Lottery companies operate lotteries and sell lottery tickets. A lottery is defined as a prize draw that players must pay to enter, with winners drawn randomly by lot. Organizations that primarily operate lotto-style games and football pools are also part of the Global Sports Betting and Lotteries industry.
Statistics have it that the sales of provincial and territorial lotteries in Canada (excluding Québec) reached approximately 8.26 billion Canadian dollars in 2021. Ontario generated lottery sales of approximately 4.36 billion Canadian dollars in 2021, making it the Canadian province with the highest sales. The lottery market potential growth difference is valued at USD 228.43 billion from 2021 to 2026.
Steps on How to Start a Lottery Business in Canada
Table of Contents
Conduct Market Research
Conducting market research before starting any business is key to the success of the business hence you must not open a lottery business in Canada without conducting market research. Market research provides critical information about your market and your business landscape.
It can tell you how your business is perceived by the customers and clients you want to reach. It can help you determine who and where your customers are, and which customers are most likely to do business with you. In essence, thorough market research will give you the ability to understand how your target customers think and adapt to their needs to turn them into regular customers and brand advocates.
a. Who is the Target Market for Lottery Business in Canada?
- Sportsmen and women
- Business owners
- Tourist and visitors
- Everyone above 18 years who resides in your business location.
b. Is Lottery Business a Profitable Business in Canada?
Yes, a lottery business in Canada is profitable. This is because the lottery market potential growth difference is expected to grow to USD 228.43 billion from 2021 to 2026.
c. Are There Existing Niches in the Industry?
Yes, there are niche areas in the lottery business in Canada and they are;
- Draw games
- Scratch cards
- Sports betting.
d. Who are the Major Competitors?
- Ontario Lottery and Gaming Corporation
- British Columbia Lottery Corporation
- Stars Lottery
- Western Canada Lottery Corporation
- Odds Shark
- Lottery Booth
- Lotto 6/49
- Lotto Max
- Mega Millions
- Daily Grand
- Big Brothers Big Sisters Dream Home Lottery
- Full House Lottery Dream Homes
- Alberta Lottery Fund
- Alberta Gaming, Liquor & Cannabis
- Dreamlife Lottery Home
- Alberta Children’s Hospital Lottery Home
- Millionaire Life.
e. Are There County or Province Regulations or Zoning Laws for Lottery Business in Canada?
Yes, there are county or state regulations or zoning laws for lottery businesses in Canada, and players in this industry are expected to work with the existing regulations governing similar businesses in the province where their business is domiciled. In Canada, most lottery winnings are tax-free, however, the income generated from the winnings is taxable.
Provincial lottery corporations have rules that require winners to publicly disclose their identity and take part in lottery public relations activities, such as having their photos taken with an oversized cheque.
f. Is There a Franchise for Lottery Business in Canada?
No, there are no franchise opportunities for lottery businesses in Canada.
g. What Do You Need to Start a Lottery Business in Canada?
- A Feasibility Report
- Business and Marketing Plans
- Business Licenses and Permits
- Office Space
- Computers, Laptops, and Servers
- Goods and Services Tax/ Harmonized Sales Tax (GST/HST)
- Council Permit
- A Corporate Bank Account
- Software Apps
- Startup Capital
Choose a Memorable Business Name
When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.
Some of the catchy business name ideas suitable for a lottery business are;
Creative Lottery Business Name ideas
- Sure Win® Lottery Company
- Everyday People® Lottery Services Company, Ltd
- Alberta Connect® Lottery Services Ltd.
- Marple Lotto® Lottery Services Ltd.
- Lucky Star® Lottery Services Co.
- Red Line® Lottery Services Group
- Green Rollers™ Lottery Company, Ltd.
- King’s Arena® Lottery Services Co.
- Mariah Jared® Lottery Services Company
- Winner’s Delight® Lottery Services Company
- Peter Jackpot® Lottery Services Company
- George Winston™ Lottery Services Ltd.
- Mike Kester® Lottery Services Company
- Union Group® Lottery Services Company
- TM Morris® Lottery Services Company
- Sanford Wellington® Lottery Services Company, Ltd.
- Big Win® Lottery Services Company, Ltd.
- Rowland Hyden© Lottery Services Company, Ltd.
- Clem Weston™ Lottery Services Company, Ltd
- Access Group® Lottery Services Company, Ltd
- West Plum® Lottery Services Company, Ltd.
- Ontario Group™ Lottery Services Company.
Register Your Business
a. What Type of Business Structure is Best for Lottery Business in Canada?
If you choose to start your business in Canada, it is important to note that there are only four basic forms of business ownership or legal entity you can build your business structure on. They include; sole proprietorship, partnership, corporation, and cooperative.
Please note that when you incorporate a business you create ownership shares, which produce taxation and legal distance between the company and its shareholders. This has tax advantages for the owners; provides some liability protection from the corporation’s debts; and offers some measure of protection for a company’s name. The downside is that setting up a corporation involves initial and ongoing costs for legal and accounting fees.
b. Steps to Form a Corporation in Canada
To register as a corporation, you will need to take the following steps:
- Incorporate your business through federal incorporation or provincial/territorial incorporation.
