Global Guide to Lottery Laws:
Industry Insights Across Borders
Industry Insights Across Borders
Lotteries may seem to be easy on the surface - purchase a ticket, cross your fingers, and hope to hit the jackpot. However, any person in this business will be aware that it is a lot more complex. Beneath these shiny advertisements and lottery cards is an impenetrable tangle of legislation, licensing paradigms and compliance pitfalls.
For startup founders, consultants, and operators, these rules aren’t just background noise. They determine the way products are constructed, the rate at which companies can grow, and in a few instances, the feasibility of a business. What is legal in one nation may be a criminal offence in another country. Getting the landscape wrong does not merely cost in terms of revenue that it would otherwise have generated, it can also cost in terms of fines, lawsuits or even banishment to a market.
If you’re new to this space, it’s useful to start with a basic introduction to lotteries or explore lottery prize divisions before diving into the global legal landscape.
Here is a country-by-country overview of the lottery legislation differences, and more to the point, the implications of the lottery legislation as it relates to building or advising in this area.
The US market is also among the hardest markets to crack. Every state creates its own regulations which implies that there is no playbook to national growth. In New York, it might be legal, but in Utah, the same thing might be illegal.
Big ones such as the California lottery are a billion-dollar machine. There is plenty of scope for lottery technology services and service providers that can assist state lotteries in modernising payments or distribution.
The thing is, however, that federal tax may take 37 percent (progressive top bracket), plus state tax, of the winning. That is counterproductive to consumer appetite. And since interstate selling is prohibited, cross-border scaling is slow and costly.
B2C should not be the first thing to venture into the U.S. unless you are already a deep-pocket and politically established business. B2B partnerships at the state level - the sale of compliance tools, the sale of technology, or infrastructure is smarter.
In case there is a market that regulates best, it is the UK. The Gambling Commission has a reputation of being aggressive yet very open and operators who have demonstrated this here would gain worldwide reputation.
National draws, charity lotteries, and online channels exist in a harmonious atmosphere with obvious rules. The system is trusted by consumers and this results in ease of acquiring customers as compared to most markets.
The downside? Advertising repressions are inhuman. Startups that pursue aggressive expansion must walk a fine line, any wrong move might attract fines in a very short time.
I perceive the UK as the ideal credibility market. When you desire the investors or friends to be interested in you, then success in this regard becomes a powerful calling card.Popular draws like Set for Life even have guides, such as how to play Set for Life lottery.
Sources: Grand View Research - UK Lottery Market Size & Outlook
Canada is a dream to consumers - tax-free gambling. However, it is not so easy with operators. The running of lotteries is at provincial levels and the running of own games by the companies is not possible by the private companies.
There are still angles. Other provinces such as Ontario and BC are more willing to be digitally collaborative. Assuming you are in the tech, distribution, or compliance business, you can find a middle ground with regulators rather than fight them off.
Do not attempt to introduce an independent lottery here. The wiser thing would be B2B cooperation with provincial operators.
Sources: Canada Lottery Market Size & Outlook, 2024-2030, Wikipedia - Interprovincial Lottery Corporation.
India is a country with a scale few other countries can boast a vast consumer base and it is rapidly going digital, not to mention that the country has a long tradition of lottery games. But the rules are messy. Other states (Kerala, Maharashtra) operate lotteries in open conditions. Others ban them outright.
The play online is in a grey zone. Offshore sites do grab Indian players, but technically, they do not. That is a risky gamble to start-ups who do not wish to be put under the microscope of regulators.
In India, you are thinking of a long game. The chance is very real, but until now the least risky areas are B2B - compliance tech, payments, fraud prevention, rather than direct-to-consumer lottery solutions.
The lottery market of Australia is well-regulated, and there are national lotteries such as Oz Lotto and Powerball in Australia, as well as charity ones. Regulators place strong emphasis on responsible gambling, requiring operators to build responsible play features into their platforms.
It is a stable, but not explosive opportunity. If you can meet the high standards here, you will be well-prepared to enter and compete in other mature markets.
The lotteries ( Takarakuji ) in Japan are a government run and a highly traditional lottery. Classic products such as scratch cards, numbers games are still popular with the consumers.
Foreigners are also allowed to take part on a legal basis although this is strictly checked. It is not readily available on-line and the system is not very welcoming to outsiders.
I find Japan rather of a growth play and more of a credibility boost. When you are able to develop relationships here you get long-term trust but not fast victories.
Sources: Japan Lottery Market Size & Outlook, 2024-2030, Japan-Zone - Lottery Culture.
Brazil had been a federal monopoly of Caixa Economica Federal. This changed in 2020, when states were permitted to conduct their lotteries. This appears to be a huge opening on paper.
In reality, progress is slow. The entry of private operators is still restricted and compliance is still expensive.
There are websites like TheLotter and Jackpot.com that let people buy tickets from one country to another, but their legality entirely depends on the laws in the country of their residents. This is a mine field to the operators.
It is not the demand of customers that is the real problem, but compliance and payments. The winnings on the other side of the borders may lead to a two-tax situation, or demand physical claims or stay in the grey sphere of the law. This is where opportunities lie for lottery compliance solutions and global fraud prevention tools.
This is where I feel there is a gap: compliance as a service - to play internationally. Startups that find a way to solve such a pain point could find an opportunity to slice a pie.
As to our fellow lottery space members, be it as founders, advisors, or regulators, the following are the main lessons learned:
TO THE NEW’s Lottery Solutions believes in empowering businesses with iGaming software development, lottery compliance consulting, and scalable digital lottery transformation services. If you’re scaling up across borders or modernizing existing systems, our expertise ensures your lottery business comes with the highest levels of compliance, security, and future-proofing.