Illustration: Steven Moore
Last year, a new player entered Australia’s ‘sharing economy’. Likened to Uber, Lottoland has been described as a ‘market disrupter’ to the Australian lottery industry.
Lottoland is a lottery betting service that allows Australians to bet on the outcomes of large overseas lotteries, with the chance to win multimillion-dollar prizes if they select the winning numbers.
Established in 2013, Lottoland is based in Gibraltar and also licensed in the UK, Ireland and now Australia. Lottoland (Australia) Pty Ltd holds an online sports bookmaker licence issued in the Northern Territory.
Under this licence, Lottoland can accept bets on Australian and international lotteries that are approved as declared betting events by the Northern Territory gambling regulator. It offers its services to Australians in all states except South Australia, where gambling laws don’t allow betting on lottery outcomes.
A ticket to dream
In most countries, only local residents can buy tickets in the lottery. This means it is difficult or even unlawful for Australians to buy tickets in overseas lotteries, including in Europe and the United States, where jackpot prizes are regularly in excess of $100 million.
To overcome these restrictions, Lottoland allows Australian customers to open an account and place bets on the outcomes of overseas and Australian lotteries. Winning customers are paid the amount equivalent to a winning ticket in the lottery itself.
While large prizes can be won in lotteries, the chances of winning are extremely slim. For example, you have a 1 in 76 million chance of winning Division 1 in Australian Powerball. You are much more likely to be killed by lightning (1 in 1.6 million) or die from a venomous bite or sting (1 in 1 million). Even smaller prizes can be hard to win, with 1 chance in 110 that you will win a Division 8 prize in Australian Powerball. The chances of winning the jackpot prize in an overseas lottery are infinitesimal, with the odds in some more than 1 in 250 million.
You are much more likely to be killed by lightning or die from a venomous bite or sting.
It is one of the paradoxes of lotteries that the large jackpots attract the most buyers, even though the actual odds of winning them are highly prohibitive. Such odds mean that buying a ticket in the lottery is essentially buying a ticket to dream, with the same satisfaction and substance.
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Lottery on steroids
The multiple possibilities to bet, coupled with pipedreams and astronomical odds against winning, give Lottoland the potential to make a larger contribution to harm than Australian lotteries tend to do.
Lottoland’s online bookmaking licence also allows it to offer customers incentives such as welcome bonus bets, two-for-one offers and special bonus prizes, which local lottery operator Tattersalls cannot offer under its state-issued lottery licence.
While it does not represent continuous gambling in the same way as pokies and casino games, Lottoland can increase gambling frequency, which has been shown to increase the risk of developing gambling problems over time. Because multiple combinations of bets are possible, a very large amount of money can be invested while still making a comparatively small dent in the odds of winning.
Lottoland can increase gambling frequency, which has been shown to increase the risk of developing gambling problems over time.
The foundation’s most recent Study of gambling and health in Victoria found that in 2014 lotteries were the top gambling activity for people with significant gambling problems, with 67.4 per cent playing Lotto, Powerball and the Pools.
While lottery is a popular form of gambling for many people, the bets are usually small and infrequent. With Lottoland, the opportunities and incentives to bet are much higher than in traditional lotteries. It is still too early to observe the effects of this product, but, logically, there are good reasons to be concerned.