Although much of the world remains bogged down due to the global pandemic, business leaders remain focused on doing what needs to be done to make sure their businesses not only survive but prosper. One of the most successful ways to ensure prosperity is to apply up and coming technology to outdated business models. Blockchain technology is defined as a decentralized, distributed LEDGER that records the provenance of a digital asset. While that may sound like a very niche technology, the potential is unlimited. In fact, Forbes recently published an article outlining many emerging uses for the technology. Blockchain tech is so versatile that it is even being applied to lottery platforms.
Traditional Lotteries are Falling Short
When I was a child (a long, long time ago), I remember my parents would buy lottery tickets twice a week in anticipation of the weekly draw. Although they never won big, they seemed to enjoy it. Unfortunately, over the years, that joy seemed to dissipate. The industry took its success for granted and rather than dedicate resources towards innovation, lotteries became stale.
Traditional lotteries simply don’t do enough to keep their players engaged. There is no social component which for many people is really important, especially if a business wants to attract millennials. Although a lottery may offer 1 or 2 big weekly prizes, there isn’t much else to look forward to. It’s basically an all-or-nothing proposition. Lastly, because of the expensive licensing procedures involved, there is an extremely costly barrier to entry which greatly reduces the number of platforms that are able to conduct lotteries.
These issues, combined with the risk of fraud, have resulted in an industry that may soon go the way of the dinosaur. Fortunately, a few promising startups are attempting to completely reshape the industry through the implementation of blockchain technology.
Why Blockchain?
Blockchain tech has a lot of qualities that make it the right choice to modernize certain business models. This is certainly the case with respect to lottery platforms. A few of these qualities include transparency, reliability, immutability, decentralization, and efficiency. We already know where traditional lotteries fall short as mentioned previously. Due to the nature of blockchain, it possesses all the necessary requirements to fix the issues that continue to hold back traditional lottery platforms.
Several startups are attempting to implement blockchain technology into their modernized lottery platforms that have the potential to completely reshape the industry as we know it.
New Market Participants
One of the issues holding back new entrants is the expensive and inefficient licensing procedures typically involved. However, through the use of blockchain technology that is no longer an issue and several startups are beginning to make significant progress toward reshaping the lottery industry.
A company that people certainly need to be familiar with is Fire Lotto. Fire Lotto is a global blockchain lottery built on the Ethereum protocol. The company’s lotteries include a draw and an instant win game. This platform creates lottery tickets which are impossible to forge by using the cryptocurrency ETH as the primary method of payment so that collection and distribution of winnings are completely and totally transparent. Although Fire Lotto is one of the major players in the space, some users have reported that they were asked for their private keys when attempting to purchase lottery tickets. Given that many users in this space place a huge value on privacy, this would seem to be a rather large issue.
A second business that deserves a strong mention is Lotto Nation. Lotto Nation is the world’s first truly decentralized lottery platform built to run on the blockchain. It is fueled by AI which allows businesses, non-profit organizations, and individual users to create their own lotteries that are able to integrate the social connection sorely lacking in today’s traditional lotteries. One of the biggest differentiators between Lotto Nation and its competitors is that the company backing Lotto Nation, Winners Group, has a strong record of building successful lottery sites for the past two decades.
A third blockchain-based lottery platform is Quanta. The Quanta lottery, founded by experts in both fintech and regtech, is a decentralized gaming organization that combines advanced decentralization techniques like smart contracts with business practices that are compliant with government regulation. Quanta’s primary innovation lies in the manner by which lottery winners will be selected – the Ethereum-powered RNG protocol known as RANDAO. Although Quanta is certainly a promising startup, it isn’t as well-known as Fire Lotto and Lotto Nation. Additionally, Quanta lacks the high engagement games such as daily draws.
Another large competitor that readers should be aware of is Lottoland. Much like Fire Lotto and Lotto Nation, Lottoland democratizes access to some of the world’s largest lottery games such as Mega Millions, Powerball, and EuroMillions. However, Lottoland has yet to implement any sort of blockchain technology or AI. Additionally, the platform doesn’t allow businesses, charities, or individuals to launch their own lotteries. Of course, just because Lottoland hasn’t implemented blockchain tech doesn’t mean they won’t eventually which is why it’s important to remember the name. Given its size, innovation is never out of the question.
Summary
It’s always fascinating to learn how new technology is attempting to innovate an industry that is in desperate need of it. This has happened countless times in our country’s history and many more times across the world. Given that the global lottery industry is expected to become a $380 billion market by 2025, it’s no wonder that several companies are attempting to earn a piece of that action. As blockchain tech continues to make inroads in the lottery industry, consumers should definitely keep an eye on the companies mentioned in this article.
