Ohio Lottery sales are transitioning to online. Investors have taken notice so as not to miss the “next big thing.”
Cleveland Browns owner Jimmy Haslam is one of them. Haslam Sports Group (or HSG) has invested in mobile lottery platform Jackpot.
Online lottery sales are not allowed in Ohio despite efforts to change that over the years. However, with Ohio sports betting set to launch Jan. 1, online Ohio lottery sales might be just around the corner.
The dollar amount of HSG’s investment in Jackpot was not disclosed. Haslam’s firm is one of several high-profile backers of Jackpot. Investors include the Kraft Group, FanDuel CEO Michael Rubin and DraftKings CEO Jason Robins.
Sports figures who have invested include Boston Red Sox President Sam Kennedy and Philadelphia 76ers players James Harden and Joel Embiid.
What is Jackpot?
Jackpot’s business model is relatively simple. It wants to capitalize on the massive $100 billion lottery industry, which, for the most part, is a cash market. Lottery customers typically play by buying tickets with cash at lottery retailers and kiosks.
Jackpot and other companies like it see an opportunity to take transactions mobile. Not only does moving to mobile make transactions easier, but, in theory, it will attract mobile-first customers who don’t carry cash. A 2020 survey from Travis Credit Union found that only 16% of respondents said they carried cash all the time. More than half of respondents were willing to move to a cashless system.
Jackpot’s app would remove the cash barrier that may prevent people from participating in the lottery. It would allow players to buy tickets from anywhere, then pick their numbers and see their ticket in the app. Jackpot CEO and co-founder Akshay Khanna told CNBC that he sees the app’s potential.
“We certainly think this will appeal to a potentially younger and more diverse demographic. It’s one of the reasons why states … are supportive of this model. Because one of the goals here is to expand this product to people who maybe traditionally would not have been those that purchase lottery tickets.”
If Khanna’s name sounds familiar, it should. Khanna is the former general manager of StubHub’s North America operation. He spent more than two years as the 76ers’ Vice President of Strategy.
Jackpot isn’t the only company trying to capitalize on mobile lottery sales. New York-based Jackpocket has already launched in 11 states. It is the official mobile lottery partner of the Colorado Rockies, Texas Rangers, Minnesota Twins, New Jersey Devils and New York Jets.
In a recent press release, Jackpocket CEO Peter Sullivan said growth is booming in the digital lottery space.
“Only three months into 2022, we’ve already seen incredible growth in the digital lottery space since last quarter and most drastically since last year. It’s clear people are opting for digital solutions in all areas of their lives.”
HSG’s other investments
HSG’s portfolio is heavy on sports-related companies. It has invested in eSports and entertainment company Misfits Gaming Group, the WNBA and sports tech company StatusPro. Other investments include sports marketing company Cast Iron Media and sports and fitness investment firm Courtside VC.
Jackpot is one of several non-sports-related companies HSG has invested in. Others include event-ticketing platform Lyte, Graham + Fisk Wine in a Can and facial recognition firm Wicket.
Status of Lottery in Ohio
The Ohio Senate recently passed legislation to bring internet lottery to the Buckeye State. But facing opposition from Ohio Lottery retailers, it seems unlikely to make it through the House this year.
The bill authorizes the Ohio Lottery Commission to operate internet lottery games. But the House recessed for its summer break after passing the bill and won’t have the opportunity to address the bill until after it returns Nov. 16 following the elections.
Lawmakers believe they will need to reach a compromise with retailers before getting a law through both the House and Senate. The debate over iLottery in Ohio will likely continue into 2023.