Three Reasons Why Lotteries Should Consider BYOD

Tablet with Square Device

This is the second post in a three-part series.

In our previous post, we defined BYOD (Bring Your Own Device) and gave an overview of its potential advantages. To consider the benefits of the BYOD model more closely:

First, this model potentially reduces the capital equipment that lotteries must supply to their retailers. Because the investment is roughly the same whether a retailer is among the 20 percent that typically produce most of the revenue, or the 80 percent that are less productive, adding new retailers involves both expense and risk. In the BYOD model, the retailer incurs some of the costs to offer lottery products. Not only does this reduce the lottery’s capital expenditures, it eases the barriers to entry for retailers that may already have the necessary equipment, including non-traditional lottery retailers.

Secondly, BYOD reduces the amount of specialized equipment needed to sell lottery. Space is valuable within any retail environment, particularly at the point of purchase, where other equipment and many products are competing for position. If a lottery can operate via the retailer’s existing equipment – for example, a tablet device with Square software for credit card processing – then it can coexist more easily. Add complementary advances like plain-paper printing and the advantages only increase.

I often see the Square solution used by small businesses, like my local bakery. They’re not selling any lottery today, but since they already have the Square device, they might consider it if they could access a secure lottery application on that device. A bakery is unlikely to want to install a set of lottery equipment, but if adding lottery sales is not invasive, there’s a better chance of increasing penetration with nontraditional trade styles.

Thirdly, BYOD can enable retail expansion and increased distribution at less risk for a lottery. If a retailer is generating enough sales results to warrant a dedicated lottery terminal with its enhanced performance characteristics, then the lottery can provide it.

Given this overview of the benefits, how would BYOD work in practice? Would retailers obtain the third-party device, or would the lottery supply it? How would the lottery application on the device be obtained and controlled? What type of service-level agreements would be appropriate? These are the types of questions we will address in Part 3 of this series, coming next week.

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