Lotteries

Tattersalls marked us down for putting non Tattersalls product on their counter. They did not give us bonus points for promoting their product on our Newspaper stand – and breaching publisher display rules.

The Australian is reporting that Tattersalls is moving from its Linux based technology to a Microsoft based solution. One outcome I would like to see from the move is integration between gaming terminals and point of sale systems. This would reduce double entry of data and thereby reduce mistakes, save time and provide for better cash management. It would also reduce the opportunity for fraud.

I have discussed this with Tattersalls and other lottery agencies in the past without success.

Tattersalls has come late to market with a Father’s Day pitch – that customers buy six in a row of their $5 scratchies and if none win then you get another six free. The key is to get customers to keep the six together which is easier said than done. Also, they have to hand them back to the outlet where purchased – challenging when the tickets are being given as a gift. I bet there is an understanding already of how many non winning sets of six will not be handed back.

While we will do what Tattersalls requires, I am not a fan of this promotion. We are many other products available in-store for Father’s Day and they have been out and promoted for at least two weeks. This scratch ticket offer feels late in the game and rushed.

We are proclaiming the win for the members of our Wednesday lottery syndicate with this basic skirting at the counter. Our view is that locally produced in-store promotion like this helps freshen our store.

We have stuck with a syndicate for Wednesday Tattslotto – a small prize pool local lottery game – and last night it paid off. Our ten customers will each receive $1,100 for their $15 ticket. It is a small win like this which will drive syndicate sales further, especially for the regular (non jackpot) weeks. It reinforces the value of smaller prize wins. It helps us continue our promotion of newsXpress Forest Hill as a lucky place to shop.

Newsagents in NSW are facing an additional $900 in insurance fees as part of the fall out from the recent high profile case involving employee fraud in one lottery outlet. Had NSW Lotteries followed the processes established years ago by Tattersalls NSW newsagents would be better off today as such a fraud could not be committed. So, if I were a NSW newsagent facing this additional $900 in insurance costs I’d be asking NSW Lotteries why their processes remain open to abuse.

We have lottery jackpots across all games in Victoria at present including the Wednesday game: OzLotto $8 million; Wednesday Tattslotto $2.1 million; Powerball $20 million; Saturday Tattslotto $21 million. Given past success we are running a joint game syndicate based on Powerball and Saturday. This allows promoting a $41 million first division pool. No matter how we mix then, syndicates sell well as punters appear to be happy to have more chance even if their piece of the pie is smaller.

Jarryd Moore makes an interesting comment about this at his blog, asking whether going too early with a jackpot hurts sales. Our experience is that it does in the short term but once you have built a good pool of syndicate customers it does not hurt. As for regular over th counter sales, we have not compared the impact.

UPDATE: We sold eight shares in 24 hours. Today we will add another syndicate.

The story about the newsagent losing a case brought about by NSW Lotteries following fraud by an employee gets another run in the Daily Telegraph today. Newsagents in the meantime are getting stirred up, realising that they face being cut loose by NSW Lotteries should their lax major prize claiming processes let a newsagent down again.

I am told that the NSW Newsagents Association, NANA, overnight organised blanked coverage for NSW newsagents for fidelity and errors and omissions insurance in relation to their lottery agencies. NANA has been actively assisting in relation to this matter since before the case became public.

The Daily Telegraph reports that the District court in NSW has found that a newsagent was negligent in his obligations surrounding handling a division 1 prize and is therefore liable for the $500,000 prize.

While I do not know the detail of this case, I do know that NSW Lotteries following best practice for managing large prizes could have seen this problem avoided. In Victoria, for example, lottery agents are not involved in processing large prize claims – the screen does not even show the value of the prize when the ticket is scanned. In NSW, the process is more lax and even though it has been changed, it remains easy for fraud. I would have thought that since NSW Lotteries controlled the process it had some obligation in relation to this case in that it could have adopted worldwide best practice and removed the temptation altogether.

