Newsagents and other retailers of lottery tickets are petitioning the government to put a stop to the phenomenon of “secondary lotteries,” exemplified by Malta-based company Lottoland, which they say are threatening their sales.   

ANLA attacks Lottoland

Balls to Lottoland, says ALNA, the newsagents industry body, which wants the government to legislate to have its services banned nationwide. (Image: National Lottery)

Lottoland was described succinctly by News.com.au this week, as the “Uber” of the lottery industry, in the sense that it brings technological disruption to traditional lotteries, much as the Uber app has to taxis.

Essentially, a secondary lottery allows a customer to “take a bet” on the outcome of any number of major lotteries from around the world, from the Powerball in the US to the Euro Millions, to any number of our various homegrown state and private lotteries.

The player is not participating in the specific lottery, per se, but instead interacting with an exact duplicate version.

That means, should you choose to place a bet on the precise jackpot-winning numbers of a Powerball draw through the Lottoland website, and that jackpot draw is worth, say, a $50 million, you will receive exactly $50 million, without having had any engagement with the Powerball operator.

How It Works

How can it do this? Lottoland uses a system called insurance linked securities, a kind of insurance policy against unlikely but potentially catastrophic events, like earthquakes and hurricanes. And in their case, lottery winners.

This provides Lottoland with a collateralized jackpot fund worth €100 million in annual coverage, should someone win an earth-shattering amount of money from one of Lottoland’s tickets.

And since these tickets can be bought with a convenient click of a mouse, or a swipe of a finger, the situation is making traditional lottery retailers uncomfortable.

And maybe they should be. Lottoland has signed up over half a million Australian players, according to news.com.au, and now estimates to have about one per cent share the lottery market share in this country since it began marketing to Australia in January 2016.

The company been spending big, signing, for example, a seven figure sponorshop deal with NRL team Manly Sea Eagles.

ALNA Petitions Government 

Enough is enough, says the Australian Lottery and Newsagents Association (ALNA), which wants the government to insert a measure in the soon-to-be-enacted Interactive Gambling Amendment Act to put a stop to all this new competition and technological disruption. South Australia has already legislated to make it an offence for Lottoland to sell its products there.

But CEO of Lottoland Luke Brill tolD news.com.au that, because Lottoland is classed as a betting company rather than a lottery company company, it’s already subject to much more stringent regulations than lottery operators..   

“The regulations around online gaming are actually more rigorous than they are around lottery. We’re licenced by the Northern Territory and there’s a very strict code of what we can and can’t do,” he said.

“If the Australian consumer wasn’t happy with our service or didn’t want our service, we wouldn’t have been able to acquire the amount of customers we have in the past 15 months.”                             .

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