Lottery operator Sizekhaya targets bigger share of sport pools market

Lotto operator Sizekhaya is aiming for a bigger slice of the country’s lucrative sport pools market.

With sports betting growing in popularity across the country, the National Lotteries Commission (NLC) has mandated the lottery operator to increase interest in sport pools and, in turn, raise more money for good causes.

Sport pools require players to pay a fixed entry fee or stake to join a pool and are regulated under the Lotteries Act. They differ from sports betting, which is regulated by provincial gambling boards.

Sizekhaya COO Fundi Sithebe told the Sunday Times the NLC had placed a strong emphasis on growing participation in sport pools.

“The NLC has put a big emphasis on us to ensure we increase appetite around sport pools.”

Sithebe said bigger jackpots could help attract more players to the offering.

“It’s a pool product in the end, but if we educate and ensure, like what we have done with Powerball and Lotto, by building those jackpot prizes, it will start becoming a potentially compelling value proposition that competes with bookmakers.”

However, with 28% of its proceeds going towards good causes, Sizekhaya faces a potential disadvantage when competing with operators that do not have the same obligation.

Sithebe said the timing of the launch had also presented challenges.

“When we started in the first week of June, we were right at the start of the World Cup, so we couldn’t necessarily offer a whole [sports] offering.”

She said the start of the PSL and other international leagues had now created an opportunity to build a more compelling sport pools product.

“We must put in an effort to compete [in the sports pool market] because the money goes back to the good causes, as we are the only ones raising revenue for the good causes, while with others that money is not even staying in the country.”

Sithebe said Sizekhaya was entering the battle for a bigger share of the market with a focus on winning internationally minded customers.

“We can’t sit back and say it will happen through osmosis. It means we have to push it, and we have started pushing MatchPlay from some of the banking apps.”

MatchPlay is Sizekhaya’s sport pools game, which was piloted and is set to be fully rolled out.

“It is imperative for us to go and try to make a mark [in the sport pools space], whether we will be able to make a difference or not. It is fundamentally the right way.”

The intention is to maximise revenue from Sports Pools, for bigger prizes to be won by players, while increasing contributions to good causes

—  Jodi Scholtz, NLC commissioner

The NLC believes the national lottery operator has an opportunity to grow its presence in the sport pools market.

NLC commissioner Jodi Scholtz said that, unlike some other lottery products, Sports Pools prizes are based on ticket sales, with a percentage of those sales allocated to prizes.

“Therefore, if ticket sales are high, prizes will be high, and vice versa. Sports Pools, like the National Lottery, contribute to the funding of worthy good causes in the charities, arts, culture and national heritage, sport and recreation sectors.”

Scholtz added: “The intention is to maximise revenue from Sports Pools, for bigger prizes to be won by players, while increasing contributions to good causes.”

Sithebe described the first three months of running the lottery as “an interesting and exhilarating” exercise.

She said extensive preparatory work, including pilots, had taken place in the background before Sizekhaya went live across 6,000 terminals on June 1, when it took over the running of the lottery from Ithuba.

“In the history of the 26 years of the lottery in South Africa, our day one had the length and breadth of the country making sure that the lottery was available to South Africans.”

Sizekhaya launched with a jackpot of almost R150m. Its offering was slightly different from that of the previous operator, with an emphasis on producing more millionaires rather than fewer, larger jackpots.

Three jackpot winners subsequently walked away with about R45m each after matching all the numbers on their lottery tickets.

Sithebe said the initial jackpot was a pleasant surprise.

“It [the first big jackpot] was a pleasant surprise. Two weeks before we took over, the Lotto, which is never seen, had a R120m jackpot, and for Lotto that’s not heard of. We were fortunate that there was a rollover from the previous operator to us.”

Sizekhaya is also promising further innovation, including rolling out a QR code-based system that will allow players to participate in the lottery through their smartphones without having to queue to buy tickets.