iLottery 2.0 (Part 1): From Experiment to Infrastructure
This article is based on a panel discussion held at PGRI Lottery Expo Nashville on November 6
iLottery 2.0 (Part 1): From Experiment to Infrastructure
The lottery industry has crossed an invisible but decisive threshold. Even in the U.S., iLottery is no longer an experiment, a pilot, or a speculative future-state. It is infrastructure.
That was the clear, and data-backed, message from the iLottery 2.0 panel, moderated by Khalid Jones, Executive Director of the Virginia Lottery, and featuring senior executives from across the lottery ecosystem. The discussion deliberately moved beyond early product life-cycle discussions of the past and toward a more mature examination of what comes next: scale, integration, collaboration, and long-term relevance.
“iLottery isn’t new anymore,” Jones told the audience early in the session. “We all know what iLottery is, and why it has become such a vital part of our portfolio. The question now is how we evolve it, how we evolve our business models, our strategies and methods, and ourselves.”
To ground the conversation, Jones began with a historical and demographic comparison. In year 2000, Powerball states represented a combined population of roughly 39 million. By 2006, Powerball participation surpassed 100 million. “Today,” Jones noted, “states that offer either eInstants, draw-only online sales, or are moving toward iLottery represent about 100 million people. On a population basis, iLottery today is where Powerball was in 2006.” In other words, iLottery today occupies a formidable space in the lottery, and even in the broader games-of-chance market-place.
With that framing, Jones posed the central question of the panel: Can lotteries of the future survive without a digital offering?
Thinking of Digital not as a Channel, but as the essential Consumer Interface
Shannon DeHaven, Vice President of Digital Engagement at Pollard Banknote, offered a concise answer. “When we talk about digital, we’re not just talking about iLottery,” DeHaven said. “We’re talking about how consumers interact with your products. So, no. I do not think that lotteries can survive, and will not thrive, if they don’t build out their digital UX, consumer-facing presence, and offerings.”
Several panelists emphasized that the notion of “digital” should not be reduced to online sales. Tina Wolf, Vice President of Business Development at Aristocrat Interactive, stressed that digital engagement now defines the brand experience itself. “It’s not just about selling online,” Wolf said. “It’s about how players engage with your brand. In the long term, and probably sooner than later, we’ll see product lifecycle curves start to tail off if we don’t adapt.”
Andrea Williams, Vice President of Marketing at Intralot Inc., reinforced that perspective by pointing to familiar consumer behavior. “Think about Starbucks,” Williams said. “The app isn’t a nice-to-have. It’s part of the experience. Digital is no longer optional, even for products that are fundamentally physical. That same mindset applies to lottery. The digital experience has to be thoughtfully integrated into the overall player journey.”
Jason Lisiecki, Executive Vice President Global at IWG, added that even lotteries not yet selling online should begin building digital foundations. “Even if you don’t offer iLottery today, having a digital platform is paramount,” Lisiecki said. “It’s where people are, and it’s what enables you to build a player database. The most successful iLottery launches we’ve seen — anywhere in the world — are built on databases developed over years.”
From Patchwork Adoption to National Momentum
Jones next asked panelists to identify the single most important takeaway for lotteries thinking about iLottery today.
Stephanie Weyant, Deputy Executive Director of Marketing & Products for the Pennsylvania Lottery, pointed to geography — and opportunity. “When you look at the map, most iLottery adoption is concentrated on the East Coast,” Weyant said. “Broader coverage across the U.S. would benefit all of us. A rising tide lifts all ships.”
She argued that states with established iLottery programs stand ready to help those still on the sidelines. “Anything we can do as an industry to learn together and support each other is critically important,” she said.
Lisiecki framed that idea even more simply. “Learn,” he said. “This is one of the few industries where lotteries can openly talk to each other. Vendors are willing to share their extensive global experiences. iLottery is constantly evolving, and the best thing you can do is learn from peers who’ve already walked the path.”
Williams emphasized how much the industry has matured. “This isn’t 2015 anymore,” she said. “We’re no longer debating whether iLottery harms retail. Years of data clearly show it does not cannibalize retail sales. When executed thoughtfully, cross-promotions and an integrated, multi-channel marketing approach actually strengthen retail performance.”
That body of data, Williams added, has become critical in legislative discussions. “When states evaluate iLottery, it comes down to clear communication, research, and evidence,” she said. “Today, we can demonstrate that iLottery is a net positive for lotteries and the communities they serve.”