It is good to see the NSW newsagents association supporting the newsagent involved.

For years Tuesdays used to be the newsagent’s day off or at least the day to get out of the shop work done. Now, with regular OzLotto jackpots the pattern has changed. With the $20 million not going off last night, newsagents can expect a 20% or more lift in traffic next Tuesday andnice kick on Monday. It’s a good problem to have – scheduling staff to cope with the additional traffic and to make the most of the opportunity.

NSW newsagents are lucky that the legislation under which they operate lottery and instant scratch ticket games explicitly prohibits the use of credit cards for the payment of these products. This serves as a barrier to the sale of the products online. While it’s easy for NSW residents to purchase Tattersalls and others products online, the lack of marketing in NSW means uptake will be much slower than elsewhere.

Newsagents invest prime real-estate promoting lottery brands and without a share of online sales (except for Queensland for a limited time) recognizing this development and promotion work, we are naturally concerned about the aggressive online moves by some lottery companies.

At least one division 1 and six division 2 winners in Saturday night’s Lotto draw bought their tickets online.

I say “at least” because Tattersalls does not indicate if winners purchased online. The data I have is from the Golden Casket office. I wouldn’t be surprised if they stop publishing the number of prizes won through internet sales – especially if newsagents and other retail lottery agents step uyp their pressure against Tattersalls and other lottery businesses driving sales from the retail channel to online.

The belief in luck being what it is, the win on Saturday night will drive online lottery sales.

The graphic is from the Tattersalls website. There is no doubt about their desire to drive lottery sales online. As a lottery retailer, one who invests significant real-estate, labour and management time in supporting their brand, I’d prefer that they equally supported their retail network and offered a way for m to share in the mutual success of the online venture.

Some newsagents have mentioned that sales in the $22 million lottery superdraw / megadraw are soft, citing too many jackpots in recent times. Certainly the $22 million is not as alluring as $30 million. Also, the Saturday winner usually has to share their prize with ten or so others whereas Powerball goes off to one winner.

We’re creating some excitement in our store through our Syndicate wall. This is what we have to do with these ‘scheduled’ superdraws – create syndicates and therefore some excitement. Our view is that it’s a matter of having a broad range of product which connects with the interest in luck among various ethnicities.

Our customers are voting with their wallets. Now all we need is to win!

The Independent Gaming Authority in South Australia has called for the banning of the sale of Keno from newsagencies among a series of proposed gaming reforms for SA announced today. The ABC news site has a story of initial reaction to this. Newsagents were represented at the IGA study by June Carter of Glenside newsagency and Australian Newsagents’ Federation (SA Branch).. A full list of submissions can be found here.

The loss of Keno by SA Newsagents would be a blow and needs to be considered carefully by Government. Small business jobs would be at stake.

With no winners last night, Powerball jackpot to $30 million this week. I’d expct traffic and sales to be up more than 20%. Our experiment last week with upselling worked so we will play in that space again.

To the many newsagent suppliers who read this blog I wish one of your would seize the opportunity of lottery jackpots. This Thursday Powerball offers a $20 million prize. Lottery sales will be up by around 20%, much of this as a result of additional traffic. Upselling across or near the lottery counter is easy and newsagents would welcome the opportunity to add value to a lottery product sale.

While entrepreneurial newsagents use jackpot traffic to boost sales elsewhere in their business, others, the majority, do not and they would wait for a supplier driven offer.

My pitch to suppliers is that a network wide offer attuned to easy upsell at or near the lottery counter would be ideal. I appreciate there are costs associated with creating and distributing such a product and that the risk in expecting newsagents to embrace the upsell tactic is considerable. However, until a supplier tries this we will not know if it works.

Personally, I know hat upselling around a jackpot is easy. In my newsagency, the team has had success with magazines, pens, other lottery product and newspapers. With at least twelve such jackpots a year the opportunities are regular yet still special.

