Corporations don’t need to win the big one

An unclaimed prize must never be seen as a corporate bonus because out there somewhere is a player who bought the winning ticket. Lottery operators who are incentivized not to work hungrily to match cash prizes – whether big or small – with their rightful winners will destroy the spirit, and indeed the viability, of this worthy industry.

Unfortunately, the recent decision to sell the unclaimed prizes of NSW Lotteries to the new operator of that business – Tatts Group – demonstrates a lack of understanding by the NSW Government and its advisers of the unique nature of the Lottery product within a community.

A lottery product is normally purchased by a “battler” – someone who dreams of the big one, the win that will change their life. A lottery brand built on increasing the number of winners in the community by using unclaimed prize money to do so is a sure fire way route to build sales and grow revenue for good causes.

Conversely, allowing a corporate to keep unclaimed prizes and add to nothing but their own profit is a one-way street to stall sales, damage the brand and facilitate an erosion of player faith.

In New Zealand, unclaimed prizes are returned to the prize pool once 12 months have passed. Legislation dictates that players must have a chance to re-win that money – so this leads to innovation in that field such as second drawer giveaways of luxury cars. When the unclaimed prizes are re-marketed in a clever way and returned to multiple smaller winners the lottery brand in the community wins and sales increase.

In the New Zealand case, sales were rebuilt to the tune of hundreds of millions of dollars, from a low point in 2003, after innovation in the unclaimed prizes market added to the promotional mix. In fact NZ Lotteries at that time was one of the fastest growing lottery markets in the region.

A strong lottery is all about the brand values that a Lottery exudes. The punter is happy about having a second bite at the unclaimed prize pool. The punter is cool about this revenue it going to worthy causes in the community or back into the taxpayers’ pockets via consolidated revenue. But the punter will not swallow having this money go to a private company with no caveats or requirements on its use – that will only erode the brand overtime.

When the unthinkable happens and a multi-million dollar Powerball Prize is unclaimed and Tatts coincidentally reports a big lift in profits, then goodbye punter support for the local newsagent scratchie and the Friday night jackpot.

Clearly the NSW Government and its bankers have been blinded by a one-off high price and have forgotten the punters and the importance of protecting the brand values of the peoples’ game.

In my opinion: forget about probity, or who paid what price for the privilege of running NSW Lotteries. JUST get the focus back on the player and the brand integrity of the lottery and do what is right with unclaimed prizes.

Trevor Hall is the former Chief Executive Officer of New Zealand Lotteries