Gordon Medenica, Director, Maryland Lottery and Gaming Control Agency

GORDON MEDENICA, Executive Director, Lottery

How will the world be different when we come out of this crisis - and how will the lottery industry, retailing, consumer shopping and recreational behavior be different?  

I think we will be living with the aftershocks of this pandemic for some time, at least until an effective vaccine is developed.  This could be months, even years away, during which time we will need to get the economy moving again before the pandemic is truly behind us.  This will mean social distancing, face masks, gloves, etc., for some period of time, as normal daily routines resume. 

I also think the impact on retailers in general will be devastating, as the pandemic accelerates the move to online shopping and home delivery.

 

What might lottery operators be doing to position ourselves for success in the post-coronavirus world?  

Lotteries are in a good position to transition to the online world, since the biggest barrier for years has been political, not technical or consumer demand.  The pandemic should hopefully bring down the last of these barriers, with even retailers unable to mount a continuing resistance to the transition.  Lottery products are essentially "ephemeral" and "experiential" and don't truly require a physical product.  The dreams that we sell work just as well with an online buy-in.

 

Lottery has performed better than other sectors in past economic recessions.  How severely will the economic repercussions of coronavirus impact Lottery?   

I think the myth of lotteries being recession proof has been shattered.  Lottery sales are down in the range of 20% to 35%, and given the seismic shift in the retail environment, they may not come back fully as retailers adjust to new operating protocols demanded by the pandemic.

 

What opportunities will emerge in the post-coronavirus world?  For instance, won't people be travelling less, and if so, might that be an opportunity to appeal to locally-grown forms of recreation like Lottery and casino gaming?  For instance, in spite of months of social distancing, can't we expect that humans will quickly return to our natural state as highly social animals?  

I very much agree with these premises.  Lotteries remain a compelling and very human form of entertainment and excitement; that part of human nature will not disappear.  Once online lottery play becomes established, it can become a very social form of entertainment, with group play and new game styles that embrace social play.

 

How might we reinforce and build upon the symbiotic relationship that Lottery has always had with its retail partners?  

Lotteries will continue to be a source of customers and commissions for retailers for many years to come.  As retailers accept online play as net-additive to their business, for instance by bringing in new customers, they will become part of a larger lottery distribution infrastructure.

 

Legislators and regulators will have a lot on their plate over the coming months.  Even so, what can we do to push harder than ever to get approval to make Lottery products available online, i.e. iLottery? And to push for authorization to invest in new games categories, and new technologies like in-lane sales and cashless transactions?    

In some ways, the press and public opinion are already doing this job for us, with stories about the logic of online play and customers demanding online options to reduce possible virus exposure.  I truly believe that this is a watershed moment in the conversion of lotteries to online, and that political resistance will be greatly reduced in the next year or so.  Once that barrier falls, all other convenience options become much easier to implement.

 

What are some of the new challenges and obstacles that we will need to adjust to? 

It is said that the real difficulty in moving from one economic structure to the next is the transition period itself, as jobs change, as operating procedures are redesigned, as supply relationships adapt and as consumers adjust.  One example very close to me is the newspaper industry, which is still in the transition period from all-print to all-digital.  That means that the legacy operations of the newspaper business (printing, delivering) is still a significant cost drag on the business.  The future of content (journalism and digital distribution) is much less expensive, but until newspapers can close down their legacy print systems completely, they are stuck with essentially duplicate cost structures. 

The future is brighter post-transition.