The smart move: Embracing AI in Lottery

With Covid-19 waking up the more traditional lottery operators in the industry to the benefits of offering tickets online, Ade Repcenko, CEO of Spinola Gaming, explains how the digitisation of lotteries can empower operators with a data-driven promotional strategy powered by cost-effective artificial intelligence (AI).

In the past few months, companies which were reluctant to embrace technology were put into a position where they needed to look into ways of reaching their customers digitally. The digital transformation which would have taken the lottery industry another 5 years has been sped up, as companies now realize the importance of being able to reach their players across virtual mediums.

Embracing technology is the difference between looking completely out of touch, or being ahead of the curve. It is vital, especially in today’s market, for lotteries to be accessible and available online using the latest technology, and taking a data and intelligence-led approach is key.

Digitisation brings with it a lot of data. Powerful, rich data that artificial intelligence (AI) can help aggregate, analyse and transform into relevant and understandable data sets that can be used to inform and give insight on players and their preferences.

Harnessing the power of AI in this way helps operators understand their players better and enhances their user experience through analysis and segmentation, creating a real-time personalised experience for each and every player.

Getting a unique and customized service is key to driving customer engagement, satisfaction and ultimate loyalty to the brand. AI-assisted targeted messaging could therefore be used for smarter ad and offer serving to current lottery players. This works by identifying valuable customers based on their ticket purchase habits, and showcasing offers that would be of particular appeal to them. Buy one get one free and other traditional lottery promotions do work, but taking on a personalised real-time digital promotion tactic has proven to work much better, generate a significant ROI, and keep more players active after large jackpots are won.

This has been shown by operators such as Camelot, who through a hyper-targeted campaign, offered every casual Mega Millions player of the Illinois Lottery a free line of Lotto when buying a line of Mega Millions. To be able to offer the promotion, Camelot needed to know a wealth of information to fuel their AI so that it understood players and responded with the right message or promotion at the right time. Thanks to using such a personalised strategy,  the players who were offered a free line of Lotto in the hyper-targeted campaign were twice as likely to continue playing after the MegaMillions jackpot was won when compared to a control group, and the campaign delivered an ROI of $8.89 for every $1 invested by the Lottery.

Keeping players active long-term, even outside of huge jackpots is the target of every lottery. AI can help lottery providers achieve this by moving away from generic marketing tactics, and instead adopting a data-driven targeted approach. A prime example of this occurred after Camelot’s $400m Mega Millions Jackpot for the Illinois Lottery was won on June 9, 2020. Active online lottery players in Illinois promptly dropped 22 percent the following week, as is to be expected after a large jackpot is won, however, assisted by AI, the Lottery was able to double active players in the week following the Mega Millions Jackpot win. This specific campaign reportedly achieved an incremental sales rise of over $10 for every $1 invested for the operator.

The lottery market is anticipated to surpass $353.1 billion by 2026, and researchers say that within a few years most customer-brand interactions will be supported by AI technology in some way or other. There is a huge opportunity to use AI to find cost-effective long-term solutions which would support the ultimate growth of the lottery sector.