The ZEAL Investments (ZI) team attended ICE Totally Gaming this week to keep up with latest industry trends and watch out for potential investment targets at Pitch ICE, a series of short pitches by startups in the gaming space.
In a round table session within the “Modernising Lotteries” track moderated by ZI’s Director James Oakes, a number of international representatives from lottery operators and suppliers debated one of the key challenges of the lottery industry: how to attract millennials and build an attractive product portfolio. On the back of our recently announced investment into the Free Postcode lottery, the discussions underlined some of our key investment hypotheses:
- There is huge merit in non-licensed models to do away with the constraints of the highly fragmented global licensing regimes. Going down the non-licensed route comes with a number of benefits: cheap and fast launches and test-based iterations as well as the lucrative ability to roll out internationally overnight instead of over several years.
- Operators need to go where millennials are and not try to impose their incrementally tweaked existing products on them – this simply does not meet their needs. Millennials are all about interaction, community, self-expression and on-demand services. They can’t be bothered waiting for a particular draw time and the prospect of ever larger jackpots just doesn’t do it for them.
In this spirit, we were excited to see esports companies being prominently featured at ICE. Esports is one of the “biggest things that no one knows about” and it could be hugely relevant to us. These games are based on skill. Replacing the “chance” character of traditional lottery products with skill is another viable segue into the world of non-licensed models. Moreover, the typical esports audience is a demographic that lotteries just haven’t appealed to yet. The lottery user base leans towards well-off males whereas esports players are 20 – 30 years younger and hence the audience of the future. Esports could be an interesting way to tap into this market and the ZI team is keen to learn more.