Several years ago, binary option operators were introduced. Most understand these are the easiest way to trade financial markets. The trend opened roads for the lottery industry that have skyrocketed. Online lottery readers acted boldly to take advantage of the uncharted paths of business. We offer you some insight on the trailblazing efforts that changed the online gambling industry forever.  

The issue

Imagine that you hear of someone who won millions on US Powerball or MegaMillions. You fire up your computer and find an online site only to discover that you must live in the country that is producing the lottery to play. This was a dilemma that haunted the industry for years. 

Lottoland is a well-known leader in the lottery industry. They do business in more than 30 countries and have more than 10 million regular online clients. Lottoland needed to address the issue above in order to accomplish their goals as a world-leader in the business. This is where binary options came into play. A binary option is a financial option where the payoff is fixed. In the case of Lottoland, they began offering fixed-odds lottery betting. This means the end user is paid by the company, not the National lottery. Customers are betting on the results of the lottery. Everything looks and plays the same, so the excitement in the home country is shared globally. When the official draws take place, the winning numbers match up with the numbers Lottoland customers selected when they placed their bets. When matched they win, and the online customer is paid the exact same amount as the land-based lottery.

Revolutionary business model

Lottoland chose to open its operations with what is known as an “insurance model.” Within its own brand, they could allow clients to place their bets on the outcome of a lottery regardless of its country of origin. To ensure payout they would insure each bet through an insurance company. They could make smaller payouts from house funds, but the instant a ticket became  a jackpot win, the insurance company would make the funds available to deposit into the client’s accounts. You can look to the Forex industry for like  products. It would fall into the (CFD) contract for difference category.  

This business model was not invented by the lottery industry. But, Lottoland pioneered a new method. The step they took created the gold-standard for the industry. In 2017, Lottoland applied for and was granted their insurance license. They set up their own insurance company called Fortuna Insurance PCC. The license was granted through the Financial Services Commission (“FSC”) in Gibraltar in accordance with EU insurance legislation. Lottoland’s headquarters is located in Gibraltar. This is the first time in history an international lottery company created its own insurance company. 

Licenses

In order to do business in the UK concerning lotteries you must be licensed by The Gambling Commission. Lottoland exceeds the legal requirements. They are licensed and regulated in every country they service. They also must prove ability to pay jackpot wins (ie; insurance.) The following regulatory establishments license them:

• The Gambling Commission - United Kingdom

• Malta Gaming Authority

• HM Government of Gibraltar

• Republic of Ireland

• Government of the Northern Territory

• Swedish Gambling Authority

• Western Cape Gambling and Racing Board

• Agenzia delle Dogane e dei Monopoli

It should be noted there are two other ways lottery companies operate under the binary laws. Neither of them come highly recommended. The first is done by the company actually purchasing lottery tickets in the country of origin and selling them to the clients via the internet. This is illegal in most cases. Dealing with a company that operates in this manner is risky business.

We live in a society where documents (and lottery tickets) can easily be forged with the help of photoshop or other editing programs. There is no guarantee that the company is actually buying tickets and not just using the photoshopped image of a ticket to fool the public. The second way is legal, but rare. This is where a company pays jackpot wins from house funds without the benefit of insurance. We could only find evidence of one corporation that operates this way. They must prove to the regulators that they have the funds available to payout. This limits the number of lotteries they can participate in, and the only thing a client has to secure their winnings is the company’s word. With a lottery company that carries the proper credentials, licenses, and coverage, winnings are guaranteed. 

Conclusion

The above example is a great example of cutting-edge business approaches and looking way beyond the scope of things for solutions. The binary options plan revolutionized a business that is worth billions. With vision and creativity, who knows what the future holds for this industry.