Basel, 16 August 2018—The robust final quarter of the year traditionally experienced by a number of the world’s lotteries helped push global lottery sales up 3.8% year-on-year.
China’s lotteries continued to power strong growth in Asia Pacific, with the region recording a full-year on full-year increase in sales of 7.4%. Growth at mainland China’s lotteries was built on the back of final quarter results, which saw sales rise by 10.5% for Q4 2017, versus the corresponding revenue period in 2016.
Latin America and Africa also experienced a fine 2017, reporting twelve-month on twelve-month growth rates of 6.2% and 4.9% respectively, even as sales moderated during Q4 2017, where quarter-on-quarter growth slowed to 2.7% and 1.9% respectively.
North America enjoyed a strong final quarter of 2017, with Q4-on-Q4 sales up 6.7%, helping to buoy a quieter year that saw twelve-month on twelve-month sales inch up 2.1%.
Slightly stronger second-half results helped Europe to steady over the course of 2017. Year-on-year, the region grew a modest 0.6%.
Asia Pacific: AsiaPac’s growth spurt continues
Rarely a quarter goes by without the WLA reporting strong growth from mainland China’s lotteries. Q4 2017 was no exception as China’s Sports Lottery enjoyed an excellent 15.6% rise in sales while the China Welfare Lottery grew by 5.8%.
While Q4 2017 produced the year’s best results, both of mainland China’s lotteries maintained their momentum throughout the year. Over the course of 2017, the China Sports Lottery boosted sales by 11.4% to CNY 209.7 billion, while the China Welfare Lottery increased sales a creditable 5.1% to CNY 217 billion.
Sales increased across 26 of China’s provinces, with the Jiangxi, Jiangsu, Hubei, Guangdong, and Fujian provinces taking center stage. Sports betting continues to be the nation’s fastest-growing product, with sales rising 21.4% year-on-year to CNY 92.9 billion. However, in terms of sheer volume, sports betting does not yet compete with draw-based games, which increased 7.3% year-on-year to a massive CNY 262.8 billion. Putting this into perspective, draw-based games currently account for 61.5% of the market in mainland China, while sports betting, the next largest market segment, accounts for 21.8% of total lottery sales.
The Hong Kong Jockey Club enjoyed 8.6% growth in sales in the fourth quarter of 2017, as compared to the fourth quarter of 2016, and 9.1% growth year-on-year. The strong performance was mainly driven by an impressive 11.2% growth in racing, thanks to the addition of simulcast racedays and local race meetings, together with the continued growth of the customer base and commingling, underlining the growing attractiveness of Hong Kong’s world-class horse racing.
Latin America: CAIXA’s Mega-Sena completes mega-year
With sales at Mexico’s Lotería National para la Asistencia Pública and Pronósticos essentially holding steady year-on-year, and sales at Chile’s Polla Chilena contracting sharply, Brazil was largely responsible for Latin America’s growth in 2017. Sales at Caixa Econômica Federal grew 8.14% over the course of the year, as against 2016, generating BRL 13.88 billion in revenues. Taking inflation over the period of 2.95% into account, real growth was a healthy 5.04%.
The Mega-Sena, Brazil’s biggest lottery, was the great highlight of 2017. It closed out 2017 with total sales of BRL 5.8 billion, exceeding the 2016 total sales of Mega-Sena by more than 14.2%. The success of Mega-Sena in 2017 was due in no small part to the special New Year’s Eve draw Mega de Virada, for which 71 million tickets were sold in 2017. Total sales for this draw were BRL 890.9 million, up 21.1% on 2016. Collectively, sales of Mega-Sena (including Mega de Virada) in December 2017 were more than BRL 1.18 billion, or 61% of revenues for the month.
Another game in the product portfolio of Caixa Econômica Federal that enjoyed an exceptional 2017 was Timemania, which saw sales of BRL 475.9 million, the largest subscription in the game’s history. In addition, Timemania also offered the two largest awards in its history in 2017, of BRL 31.8 million and BRL 32.4 million respectively.
The sterling performance of Caixa Econômica Federal guaranteed BRL 6.55 billion in transfers to legal beneficiaries, and BRL 4.72 billion in prizes to bettors. The average spend per ticket was BRL 5.00, representing an increase of almost 3% compared to the average spend per ticket in 2016.
