A White Paper By LocusPlay

Mobile Lottery and Emerging Markets

3 October 2013

The mobile and the telecom industry has developed in to a very dynamic and phenomenal revolution today, it has moved beyond it’s fundamental role of a communication device and has graduated into becoming an identity of the individual. Today, a mobile phone is an exten-sion of the user’s persona; it depicts their interests, attitude, feelings and lifestyle.

The innovation and continuous efforts to delight the mobile user’s market has resulted into a new era of mobile phones that play games, music, mov-ies, browse internet, banking etc. Thus, there exists a vast world beyond voice that needs to be explored and tapped as the entire cellular industry is heading towards it to provide innovative options to the cus-tomer. This has resulted in a Smartphone with hi-speed Internet and applications- One such value addition to the mobile phone users is the Mobile Lottery.

Now players can access and play lottery via mobile phones without the hassle of going to lottery terminals/stores to buy lottery tickets.

This white paper provides an in-sight of the trends in emerging markets for mobile lottery.

(PR web UK) September 2, 2010

“State lottery provides an anxious to explore new distribution channels, with US lottery sales from traditional outlets in decline. The upshot is that several lotteries are in latter stages of discussions

with mobile technology providers with a view to launching mobile lottery services 2011”

Mobile lottery being the most discussed form of mobile entertainment services today offers great scope for growth as it dissolves various barriers to market development. Lottery has always been a lucrative business, with the UK’s betting office li-censes association (BOLA) estimating that global gaming in all its forms is worth around about US$ 1 Trillion.

However, lottery services via the mobile are rela-tively a new phenomenon, with their deployment plagued by a plethora of cultural and regulatory hurdles. Nevertheless, some analysts have argued that such services could well be the “Killer Apps” that mobile has been seeking and that m-lottery could well become a multi-billion dollar business. In either event, there is a strong market for mobile lottery services.

Types of services

The organized gaming sector, while easy to con-sider as a whole, is in fact made up of at least three distinct sectors viz. casino and lotteries.

locusplayA WHITE PAPER BY LOCUSPLAY

www.LocusPlay.com

A White Paper By LocusPlay

We emphasize on mobile lottery domain and busi-ness hence would derive at facts and figures per-taining to mobile lottery services only.

Casino

In appearance and user experience, this is very much like the current cop of mobile games with colorful graphics that allow the user to play poker, roulette, slots, black jack etc using their mobile de-vices.

Online and Mobile Lotteries

More than 90% of the adult population of UK and US has at times played a lottery (in its traditional paper form) at least once, (with around 60% of them playing lottery regularly). Coupling this huge market for lotteries with the immediacy and pene-tration of the mobile phones is a logical and lucra-tive proposition, both for existing lottery operators and alternative providers. Juniper a market re-search company-, believes that lottery services will explode across all regions within the next 5 years and will generate vast revenues.

As far as emerging markets are concerned Africa online lottery markets rose from 7.6% to 11.8% since 2011

Source: W L A 2012

The estimation claims that mobile lottery to surpass US$ 48 Billion by 2015.

UK Ladbrokes was the first major betting company to announce launching of a mobile lottery. Current market is virtually untapped and several market research agencies are pointing to mobile lottery as a dynamic and lucrative market in the future. Worldwide revenue for gaming on mobile phone is likely to reach US$ 25 Billion by 2014. Lottery revenue from mobile phones alone is expected to reach slightly more than US$ 48 Billion by 2015

(Estimated by Alexander resources)

Mobile Lottery Market

(PR Web UK) September 2, 2010

“State lottery providers are anxious to explore new distribution channels, with US lottery sales from traditional outlets in decline. The upshot is that several lotteries are in latter stages of discussions with mobile technology providers with a view to launching mobile lottery services”

The largest geographic market throughout the fore-cast period is estimated to be Asia Pacific, although it should be noted that the most active individual country market for mobile lottery is currently the UK. The second largest market is estimated to be in Europe, with the other three geographic regions a considerable way behind. Europe and Asia Pa-cific are estimated to contribute similar revenues over the forecast period, although with different business mixes. Asia pacific is forecasted to grow from US$ 18 Billion by 2014 which sore from US$ 966 Million in 2006 to US$ 12.8 Billion in 2012 and presently nearing US$ 16 Billion with the European market growing from US$ 950 Million to US$ 19 Billion in 2013.

The basic drivers in to market are

Desire to gamble

Growing disposable income

Technology and innovation in telecom and IT industry

Availability/ Convenience/Access to the tech-nology and channels

Increasing mobile penetration

Mobile user profiles and privacy.

Mobile Lottery

The lottery player can easily play lottery on their mobile phones without Internet and in a very few simple guided steps.

A White Paper By LocusPlay

SMS Betting

The lottery can be played either by sending a formatted SMS to the pre specified lottery op-erators number.

Playing Lottery via USSD

Here the lottery player can access the lottery application by dialing a pre-assigned code.

This code leads to an interactive menu of

games that can be played by selecting options that appears on the screen of the mobile phone.

The mobile operator and mobile lottery center co ordinates and offers the games to be played, date and time of the draw etc details to the lottery play-ers. The player gets an acknowledgement message, soon after the draw through automatically gener-ated SMS.

