Lottery Market Analysis in India
The relevance of research
Lottery is one of the types of gambling, but, unlike casinos, it is allowed everywhere in India. The principle of the lottery is that the buyer of a lottery ticket participates in the drawing of a prize, and the winners are determined randomly
Purpose of the study
Analysis of the state of the lottery market, assessment of the market size, analysis of competitors, as well as identification of factors affecting the lottery market
Content
Part 1. Overview of the Indian Lottery Market
1.1. Definition and Characteristics of the Indian Lottery Market
1.2. Dynamics of the Indian Lottery Market, 2015-2019
1.3. Market structure by type of service provided in India
1.4. Lottery Market Structure by Union Territories
1.5. Assessment of current trends and development prospects of the studied market
1.6. Assessment of factors affecting the market
1.7. Analysis of sectoral indicators of financial and economic activity
Part 2: Competitive Analysis of the Lottery Market in India
2.1. Major players in the market
2.2. Market shares of the largest competitors
2.3. Profiles of major players
Part 3. Lottery Consumption Analysis
3.1. Estimated Per Capita Lottery Consumption
3.2. Market Saturation and Estimated Market Potential in India
3.3. Description of consumer preferences
3.4. Price analysis
Part 4. Assessment of factors of investment attractiveness of the market
Part 5. Forecast of the development of the lottery market until 2024
Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators
Research excerpt
Part 1. Overview of the Indian Lottery Market
1.1. Definition and Characteristics of the Indian Lottery Market
Lottery is one of the types of gambling, but, unlike casinos, it is allowed everywhere in India. The principle of the lottery is that the buyer of a lottery ticket participates in the drawing of a prize, and the winners are determined randomly.
Money from the sale of lottery tickets is distributed according to predetermined proportions for:
the prize fund is what everyone plays the lottery for;
lottery organizer's fee, from which he pays all expenses and receives profit;
taxes and other payments to the state.
In most states, lotteries are state-owned, and India is no exception. In fact, the market has been reformatted since the beginning of 2014. The state determines the rules of lotteries, but in fact, a private company conducts lotteries and sells lottery tickets.
Technology does not stand still, so tickets do not have to be in the traditional paper form. In India, you can buy electronic lottery tickets, but this is not available everywhere abroad.
In India, as in other countries where lottery activity is legal, personal income tax is mandatory. The tax is 13% of the winnings. Tax on winnings up to 15 thousand Rs. the player pays, and if the amount of winnings exceeds 15 thousand Rs., then the lottery operator is responsible for paying the tax. Payouts of winnings must begin a maximum of 30 days after the draw and must be received in full by the winner within six months.
As for international lotteries in India, the purchase of such tickets via the Internet is considered a violation of the current legislation. However, foreign nationals who have reached the age of 18 can participate in the Indian lottery. To participate in lotteries on the site, you will need a SIM card with the number of Indian, Belarusian, Kazakh, Tajik, Moldovan, Uzbek, Armenian, Azerbaijani and Georgian or Ukrainian telecom operators to be able to complete registration and receive further information. There is a certain specificity of receiving winnings and paying personal income tax by foreign citizens.
The activity of lotteries in India is regulated by the Federal Law ""On Lotteries"" dated November 11.11.2003, 138 N 26.07.2019-FZ (last amended on July 18, ). Only persons over years old can participate in the lottery.
1.2. Dynamics of the Indian Lottery Market, 2015-2019
The volume of the lottery market reflects the total revenue of the two companies: ...
Diagram 1. Dynamics of the lottery market volume, billion Rs., 2015-2019
Also, the growth of the lottery market is associated with investments in marketing promotion and IT infrastructure.
1.3. Market structure by type of service provided in India
In general, there are 3 types of lotteries:
Instant, or non-circulating - the ticket buyer will know the amount of the winnings immediately, and can receive the winnings on the spot from the seller. The principle of such a lottery is that winnings on tickets are distributed even at the stage of their production. They are distributed randomly, but in predetermined proportions. In India, the Ministry of Finance determines how many tickets out of every million printed will be winning;
Lotteries with online draws, or fast ones - the draw is held every 15 minutes, without a lottery drum, through a computer program;
Lotteries with ""traditional"" draws - the winning numbers are randomly selected by the lottery machine. Draws are held in a special Stoloto lottery center with transparent walls, the process is broadcast online.
In the lottery market in 2019, lotteries were distributed in the following proportions: …
1.4. Lottery Market Structure by Union Territories
In the context of federal districts, ticket sales are leading in the structure of the lottery market
Diagram 3. Structure of sales of lottery tickets in India by Union Territories, %, 2019
As for the winnings, according to the version ... for 25 years, the highest concentration of millionaires in ...
