New app mixes lottery, puzzle games for cash

A new puzzle game, Star Match, looks to inject new life into state lotteries.

Available first in the state of Georgia, the gem-matching game puzzle -- think Bejeweled or Candy Crush -- lets players pay $2 per play for a chance to win up to $10,000.

Publisher LottoInteractive, which is releasing the game today (on Android, iOS and desktop computers), aims to attract smartphone gamers who perhaps don't play traditional scratch-and-match lottery games, as well as lottery junkies looking for the next big game.

"The mobile gamer spends almost $300 a year and they don’t win anything. They just win virtual prizes," says LottoInteractive CEO and founder Brian Ward. With Star Match, "they have a chance to win real cash prices with some content that is as compelling as what they play today. We think they will spend more. Likewise, the lottery player already spends a lot. If we offer them an even more compelling entertainment experience we think we will engage more players."

Consumers have shown a willingness to spend on lotteries and mobile games. Global spending on lotteries approaches $300 billion, according to La Fleur's 2016 World Lottery Almanac. Mobile games are expected to generate $35 billion this year, Deloitte Global estimates.

In the U.S., nearly half of all Americans (49%) play the lottery, according to a Gallup Poll from July. However, state lotteries revenue has remained fairly stable, rising from $19.41 billion in 2012 to $20.91 in 2015, according to the North American Association of State and Provincial Lotteries.

State lotteries want to connect with millennials, as that age group doesn't play lottery games as much as older adults do, said Kurt Freedlund, president of LottoInteractive who spent 20 years as a senior lottery industry executive and help launch the national Powerball/Mega Millions games nationwide.

"The goal of Star Match is to provide a fun interactive type of game which these consumers already play and enjoy, combined with a chance to win a cash prize," Freedlund said in an emailed statement. "This also helps engage loyal lottery players with new and compelling content in addition to the convenience of mobile."

After a career in the video game industry at publishers Electronic Arts, Microsoft andActivision, Ward left in 2012 with a plan to mashup digital games with the lottery. The idea was sparked by a conversation at the Masters golf tournament with a senior lottery executive.

"She was telling me how the lottery needed to move into the digital age. They were still doing everything the old-fashioned way at the 7-Eleven, basically, selling paper tickets and (she said) that the lottery needed to offer a more interactive and entertaining product through digital channels to reengage younger players. ... They were afraid of losing an entire generation of players."

A few states do offer some digital scratch-and-match games, but none with the added option of true video game play built-in. “We’re thrilled to be the first lottery in the world to launch Star Match,” said Georgia Lottery Corp. President and CEO Debbie Alford in a statement. “This mobile-game-inspired addition will enhance our product offerings and deliver engaging content to our players.”

Star Match plays out like a typical gem-matching puzzle game in which you clear rows of jewels to increase your score. Depending on how well you do, you get six to 18 stars that will reveal a dollar prize figure and if you match three, you win that amount. Prizes range from a free game or $2 to $10,000.

For now, those who don't live in Georgia can only demo a trial version of the game. But LottoInteractive is already talking to other states including Michigan, as well as other countries including Canada and several in Europe.

And there are other game types in the works, too, Ward says. "The next step is integrating a bunch of social and engagement and retention mechanics," he said. "From there it is an easy step into offering the national games Powerball and Mega Millions and more traditional lottery product you can purchase form the same app."