?
Peter Sullivan: In several jurisdictions, we’re ready to go and are awaiting the green light from the state lottery. In a matter of 48 hours, we’d be able to offer mobile play at no additional cost to the state while also utilizing our own marketing dollars to help prevent a drop in lottery proceeds from harming state budgets during the COVID-19 pandemic. Our technology platform is ready to scale and we hope the state lotteries utilize this opportunity. We’re ready to help them during this difficult time!