Wolf framed the issue in mission-driven terms. “We are on a mission,” she said. “And that mission is growing funds for good causes. When I started in this industry, growth came from things like Powerball cross-selling and game tweaks. Going forward, that alone won’t be enough to fuel sustainable growth.”
Wolf noted that players who engage both online and at retail are demonstrably more engaged overall. “It’s no different than Starbucks or Target,” she said. “Omnichannel players are more valuable players.”
DeHaven concluded the segment with a warning about accessibility. “Our products are simply not as accessible as they once were,” she said. “iLottery helps solve that. Consumer behavior is changing daily, and we can’t keep up fast enough. My hope is that the map showing U.S. lotteries with online offerings fills in quickly and that more states move to adopt iLottery.”
Coexistence, Not Conflict: iLottery and Retail
Jones then turned to one of the most persistent questions surrounding iLottery: How to ensure that iLottery complements and augments your retail channel?
Weyant, representing one of the longest-running U.S. iLottery programs, emphasized that alignment must begin inside the organization. “It starts internally,” she said. “If leadership isn’t aligned, that misalignment shows up externally. In Pennsylvania, we have integrated teams responsible for growing sales across all channels.”
She recalled early concerns among sales staff. “Some people worried about losing their job. That didn’t happen,” Weyant said. “You have to explain the ‘why’ — the strategy — so everyone delivers the same message to retailers.”
Jones asked vendors how they support lotteries in telling that story.
Williams also highlighted the importance of active retailer engagement. “It’s critical that retailers understand this is not a single-channel strategy, but an interconnected ecosystem,” she said. “The objective is growth across the entire portfolio. A more engaged omni-channel player ultimately becomes a stronger retail customer.”
Lisiecki offered a consumer-centric analogy. “Think about your favorite brand,” he told the audience. “Mine’s Titleist. When you get something physical from that brand, it feels good. Retail isn’t going anywhere because it alone provides that tactile, personal, real-world experience that consumers, i.e. people, will always crave.”
He argued that physical tickets remain a powerful differentiator. “There’s something meaningful about holding a ticket, scratching it, feeling that excitement,” Lisiecki said. “That’s why retail and digital complement each other.”
Wolf added that lessons from other industries reinforce the same conclusion. “My favorite brand is Rent the Runway,” she said. “It’s incredibly digital and data-driven, but there’s still a tactile, physical product involved. The key is personalization and engagement, not replacement.”
She urged lotteries to leverage the experience of peers. “You won’t be the first lottery to go online,” Wolf said. “Talk to others who’ve been through it. From the partner side, we can provide transparent data — including third-party data — to help tell the story.”
DeHaven reframed the issue: “These aren’t iLottery conversations,” she said. “They’re lottery conversations. Different channels. But, there’s one brand. One mission.”
She cautioned that data alone is not enough. “You can give retailers numbers, but you also need a strategy that shows how you’re continuing to support them,” DeHaven said. “When they understand the broader plan, the numbers make sense.”
iLottery 2.0: A Mature Conversation
If iLottery 1.0 was about permission—legal, cultural, and operational—then iLottery 2.0 is about performance. The panel made clear that the industry has entered a new phase: one defined less by debate over whether iLottery belongs, and more by how effectively it is integrated into the broader lottery enterprise.
As Jones said, “We’re past the introduction. Now it’s about execution.”
For lotteries facing mounting competition, shifting consumer behavior, and increasing pressure on revenue growth, the message from this panel was unambiguous: digital is not the future of lottery — it is the present.
iLottery 2.0 (Part II): Competition, Coexistence, and the Next Frontier
If the first half of the iLottery 2.0 panel established that digital lottery is no longer optional, the second half confronted a more uncomfortable question: What happens when lotteries are no longer the dominant digital gaming option in their own markets?
Moderator Khalid Jones moved decisively to examine competition from sports betting and iGaming, the economics of digital margins, and how lotteries can position themselves strategically rather than defensively in an increasingly crowded online marketplace.
Jones began with a data point from Virginia that neatly encapsulated both the opportunity and the anxiety surrounding iLottery.
“In FY2024, for the first time, our gross iLottery sales eclipsed our gross retail sales,” Jones said. “That raised eyebrows. There was a real ‘what’s going to happen now?’ moment.”
But the headline told only part of the story. “Yes, we set a record for iLottery,” Jones continued. “But we also set a record for retailer compensation. Far from being in conflict, we saw overall lift — largely driven by omnichannel play.”
