How can starting a lottery business in one country be harder than another? What does a country need to have for a startup lottery business to succeed and grow? Whether you’re a new operator researching how to get a gaming license or a veteran tapping into a new business market, this helpful guide will have you on your way to starting a lottery business in the best location possible by considering:
- Gaming licenses
- Lotto laws
- Emerging markets
- Cultural trends
1. How to Get Gaming Licenses
To start a lottery, your business may need to obtain a gaming license. Regulations vary in different jurisdictions and, as an operator starting a lottery business in a new country, researching this requirement should be one of your first priorities. Important considerations for obtaining a gaming license are:
Availability – Are you trying to start a lottery in a country with legal limits on the number of lottery gaming licenses? In The Bahamas, for example, only 7 gaming licenses are permitted.
Upfront costs – A gaming license can cost millions, or it can be relatively inexpensive. You can obtain a license to start a lottery business in Nigeria for under $50.
Restrictions – Does the country permit printed ticket sales by distributors? Are online lotteries allowed? Will the country accept a gaming license from another jurisdiction? Restrictions will vary from region to region.
To start a lottery company online, consider a “global” gaming license. These can be used by any operator whose country has no laws against doing so, and can accept players from around the world. These types of online lottery licenses can be found here:
- Curacao eGaming – The oldest lottery license providers since 1996 can have your business started in as little as a week.
- Malta Gaming Authority – A gaming license from Malta is trusted by most countries when opening foreign bank accounts, getting financing, making third party agreements, and conducting other forms of business. However, it can be very expensive.
- UK Gambling Commission – A costlier license than those from Malta or Curacao. This license is generally used for lotteries in the United Kingdom, where it’s required.
- Costa Rica – More of a technicality than a true gaming license. Costa Rica has no central licensing authority and is known for lotto-friendly laws. International operators can establish a corporate entity in Costa Rica, which does not require a license.
2. Examining Lotto Laws
You can’t start your own lottery business in a region where gaming is illegal, but what if the laws are unclear, or if there are no laws altogether? Is this scenario good for lottery startup success? What are the dangers involved?
It might sound risky but starting a lottery business in a country with little-to-no lotto regulations can be a success. You may be able to avoid gaming license limits and the cost of licenses, as well as other government regulations (like Britain’s mandatory charitable fundraising requirements that could take away 20% of your lottery income every year). Also, there can be more banking flexibility in countries with fewer regulations.
A primary concern about starting a lottery in a country without well-defined laws, is that the country will one day challenge its legal standing. However, new lottery laws can take years to implement. If changes are thrown out, unenforceable or contain loopholes, you will still have a head start over any competitors entering the market if your lottery platform is already established.
An online lottery business should always confirm that their operation is legal in the countries they plan to serve. For example, obtaining a gaming license from Malta will let Canadian players use your gaming website, but not any US players. All U.S. states are excluded from international online gambling.
3. Researching Emerging Lotto Markets
The global online lottery market is projected to reach $11.1 billion by 2027, and some regions are growing faster than others. COVID-19 has sparked a trend away from traditional gaming to online lottery, with “Europe holding a major share,” including Scandinavia, Russia, and other nearby regions.
Emerging online markets in South America (especially Brazil) and Africa are on the rise due to better access to not only the required technology for players (smartphones, mobile devices, etc.), but also improved access to data centers, third-party hosting services, and other facilities required for operators to smoothly provide access to online lottery platforms.
4. Observing Cultural Trends
When it comes to starting a lotto business, understanding the regional culture of a country is equally as important as knowing its laws and regulations.
- Is there a social or religious taboo against gambling? At what age is it acceptable?
- What is the average income of players from this area?
- Are there any popular games that you can convert from printed tickets to digital?
- Are you aware of local corruption or black market gaming activities?
- What is the size of the competition? How competitive is the market?
How to Start a Lottery Business with a Plan
The best way to start your own lottery business and grow it fast, is by starting your lottery in a country that’s already receptive to the gaming industry. Online lotteries represent a fast-growing segment that can operate in multiple countries, but they must still follow laws and regulations. Choosing a country without gaming laws and regulations can be a viable path, as well.
With a rapidly expanding market, a host of new technologies and a wealth of opportunities for new lottery businesses, it can be hard to know the right path to take. An introduction to 4 Leaf Lotto and a free Lottery Growth Plan is a great place to start.