Innovation activity is expected to continue to struggle, as the industry's core demographic of older consumers persists in its aversion to technology
Melbourne, Australia (PRWEB) August 13, 2013
The Lotteries industry in Australia has been volatile over the past five years, growing at an annualised rate of 1.4% over the five years through 2013-14. Until now, the industry has had an extended life cycle and a generally high penetration rate among its target groups. However, gaming machines and sports betting have become a very direct and fierce competitor. The industry is growing strongly only in Western Australia, where there are no gaming machines outside of the casino. According to IBISWorld industry analyst Craig Shulman, “both forms of gaming are attractive to the same demographic market, which largely consists of older adults”. In lotto, a series of jackpot first prizes, some up to $90.0 million, has helped attract infrequent players to the game. However, this has sometimes been to the detriment of other weekly lottery draws. In addition, lottery operators have increased the frequency of lotto draws to increase both interest and expenditure. IBISWorld expects that the Lotteries industry will generate $7.5 billion in revenue in 2013-14, an increase of 4.3% on the previous year.
“The main demand determinant for lottery expenditure is real household disposable income, which is influenced by changes in economic activity, interest rates, fuel prices and unemployment,” says Shulman. During 2009-10, industry revenue was affected by modest economic conditions, higher interest rates and continuing strong competition from the broader gaming market, particularly gaming machines (which are also in a low revenue growth phase). The Lotteries industry has a medium level of concentration, with Tatts Group Limited, the Lotteries Commission of Western Australia and Tabcorp Holdings Limited holding the most significant market shares.
Over the next five years, industry revenue is expected to undergo healthier growth. While household incomes are expected to continue to rise, allowing for greater potential expenditure on lottery products, the change is not expected to be significant. Operators are expected to further consolidate, and ongoing competition from other gambling services is likely to continue to eat away at industry revenue. Innovation activity is expected to continue to struggle, as the industry's core demographic of older consumers persists in its aversion to technology. The Lotteries industry will need to appeal to younger demographics in order to maintain growth.
For more information, visit IBISWorld’s Lotteries in Australia industry report page.
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IBISWorld industry Report Key Topics
Businesses in this industry operate lotteries or sell lottery tickets. A lottery is commonly defined as a draw that has a cost to enter, with prize winners drawn randomly by lot. As such, it includes lotto, traditional lottery draws, instant/scratch tickets, soccer pools and minor gaming like bingo and keno.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.