- Get a federal business number and corporation income tax account from the Canada Revenue Agency (CRA).
- Register as an extra-provincial or extra-territorial corporation in all other Canadian jurisdictions where you plan to do business.
c. What Type of License is Needed to Open a Lottery Business in Canada?
- General Business License
- Zonal Permits (Applicable in some Province)
- Signage Permit
- Lottery License
Please note that Lottery licensing refers to lottery schemes permitted by a license under the Criminal Code of Canada.
d. What Type of Certification is Needed to Open a Lottery Business in Canada?
You don’t need any special certifications to start a lottery business in Canada.
e. What Documents are Needed to Open a Lottery Business in Canada?
These are some of the basic legal documents that you are expected to have in place if you want to legally run a lottery business in Canada;
- Goods and Services Tax/Harmonized Sales Tax (GST/HST)
- Council Permit
- Business and liability insurance
- State Permit and Building Approval
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Contract Document
- Company Bylaws
- Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?
If you are considering starting a lottery business in Canada, usually you may not have any need to file for intellectual property protection or trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Lottery Business in Canada?
When it comes to starting a lottery business in Canada, the startup costs could range from $150,000 (CAD) to over $250,000 (CAD) depending on how big you want to start the business. Please note that this amount includes the salaries of all the staff for the first month of operation.
b. What are the Costs Involved in Starting a Lottery Business in Canada?
- The fee to file articles of incorporation federally is $200
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines, and other software) – $8,300.
- Marketing promotion expenses for the grand opening of the lottery business in Canada- $3,580.
- The total cost for hiring a business consultant including writing a business plan – $2,500.
- The total cost for the purchase of insurance – $4,400.
- The cost for renting or leasing operational office space – $45,000.
- Other start-up expenses include commercial satellite TV subscriptions, stationery ($500), and phone and utility deposits ($2,800).
- Operational cost for the first 3 months (salaries of employees, payments of bills, and software renewal fees et al) – $35,000
- The cost for the purchase of software apps: $5,000
- The cost for store equipment (cash register, security, ventilation, signage) – $1,750
- The cost of purchase and installation of CCTVs: $2,000
- The cost of launching a website: $2000
- The cost for our opening party: $3,000
- Miscellaneous: $2,000
c. What Factors Determine the Cost of Opening a Lottery Business in Canada?
- The size of the lottery business
- The choice of location
- The required licenses and permits
- The type of facility
- The additional services offerings
- The cost of hiring and paying a business consultant and attorney
- The cost for branding, promotion, and marketing of the lottery business in Canada
- The cost of furnishing and equipping the lottery business facility
- The cost of the insurance policy covers
- The cost of registering the business
- The cost of recruiting and training your staff
- The cost of the purchase and customizing of uniforms
- The cost of the grand opening of the lottery business in Canada
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
You don’t need to build a new facility for your lottery business in Canada because the business can be operated from a leased or rented office space.
e. What are the Ongoing Expenses of a Lottery Business in Canada?
- Utility bills (internet subscriptions, phone bills, signage, and software renewal fees et al)
- Payout cash
- Salaries of employees
f. What is the Average Salary of your Staff?
- Chief Executive Officer (CEO) – $45,000 Per Year
- Human Resources and Admin Manager – $36,000 Per Year
- Accountant – $32,000 Per Year
- Lottery Sales Officer – $32,000 Per Year
- Client Service Executive (Help Desk Office) -$28,000 Per Year
g. How Do You Get Funding to Start a Lottery Business in Canada
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks
- Source for soft loans from your family members and friends.
Write a Business Plan
a. Executive Summary
Clem Weston™ Lottery Services Company, Ltd is a standard, licensed, and well-equipped sports betting and lottery company that will be located on one of the busiest streets in Toronto, Ontario – Canada. We have been able to secure a standard facility in a central location in Toronto.
Clem Weston™ Lottery Services Company, Ltd is going to become the number one destination for lottery lovers and gamblers in Toronto, Ontario. We are well equipped and positioned to operate licensed sports betting and lottery businesses, and also to operate online legal sports betting and lottery services. Our sports betting and lottery center has enough parking space to accommodate the number of people that will patronize use per time.
b. Products and Service
- Operating draw lotteries
- Operating ticket lotteries
- Administering instant (scratch) tickets
- Lotteries – including lotto and instant scratch tickets
- Sports betting
- Keno and VLTs
- Bingo etc.
c. Mission Statement
Our mission for establishing Clem Weston™ Lottery Services Company, Ltd is to contribute our quota in promoting sports betting and lottery activities in Toronto, Ontario, and also to make profits from the industry; we want to become the leading sports betting and lottery brand in the whole of Toronto, Ontario.