The lottery player can also access the winning numbers, play history and credit balance through this facility.

Mobile lottery on Smart phones

It is a customized mobile lottery platform. That has graphical user interface (GUI) designed to achieve maximum usability at ease giving the lottery play-ers a real time experience on their mobile devices.

An interactive platform that guides and en-hances the lottery play-ing process with lot of ease. Undoubtedly, this is more sophisticated method that offers mo-

bile lottery benefits tremendously from higher bandwidth and improved handset capability that go with Android phones complimented with 3G and 4G internet services

Market Growth Promoters and Drivers

Some of the key drivers to playing lottery could fundamentally be the inherent desire to try luck in some sectors of the population, rapidly advancing mobile network and handset technology; the inher-ent advantages of mobile communications in terms of convenience and pervasiveness; and the contin-ued growth of telecom subscriber’s base, particu-larly in the Asia Pacific region.

Nonetheless, the usability and access to generation next mobile models and Smartphone to the tech savvy people in emerging markets are attracting enterprises to envisage the scope of business in these regions.

Region 2006 in Million US$ 2013 in Million US$

Rest of the world 40 4105

South America 34 3110

Europe 950 9130

Asia Pacific 966 11818

North America 0 5910

Total 1991 34073

Total revenue from the mobile lottery. Regional forecast 2006-13 (Million US$)

A White Paper By LocusPlay

Technology and Advantages

Mobile lottery technology enables to play lottery on the mobile phones anytime and anywhere. Mo-bile lottery as an advanced system based on SMS/GPRS technology, can be implemented in lottery enterprises that already run lotto games in tradi-tional style. Mobile lottery will be one amongst other sales channels for already established lottery enterprise

Mobile lottery can be easily incorporated with the centrally hosted without any change in the existing operations or without incurring exuberant costs. Sales database with the tickets sold via mobile phones is automatically updated along with the tickets sold via terminals/outlets and creating a unique database for the draw updates.

Benefits of using GPRS include fast access time, high speed, less cost for most services, global ac-cess, user - friendly, real time interactive and over-all wonderful lottery playing experience.

Constraints

Lottery is a regulation constrained industry. Gov-ernment bodies at all levels have taken interest in the regulation of gaining in the “public interest”. In order to encourage “responsible lottery playing”, both Government bodies and the industry have sought to establish balance between regulation and market freedom.

Linked to regulation is age verification. The whole industry is keen to prevent underage lottery playing practice, which is a significant risk because of the large base of mobile users. Apart from ethical con-cerns, the lottery service provider is intimidated by the daunting prospect of an under-age betting scan-dal that could damage the entire industry and limit its takeoff. Therefore, robust age verification is the cornerstone of all new lottery- related legislation and self-regulatory codes.

Other factors that may contracts the scope are branding and gaining trust of customers locally. Lottery players are more likely to trust lottery serv-

ices offered through a recognized brand or a well known operator. In turn the brand owners want to retain brand value, so are reluctant to do anything that they feel may diminish it. This in itself will act as a constraint to the overall industry. As indi-cated earlier, technology is both an enabler, in any specific market delays can become a constraint on the path of growth.

A further technology constraint may be pointed on application development. Designing mobile lottery is severely challenging than it appears, demanding good quality graphics, rapid response, security for payment (including restoration after signal loss). Luckily, constant efforts are being channelized to address these issues and a new era of more stable and unwavering technology is available today.

Conclusion:

The market status at the moment is fairly evenly balanced for both industry growth promoters and the possible impediments. The participation of in-dustry pioneers across lottery and betting enter-prises and technology providers the balance will swing emphatically to the benefit of the market growth promoters, mainly for the online and mo-bile lottery business as the mobile channel has many inherent advantages for the provision of gam-ing services. In spite of some disadvantages, it paves a way for much more innovations and im-provements.

Regulatory restrictions notwithstanding, the poten-tial for mobile lottery revenue is substantial. The services with respect to mobile lottery will generate revenues of more than US$ 48 Billion by 2015 or nearly one third of all mobile gaming revenues.

Other perspectives to the call infers that should regulators in countries such as US and China be-come more liberal in their attitude towards these services, then revenues could far exceed the esti-mates. Considering the scale of accessibility to mobile devices and desire of many lottery operators to make good of available opportunity, then poten-tially the resulting sales could be multifold higher.

A White Paper By LocusPlay

As it is, lotteries will be the most successful forms of mobile gaming services, accounting for around 40% of all mobile gaming revenues (or nearly US$ 48 Billion) by 2015. Already, mobile lottery services are up and running in a number of countries, and their popularity is expected to mushroom in the medium term. Need-less to mention emerging markets offering green patch for the technology providers and lottery enterprise facilitators. Right time has arrived; right actions need to be taken.

About LocusPlay

LocusPlay is a suite of integrated applications that work together to seamlessly manage and deliver your Lottery games to your customers, agents, and game houses.

Your perfect technology partner - Deliver your lottery online and offline through Mobile, Tablet, Kiosk, Web SMS & USSD

LocusPlay, Inc. 95 Chestnut St, 3rd Floor

Providence, RI 02903 USA

+1(401)400-1183

info@locusplay.comwww.LocusPlay.com

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