Jones added that a five-year retrospective showed retailer compensation was higher every year after iLottery launched than in the year prior. “I recently spoke to a retailer association,” he said. “The head of the association told the room, ‘That was our fear—and we were just flat wrong.’ That matters.”
From Market Leader to “Cheap Acquisition”?
Jones then introduced a quote that reframed the competitive discussion in stark terms. The comment, made by the CEO of DraftKings during a Q4 earnings call, described lottery as a “cheap acquisition vehicle” for sportsbook operators — especially during billion-dollar jackpot cycles. “So the question is,” Jones asked the panel, “how scared do we need to be? Are we now just minnows in the ecosystem—or is there room for real partnership?”
Jason Lisiecki was quick to strike a measured tone. “I think there is room for partnership,” Lisiecki said. “But lotteries need to be careful. Timing matters. Product mix matters. Structure matters.”
He acknowledged both upside and risk. “If a lottery product can get more eyeballs on a platform that also sells sports betting, maybe a commission structure makes sense,” he said. “But it depends on what your iLottery program looks like and what casinos offer in your jurisdiction.”
On the core question of competition, Lisiecki drew a clear distinction. “I believe sports betting and iLottery are complementary,” he said. “They don’t compete. We’ve seen both grow rapidly in the same markets. They’re different value propositions.”
When the Lines Blur: iGaming vs. iLottery
Where Lisiecki did see friction was between iLottery and iGaming. “That’s closer to competition, and revolves around focus,” he said, pointing to Canada as a case study. “Atlantic Lottery launched digital instants first, then casino, and now proactively distinguishes lottery players from casino players in their product offerings. Today, they have the largest digital instant program in Canada.”
By contrast, Ontario Lottery — in a much larger market — operates iGaming that competes directly against commercial operators, has chosen to blur the lines. “They mix their iLottery games with their iCasino games,” Lisiecki said. “So yes, iGaming and iLottery are closer competitors.”
Jones turned to Stephanie Weyant, whose jurisdiction experienced the launch of iLottery, sports betting, and iGaming expansion nearly simultaneously. “We have one of the most competitive gaming markets in the U.S.,” Weyant said. “Those sectors are all regulated, but there is a very active unregulated gaming market as well.”
Rather than reflexively rejecting partnerships with “competitors”, Weyant argued for a broader rethink. “I actually asked ChatGPT last night: can lotteries, sportsbooks, and casinos work together?” she said. “It immediately said yes — and used Pennsylvania as an example.”
She noted that land-based casinos in Pennsylvania are now among the lottery’s strongest retail partners. “If structured properly, the relationship can be mutually beneficial,” Weyant said. “The competitive landscape is evolving. While we do need to face reality and mitigate risks, we also need to be open minded to recognize new opportunities.”
She illustrated the competitive imbalance with a striking comparison. “In Pennsylvania, for instance, there are about 35 online gambling sites and apps — and one lottery site,” she said. “We have nearly 10,000 retail locations. So, we did figure out distribution in the physical world. Now we have to ask: how do we do that in the online world?”
Despite generating nearly $1 billion in online gaming revenue statewide, the Pennsylvania Lottery holds roughly a 1% share of that market. “We need to think differently if we want to grow beyond 1% market-share,” Weyant said.
Lessons from Michigan: Even First-Mover Advantage has its Limits
Shannon DeHaven brought a longer historical view from Michigan, where iLottery launched well before online casinos and sports betting.
“That first-mover advantage matters,” DeHaven said. “Like Lyft versus Uber—whichever you download first, you tend to stick with.”
But that advantage can evaporate quickly. “We went from being the only show in town to having many online casinos appear almost overnight,” she said. “Based on my recollection, they spent, in one month of TV advertising, what the Michigan Lottery spent in an entire year on all advertising.”
More concerning was the structural imbalance. “They could afford to lose money,” DeHaven said. “They spent heavily on aggressive bonusing to acquire customers, which state lotteries are not typically allowed to do. The expenditure on advertising and aggressive bonusing minimized their taxable profits. So, the first 18 months were a period of minimizing contributions to the state while they built their customer base. Lotteries don’t have that option. We have a mandate to return money to the state.”
Her warning was pointed. “Yes, we should expand our thinking,” she said. “But we also need to be realistic about what partnerships look like over five or ten years — not just the first year or two.”
