There many guidelines, taxation, state and federal regulations.
Lottery is gambling and involves the selection of numbers.
The business is legal in some countries and a huge
revenue earner for the governments. And in other countries there is an outright
ban on such activities.
Before setting up your enterprise you need to study
federal and state laws in your country. The organizers of lotteries have
different format such as purchase of tickets, selection of numbers and multiple
entries.
The prize money could be fixed, based on multiplier numerics,
fixed percentage of the receipt or 50% of the revenue. The chance of winning lotto
varies and is determined by various factors. The game is patronized by low and
middle class workers dreaming of big fortune and luck. Here are ideas on how to
start a lottery business.
What
you need to start a Lottery Business
There are a few things you need to start the business. You
need funds, insurance cover, certificate of incorporation and operational
license. Others are employment agreement, business plan, non disclosure
agreement and business license.
- funding
- insurance cover
- certificate of incorporation
- operational license
- employment agreement
- business plan
- non disclosure agreement
- business license
- technology
How
to Start a Lottery Company
Locating
the Business
The location is critical to the success of the
enterprise. The choice location should have access to your potential customers.
To find ideal locations carry out a feasibility study and
conduct a survey. Write a lottery business plan and study your competitors.
Ideal geographical locations are urban towns with huge population.
Make sure the location is easily accessible and convenient for your customers.
Apart from establishing a terrestrial office you need to
leverage on the internet. Online gambling accounts for 50% of sales of a
lottery company.
To go online you need a license from your regulatory
body. Make sure the category of license you apply for accommodates both terrestrial
and online games. Common types of internet games are SMS, USSD, online games
and mobile.
Lottery
Technology
Every lottery company needs serious investment in
technology. The technology is needed to provide secure services, data storage
and game systems. They should be well secured with latest software
Licensing
and Permit
This licensing and permit procedure is based on the
national lottery regulatory commission of Nigeria. To operate a lottery the
company is required to have an operational license and permit.
The company must submit a letter of application to the
director general National Lottery Regulatory Commission. The letter should
contain an express of interest in a named lottery business.
The next step is to obtain a prescribed form with a non
refundable fee. The fee is determined by the commission based on the category
of lotto you want to establish. You submit the completed application form you
need with the following documents.
Documents
that Accompany an Application Form
The documents are a certificate of incorporation and
particulars of directors (Form C07). Others are a copy of memorandum and
article of association.
More documents are evidence of capital base from your
bankers and organizational profile. Add evidence of technology to play the
lotto, detailed accounting, security system and administration.
You are required to submit evidence of clearance from
relevant agencies and detailed rules of your intended lottery game.
Documents
- a certificate of incorporation
- particulars of directors Form C07
- a copy of memorandum and article of association
- evidence of capital base from bank
- organizational profile
- evidence of technology to play the lotto
- detailed accounting
- security system
- administration
- evidence of clearance from relevant agencies
- detailed rules of your intended lottery game
Post
Grant of License or Permit
The company should
establish a Price Fund account for the named lottery. The statutory payment of
20% of prize value made to the National Lottery Trust Fund to safeguard lottery
players.
Insurance
The high risk factor requires a good insurance policy.
Some insurance policies to consider are liability insurance, contractual bonus
sports insurance and price insurance.
Others are redemption rebate insurance and workers
compensation insurance. Find out from an insurance expert the right policy to
take.
Lottery
Categories
There are different types of lottery games, however the
basic principle are the same. Lotto’s generally revolve around matching numbers
drawn by the lotto company.
You have the daily lotto, mini lotto and standard lotto.
Others are the multi-state lotto, quick picks, scratchers and the seven number
lotto.
The standard lotto is when a player picks six numbers
from a specific range of numbers like (Baba Ijebu). Daily lotto’s are drawn one
a daily bases while multi state lotto’s offers large jackpot prices.
There are some lottery categories covered by the national
lottery regulatory commission. The categories are online lotteries, promotional
lotteries and sports lottery.
Others are USSD lotteries, charitable lottery, and
lottery concierge services. They also accommodate short messaging
service(SMS)lottery.
- daily lotto
- mini lotto
- standard lotto
- multi-state lotto
- quick picks
- scratchers
- 7 number lotto’s
- standard lotto
- online lotteries
- promotional lotteries
- sports lottery
- USSD lotteries
- charitable lottery
- lottery concierge services
- short messaging service (SMS)lottery
How
Lotteries are funded
There are two ways lottery companies fund price money. The
use an insurance company to underwrite the game or uses gamers funds. To use
gamers funds they need to sell enough tickets to cover the price payouts.
What
Differentiate your Company?
The business is highly challenging and securing a license
is difficult. To succeed you need to create a buzz and differentiate your
company for competitors.
A simply way is to offer gamers better odds or price
money. Another way is to make the ticket affordable and easy to buy.
Payment
and Prices
The mode of payment for huge lottery prices depends on
the organizers. Contrary to expectation in the United States of America there
are two options.
The winner may chose to collect a lump sum or annuity
payment. The lump sum payment is significantly lower than the advertised
winning.
This could account for a reduction in earning to 1/3rd
the actual prize money. This is also because of tax on winning. However in some
countries the winning do not attract any personal tax especially for those who
choose annuity payment.
Marketing
One of the most important aspects of the business is
marketing. You need to reach your target audience and attract participation.
It is important you have a marketing budget and create a
website. Use direct marketing, television advertisement and radio.
Use newspaper publications, banners and billboards.
Increase awareness through social media platforms and web advertisement. Use
email marketing, provide incentives and enlist sales agents.
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