SVL eyes sports betting game that plays every 5 minutes
Following on Money Time's success, Supreme Ventures Limited (SVL) is planning to introduce a sports betting game that will be drawn every five minutes.
"It will use a random number generator to determine the outcome of each (match)," SVL CEO Brian George told Sunday Business.
After six years of operations, the sports betting division, which trades as JustBet, has yet to post a profit, and it saw revenue fall from $587 million in 2014 to $576 million last year, while losses grew from $194 million to $212 million.
"It's challenging," said George. "There is interest, but we still have to convert our target audience (21 to 35 year-olds).
"We have to educate players to take risk."
But the new 'Quick Sports' game is expected to catapult the business segment into profitability.
In its first full year of operation, the roulette-styled electronic game called Money Time generated $4.2 billion, or 11.6 per cent of SVL lottery revenue in 2015.
That's more than the $3.9 billion the 'Pick family' took in last year, and more than Lotto and Super Lotto combined. The price increase from $50 to $100 a ticket helped increase Lotto sales from $1.1 billion in 2014 to $1.5 billion last year but the multi-jurisdictional lottery saw revenue fall from $686 million to $543 million.
Cash Pot generated $24.6 billion in revenue in 2015, down from $26 billion the year before.
Since listing on the Jamaica Stock Exchange in 2005, SVL has introduced eight new lottery games, including two bingo games that were suspended in 2008.
But none has seen as much success as Money Time.
In 2011, Pick 2 saw its revenue peak at $720 million for its first full year of operation, but it fell dramatically the following year, and in 2015, the game took in $241 million. The game's failure to replicate the success of its predecessor, Pick 3, which is the most played of the Pick family, generating $1.9 billion in revenue last year, likely comes from the expansion of the field of numbers to choose from to 36. Pick 3 requires players to pick three numbers each from a field of 10.
So when Pick 4, which commenced in 2012, required bettors to again choose from a field of 10 numbers, it generated $2.7 billion in sales, and although its revenue fell each year since, it took in $1.8 billion in 2015.
Money Time's success undoubtedly comes from the high frequency of draws. Like Cash Pot, it requires bettors to choose a single number, albeit from a field of 38, including '0' and '00', rather than 36 numbers. Unlike Cash Pot, which plays six times a day, Money Time is drawn every five minutes between 6 a.m. and 2 a.m. That's 241 times daily.
In the past, increasing the frequency of Cash Pot draws helped boost revenue. Monthly revenue from the game in 2010 remained flat on year-earlier levels, but it increased by 12 per cent to $1.6 billion in 2011 after a fourth draw was introduced. Sales were flat again in 2012, then in 2013, when Sunday betting was approved by the Government, Cash Pot revenue climbed 21 per cent. By 2014, the game was generating $2.2 billion a month from five daily draws seven days a week. It now has six draws each day, but sales declined to $2.05 billion a month, likely due to some migration to Money Time.
Combined lottery sales increased by three per cent from year-earlier levels to $36 billion in 2015. Profit for the business segment rose from $1.2 billion in 2014 to $1.8 billion last year.
Revenue from selling PIN codes, or electronic credit top-ups, which piggybacks on the lottery company's retail network, increased by 32 per cent to $6.8 million in 2015. Segment profit rose from $78 million in 2014 to $111 million in 2015. This income stream has been enjoying significant growth since 2012, when it took in $2.5 billion in sales, as phone cards migrated from paper to electronic platforms, lining up with SVL's network of lottery machines nationwide.
The company is now taking a similar network approach to its video lottery terminal (VLT) business, which SVL has been trying to make profitable since entering that market segment in 2005.
After 10 years, having invested over $1.4 billion in gaming lounges and incurred close to $2 billion in losses, SVL is rolling out a new route gaming system across the island.
The project, which outsources the provisioning and servicing of VLTs to ICE Jamaica, will see gaming machines being deployed to bars, shops, and lounges across Jamaica, where they will be operated by third parties and tied back into SVL's network for monitoring and even pooling of prizes.
Under the arrangement, SVL hopes to eventually deploy some 2,000 VLTs across Jamaica. The company estimates that there are about 10,000 to 12,000 amusement boxes locally and hopes to claim market share by offering even bigger payouts.
Previously, SVL's model relied on establishing its own gaming lounges. It took over Coral Cliff in Montego Bay in 2005, the year it commenced operations at Acropolis in Barbican. Then it opened other gaming lounges at the Hilton Hotel in New Kingston, in Portmore, May Pen, and Cross Roads and Market Place in Kingston. Subsequently, all its full-scale lounges except for Barbican were closed, while the lounges in May Pen and Cross Roads were downgraded to betting lounges - establishments with less than 20 seats.
George told Sunday Business that VLTs through the route gaming system have already been deployed in Cross Roads and Montego Bay, and over 40 locations should be equipped with the amusement boxes over the next six weeks.
Acropolis Barbican will remain open as it is currently "cash neutral" in that it is not a drain on cash for the company, although from an accounting standpoint, it loses money due to non-cash items such as depreciation of furniture, fixtures, and the machines themselves.
The Cross Roads location was also upgraded to accommodate SVL's full range of offerings, including sports betting.
Meanwhile, SVL might soon be the new owner of horse racing betting company Caymanas Track Limited.
CTL CEO Cedric Stewart told The Gleaner that SVL's bid was recommended as the preferred one, but the Cabinet has yet to declare a bid winner.
"We still await indications about the outcome of our bids," said George. "We do not anticipate (the new government) would take a different view either on the decision to divest (CTL) or the process that was used."
At stake is an entity that generates over $5 billion in revenue but incurs annual losses. SVL wants to restructure the organisation and pump $1 billion into it over the next five years.