Supreme Ventures prepping for lottery’s inevitable decline
It may not happen in the near term, but Supreme Ventures Limited CEO Ann-Dawn Young Sang is warning that the lottery may one day no longer be the mainstay of the gaming and entertainment company.
The decline in the popularity of lottery games is a growing worldwide phenomenon and Jamaica is not immune, she said at Monday's annual general meeting of shareholders.
So far, however, it is lottery games that drives Supreme Ventures' revenues, including Cash Pot and Lotto, but the company is investing in other money makers, having most recently taken a risky bet on horse racing, with the acquisition of Caymanas Park.
"Jamaica has been very fortunate in coming up with various products and innovations but what is happening in the rest of the world is going to eventually start happening here," Young Sang said on the sidelines of the meeting where she reported on the company's best-ever performance in 2017.
Supreme Ventures earned $1.2 billion profit amid record revenue of nearly $56 billion. Some of the revenue gain was attributed to the addition of horse racing, but the new segment contributed less than $5 billion to the $11 billion sales growth.
GEARING UP FOR CHANGES
The gaming boss told the Financial Gleaner that while the numbers look good at this time, she foresees a day when even in the face
of growth the overall performance will be lacklustre. As a result, she says her team is gearing up for changes to keep the company growing.
"What you'll find is that while we're growing, the rate will start to decline and the margins will start to decrease so we must pay attention in the other areas and start to do more.
Pressed on whether to expect any dramatic moves away from the lottery as the key source of income, Young Sang said no but reaffirmed that the company needs to have options when the inevitable decline occurs.
"It is not a matter of moving away, but we can't rely on lottery only. We have to recognise what is happening in the global arena and start preparing ourselves locally for it. We can't wait until it happens," she said.
Of the $56 billion of revenue reported by Supreme Ventures Limited, one lottery game, Cash Pot, continued to dominate with nearly half of the inflows or more than $27.5 billion. Pin codes contributed $9.85 billion, while lottery game Money Time rounded out the top three at $5 billion. Horse racing accounted for $4.66 billion.
Young Sang also reported a record first quarter ending March 2018. The company made 48 per cent more profit at $618 billion, off revenue of $15 billion in the period.
On Monday, Supreme Ventures began testing its newly developed mobile app through its JustBet sports betting service.
Supreme Ventures has not said how extensively it intends to deploy the betting app relative to its other games, in the future, but Young Sang sees online technology as a route to market penetration.
"When we speak of gaming we are speaking about online. Our regulators may not love to hear it but that is the global market trend mobile and internet. For our part it is to make sure that we're technologically ready and able to take advantage of those, hence our sports betting platform," Young Sang said.
The company is also preparing to enter the Guyanese market, having acquired to licence to operate there, but is not ready to divulge how its operations will be rolled out there.
"We got the licence but we are bound by certain confidentiality clauses, so our plan is to be in there by the end of 2018," Young Sang said.