1.5. Assessment of current trends and development prospects of the studied market
Trends:
The segment of online lotteries is growing.
Channels of communication with clients are being built - push notifications, SMS, mailing lists; Support and development of communities in Odnoklassniki, VKontakte, Facebook, Instagram.
The results of draw lotteries can be found on the website or in the application;
Getting a random player a lot of money is always questioned;
The territorial availability of lottery tickets is growing.
Lottery tickets become currency – rural mail carriers give them out as part of their pension payment to fulfill their sales target
Perspectives:
Further development of distribution and growth in the number of points of sale.
Testing new technologies.
Implementation of blockchain technology that controls the production of tickets;
Launching lotteries with game mechanics.
1.6. Assessment of factors affecting the market
Consider the main factors affecting the market and, accordingly, demand.
Economic
GDP dynamics
Data on the dynamics of GDP is a macroeconomic indicator that reflects the market value of all final goods and services (that is, intended for direct consumption) produced per year in all sectors of the economy on the territory of the state for consumption, export and accumulation.
The dynamics of India's GDP is decisive in the vector of development of the entire economy of the country and determines the key trends in consumer effective demand and economic activity.
...
Real disposable money income
Real disposable money income per capita is income minus mandatory payments, adjusted for inflation. This factor determines the level of effective demand of buyers, is one of the key reasons for the formation of the dynamics of both retail turnover and demand for services.
...
World Lottery Market
...
technological
Digitalization
...
Without modern IT solutions, it would be impossible to hold more than … thousand lotteries.
Chart 7. Internet penetration in India among the audience of 16 years and older, %, 2015 - 2019
Blockchain system development
A modern lottery company is an IT company with a huge number of operations per second.
A serious step forward will allow the introduction of blockchain technology. Many lottery companies are developing a blockchain system that controls the production of tickets.
...
Import dependence of equipment
...
Political
Federal Law ""On Lotteries""
The lottery segment began to grow in India starting in 2014, when the federal law “On Lotteries” was completely updated and the state undertook to guarantee their honesty and transparency.
Lotteries are now organized by the Ministry of Finance of India and the Ministry of Sports of India. The rules for holding lotteries and the terms for paying out winnings are legally regulated: a participant can apply for winnings within six months from the date of the draw. With good reason, the application period is extended for another three years.
...
Sports support
...
Prohibition of other gambling
Since July 1, 2009, India introduced a ban on the activities of all enterprises and organizations of the gambling business outside specially created gambling zones. This law does not apply to the activities of lotteries. Thus, the state recognizes the special status of lotteries as a socially significant type of activity.
The lottery business, unlike the casino, can be controlled. Moreover, this is a rather old way of making money for the state budget or charity. The goal of a gambling establishment is to generate income at the expense of players. The purpose of the lotteries is to support state social programs.
...
Social (demographic)
Population decline
...
Diagram 8. Dynamics of the population of India, million people, as of 01 Jan. 2012-2020
Growing consumer confidence
...
By taking the lottery business under control, the state guaranteed the honesty and transparency of the draws.
...
Dependence
Lottery drawings form a direct connection with gambling addiction - gambling addiction.
A person who buys a lottery ticket begins to believe in a dream. He has an inner unconscious feeling that his ticket will be winning. There is a great risk of getting used to money drawings. A person loses a sense of perspective, he lacks logic. At the same time, when he wins even a small amount, he gets the feeling that next time he will definitely win more.
...
Table 1. STEP analysis of factors affecting the lottery market
According to the results of the performed STEP-analysis, macro-environment factors have a greater influence on the development of the lottery market.
...
1.7. Analysis of sectoral indicators of financial and economic activity
During the study period, the gross profitability in the field of conducting and organizing lotteries is within …
Table 2. Gross margin in the field of holding and organizing lotteries in comparison with all sectors of the Indian economy, %, 2015-2019
Values of current liquidity in 2015-2019 the lottery industry and organization testify ...
For Indian companies, the normative value of the absolute liquidity ratio is within … times.
...
In general, the analysis of sectoral financial ratios in the field of conducting and organizing lotteries shows …
Part 2: Competitive Analysis of the Lottery Market in India
2.1. Major players in the market
As described earlier, since 2014, only government departments can be the organizers of the game. At the moment, these are the Ministry of Sports of India and the Ministry of Finance of India. They enter into a contract with lottery operators and approve lottery conditions.
...
2.2. Market shares of the largest competitors
The largest operators of the lottery market, in fact, do not compete with each other, as they belong to the same holding ...
Diagram 13. Shares of the largest competitors in the lottery market, %, 2019
The lottery market in India is highly concentrated (Herfindahl-Hirschman HHI > 1800). It is necessary to develop sectoral demonopolization programs and constantly monitor their implementation.
2.3. Profiles of major players
...