Our vision is to build a lottery business in Canada – a brand that will become the number one choice for individuals, families, and visitors in Toronto, Ontario.
d. Goals and Objectives
The goals and objectives of the lottery business in Canada are to give people the opportunity to play the lottery and earn more money.
e. Organizational Structure
- Chief Executive Officer (CEO)
- Human Resources and Admin Manager
- Lottery Sales Officer
- Client Service Executive (Help Desk Office)
a. SWOT Analysis
- Effective structure in place
- Highly experienced and qualified employees and management
- Reliable software app
- Support from relevant organizations
- Water-tight strategies on how to expand beyond the major markets.
- Financial Constraints
- A new business that will be competing with well-established lottery business in Canada
- Inability to retain our highly experienced and qualified employees longer than we want
- Partnerships and mergers between established companies.
- Good support structure for lottery business in Canada.
- The arrival of a new lottery business within our market space
- Unfavorable government policy and regulations.
- Differences in management and culture are the biggest barriers to integrating the lottery business in Canada
- Liability problems
- Continuously changing consumer demands especially as it relates to how they expect lottery business in Canada to serve them.
b. How Do Lottery Businesses in Canada Make Money?
Lottery companies make money by selling and licensing their products and services to state lottery agencies (since private lotteries are illegal). Lottery retailers collect commissions on the tickets they sell and also cash in when they sell a winning ticket.
c. Payment Options
- Payment via bank transfer
- Payment with cash
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
d. Sales & Advertising Strategies
- Introduce your lottery business and the services your offer by sending introductory letters alongside your brochure to residents and other key stakeholders throughout the city where your lottery business is located.
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, and LinkedIn to get your message across
- Create a basic website for your business so as to give your business an online presence
- Directly market your services
- Advertise your business in community-based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word-of-mouth marketing (referrals)
a. How Much Should You Charge for your Product/Service?
Generally, there is no fixed charge for lottery tickets, operators are at liberty to price their tickets as they desire.
b. How Much Profit Do Lottery Businesses in Canada Owners Make a Year?
A typical lottery business owner in Canada will make between $120,000 to over $300,000 per year.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the lottery business
- The location the lottery business is covering
- The management style of the lottery business
- The business approach of the lottery business
- The advertising and marketing strategies adopted by the lottery business
- The number of years the lottery business is in business
d. What is the Profit Margin of a Lottery Business in Canada?
The profit margin of the lottery business in Canada is not fixed; to a large extent, it will depend on the number of tickets sold and those who won.
e. What is the Sales Forecast?
Below is the sales forecast for a lottery business. It is based on the location of the business and other factors as it relates to such startups in Canada;
- First Fiscal Year (FY1): $350,000
- Second Fiscal Year (FY2): $880,000
- Third Fiscal Year (FY3): $800,000
Set Up your Shop/Office
a. How Do You Choose a Perfect Location for Lottery Business in Canada?
- The demography of the location
- The demand for lottery tickets in the location
- The purchasing power of businesses and residents of the location
- Accessibility of the location
- The number of lottery businesses in the location
- The local laws and regulations in the community/province
- Traffic, parking and security et al
b. What City is Best to Open a Lottery Business in Canada?
- Toronto, Ontario
- Montreal, Quebec
- Calgary, Alberta
- Ottawa, Ontario
- Edmonton, Alberta
- Winnipeg, Manitoba
- Mississauga, Ontario
- Vancouver, British Columbia
- Brampton, Ontario
- Hamilton, Ontario.
c. What Equipment is Needed to Operate a Lottery Business in Canada?
You should be prepared to purchase software applications, computers/laptops, servers, internet facilities, telephone, fax machines, and office furniture (chairs, tables, and shelves) amongst others, and all of these can be gotten as fairly used except the software.
When it comes to hiring employees for a standard Lottery business in Canada, you should make plans to hire a competent Chief Executive Officer (CEO), Human Resources and Admin Manager, Account Manager, Lottery Sales Officer, and Client Service Executive (Help Desk Office).
Launch the Business Proper
In recent times, no lottery business in Canada opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party. The bottom line is that with a proper launching of the lottery business, you will officially inform people in your city that your lottery business is open for business.
a. What Makes a Lottery Business in Canada Successful?
- Ability to identify good deals
- Willingness to take chances
- Customer-centric business approach
- Good marketing and sales approach
- Strong vision
- Passionate leadership
b. What Happens During a Typical Day at a Lottery Business in Canada?
- The office is open for the day’s work
- The to-do list is reviewed
- Employees go straight to their job description (sell lottery tickets and payout)
- Marketers go all out to market the service offerings of the company
- Reports are written and submitted to superior officers
- The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Lottery Business in Canada?
- Excellent marketing skills
- Excellent computer skills
- Ability to Pay Attention to Details
- Good managerial and human development skills
- Good Accounting and Bookkeeping Skills
- Visionary Leadership
- Team-building and Interpersonal Skills
- Excellent communication and negotiation skills
- Organizational skills
- Problem-solving ability
- Good Supervisory skills
- Experience in managing lottery business
- Experience in business administration
- Experience in handling relevant software.