Jumbo Interactive: Diversifying Away From Lottery Corp Makes Sense but Is Proving Difficult

Although we expect Jumbo’s core lottery retailing business will keep ceding market share to Lottery Corp.’s The Lott platform, its continued growth is underpinned by a channel mix shift to more lottery ticket sales moving online. Jumbo is principally a digital reseller of Lottery Corp. tickets through its Oz Lotteries platform, generating revenue by charging a premium, typically 10%-30%, on tickets sold. Largely a result of its first-mover advantage, Jumbo has accumulated a sizable customer base of around 4 million, on our estimation, although each year only around 1 million customers make a transaction.