Lottery is popular all over the world for many years. And it still growing at an alarming rate. It’s average growth rate is above 8%, and is almost three times that of the world economy.
Many people consider the lottery as a gaming product, but it is a high volume industry which can also be called a commodity. The lottery industry keeps a 29% share of the entire global gambling revenue. With modern technologies, this field also comes with many developments such as lottery apps, online lottery etc. But with the growth of the digital economy, the industry faces challenges like the lack of transparency and fairness, geographical restrictions and so on. One of the most common demands is transparency and fairness with advanced technologies like blockchain.
Let’s discover the issues faced by the industry.
Problems With The Traditional Lottery Industry-
1. Lack of transparency-
It is one of the biggest issues faced by traditional lottery. Because of the centralization, lottery organizers have complete control over many factors like- What will happen to about the money got from ticket sales? How to configure RNG mechanism? How to generate winnings? Where will the list go? The overall trust in lottery tickets and their decency is diminishing, which has prompted the conviction that coordinators are the most profitable organizers.
There are many cases of fraud in national lotteries that should be cleared. Nearly, 50% of the total funds gained from lottery sales are utilised for jackpots. There are very low chance of winning big prizes(1 out of 14 million wins 6 out of 49 Powerball), which is not economically favorable to participate in the lottery.
2. Geographical restrictions-
Domestic market is small for the lottery. If a user wants to participate in global lotteries, they have some restrictions. It is limited to the country in which it is conducted. It restricts the prize pool and does not increase the chance of winning a prize. In any case, it might appear to be coherent that less participants mean a more noteworthy possibility of winning; the traditional lottery structure isn’t the situation.
Much of the time, no one figured out how to win a few months, prompting further draws, which sometimes lengthened the process considerably. At the same time, the jackpot ratio reduces with each subsequent draw, which is profitable for lottery organizers. In some countries, lottery winnings are taxed.
3. Old approach –
Online lotteries allows you to participate from home but they have some disadvantages. They are not popular to the community and hence reduce the jackpot. Also they have low security which leads to the financial frauds. While offering a higher prize pool, national lotteries require you to buy old-fashioned lottery tickets. Users may lost tickets which can make your chances of getting prizes tumble to zero.
How could Blockchain Lottery Platform work?
1. Sign up –
In the first step, participants need to sign up to the platform and become a part of it with the basic information like name, wallet address, email id and phone number. A successful sign up prompts you to get regular alerts and notifications about ticked openings.
2. Ticket openings and deployment of the smart contracts-
Announcement of ticket openings is carried out by admins and notification is sent to the users. They also deploy smart contracts containing pre-characterized rules for lottery games for fairness and transparency. Smart contract verifies the information shared to pattern in the system and gives security to the data.
3. RNG with blockchain-
The RNG algorithms are also predefined and made available to anyone, which makes it inconceivable for lottery coordinators (or any other individual, if an external attack occurs to control them for their own advantage. Blockchain can solve the problem of traditional lottery fraud.
4. Tracing the history of records of transactions-
Due to blockchain blockchain, players can follow back the history to know who has won the jackpot and if the commissions and wins are paid out as defined in the smart contracts.
How blockchain can improve lottery industry?
1. Smart contracts-
A smart contract is a digital agreement between the parties wherein computers enforce terms and bring transparency to any transaction. With an online blockchain lottery set up, rules which are clear to all parties can never be changed. As no centralized authority is there to administer the game, there will be no concerns related to winnings. The player’s funds can legitimately go into the contract without the interference of intermediaries.
2. Privacy and Accessibility-
Use of cryptocurrency for lottery is a beneficial and popular solution for casinos. It helps users to gamble anonymously without need to submit copies of documents. Cryptocurrencies can make online gambling accessible because it offers a low entry barrier to new players and enables them to avoid gambling regulations applied to fiat currency.
As all of the records are stored on the blockchain, players can have a transparent and traceable view of the saved transactions. Because of the traceability, they can reach to the roots of disputes if any occurs in the future.
As the lottery concept is advancing towards online lottery, using Blockchain will be the great practice. You can also know the use of blochain for business at- A Complete Guide To Choose Blockchain Platform For Business Growth.
If you are also thinking of developing a lottery app/software by using blockchain, consult with solace experts. We are here to help you through consultation and development. We have dedicated blockchain developers to help you through effective software development. Connect with solace and get a free quote for effective lottery app development with blockchain. We will be happy to help you.