Vietlott churns up lottery market
Vietlott churns up lottery market
Since its launch last July the American-style computerised lottery Mega 6/45 has been rapidly becoming popular in Viet Nam due to its large prizes.
It is organised by the Ministry of Finance’s Viet Nam Computerised Lottery One-member Limited Liability Company (Vietlott) in collaboration with Malaysia’s Berjaya Bhd under a 18-year business co-operation contract.
After Vietlott announced its first jackpot winner, a pork seller in Tra Vinh Province who won VND92 billion (US$4.03 million) last October, its lottery ticket sales surged from VND2.12 billion ($93,492) a day to VND11.2 billion ($493,920) within two months.
By December it was selling tickets worth VND14.2 billion daily.
Vietlott’s rapid ascent has not been good news for traditional lottery companies in the southern region, the country’s main market.
At a meeting in January in the Mekong (Cuu Long) Delta province of Soc Trang, many members of the Southern Lottery Council blamed Vietlott’s violations of rules for hurting their sales in the last quarter of last year.
In that quarter the average revenue of the remaining 21 members declined by 4.36 per cent though their full-year sales rose by 8 per cent to nearly VND66.7 trillion ($2.9 billion).
Vietlott grossed VND1.6 trillion overall, and VND1.3 trillion in the south.
Speaking at a seminar titled Transparency in the Lottery Market organised by Thanh Nien (Young People) newspaper last week, Dr Bui Quang Tin, a lecturer at the Banking University of HCM City, said, “Though Vietlott’s business activity is growing rapidly, it has not affected the traditional lottery’s market share.”
In fact, Vietlott helped vary the market, encouraging the traditional lottery companies to change their business strategies and offer the public new products, he added.
Dr Dinh The Hien, an independent economist, agreed, saying Vietlott was not a threat to the traditional companies, at least for now.
He rejected the idea that Vietlott created unfair competition by offering high-value prizes, saying each type of lottery has its own uniqueness.
Besides, the odds of hitting the jackpot are quite slim, of about one in eight million, compared to the one in one million for traditional lotteries.
In a market economy competition is fierce, but it encourages companies to offer customers more choices, change the way they interact with customers and improve the quality of products, he said.
To boost their sales, traditional companies in the south have recently raised their top prize from VND1.5 billion to VND2 billion.
Some lottery companies have even started selling tickets where buyers can write their own numbers instead of buying pre-printed numbers.
According to Hien, instead of competing to dominate the market, traditional lottery companies and Vietlott should compete but also co-operate to create a win-win situation.
They could set up agencies that sell both Mega and their own tickets or develop new products to offer customers more choices, he said.
A lucrative business
Computerised lottery, where the number is not printed on the tickets and buyers can enter their own, was first introduced in the US in 1975.
It has since spread world-wide. Cambodia has been having these lotteries since 2003.
The Vietnamese Government had wanted to modernise the lottery set-up in 1997, but it took until last year for that to happen with Vietlott’s entry.
With estimated sales of around VND75 trillion ($3.3 billion) last year, the lottery industry is very lucrative despite fierce competition, experts said.
Nguyen Thanh Dam, deputy general director of Vietlott, said the “world is flat” now, and some of his friends in Viet Nam buy lottery tickets in the US through friends and relatives.
If more Vietnamese turn to the US or neighbour Cambodia to buy lottery tickets if their demand is not met here, the country would see the money flowing out, he said.