I pitched this idea to Lovatts, the crossword folk, a year ago and it seemed to be too hard for them. Hopefully another supplier can come to the table with a timeless product offer which will work with lottery customers. What we need is the ideal win win win where suppliers, newsagents and customers benefit.

It’s good to see the Lotto payout fraud case getting more coverage.

This case is about whether Lotteries NSW (and possibly the newsagent’s insurance company) can leave the small business newsagent carrying the responsibility for employee fraud which seems to have happened because of poor Lotteries procedures.

The matter of breach of contract with NSW Lotteries is something newsagents need to investigate and discuss urgently. If a breach is proved, it’s likely you’re on your own.

A friend sent me some scratch tickets from the US. I liked it that they are bigger in size than the dollar tickets we get through Tattersalls. They also scratch more easily. They were no luckier but it’s the dream that counts right?

The announcement today that they have purchased the Golden Casket lotteries business is significant for newsagents in Victoria, Tasmania, Northern Territory and Queensland.

The management of Tattersalls’ lottery business is to move to Queensland under the management of Bill Thorburn. Thorburn is well regarded in the retail network and, obviously, by Tattersalls. This is a difference in practical retailer support offered by Tattersalls compared to Golden Casket – if the Casket approach is adopted across the Tattersalls network. For example, the Golden Casket in store collateral supporting instant lottery ticket sales and superdraws is more plentiful and robust than that from Tattersalls. Don’t get me wrong – I’m happy with what Tattersalls provides but I know that in this case the grass is greener…

Golden Casket pays a trail commission to retail outlets from online sales. Tattersalls does not pay such a commission. This trail commission was well negotiated by the Casket Agents Association in Queensland. Hopefully their successful approach can influence the seemingly ineffective Victorian Lottery Agents Association.

Another difference is in the area of who sells the products. In Queensland, the Government has enshrined legislation that latter products can only be sold by small business – with a definition tied to number of employees. Elsewhere in Australia no such protection of small business exists. Through this transaction there is an opportunity to focus the attention of other state governments on the leadership position taken by the Queensland government.

Now all we in Victoria need is certainty that Tattersalls retains its current licences.

The $21 million lottery superdraw (megadraw in some states) looked like being soft but then traffic increased Wednesday. Yesterday it was up further and today has been excellent. It still baffles me that non lottery newsagent suppliers do not provide tie-in product to push at the times of these traffic surges. We have our own promotions but would prefer something more national.

A common frustration among newsagents is the customers who ask you to check their instant lottery tickets when they know they have not won. Newsagents are frustrated because the checking takes time and often customers don’t buy anything. The icing on the cake comes when you say: “sorry, it didn’t win anything” and they responds with “I know but I wanted to be sure”.

Rather than wallow in frustration we are experimenting with trying to turn the prize check request into an opportunity. We give them one of our Magazine Club Cards with the pitch of: sorry, but you’re a winner if you buy your magazines from us! Then we hand them the Magazine Card which pitches our loyalty discount. Okay it’s corny. The idea is to embrace the opportunity and make it positive for us. The worst response we could get is a grunt and the best is that they wander into our magazine area and make a purchase.

Newsagents are blessed every day with fantastic traffic for newspapers, magazines and lotteries and we have to work hard to make every pair of feet worth as much to our businesses as possible.

Trying to turn ‘dead business’ – the lottery ticket check – into a browse and purchase elsewhere in the business is what retail is about.

This is how strong businesses are grown. Transaction by transaction, customer by customer.

Here’s what an instant lottery ticket dispensing unit looks like at the checkout counter of Tesco supermarkets in the UK. I expect that it’s this type of unit which Intralot would have placed at checkouts of Coles and Safeway if they will the instant ticket licence in Victoria.

Newsagents who do not want to see these units at supermarket checkout counters in Australia need to act now. The petition re the move by Greek company Intralot to setup in Victoria and partner with supermarkets is still live here. You have nothing to lose by letting your elected representatives know how you feel now.