WHY ELOT WILL SUCCEED... This was posted on Yahoo!
It was 5 different posting. I had to copy, because it makes a
lot of sense. Julius
This is the data I used to formulate my assumptions that eLot
will succeed. Since I believe that the most important activity
for eLot at this time is marketing, and because my background
is sales & marketing, I am using a marketing plan to organize
the data into a logical format. Nothing revolutionary...just
plain old marketing 101.
IDENTIFY THE MARKETPLACE (Prospects) source - NASPL
Because eLots stated target market is government operated
lotteries, that is all I am using.However, it may be prudent to
remember that there are other forms of legal gaming that may
become opportunities for eLot at a later time.
Currently 40 Lotteries operate in the US; 37 states, the
District of Columbia, Puerto Rico and the U.S. Virgin Islands.
In addition at least 100 foreign governmental lotteries are in
operation. This marketplace had almost $120B in revenues 1997.
Assumption #1. Will eLot capture all of this market? No. No
company will be able to get 100% of the market Competition
discussed later).
Assumption #2. Will eLot be able to capture a reasonable
percentage of this marketplace? Yes.eLot's experience with the
NIL, the experience of it's officers and directors and its
marketing capability will result in capturing a reasonable
percentage of the marketplace (again competition discussed
later). I have read estimates ranging from 1 to 4 contracts
necessary to produce a reasonably profitable operation. Thus
eLot would have to get contracts from 2-3% of the worldwide
market. This seems well within reason.
IDENTIFY THE NEED.
Fact #1. Currently the state lotteries provide 6-8% of the
total revenues in the states that conduct lotteries. A
significant contribution to revenue. In 1998 lottery revenues
were flat compared to the year before ( +.9%) not keeping up
with inflation.
Fact #2. Almost every state is suffering from a shortage of
revenue. Even states that report a surplus (i,e, Oregon) are
finding it necessary to increase funding for some areas
supported by state revenues. Education and transportation are
good examples. Many school buildings are crumbling or have
serious asbestos abatement problems. New technology is required
to keep pace with educational processes and curriculum.
The local highway infrastructure is failing.
Fact #3. The states have limited ways of raising revenue.
Taxes, licensing fees and lottery income. If lottery revenues
do not increase dramatically in the near future or taxes will
have to be increased. Maybe some of the revenue shortfall could
be offset by introducing new economies into sate government or
reducing costs. But normal politics would dictate either
increase lottery revenues or increase taxes.
Assumption #1. Is there a need to increase state lottery
revenue. Yes. It is the most politically expedient way to
increase state revenues. Most politicians do not like to raise
taxes. They want to get reelected.
Assumption #2. Will internet access to state lotteries increase
revenue. Yes. I think it will bring a new group of citizens to
lottery play. Those with home PCs and internet access. This is
an unscientific assumption, admittedly. I can find no studies
to support my assumption. Many may not agree with, it but it
my assumption.
IDENTIFY COMPANY STRENGTHS.
Fact #1. Experience. The company developed and operated the
systems for the National Indian Lottery. The systems were in
operation for more than one year. More than 10,000,000 ticket
transactions were processed. The system was able to filter
transaction by boundary limits, age verification, credit limit
verification, etc. (more on this later, also more about
competition later).
Fact #2. Directors and other personnel. The eLot board of
directors includes people with the wide range of experience and
background to move the company forward. Included are people
with experience in operating an internet lottery system
(Yacenda and Hopwood), familiarity with the gaming industry
(Berman), strong business background (Kabala, et.al), political
clout (Carey).
Assumption #1. Does eLot have the experience necessary to
answer the needs of the marketplace. Yes.
Under company personnel is should have talked about the new
director of sales and marketing.(OMG..his name just escaped
me...sorry), He has extensive industry experience (GTECH) and
experience as a state lottery director (Idaho). Uniquely
qualified to do what's most important....secure a contract.
Assumption #2. Does eLot have the board members and personnel
necessary to make the company succeed? Yes.
I am typing and posting on the fly. After getting a chance to
reread some of it, I see a lot of typos. But I think it
coherent enough to get my message across.
