In Q3 last year, the UK Gambling Commission suggested prize draw offerings could be cannibalising traditional lotteries in the UK, based on player data for the quarter.
“We’ve seen the growth of large-scale prize draws and that growth has been very significant,” Gambling Commission CEO Andrew Rhodes told attendees of the Betting and Gaming Council’s AGM on 27 February.
But Helmut Becker, who has led Zeal for almost 10 years, says verticals like prize draws are meeting the demands of younger players. “I do think generally speaking there’s an opportunity for more innovation in our industry,” he notes. “There are ways to address the needs of those target groups and that’s through product innovation.”
‘Still room for traditional lottery to grow‘, says Zeal CEO
Becker says there is also room for traditional lotteries to grow and innovate, particularly by improving online penetration for lottery ticket sales.
“I see tremendous growth potential in the industry converting from offline to online. There’s continuous optimisation in e-commerce best practice,” says Becker.
Zeal has both invested in and developed an in-house version of a prize draw offering, but offered under a charity lottery license. Becker suggests it is this agility and commitment to innovation that has powered Zeal’s progressive growth in recent years.
In its full-year 2024 results, Zeal posted record group revenue of €188.2 million ($203 million), beating the previous year by 62.2%. It also saw bottom-line net profit rise 333.2% to €59.4 million.
Various lottery stakeholders, including the UK Lotteries Council, have called for stricter regulations for prize draws, as they currently don’t fall under the Lottery Act. This is because they offer a “free-to-enter” opportunity, which prevents them from facing strict charity funding rules and other regulations.
Lottery regulation is not up to par
Becker notes there is a disconnect between lottery innovations and regulation in a number of markets, particularly the US.
The vertical came under fire in February when a group of investors won two multimillion-dollar jackpots in Texas, after mass purchasing tickets in bulk.
The scandal resulted in harsh criticism around the lottery courier offering, and Texas moved to ban these services in the state.
Becker is critical of the fragmented regulatory model in the US. “A well-regulated market fosters and incentivises good behaviour and growth. In the end, society benefits from that growth. I do think there’s an opportunity to strike a balance between a well-regulated and open market that is open to private players like us,” he says.
“The US is complicated. Oftentimes there’s no clear regulation for online sales, or there it’s actually forbidden to sell online, or for the state lotteries it’s forbidden to sell online. So the messenger model evolved because there’s demand.”
However, Becker praises “robust” lottery regulations in Germany, which support lottery brokerage businesses like Zeal Network. The vertical emerged in 1999, enabling players a chance to purchase resold lottery tickets based on a new licensing framework.
In the beginning of this wave, operators were heavily scrutinised and many called for new regulations to clamp down on the spread of these types of offerings, similar to the fight against prize draws today.
Helmut Becker, CEO of lottery brokerage Zeal Network, believes operators should “focus on innovation in their own business” rather than challenging prize draws.