Online Lottery Sales Poised To Compete With Convenience Stores
The State of Illinois is about to begin selling lottery tickets online and now the convenience store owners who have had a monopoly on lottery ticket sales for years are getting very nervous about the impact it will have on their own revenue.
The representatives of many Illinois convenience stores are saying that online lottery ticket sales, while will start on March 25, 2012 may have a devastating impact on convenience stores because many of their customers will no longer have a daily reason to visit or purchase other items in the store as "impulse buys" such as a soda, candy bar or newspaper.
"We're not against competition. We're in competition every day" said David Vite, CEO of the Illinois Retail Merchants Association, representing about 5,000 convenience stores across the state. "It's imperative that we get it right."
Illinois lottery tickets are only bought with cash, in-person, at convenience stores across the state. The stores collect a five percent commission which can account for as much as 50% of the total revenue at some locations, and when you factor in the value of impulse purchases that number climbs even higher.
Joe Rossi, president of the 7-Eleven Franchise Owners Association has claimed the online lottery sales might mean as many as 7,000 Illinois retail jobs being lost because the lottery "brings a lot of people into our stores and our locations. It's a lot of foot traffic" said Rossi.
It's a decision many States are struggling with, and having a hard time solving. Online lottery play is much more convenient and open to many more players, but those benefits are exactly the same things that put convenience store owners in danger.