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On the rebound

Global lottery sales inch upward in 2001 after previous year's setback

By Patricia A. McQueen

Anyone looking at the big picture of global lottery sales probably breathed a sigh of relief as 2001 wound down. There weren't any catastrophic declines among the world's largest lotteries as had occurred in 2000, when Italy's lottery games dropped 20 percent to 30 percent.

Indeed, several larger lotteries reported sales increases for the year, and those that didn't typically experienced relatively small declines. 

The bottom line is that global lottery sales in 2001 climbed to about $123 billion, a little more than 1 percent higher than 2000's revised estimate of $121.5 billion. 

Any attempt to provide a global lottery sales figure has to recognize that there are many parts of the world where lotteries exist, and perhaps even thrive, but where sales figures are difficult to obtain. Those areas include parts of Africa, Asia and Latin America.

Thus $123 billion in sales has to be considered an absolute minimum, and that figure could easily be 5 percent to 10 percent higher. The accompanying table summarizes the most recent available data from 187 lotteries in 87 countries. 

Sales for 2001 were reported by 114 of those lotteries, and of those, gains (in local currency) were reported by 74 of them. To indicate how currency exchange can affect attempts to compile sales in any given currency, only 61 lotteries showed gains when their sales were converted to U.S. dollars.

Large percentage gains (and sometimes losses) are often recorded by very small lotteries, and there were many of those reported in 2001, with the biggest gains coming from lotteries in Morocco (La Marocaine des Jeux et des Sports), Lithuania (OLIFEJA), and Poland (Totolotek).

It's often more impressive when the largest lotteries post double-digit gains, and there were a few big winners among the 32 lotteries with sales in excess of $1 billion.

Hands down, the leader of that group was the China Sports Lottery, which had a whopping 64 percent increase in sales, coming in at $1.8 billion. Sports and lotto-type games accounted for that increase in this developing lottery market.

Double-digit gains were reported by only three other $1 billion-plus lotteries, the Greek operator OPAP (+19 percent), and two in the United States: New York (+15 percent) and California (+11 percent).

Japan holds lead
Japan's lottery operator, the Dai-Ichi Kangyo Bank (now known as Mizuho Bank Ltd.), was able to hold on to its lead in the global market for the second consecutive year, despite a drop in sales in dollar terms, coming in at $7.9 billion in 2001 compared with $8.6 billion in 2000. (Sales in yen actually increased by 3 percent.) Despite a small drop in sales, the U.K. National Lottery stayed in the second spot with $7.2 billion.

Strong performance by Spain's Loterias y Apuestas del Estado edged it past Italy's Lottomatica into the third spot, with $6.7 billion in sales. Lottomatica ended up with $6.6 billion in sales, only down slightly from 2000.

French national lottery operator La Francaise des Jeux retained its spot in fifth place with $6.3 billion in sales, a 4 percent increase from the prior year.

The five remaining lotteries in the top 10 call the United States home.

Leading that group is the New York Lottery, which roared back from a temporary setback in 2000 to become the first U.S. lottery to surpass $4 billion in sales. Massachusetts, California, Texas, and Florida rounded out the top 10, all with comfortable increases over 2000.

As a country, the U.S. continues to lead the world in total lottery sales, as its 37 state lotteries plus the District of Columbia generated $39.4 billion in sales during the 2001 fiscal year.
Italy lost a little ground again, but remained the second-highest country in terms of lottery sales, with $9.6 billion. Spain moved up a notch into third with $9.0 billion in sales from its three lotteries. With 16 state lotteries plus two regional class lotteries, Germany ranked fourth with $8.9 billion, and Japan rounded out the top five.

Last year China made the top 10 country list for the first time; this year it was Greece's turn. Significant growth in sports betting, in particular, by Greek operator OPAP, resulted in total Greek lottery sales surpassing $2 billion for the first time.
Games people play

Lotto-type games continued their market-leading performance in 2001, although their share of the market was down a bit, to 37 percent of global sales (from 38 percent). Instant games held steady at about 22 percent of the market, numbers games rose slightly to 13 percent, and traditional draw lotteries fell from 15 percent to just under 14 percent of the total. And although their absolute numbers remain dwarfed by lotto and the other more traditional games, the strongest growth came from three categories: sports betting, keno and other, which includes high-growth games such as video lottery terminals and bingo.

Sports betting, and in particular fixed-odds betting, was responsible for Greece's entry into the top 10 countries by total sales, as indicated earlier. Fixed-odds betting also triggered one of largest gains any lottery reported last year, as Poland's Totolotek grew by 84 percent (72 percent in its native currency).
It should be noted that with VLTs, the reporting of revenues varies by country, and is usually either net revenues (after prizes) or cash-in figures. Other electronic games, such as electronic instant tickets, are also reported net of prizes.

One additional note regarding sports betting: a number of lotteries conduct betting on horse races, but it has been our general policy to exclude parimutuel horse (and greyhound) racing handle from the compilation of lottery sales. This is simply because lotteries and parimutuels have historically been separate classes of gaming, and we continue that pattern in this report.

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