After one year, iPhone app to buy Powerball in N.H. is doing well

Monitor staff
Wednesday, July 12, 2017

After a year of using New Hampshire as a test bed for a lottery iPhone app, one developer thinks it’s hit the jackpot.

The Granite State’s trial run of AutoLotto’s digital portal for playing Powerball and Mega Millions via an iPhone has proved successful enough that the company behind the project has gotten more funding and is expanding into other states.

“There are north of 10,000 iOS (Apple) users in New Hampshire that are live,” said Tony DiMatteo, CEO of the California-based firm that created the app.

On Monday, AutoLotto announced $17 million in a Series A funding round, which DiMatteo attributed partly to success in the Granite State.

“One of our users in New Hampshire has become an investor,” DiMatteo said. “He was just an enthusiast; once he saw he could play online, ultimately he ended up investing.”

AutoLotto launched in New Hampshire in July 2016 after gathering $2.4 million in seed funding by presenting itself as a way to bring lottery sales into the 21st century.

It remains a small part of the business: $204,491 of the total $32.3 million in Powerball sales in New Hampshire over the past 12 months were attributed to AutoLotto, according to New Hampshire Lottery officials.

That’s about half of 1 percent of in-state Powerball sales coming from the app. AutoLotto also covers Mega Millions’s multi-state game.

Many consultants argue, however, that expanding government lottery sales into the online world is potentially big business. It has proceeded slowly, partly because buying and cashing in lottery tickets via smartphone apps faces regulatory and legal complications.

For example, New Hampshire state law forbids out-of-state companies from selling lottery tickets in New Hampshire, so AutoLotto has reached an agreement with one of the roughly 1,250 stores and chains that have licenses to sell them. It will likely need similar arrangements in other states to expand, slowing a national rollout.

Also, due to the way state lotteries work, AutoLotto can’t exist merely in the digital realm. It has to buy and print out each ticket that is purchased through the app.

DiMatteo said a year’s worth of sales in New Hampshire has uncovered some interesting patterns.

For example, he said that 54 percent of those using the app are millennials, or people born during the 1980s and 1990s. That figure is much higher than for purchases of paper tickets in stores, he claimed.

“It’s not that they do not want to play, it’s that they don’t go to the store,” DiMatteo said.

He argued that the app encourages more sales.

“We see that users buy about one more ticket than they normally would. They buy about 4 tickets per transaction on our system,” he said.

The app allows AutoLotto to gather more information about purchases than is possible through traditional sales at convenience stores and most other physical outlets.

DiMatteo said the company is running tests in other states and expects to expand soon, and will be updating the app, including making it available for Android devices, later this summer.

“New Hampshire has been a great market for us, as our first market,” he said.

(David Brooks can be reached at 369-3313 or dbrooks@cmonitor.com or on Twitter @GraniteGeek.)