Laserlike

This post is by guest blogger Rowan Trollope. Rowan is Senior Vice President of Consumer Products at Symantec. Rowan joined Symantec in 1991, and currently oversees product development, engineering, business strategy, and industry relations for Symantec’s worldwide consumer products. In this role, Trollope manages a team of engineers, product managers, and research and development staff that identifies and develops the Norton line of consumer products, including Norton Internet Security, Norton AntiVirus and Norton 360. You can find out more about Rowan here.

As E-bay is to auctions, E-Lottery would be to lotteries.

The other day I was driving home and thinking about how I could justify purchasing a ticket on the inaugural Virgin Galactic flight to space (http://www.virgingalactic.com).  The (projected) $200k price-tag makes it a bit more than I want to bite off for 5 minutes in space and I am willing to wait until the prices come down.  So this got me thinking about how much I’d be willing to spend, even just for a *chance* to go to space.

This led me to an idea I’ve dubbed “ELottery”.  ELottery is an idea for a web-site where users can create a lottery listing for virtually anything.  Other users can then purchase tickets to win the item being listed.  This could be a ticket to space, a date with a celebrity (proceeds go to charity), or a Ferrari F430 Spyder.

The site might work as follows:

A site user creates a new lottery for an item, let’s use “Ticket to space” as the example.  This item will have a cost of $200,000.  The user sets the ticket price at $1 and the lottery gets listed on the listing page.  Other users who are interested in a chance to win a ticket to space can now purchase one or more tickets for the lottery.  When a ticket is purchased by a user, their credit card is charged, in this case, $1.  Once enough people have purchased tickets to pay for the item (or a set time expires), the lottery closes, and the item is purchased.

There is a case where the total number of lottery tickets cannot be sold, and in this case, each persons money would have to be refunded.  An alternative scheme would be that a “hold” is placed on the credit card until such time as enough users have signed up, at which point all users who had purchased tickets would be charged simultaneously, thus eliminating the need to refund.  Another alternative would be to charge the card immediately, and refund the money to the user into their “lottery” account on the site.  This would prevent unnecessary charges back and forth, and would keep the money in the system.

I would point out here that I have not looked at the gambling aspects of this.  This type of site (hosted in the US) might be illegal!  Nevertheless, monetization would be through a variety of avenues:

1) Interest earned on holding the $ from the ticket sales between the time of purchase, and the close of the lottery. 
2) Charging per-item/listing flat fee (oversell tickets to cover this cost — the cost is thus distributed between the lottery ticket buyers.
3) Online advertising.

Consider this:  You might not be willing to spend $200k on a ticket to space, but would you be willing to spend $2,000 for a 1:100 chance?  Would you spend $5,000k for a 1:20 chance of winning an Audi R8?

I think if you keep the prices on individual tickets low enough you would have plenty of takers who would bid on items, despite potentially very low odds of winning.  For example, a user might put $50 in their lottery account, and purchase 50 lottery tickets to 50 different items that interested them:  expensive TV’s, Ferrari’s, Motorcycles, etc. 

To increase the entertainment value of this site and drive increased daily traffic and interactions, I would add the element of time into the “selection process”.  For example, let’s take the example of the “ticket to space”.  Once the total required number of tickets have been purchased, the “selection process” or “elimination round” begins.  This is the process of elimination where the final winner is selected.  This could be drawn out over a period of days, weeks or months.  In the case of our ticket to space, imagine that the selection process occurred over a 2 week period, causing people to be drawn back into the site to watch and “cheer themselves on” as long as their ticket is still “in the game”.  Each time an elimination occurs, users would see their “odds to win” increase!

Another interesting element would be reselling or auctioning off your ticket during the elimination rounds.  As your odds of winning increase after each elimination, the value of your ticket would go up, and could be traded on a secondary marketplace on the site.

Another possible option would be the ability to end a lottery prematurely.  During the final weeks as the total remaining players decreased to smaller numbers (say 4 players), players could vote at any time to “end” the lottery, which, if agreed unanimously, would result in the cash being distributed 4 ways, instead of waiting and hoping for a 25% chance of the final prize.  All of these settings could be determined up front by the lottery creator, or could be voted on by the lottery players in real-time.

As envisioned, this concept would primarily have value as a gaming/entertainment site, however I could imagine the interesting things that people might do with it, and I think it could be a very interesting site if someone took the time to create it.