Inside Asian Gaming

40 Passing Another Milestone Global lottery sales in 2006 sailed past the US$200 billion with a year-on-year increase of nearly 10% T here seems to be no end to the party—worldwide lottery sales continued their upward march in 2006, reaching a reported US$205 billion last year, a gain of almost 10% over 2005’s US$187 billion. In the past five years, global lottery sales have soared more than 65%, an average of almost 11% per year. As we’ve noted in previous years,this lofty sales total doesn’t include some lotteries in Asian and South American countries, and reporting in Asia, Africa, and Latin America remains sketchy at best. India is a prime ex- ample of a new lottery market with competi- tive operators where sales figures are hard to come by, and sales could be in the billions. Another growing lottery is the Construction Lottery in Hanoi,Vietnam. According to news reports, sales in 2005 were approximately US$1.3 billion, but exact figures are difficult to obtain and are therefore not included in the chart here. Clearly, US$205 billion is at the low end of any estimate of global lottery sales; the actu- al figure could easily be more.The estimate is derived from the most recent available data from 180 lotteries in 88 countries. Sales for 2006 were reported by 102 of those lotteries, and the vast majority re- ported gains over 2005 levels, both in terms of local currencies and US dollars. More than one-third reported sales increases of greater than 10%. Currency effects had very little im- pact overall, with Japan being a major excep- tion—operator Mizuho Bank, Ltd., showed a small gain in yen, but a small decline when sales were converted to dollars. In the United States, every lottery re- ported a sales increase, a rare occurrence in recent years, although it also happened just two years ago. Among the largest lotteries, 31 around the world reported more than US$2 billion in sales, compared to 28 in 2005—lotteries in Portugal, Ontario and Oregon joined the exclusive club last year, the latter due pri- marily to video lottery terminals, reported as cash-in amounts. A total of 48 lotteries achieved sales in excess of $1 billion. Almost all of these big lotteries increased their sales in 2006, both in terms of local currencies and when converted to US dollars. Some big gains were reported by some big lotteries.China’sWelfare lottery increased sales by nearly 24% to reach US$6.2 billion, following an extraordinary 83% gain in 2005 as that country’s lottery industry continues its phenomenal rise up the world ranks. In Europe, Greece’s O.P.A.P. continued a recent trend of double-digit growth with a 27% in- crease to US$5.8 billion, and Italy’s Lottomat- ica grew sales by 22% to hit US$13.3 billion. Numerous other large lotteries checked in with growth rates above 10%. It is especially challenging for these large lotteries to maintain double-digit growth as many have, or even any growth year after year, so those that have done so should be considered exceptional performers. Lottomatica back on top As has been the case for the past few years, with significant growth spurts by the world’s largest lotteries, there were several changes among the ranking of the top ten lotteries by 2006 sales. Italy’s Lottomatica regained the top spot it last held in 2004 with US$13.3 billion in total sales, thanks to a whopping 170% in- crease in the country’s still-evolving instant ticket category, as lotto sales continued to sag. It should be noted that in last year’s re- port, Italy’s instant ticket sales were attribut- ed to the Amministrazione Autonoma Mo- nopoli di Stato (AAMS), which oversees all lottery activity in the country. For 2006, we have placed instant ticket sales under the Lottomatica name, which operates these games on behalf of a consortium awarded the contract in 2001. Other games in Italy with multiple operators are still included under the AAMS banner. After temporarily leading the world for the first time in 2005, Spain’s Loterias y Apuestas del Estado ended up in the second spot in 2006, but still produced a solid 4.5% sales increase, reaching US$12.1 billion. Just behind it was French national lottery op- erator La Francaise des Jeux, third on the list with US$11.9 billion in sales, a 7.2% increase over 2005. The only lottery among the top ten to ex- perience a decline in sales, at least in terms of US dollars, was Japan’s national lottery oper- ator, fourth-ranked Mizuho Bank. Sales were down 2.6% to US$9.5 billion, but that was due to a fluctuating exchange rate—sales in yen were actually up by 2.8%. Rounding out the top five lotteries worldwide, as it has for the past four years, was the UK National Lottery, with operator Camelot reporting sales of US$9.1 billion in 2006, a 5% increase. The balance of the top ten lotteries re- mained unchanged from 2005, with the New York Lottery checking in at number six with US$6.8 billion in sales (up 8.5%). It was fol- lowed by China’s Welfare lottery at US$6.2 billion (+23.7%); Greek operator O.P.A.P. US$5.8 billion (+26.5%); the Massachusetts Lottery at US$4.5 billion (up just barely, by 0.8%); and China’s Sports lottery at US$4.1 billion (+9.7%). When grouped by countries,therewas lit- tle change in the rankings among top lottery markets in 2006, the only movement coming from China, which is continuing its march up the top ten. Now ranking fifth in the world, the country’s lottery sales (including Hong Kong) totaled US$11.1 billion last year. The United States continues to lead the world in total lottery sales, as its 42 state lot- teries plus the District of Columbia gener-