Aussie lottery retailers reject Lottoland’s revenue-sharing pitch

in Retail

Australian lottery retailers have rejected online lottery betting operator Lottoland’s offer to kick back 10% of its revenue in exchange for being allowed to maintain its current operations.

On Thursday, Lottoland Australia announced that it had proposed a “world-first partnership model with newsagents,” offering to provide local lottery retailers with 10% of every bet that the company’s 600k Australian customers make with the site.

Lottoland’s proposal would require lottery retailers to opt in to the plan, and for Lottoland customers to ‘nominate’ a specific newsagent as the designated recipient of the 10% kickback.

In exchange, participating newsagents would be “asked” to promote Lottoland in-store via posters, flags and such. These in-store promos would be restricted to Lottoland’s international lottery betting markets, i.e. products that Aussie retailers aren’t allowed to offer, but from which they could now indirectly derive some income.

Lottoland Australia CEO Luke Brill, who discussed the plan with Australian Lottery and Newsagents Association(ALNA) CEO Adam Joy on Monday, said the proposed kickback demonstrated that Lottoland has responded to Australian newsagents’ concerns about competing with the lottery betting site.

But the ALNA issued its own statement on Thursday rejecting Lottoland’s offer as “a further attempt to siphon customers from Australia’s newsagents.” Joy (pictured) said Lottoland had spent the past 18 months “denigrating newsagents , and a partnership requires trust and usually does not involve a party that is aggressively trying to detract from the other party’s livelihood.”

Joy further claimed that Lottoland’s “token” offer only came because the company is “under pressure” from state governments due to its “concerning tactics” that leverage “the branding and [intellectual property] of official lotteries.”

Joy went on to say that ALNA members don’t trust Lottoland and do not consider the revenue-sharing plan “a genuine or helpful idea.” In fact, some ALNA members consider the offer “an insult added to the injuries already caused by Lottoland.”

Lottoland Australia’s Northern Territory-licensed site doesn’t offer traditional lottery ticket sales, only the opportunity to place wagers on the outcome of lottery draws, with winning bets paying the same prizes offered by official lotteries.

The company’s ‘disruptive’ business model has come under fire from newsagents and local lottery operators since the Australian site’s January 2016 launch, but the rhetoric ratcheted up a notch last month with Tatts Group’s Lottoland’s Gotta Go! campaign, which has attracted the support of state and federal politicians.

Lottoland has rejected claims that it is cannibalizing local lottery sales, and expressed its willingness to pay a suitable tax on its revenue in each state in which it operates. However, the growing mob of newsagents, lottery operators and politicians appears to have its heart set on seeing at least some blood and guts before putting the torches and pitchforks back in storage.

https://calvinayre.com/2017/10/19/business/aussie-lottery-retailers-reject-lottoland-revenue-sharing/