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There is a large and active market for lottery products worldwide. State and foreign governmental authorities and their licensees in approximately 200 jurisdictions worldwide operate lotteries. Worldwide lottery ticket sales in fiscal year 2010 will approximate $245 billion. In the United States, there are currently 44 jurisdictions offering lottery products. In fiscal year 2010, lottery sales in the United States were approximately $52.4 billion. Worldwide lotteries also spend approximately $5 billion annually on marketing and advertising.

Government Authorization

Governments have authorized lotteries primarily as a means of generating non-tax revenues. Lottery revenues are often a means by which to generate revenues without raising taxes and are frequently set-aside for particular public purposes, such as education, aid to the elderly, conservation, transportation and economic development. As lottery ticket sales have become a significant source of funding for such programs, many jurisdictions have come to rely on the revenues generated by such sales.

Lottery Sales Growth

Worldwide lottery ticket sales grew at a compounded annual rate of just 3% for the seven years from 2004 through 2010. This relatively flat sales trend is counter to the double-digit growth being experienced by legalized casino gaming establishments throughout the United States (not to mention the offshore e-gaming websites). Of interest, e-gaming sites are among the most popular and “sticky” sites on the Internet.

A number of factors have been identified as contributing to the slowdown in lottery sales. Among the principal factors are:

  • Off Shore e-gaming. In 2010 e-gaming managed by off-shore companies aggregated approximately $20 billion of which US citizens’ play is estimated to be approximately 35%.
  • New Products. The last few years have had a noticeable lack of new product offerings. The introduction of video lottery terminals and Keno in a handful of states and the testing of probability instant scratch games in one or two states are the extent of new products.
  • Jackpot Fatigue. The cross-selling of Powerball and MegaMillions have increased the odds and thus, over time, the size of the jackpots, reaching levels of $150 million to $250 million. Player interest in everyday jackpot amount ($5 to $20 million) is minimal.
  • Aging player base. The lottery player, particularly those who play traditional lotto games and daily number draw games are getting older. Lotteries have not be able to convert enough younger players to be loyal lotto or daily draw players, in some cases threatening the viability of these games in some states.
  • Instant Ticket Maturity. The instant ticket scratch product has fueled much of the growth in the North American lottery industry during the past 15 years. Lotteries discovered that their players wanted instant results and products that were more entertaining and fun. However, scratch tickets have shown a significant slowing of growth as the product matures and fewer new offerings are presented.
  • Advertising. Lottery advertising budgets have not increased in most states and have been dramatically reduced or eliminated in other states. Lotteries are forced to find new, less expensive ways to communicate if they are to maintain their level of advertising impressions with the playing public.
  • Retail Consolidations. The proliferation of chain retail stores has also created a reduction in local, neighborhood “Mom and Pop” stores, making the purchase of lottery tickets inconvenient for those with busy schedules or who are less mobile. Additionally, the growth of self-serve gas at most convenience stores has eliminated the need to go into the store and buy an impulse item like a lottery ticket.

eLottery believes that these trends and the continued dependence of consumers on the convenience of the Internet will bring along the need to distribute lottery product on the Internet. Clearly, traditional methods for distributing lottery tickets involve inefficiencies and inconvenience for all participants can be alleviated using an e-commerce sales model.

eLottery believes that electronic distribution of lottery tickets would not necessarily be a negative for brick and mortar retail outlets. Web retailing will attract new customers, who do not currently buy at retail outlets, but who may still need to visit these stores to cash low tier prize winnings. Retailers can use the Lottery e-commerce vehicle to promote their locations. Finally, the convenience of Internet sales, especially when jackpots reach astronomical levels will alleviate the long lines and customer frustration that many retailers complain about.

The Company is confident the ability to play a lottery from home or other remote locations would significantly increase sales.

The North American government and provincial lottery industry aggregates approximately $63 billion in sales in 43 U.S. states, the District of Columbia and five Canadian provincial selling groups.

Average per capita consumption per authorized adult player is $190. Annual revenues and per capital consumption have been flat for several years and the only increases are attributable to new states entering the lottery industry or bringing on new products like Keno or VLT play.

eLottery’s mission is to support the governmental lottery industry effectively using the Internet. With over 50 million Internet users in the U.S., and e-commerce spending approaching $10 billion, eLottery understands the importance of the Internet for servicing, communicating with and retaining new and current customers. eLottery’s experience and expertise in technology, e-commerce and lottery operations uniquely positions the company as the prime source for serving the Internet needs of governmental lotteries.

Design and Implementation of a Secure Online Lottery System

  • Pramote Kuacharoen

Abstract

Government has the authority to operate lottery schemes. Since the operation of the lottery system is controlled by the government, there are issues with public trust. The people may speculate that the lottery is rigged. This issue becomes critical with an online lottery system since the unprotected data can be easy manipulated. If all combinations which have been sold are known before the drawing, the government may draw winning numbers which pay the least. Moreover, winning tickets may be added after the drawing. As a result, corruption may be inevitable. The government should operate lottery schemes with integrity which include transparency and accountability.

This paper presents the design and the implementation of a secure online lottery system. The proposed system can provide accuracy, privacy, transparency, and verifiability. Using the proposed system, the government can operate lottery schemes with integrity.

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Government has the authority to operate lottery schemes. Since the operation of the lottery system is controlled by the government, there are issues with public trust. The people may speculate that…