Sunday, November 1, 2009

New lottery games, including toto, coming up

The introduction of new products by number forecast operators (NFOs) is intended to draw consumers away from illegal operators and expand the legal market.

Magnum Corp Sdn Bhd, a 51% subsidiary of Multi-Purpose Holdings Bhd, and Berjaya Sports Toto Bhd (BToto) were given the green light by the Government in the middle of this year to introduce new games – the first since the Government froze approvals in 1992.

In September, Magnum launched the 4D Jackpot while BToto is expected to release a new lotto variant, Power Toto 6/55, by year-end to replace its existing lotto games, Toto 6/42.

BToto’s new game was expected to have a much larger matrix of numbers for punters to select and a minimum guaranteed upfront jackpot of RM3mil, the highest minimum jackpot size currently, a research house said.

The approvals given to the two companies, coupled with the authorities’ generous allocation of special draws, had turned the operating environment in favour of legal NFOs, said a bank-backed brokerage in a report.

“It may not be overly optimistic to expect the legal market to grow beyond the low single-digit level with the latest expansion of product offerings,” it said.

It noted that the sector had high single-digit growth from 2003 to 2005, partly due to the extension of product offerings to the permutation variant.

Sales of NFOs had grown at a compounded average growth rate of 2.5% in the past 10 years, it said.

In an e-mail reply to StarBiz, the management of Magnum indicated that the sector remained resilient despite the difficult economic conditions.

“Sales have improved in the last few years albeit in the single-digit range and this is likely to sustain. Every business is not spared from the recession but it also depends on how severe the impact is.

“We believe everyone wants to nurture a little hope in his life and, for some lucky ones, this comes true with Magnum,” it said.

Another industry player, who declined to be named, said the NFO was a small-ticket item, hence the affordability for consumers even in a downturn.

The performance of NFO companies in the last 12 months was also an indication of the sector’s resilience.

“Whether upturn or downturn, punters will continue to punt,” he said.

Source: StarBiz

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