The Future - A
Five-Year Outlook For
The Lottery Industry
I'll have to admit that I am no more of a sage than most people, but I do have one advantage: an
excellent staff of people who are helping PGRI to stay at the forefront of what is happening and what is
likely to happen in the future. With that in mind, I would like to take this opportunity to share some
thoughts about the future of the industry.
(Honored Founder and former CEO for 36 years - now Retired) Wrote this Outlook in September of 2001.
The Internet will become an important marketing tool. Hand-held, multipurpose devices such as cellular
phones with Internet capabilities will become key to marketing and sales to important segments of world
As the Internet becomes a vehicle for the sale of lottery products, the television set will ultimately be the
principal conveyor of that product as it becomes the principal device by which most people interact with the
Television as a means of selling lottery products, which is currently blocked in most areas of the world, will
now come to fruition indirectly as a result of the Internet.
Generation X is probably the next big challenge for marketing lottery products, but fortunately the
technology that they've grown up with will be an important vehicle for future lottery games.
As the population ages, games that historically have been popular will be replaced with games more
appealing to Generation X. Marketing will take on a different approach and a different emphasis as
products move deeper into technology. There will be an impact on traditional lottery retailers that can be
overcome by tying retailers to prize redemption and products.
The traditional on-line products are maturing in their current formats and require modification to get them
back on track. Fortunately, the on-line technology lends itself to a variety of game formats that will work well
with the technologies of the future. This will be a continuation of on-line systems growth. On-line systems
provide an important foundation for the delivery of a wide range of products through whatever sales means
might be used.
Scratch-off games will continue to be important. Probability games will be key in scratch-off importance.
The industry will see more of those types of games, as well as more specialty games with even higher price
points than seen on the market today.
Instant games and other theme-related games will continue to see higher price points and greater success.
The U.S. Government will continue to take periodic shots at gaining control of state lotteries but with little
actual effect. Canadian lotteries are better insulated from their national government. But state and
provincial governments are another matter. Lotteries will always be subject to politics and current public
opinion in regard to expansion and advertising of lottery games.
Multi-jurisdictional lotteries such as multistate lotteries and interprovincial lotteries will continue to grow and
will eventually account for major portions of all participating lotteries' revenues. Additionally, there will be
major potential for more cooperative international ventures.
There will be increasing competition from casino gambling in areas where the lottery does not have control.
It is a possibility that unless lotteries develop a very strong program of legal presence on the Internet, illegal
Internet lotteries will become a measurable competitive factor in another five years. Competition from
illegal lottery entities is another good reason for lotteries to be a force on the Internet.
Public attitudes in the United States and Canada, in state and national surveys, convey a strong continuing
support of state/provincial lotteries. Lottery support, as long as game integrity continues, is unlikely to
change. There are still 13 states that do not have lotteries. It's very likely that at the next downturn of the U.S.
economy, when states are once again struggling to find more money, the remaining 13 states will turn to
lotteries as an opportunity to provide revenue without increasing taxation.
Motivation will be even stronger
than in years past because lotteries continue to be successful and generate more money than ever
imagined, even as recently as 10 years ago. It is hoped and expected that all the jurisdictions will legalize
lotteries in the next century. New lotteries will use modern models (such as the ones found in the United
States, Canada, and overseas) which keep the agencies more independent of government in their
day-to-day operations rather than operating as government agencies.
Large prize amounts continue to be a surefire way to get people to play lottery. Another key factor is
repetitive winning experiences. Large prizes and repetitive winning experiences are tied deeply to human
response, which will not change in the future.
Payouts in the future, increasingly in U.S. lotteries, will be giving players the option of getting cash in lieu of
the traditional annuities. Expect to see this trend increase and expect the cash award to become the
dominant method of awarding large prizes in the United States.
Machines may become more important in retail outlets as Internet games become more important. For
example, a person going into a store to buy something can use a machine from which all on-line and
Internet games can be accessed. The possibility of having more machines in one retail location could
provide an opportunity for lotteries and suppliers.
Video lottery will increasingly become an opportunity for lotteries. As a result of the spread of casinos in the
United States and Canada, and the widespread use of video-type machines in those areas, lotteries will
find the stigma associated with video diminished, enabling them to more easily offer video as a product.
The Future of PGRI
Public Gaming Research Institute will remain committed to the success of the lotteries, the success of
lottery people, and the success of lottery suppliers. The company's products and services will evolve in
response to new needs, opportunities, and the changing market.
PGRI would like to take this opportunity to thank everyone in the entire lottery industry for their participation
in PGRI sponsored conferences, PGRI managed trade shows, and for continually relying on PGRI
publications and services to support industry professional needs.