Table tennis, anyone? ALC revenues gutted by pandemic

A Ukrainian table tennis tournament, Taiwanese league basketball, professional Nicaraguan soccer and obscure golf matchups on something called the Outlaw Tour were all on the menu for betting in New Brunswick this week as the Atlantic Lottery Corporation hunts for ways to salvage revenues that have been gutted by the COVID-19 crisis.

"Many of our customers have remained active," wrote ALC's Jennifer Tulk in an email about the unusual events the corporation has been taking wagers on for the past month.

"We've been maintaining a long list of events to keep our players entertained."

Lottery revenues generated by ALC are a top 10 source of income for the New Brunswick government — more important than tobacco taxes, motor vehicle registrations or Crown timber royalties. 

Instagram/Setka Cup

The Crown corporation has not given specific figures, but the COVID-19 pandemic has hit its operations hard and the province's budget projection of $160.9 million in lottery revenue for the year, made just last month, already looks like a wishful thought from better days.

Problems began at midnight on March 15, five days after New Brunswick's budget was presented in the legislature, when concern about the pandemic among regional governments forced ALC to turn off all 6,200 of its video lottery terminals in the region, including nearly 2,000 in New Brunswick.

In normal times, video lottery accounts for more than half of ALC's net revenues, generating more than $1.1 million per day from players who use them. In March, those amounts fell to zero overnight.

Mike Heenan/CBC

At the time of the shutdown, then ALC president Brent Scrimshaw said the video lottery suspension would last for "two weeks" and then be reassessed. Four weeks later, the machines are still silent with no hint of when they might restart.

Adding to its troubles, ALC's mall-based sales kiosks were also all closed. 

Break-open and scratch tickets can still be purchased at some retail locations and big jackpot draws like 6/49 and Lotto Max continue to operate, but with people stuck at home and many suddenly out of work because of the virus, play has plummeted on those as well.

Last week, on Tuesday's and Friday's $70-million national Lotto Max draws, which ALC co-sponsors, sales were fewer than seven million tickets on each event. That's well below the 16 and 17 million tickets sold on the same-sized jackpots on Jan. 3 and 7.

On Saturday, 3.47 million tickets were sold on the 6/49 jackpot of $14.5 million, a 30 per cent drop from sales in December on similar-sized prizes.

'People may want all the certainty they can get'

The big jackpot draws are the second largest revenue source for ALC after video lottery, and Ben Orlin, a American author who has written about the motivations of people who play the lottery, speculated the pandemic has people focused on more serious issues.

"For those who use a lottery ticket as an excuse to dream, perhaps the dream of great wealth isn't what they're craving these days," said Orlin in an email exchange about players not chasing the large jackpots like they did just weeks ago.

"Perhaps a time of great doubt makes us all a little more risk averse. Under normal circumstances, a little dose of uncertainty can be stimulating. Under current circumstances, people may want all the certainty they can get."

Robert Jones/CBC

ALC has been trying to nudge players who are used to buying physical tickets in person to do it online instead, but that has been a challenge.

Last year,  less than four per cent of its lottery sales went through its web and mobile sites, and in its recent social media communications the corporation has been pushing customers harder to make the transition.

"We encourage you to visit us at alc.ca from the comfort of your home," it said to a Halifax customer last week who asked on Twitter if stores were still selling tickets.

ALC spokesperson Greg Weston said new online accounts were being set up at five times the normal rate in the early days of the shutdown but did not give specific numbers.

"We have seen a significant increase in new accounts being created in recent weeks and the share of online sales has grown accordingly," said Weston in an email.

"We are encouraged many players are taking advantage of this alternative."

Fears for increased gambling

More online play is good for ALC, but it concerns Luke Clark, the director of the Centre for Gambling Research at the University of British Columbia.

Clark said some research from the 2008 recession shows gambling tendencies in certain people can worsen during economic difficulties and obtaining an online account to buy a lottery ticket for a big jackpot can lead to other things.  

ALC offers video lottery-like slots on its site as well as tickets and other games, and Clark fears that can be dangerous for some.

University of British Columbia

"There are a lot of unknowns about how the current response to COVID-19 is affecting many areas of people's lives and that includes their gambling behaviour," said Clark.

"The concern is that the combination of staying at home and the tremendous economic pressures that a lot of households are under may lead to increases in gambling, especially in people who are already regular gamblers and this could increase gambling harms at a time when people are at their most vulnerable." 

ALC has not said how much increasing online play has been worth in the last month, but there is little doubt those gains will be swamped by what's been lost.

With mediocre ticket sales on large national jackpot lotteries, video lottery venues closed tight and sports fans being offered table tennis instead of playoff hockey, it's a safe bet ALC revenues are well below budget.