Africa: The Mauritian National Lottery reaps dividends
In Afrca, Morocco’s Loterie Nationale and La Marocaine des Jeux (MDJS) enjoyed the strongest showing of the continent’s lotteries, recording growth rates with 17.5% and 10.8% rises respectively. The Mauritian National Lottery ran in a very close third.
Both the national lotteries of Morocco and Mauritius enjoyed outstanding closing quarters, with Morocco’s Loterie Nationale increasing sales by 24.3% and Mauritius boosting sales by 23%. The former also boasted the best growth rates for the calendar year with a growth rate of 17.5%, beating all other lotteries contributing to the WLA Quarterly Lottery Sales Indicator.
Mauritian National Lottery operator Lottotech boosted sales by 10.7% over the course of the year. This pushed net profit after tax up an excellent 25.7% to MUR 110.8 million. The National Lottery has laboured under an advertising ban since 2015, and, while net profit has yet to recover, transaction levels are on track to hit pre-ban levels.
The operator has been fighting the ban in court but a systematic focus on increasing the player base through innovation, communications, and responsible cost management is reaping dividends.
North America: Loto-Québec shines in North America
Canada’s Loto-Québec led the way in North America with an excellent Q4 2017, helping the French-Canadian lottery to increased revenues for a third year running. According to Loto-Québec’s 2017–2018 annual report, total revenues for the fiscal year (April 2017–March 2018) were up 3.7%.
Commenting on the results, Loto-Québec noted that sales of lottery products, which compose a major segment of its gaming business by revenues, are on the upswing. Quebecers enthusiastically adopted Grande Vie, the pan-Canadian product launched toward the end of 2016, with Loto-Québec holding a significant market share (33.4%). Instant lotteries and event betting also proved popular over the course of the 2017 financial year, growing at a higher than average rate.
The gaming establishment sector, consisting of VLTs in bars and brasseries, as well as gaming, bingo and Kinzo halls, recorded slightly higher revenues. Revenue growth (8.1%) across the four casinos was mainly due to an increased focus on varying entertainment offerings.
Loto-Québec’s online gaming sector is the organization’s smallest business sector by revenues but it is also the fastest growing. Over the past fiscal year, total revenues for all types of online games combined reached CAD 118.0 million, an increase of 37.5%. Online gaming is now consolidated at the new lotoquebec.com portal, which bring together all types of online games in a single location. The initiative has simplified navigation between all product lines to provide customers with a more fluid and user-friendly online experience.
Commenting on the FY 2017 results, President and CEO of Loto‑Québec Lynne Roiter said, “Our excellent performance is attributable to the combined efforts of all our business sectors to make our offerings more attractive and apply efficient management practices in compliance with our responsible commercialization framework.”
In the United States, the California Lottery was the country’s fastest growing lottery. It also had a good October-December revenue period, with sales rising 9.3% quarter-on-quarter. This contributed significantly to a rise in sales of 3.8% year-on-year, with increased scratchcard sales of USD 482.3 million partially offsetting decreased Powerball sales of USD 242.9 million.
The lottery’s scratchcards (or Scratchers, as it brands them) continue to grow at a significant rate 25 years after they were initially launched. The increase in Scratchers sales centered around the USD 30 price point and the lottery’s extended play product lines like bingo, crosswords, and other new products that consumers spent a little more time playing.
Florida and Tennessee also enjoyed notable success in the final quarter of 2017, with both lotteries recording quarter-on-quarter sales increases of just under 9%, and coincidentally similar growth rates of just under 3% year-on-year.
Europe: Central Europe shows the way
The central European lotteries of the Czech Republic and Hungary posted the best results in Europe in 2017, with France’s FDJ also enjoying a strong year.
Indeed, Hungary’s Szerencsejáték Zrt. recorded a twelve-month on twelve-month increase in sales of 13.1%, a figure that was only eclipsed among the contributing lotteries by the 17.5% increase in sales of Morocco’s Loterie Nationale.
With revenues reaching new heights in 2017, Szerencsejáték’s Zrt.’s growth was driven by a rise in sports betting, which grew an outstanding 16.1% year-on-year and which now accounts for almost 45% of the Hungarian lottery’s total turnover. Draw-based games performed well compared to the previous quarter, but their market share continued to decline despite several record high and major jackpots during the year.
