NetworkNewsWire
Editorial Coverage: With a worldwide pandemic raging,
industries that were already moving toward digital applications
have accelerated the process. People now grab their mobile device
for everything from ordering groceries to buying cars — and
the trend isn’t likely to end any time soon. The founders
of Lottery.com (Profile) recognized
the shifting trends years ago and were first movers to address the
untapped global lottery market. The company uniquely combines
blockchain with other cutting-edge technology to offer at-home
lottery participation and aims to capture a lion’s share of huge
lottery and sports betting markets. Now the company is timing its
entry into the public markets with another hot trend: investor
appetite for special purpose acquisition companies, or SPACs. The
entire gambling and gaming industry is likely to explode as the
pandemic subsides and the economy gets its legs back. DraftKings Inc. (NASDAQ:
DKNG) used the SPAC path to go public last April,
and traditional casinos are expecting revenue resurgence
post-pandemic, with companies such as Bally’s Corporation (NYSE:
BALY), MGM
Resorts International (NYSE:
MGM) and Penn
National Gaming Inc. (NASDAQ: PENN) all eager for
a return to normalcy.
- The global lottery market is valued at $398 billion, more than
the worldwide SaaS, video games and film industries combined.
- com, one of the foremost brands in global lottery data, is
planning to go public via a SPAC reverse merger transaction.
- The company offers a suite of high-margin lottery products,
with operations in 12 U.S. states and quickly expanding
internationally.
- Management forecasts gross revenue of $71 million in 2021, $279
million in 2022 and $571 million in 2023.
Click here to view the custom infographic of
the Lottery.com editorial.
Mind-Boggling Market
Words such as huge or massive are often tossed around to
describe a market’s size, and rightfully so — it would be a
disservice to call the $138
billion global video games or $158
billion Software-as-a-Service (SaaS) sectors anything
less. Still, it begs the question of what adjective accurately
describes the $398 billion
global lottery market, which is larger than the worldwide video
games and SaaS markets combined? Mind boggling comes to mind
especially when considering the global lottery market is forecast
to reach $625 billion in 2025. Despite the size, it’s a market that
investors have little exposure to presently.
Even with its scale, the lottery market is particularly unique.
Competition is relatively scant due to the difficulty of breaking
the long-held paradigm of buying tickets at a retail point of sale.
Currently less than 3% of global lottery sales are online. That’s
only about $12 billion market penetration into a nearly $400
billion industry. A digital transformation seems inevitable, one
that aligns with the online sports betting market where 82% of all
activity is online.
High-Margin Product Suite
An innovator in blockchain, Lottery.com is leading the digital transformation
by building a premier global marketplace for games of chance.
Already one of the most recognized and trusted brands in the space,
Lottery.com is a premier provider of global lottery data with a
diverse product offering, underscoring current revenues and
projections for strong upcoming cash flow. The company’s online
platform and mobile application allow users to play
state-sanctioned lottery games from their homes or on the go in the
United States and internationally. In 2020, Lottery.com sold more
than one million Powerball and Mega Millions tickets across 148
countries worldwide, a milestone in the company’s rapid
expansion.
Lottery.com is working in conjunction with states to steadily
bring the lottery into the digital age, a necessity realized by
lottery officials amid covid
lockdowns. So far, Lottery.com operates in 12 states, with
expectations to add at least six more in 2021 and to be operational
in 34 states by the end of 2023. The company’s technology is
turnkey, utilizing blockchain as a digital ledger, while allowing
people to quickly play from a selection of sanctioned games, check
winning numbers and jackpot totals, and even be notified of
winnings which can be collected directly within the app (in
accordance with state laws). Consumers keep 100% of the winnings,
just like in a retail setting.
Lottery.com derives revenue primarily from revenue service fees
paid by app users and subscription fees for lottery data access
from digital publishers and other data consumers. The company has
established itself as a top lottery data service provider, with
more than 400 customers that include the likes of Google and
Amazon. Lottery.com charges a subscription fee to its data clients
plus a per record fee for certain data sets that translates to an
eye-popping 75%–95% margin.
The company has a spectrum of other business-to-consumer (B2C)
and business-to-business (B2B) products that range in margin from
17% to 54%. These include a robust API platform for selling lottery
tickets, domestic and international lotteries, international games,
charitable sweepstakes and an innovative user subscription program
that provides premium market data and exclusive, members-only
lottery pools.