Jones underscored that regulatory structure fundamentally shapes these relationships. “In Virginia, we regulate sports betting,” he said. “In other states, lotteries operate it. ‘Friend or foe’ can depend on the jurisdiction.”
Preparing for iLottery: Roadmaps, Acronyms, and Readiness
When the conversation turned to jurisdictions exploring iLottery, Andrea Williams outlined a practical, experience-driven framework.
“I think about it in three pillars: Law, Lanes, and Love,” Williams said.
Law focuses on legislative alignment and a clear understanding of what existing statutes permit. Lanes speaks to operational readiness, including CRM capabilities, player account management, and the underlying digital infrastructure. And Love centers on stakeholders. “Retailers need to be part of the conversation early,” Williams said. “Surprises create friction.”
Tina Wolf responded with another polestar: GROWTH.
“Grow your player base now,” Wolf said. “Do the Research and talk to peers. Orient stakeholders. Win players through experience. Tender a competitive RFP. And build a Hungry team aligned to the mission.”
Jones connected those ideas to a broader communications strategy. “By the time you have the big conversation with legislators about iLottery, everyone should already understand the reasons,” he said.
Weyant agreed that preparation is easier today than when early adopters launched. “When we launched in 2018, there were only a few states to learn from,” she said. “Now best practices are well established.”
Her advice was blunt. “Educate yourself now. Be ready. When your state comes looking for more revenue, iLottery delivers real money for real programs.”
Systems, Content, and the Economics of Play
Lisiecki argued that procurement strategy matters as much as product strategy. “If I were doing it again, I’d strongly consider separate RFPs—one for the iLottery system, another for eInstant content,” he said. “That keeps pricing sharp and ensures the best offerings from day one.”
He noted that roughly 90% of iLottery revenue comes from eInstants, making those choices especially consequential. But future growth, he said, depends on portfolio diversity. “Casinos do a great job merchandising exploratory content — what they call ‘arcade’ games,” Lisiecki said. “That’s an untapped opportunity for lotteries: test new play styles without overcommitting.”
Jones then turned to the margin challenge inherent in eInstants. “More players are migrating to online platforms,” he said. “But we still need lottery-playing experiences that support margins for good causes.”
Weyant explained how Pennsylvania has adapted. “We’ve increased payouts over time — from 85% to around 90%—to stay competitive,” she said. “We can’t match casinos head-on, but we can leverage brand trust and adjust thoughtfully.”
Williams noted that payout strategy varies by market. “In Georgia, we took a measured approach to launching eInstants,” she said. “As the player base matured, we adjusted payouts over time. There is no one-size-fits-all model.”
DeHaven emphasized experience over pure payout. “A 10% payout change is where players really feel it,” she said. “But breadth matters too. You need different products for different player segments.”
Entertainment, Experience, and the Long Game
When asked to summarize iLottery in a word or two, panelists converged on a common theme.
“Technology,” Wolf said.
“Fun and fast,” DeHaven added. “No friction. That’s the expectation now.”
Wolf framed it in broader consumer terms. “I don’t think players are thinking ‘competition,’” she said. “They’re choosing entertainment options in the moment. Lottery still has a trusted place if it stays relevant.”
In a closing exchange, Jones posed the hardest question of all: how to persuade skeptical governors and lawmakers.
Williams challenged the framing itself. “I’d love to stop saying ‘iLottery’ altogether,” she said. “It’s just lottery. This is about modernizing the brand—not selling a channel.”
Lisiecki warned of stagnation. “If lotteries can’t sell products online, that’s a real risk,” he said. “Everything else in the world is sold online. If we don’t invest in technology, it’s only a matter of time before growth will stall.”
Weyant returned to readiness. Commenting on a word cloud that displayed the audience response to the question “What word comes to mind regarding iLottery?” which indicated “Impossible” as the most prominent word that describes their own state posture towards iLottery, she said, “that breaks my heart. Legislatures change. Budgets change. The key is being ready when the window opens.”
Jones closed with a reminder that coexistence with competition, while complex, is achievable. “The question isn’t whether digital competition exists,” he said. “It’s whether lotteries are prepared to meet it, and shape their destiny on their own terms.”
If iLottery 1.0 was about permission, iLottery 2.0 is about positioning. The industry’s next chapter will be written not by avoiding competition, but by understanding it, structuring around it, and staying relentlessly focused on the mission that makes lottery different from every other gaming option on the screen.