The online lottery vertical with Thomas Metzger from Lotto.com

You probably have the perfect resume for becoming the CEO of Lotto.com as your background spans numerous years of running other lottery projects and you have experience as a financial analyst. How has all this experience prepared you for your current role at Lotto.com?

Thank you! I started my career as an investment banking analyst at Bear Stearns back in 2000 when they had the #1 Gaming bank on Wall Street. In those days, 80 hour weeks were common, so in a few years I got a lot of exposure to many of the leading companies in the industry. We had a client list that included Wynn, Penn National and of course Scientific Games which ended up being the next stop for me. My experience at SG led to my position at Camelot (operator of the UK National Lottery) which is where I was first really exposed to online lottery in a meaningful way. Camelot is one of the best in the world at developing their digital channel which is now over 45% of their sales. I have always been trying to craft my resume in a linear fashion where each experience builds on the prior one. Lotto.com has definitely been the highlight!

How does Lotto.com work exactly, is it a means for people to buy tickets of that State’s lottery or is it more part of a unified pool managed fully by Lotto.com? 

Lotto.com is really a lottery delivery service – we are a digital platform available on any device that allows customers to order all the official state lottery draw and scratch games that are available at retail.Lottery tickets are not purchased on Lotto.com, rather we take orders for physical tickets and then deliver them electronically to our customers. We will notify you if you win, and pay most prizes immediately after the draw. We take particular pride in the fact that all the proceeds from the incremental ticket sales we deliver go straight back to the initiatives that state lotteries support including education, social programs, and environmental initiatives.

Online lotteries seem to be the last of the major verticals in online gambling to become big. Why do you think it took so long for this segment to take off?

Most state lotteries either need legislative approval to do a state-run “iLottery,” as they are called, or don’t have the risk appetite to run one themselves. The great thing about our delivery model or “lottery courier” as many states refer to it, is that it is already legal in every state in the country except two. We are the fastest and lowest risk way for states to bring their lotteries online. Additionally, our technology is responsible for age verification, geolocation, and most importantly marketing which are pain points for most lotteries thinking about going online themselves. We do not see ourselves as a “disruptor”, but rather a new channel to bring in incremental players and funds from customers who have not traditionally played the lottery. 

Through lotto.com we are able to educate our players, not only on all the good lotteries do – raising money for good causes, but also on responsible play. These key features on our platform are important not only to our players but also any future state partners.

Seeing how much of an all-around resource couriers are, more and more states are starting to adopt the model and in turn creates player confidence, which I think led to this segment taking off. It required steady progress, but working with states and building customer confidence is central to how our business operates.

Do you think that too many countries and states won’t want to share their business and keep a monopoly by being the only licensed lottery provider?

State lotteries are not in the business of taking on risk. Online customer acquisition is very expensive, and it takes months to earn a return on that investment. For every ticket we deliver, lotteries enjoy the same return as they would at retail, usually 50%, straight to their bottom line. If you compare this to state-run iLottery margins which are 15% or less, we are just a much better model! 

What are some of the future plans that you can share that Lotto.com is working on?

While we like to keep our expansion details close to our chest, we can happily say that we plan to be in quite a few more states before the end of 2023. Along with that, we expect big growth from our “Digital Scratch Ticket” product which is currently live in Texas and Colorado. Given how well it has been performing we definitely see additional states coming online in the near future!