The Upcoming SPAC
Lottery.com (planned NASDAQ ticker LTRY) is planning to go
public through an imminent merger with the SPAC Trident
Acquisitions Corp. A SPAC company raises money through an IPO
exclusively for the purpose of acquiring or merging with a
privately held company and bringing it public. These blank-check
companies are the hottest trend on Wall Street, with celebrities to
billionaire investors all joining the mix as a quick route to enter
the public domain. According to Business
Insider, $166 billion in SPAC deals took place in Q1 2021, more
than all of 2020.
With a management team featuring successful serial entrepreneurs
uniquely positioned in the lottery market, Lottery.com has
attracted an impressive list of investors and advisors. The list
includes, among others, Senator Mark Lipparelli (former chairman of
Nevada Gaming Control Board and current chairman of Galaxy Gaming)
and Paraag Marathe, president of the San Francisco 49ers
Enterprises. These heavy hitters are betting big on the digital
gaming market.
A Technology Play with a Do-Good Benefit
In the way that Apple is a tech company rather than a computer
maker, so goes it for Lottery.com. The company is growing revenue
through its suite of services (effectively an e-commerce platform)
and data library rooted in next-generation blockchain technology
securing it all. The numbers speak to the success being achieved,
with gross revenue rising at a compound annual growth rate of 363%
from 2016 to 2020 as foundation was put in place. Looking ahead,
management forecasts gross revenue of approximately $71 million
this year, $279 million in 2022 and $571 million in 2023.
Lottery.com built and recently launched WinTogether, a program that allows players to
donate to qualified causes and get entered into sweepstakes to win
luxury prizes or once-in-a-lifetime experiences. For instance, the
inaugural campaign supported the Time for Trees(R) initiative where
a participant could win a Tesla Cybertruck.
Expectations are that the trend toward digital applications will
continue accelerating well past the pandemic. Already on an upswing
with enormous growth projections, the digital gaming markets appear
to be a winning ticket. It just might be time to bet on it.
Polishing the Edges
Last year — 2020 — was a year that will be talked about for
decades. If nothing else, it identified potentially every pain
point a company could experience, from operational efficiencies to
overlooked business segments that aren’t keeping pace with changing
demographics and consumer demand. Most consumer-facing companies
languished but adjusted to weather the storm and hopefully see a
rebound in 2021.
DraftKings Inc. (NASDAQ:
DKNG) is well positioned not only because
sporting events are returning to full schedules and re-opening
economies giving people a little extra cash to play with, but wider
legalization of online sports betting is also anticipated. The
company has recently launched in Virginia and Michigan and is
certainly watching as 19 state legislatures have introduced
legislation to legalize online sports betting. There is a
reason DraftKings recently raised its
2021 revenue guidance.
Bally Corporation (NYSE:
BALY) president and CEO George Papanier recently
called 2020 a “truly remarkable” year for his company, which only
suffered a small net
loss despite the coronavirus pandemic shutdowns and storm
damage from Hurricane Zeta at its Hard Rock Biloxi. Several moves
were made to strengthen the company for 2021 and going forward,
including the pending acquisition of Bet.Works and closing the
acquisitions of the Bally’s Atlantic City Hotel & Casino and
the Eldorado Resort Casino Shreveport, as well as opening its first
FanDuel Sportsbook.
MGM
Resorts International (NYSE: MGM) is coming out
of the pandemic stronger than before, focusing on the future while
overcoming the obstacles. The international hotel and casino
juggernaut was hit hard during Q4, with consolidated net revenues
slumping 53% year-over-year to $1.5 billion. CEO Bill Hornbuckle is
confident in the recovery of Las Vegas and Macau markets, as well
as the future of
BetMGM, the company’s sports betting and iGaming app that is
expanding across the United States
Penn
National Gaming Inc. (NASDAQ: PENN), owner of the
wildly popular Barstool Sports franchise, was another prime example
of a company trending the right way before getting derailed by
COVID-19-related shutdowns in strong markets. In addition to its
hotel and casino operations, its Barstool Sports media business
should not be overlooked. This is a dominant brand among younger
generations with more than 52 million followers on Instagram and
another 53 million between TikTok and Twitter. The loyal followers
are showing up at retail sportsbooks being rebranded under the
Barstool moniker.
While analysts pay plenty of attention to the online gambling
markets, it seems only a matter of time before a growing choir of
voices starts to muse about the opportunity in the lottery space, a
little-recognized market with global scale and reach. As digital
lottery operations gain global traction, it may well be time to
place a bet on the future of gaming.
For more information
about Lottery.com, please
visit Lottery.com.
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