Thanks.......makes sense,

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somerslea

4 Posts.

18/09/20

19:07

Post #: 47461792
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Originally posted by Abdi70: ↑

Hi somerslea,

I'll offer my view.

Each lottery on the Jumbo platform varies in cost relative to the cost to play on the Lott platform. What this means is that Jumbo extracts varying degrees of margin at the expense of consumers. I'll put forward the thesis that the consumer is aware of the extra cost to play on the Jumbo platform and we can test this by looking at the share of TTV for the games versus margin.
From my analysis, Saturday Lotto is the highest margin game on the Jumbo platform (and hence dearer to play for the consumer) but only constitutes ~2-3% share of the TTV.
Whereas Powerball is a low margin game for Jumbo (and hence cheaper to play for the consumer) constitutes ~7% share of the TTV.
I therefore put forward the argument that because consumers are actively selecting the 'cheaper' (relative to the Lott) games to play on the Jumbo platform, consumers are willingly accepting the extra cost.

So why do consumers choose to play on the Jumbo platform?
1) Customer Service is more superior.
2) The app/website is better (based on customer ratings - and if you were to remove the 1 star reviews pointing out the price difference compared to the Lott, then Jumbo would be ~5.0/5.0).
3) Social features/Syndicates are more useful.

The gross margins for Jumbo allow plenty of room to move on price, but there isn't any need. Jumbo has actually been gaining market share at a rate of ~12% per half year. If you are gaining market share, it's wiser to put prices up (not down).

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Thanks.......makes sense,

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Thanks.......makes sense,

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Thanks.......makes sense,

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