The assumption are my own and should not be construed as
anything else.
IDENTIFY THE COMPANY'S WEAKNESSES.
Fact #1. The company has a limited source of revenue.
Currently, eLottery is an operating division of Executone. The
company, Executone, has pledged a monthly operating allowance
to eLottery of an average of $500K per month (averaged over
each quarter) until the sale of the core operation. When the
sale of the core is finalized, this allowance will cease. But
at that time eLottery will realize the funds from the sale.
What that may be is undetermined at this time. The funds may
consist of cash, retirement of debt, paper or other
considerations. However, eLottery has stated that they EXPECT
to receive enough consideration to fund the operation for at
least 18 months.
Fact #2. The company does not have a contract. True. That is
the current goal of the company to secure a contract with an
operating government lottery.
Assumption #1. Does eLottery have the revenue (funds) necessary
to support the company until a contract is obtained. Yes.
According to the facts there is enough money available.
Assumption #2. Will the company secure a contract soon enough
to sustain the operation. Yes.
Assumption #3. Does the company have the resources, experience
and personnel necessary to secure a contract. Yes. Again see
above postings.
Assumption #4. Can the company secure a contract when it does
not have any existing contract? Yes. This is kind of ambiguous
because, other than the GTK Irish contract and possibly one or
two other foreign contracts, no other company does either. It
is a level playing field, except I believe eLots NIL experience
tilts the advantage toward eLot.
IDENTIFY THE OBSTACLES TO SUCCESS.
Fact #1. The Kyl Bill. The Kyl Bill is progressing through the
Senate. It is meeting many obstacles during this progression
form senators, such as Hatch, who are trying to preserve states
rights. The Supreme Court has recently handed down decisions
that confirm that states rights should be protected. There is
no concurrent bill in the House to support the Kyl Bill.
Fact #2. The recent commission report has stated that there
should be a moratorium on the expansion of state lotteries.
Fact#3. There is belief among some people that there are many
social issues involved in government operated lotteries.
Fact#4. eLot's product consists of hardware and software that
could be emulated by other companies.
Fact #5. Other companies, such as Gtech, who has an existing
presence in the marketplace, could pose significant competition
to eLot.
Assumption #1. Will the Kyl Bill reduce eLots chances no
succeed? No. The Kyl Bill will not succeed in the senate unless
all impingement on states rights are nullified or rewritten. If
this assumption is wrong, it will not be successful in the
House without a concurrent bill designed by representatives
that will enable it to gain House support. Kyl is now 0 for 2.
It appears that his third attempt will fail. Some people say
third time is a charm....others say three strikes and your out.
My assumption is that Kyl will fail either in the senate or
subsequently in the house.
Assumption #2. Will the commission report have an adverse
effect on eLot's business plan? No. The commission report is
almost history now, only after two weeks since it was
announced. The
report is flawed in its methodology and is under attack from
many quarters. There is currently an NEW commission that is
preparing a counter report. Other than a house resolution, the
report has received no Presidential or legistative comment.
Assumption #3. Will social issues affect eLot's ability to
obtain a contract? No. While social issues may delay SOME
jurisdictions from agreeing to internet access, eLots system
addresses each and every social issue raised that I am aware
of. eLot is the solution to these social problems.
Assumption #4 Can't Microsoft, Oracle or same other software
giant produce a product that does the same thing eLot's does?
Yes.....but why? eLot has developed a product for a niche
market. It's not an operating system that has applications for
thousands of users. There was a lot of time and money spent
developing eLots product. If another company wanted to apply
the necessary resources, of course they could. But...it has
already been done...and done by eLot. It takes an incredible
amount of resources in time and money to replicate what eLot
has already done. And as we all know, time is of the essence,
Assumption #5. Can't Gtech, or some other company with an
existing market presence, be perceived as a preferred vendor
over eLot. No. eLot is still the only company with experience
operating a domestic lottery over the internet. See my comments
regarding the NIL. Sure the NIL was shut down. But only after
mare than a year of operation and the processing of more than
10,000,000 transactions. It was NOT shut down for any reason
other than a court decision. It was not terminated for any
technical or operational reason. |