Szerencsejáték Zrt.’s final quarter was up a healthy 9% on the previous year, thanks to a successful marketing campaign that boosted Christmas instant tickets and other seasonal instants.
The Czech Republic’s SAZKA achieved another peak year with total sales growing 9.8% year-on-year. Its growth was driven by all of its product verticals, with the number lotteries segment generating 65% of total sales. The major growth driver was instant lotteries, both printed and electronic, which saw strong increases of 45% year-on-year. This was driven by both the innovation of the instants portfolio and the successful launch of the online business, including e-scratches. This progress was complemented by a 22% year-on-year growth in sports betting following the product’s integration into SAZKA’s new online gaming portal.
The Greek lottery OPAP saw total sales increase 4.6% year-on-year and a gross gaming revenue of EUR 1.5 billion. This performance was largely attributable to the launch of new products, especially VLTs launched in January 2017; the roll-out of the new terminals is still in progress. Innovations in the sports betting portfolio and contributions from self-service betting terminals also helped boost performance. The continued growth is being supported by the launch of a new retail and on-line betting platform this year.
Strong results of both Czech and Greek lotteries, both part of SAZKA Group investments, complemented by further acquisitions in Austria, Italy, and Croatia, show the benefits of market investments, innovation drive, and sharing of best practices within one of the largest European lottery groups.
France’s FDJ was delighted by the progress made by its transformational FDJ 2020 growth project; this focuses on new digital technologies for both gaming and customers. EBITDA grew 5.3% to total EUR 316 million on the back of 2.8% growth in net income to EUR 181 million.
The FDJ 2020 project has resulted in increased player stakes (up 5.7% for 2017), a stable customer base of 26 million players, and a digital transformation that has resulted in EUR 1.7 billion in digital stakes in 2017, 3.5 times higher than three years ago. The results emphasize FDJ’s contribution to national wealth creation and employment, with the French national lottery now contributing 0.2% of national GDP. Explained CEO Stéphane Pallez, “FDJ continues to improve its operational, financial, and non-financial performance through the implementation of its strategic project FDJ 2020, designed to guide the business towards the consumer habits and gaming technologies of the future. Its results have contributed to an increase in national wealth and to the social initiatives of its longstanding military veteran shareholders. It has boosted employment and generated significant economic flows throughout the country. In a fast-changing gaming sector in France, Europe, and worldwide, from a customer, technological, and competitive point of view, FDJ is currently the second largest European lottery and is ready to face the related challenges head-on.”
The WLA will continue to track the progress of global lottery sales in future editions of the WLA QLSI. Once again we thank all WLA member lotteries participating in this initiative, and look forward to bringing you the first quarter 2018 results shortly.
|* Based on sales of participating lotteries. Participating lotteries by region:|
|Ghana: National Lottery Authority||Brazil: Caixa Econômica Federal|
|Mauritius: Mauritius National Lottery||Chile: Polla Chilena de Beneficencia|
|Morocco: La Marocaine des Jeux et des Sports||Mexico: Lotería National para la Asistencia Pública|
|Morocco: Loterie Nationale||Mexico: Pronósticos|
|South Africa: Ithuba Holdings (RF) (Proprietary) Limited|
|Asia Pacific||North America|
|Australia: Lotterywest||Canada: BCLC|
|China: China Sports Lottery||Canada: Loto-Québec|
|China: Chinese Welfare Lottery||Canada: Ontario Lottery|
|Hong Kong: HKJC||USA: California Lottery|
|Japan: Mizuho Bank Ltd.||USA: Connecticut Lottery Corporation|
|Europe||USA: Florida Lottery|
|Czech Republic: SAZKA a.s.||USA: Kentucky Lottery Corporation|
|Finland: Veikkaus Oy||USA: New York State Lottery|
|France: Francaise des Jeux||USA: Tennessee Education Lottery Corporation|
|Hungary: Szerencsejáték Zrt.|
|Italy: Lottomatica S.p.A|
|Norway: Norsk Tipping AS|
|Poland: Totalizator Sportowy Sp. z o.o.|
|Spain: Loterías y Apuestas del Estado|
|Spain: Organización Nacional de Ciegos Españoles|
|Sweden: AB Svenska Spel|
|Switerland: La Loterie Romande|
|United Kingdom: Camelot UK Lotteries Limited|