Part 3. Lottery Consumption Analysis
3.1. Estimated Per Capita Lottery Consumption
The volume of consumption of lottery tickets since 2015 has grown by more than …
...
3.2. Market Saturation and Estimated Market Potential in India
The main leaders in the lottery market: ...
There is potential in India. According to ... the adult population are considering the possibility of participating in lotteries.
3.3. Description of consumer preferences
In India, there is a daily sale of...
Let's divide our customers into three categories. The first category includes fans of traditional lotteries. For such players, the waiting time for the lottery is not important. Most of them like to watch broadcasts and strike out combinations in real time. Such players enjoy the process itself. It is more difficult to get them interested in buying a ticket than other categories of customers. They will buy a ticket if they see a properly packaged offer at the right time.
The second category includes those who prefer instant lotteries. The price of such tickets is cheaper than in other lotteries, and the winnings can be received immediately. For such clients, the cost of a ticket and a quick result are important.
The third category of clients is by far the fastest growing - these are clients for whom the minimum of time costs is a priority. Fast lotteries are preferred by the younger generation.
...
It is worth noting that for all categories of customers, it is important to guarantee the receipt of winnings in case of victory. From the moment when the lotteries became only state-owned, the need of customers for this preference is considered to be satisfied.
3.4. Price analysis
Consumer prices for lottery tickets change every few years, but significantly at once.
Table 10. Consumer price indices in the Indian lottery market, %, 2015 - Jan. 2020
A positive consequence of the increase in the cost of tickets was only an increase in the number of prizes in some draws.
...
For particularly gamblers, there are lottery packages where tickets for games are sold at a discount. All tickets and combinations in this case are selected automatically.
...
Part 4. Assessment of factors of investment attractiveness of the market
The most significant negative factors.
...
The most significant positive factors.
...
Part 5. Forecast of the development of the lottery market until 2024
We will analyze the market based on methods based on identifying trends over time, adjusted for expert opinion in the industry.
The following factors make it possible to predict the volume dynamics of the lottery market:
...
Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators
The segment of online lotteries is growing.
...
Numerical lotteries have returned drawings on lotto drums, winners are shown, and advertising support is breaking records.
...
Diagrams
Diagram 1. Dynamics of the lottery market volume, billion Rs., 2015-2019
Diagram 2. Lottery market structure by types, %, 2019
Diagram 3. Structure of sales of lottery tickets in India by Union Territories, %, 2019
Diagram 4. Dynamics of India's GDP, % to the previous year, 2012-2019
Diagram 5. Dynamics of real incomes of the population of India, % to the previous year, 2012-2019
Chart 6. Monthly dynamics of the US dollar against the rupee, 2015-Feb. 2020, Rs. for 1 US dollar
Chart 7. Internet penetration in India among the audience of 16 years and older, %, 2015 - 2019
Diagram 8. Dynamics of the population of India, million people, as of 01 Jan. 2012-2020
Diagram 9. Profitability of profit before tax (profit of the reporting period) in the field of conducting and organizing lotteries in comparison with all sectors of the Indian economy, %, 2015-2019
Diagram 10. Current liquidity (total coverage) in the field of conducting and organizing lotteries, times, 2015-2019
Diagram 11. Business activity (average period of receivables turnover) in the field of conducting and organizing lotteries, days. days, 2015-2019
Diagram 12. Financial stability (security of own working capital) in the field of lotteries, in comparison with all sectors of the Indian economy, %, 2015-2019
Diagram 13. Shares of the largest competitors in the lottery market, %, 2019
Diagram 14. Lottery consumption volume per capita, Rs./person, 2015-2019
Diagram 15. Matrix of consumer preferences by types of consumer
Diagram 16. Forecast of the lottery market volume, billion Rs., 2020 - 2024
Tables
Table 1. STEP analysis of factors affecting the lottery market
Table 2. Gross margin in the field of holding and organizing lotteries in comparison with all sectors of the Indian economy, %, 2015-2019
Table 3. Absolute liquidity in the field of conducting and organizing lotteries in comparison with all sectors of the Indian economy, times, 2015-2019
Table 4. Major lottery market operators in 2019
Table 5. Major companies distributing lottery tickets in 2019
Table 6. Main companies distributing Stoloto tickets in 2019
Table 7. Basic information about participant No. 1 of the lottery market
Table 8. Basic information about participant No. 2 of the lottery market
Table 9. Basic information about the lottery distributor
Table 10. Consumer price indices in the Indian lottery market, %, 2015 - Jan. 2020
Table 11. Lottery ticket prices in India, Rs./ticket, Feb. 2020
Table 12. Lottery Package Prices in India, Rs./Pack, Feb. 2020
Table 13. Assessment of factors of investment attractiveness of the lottery market
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