News writer
A new lottery experiment is underway in western Canada, sparking frustration among small lottery retailers. It has also raised new questions about whether big-box exclusives could someday reach the U.S. lottery landscape.
Costco's limited trial raises eyebrows
In British Columbia, the British Columbia Lottery Corporation (BCLC) has launched a limited trial giving Costco locations exclusive access to sell a new scratch-off ticket called Hit #1,000, along with holiday-themed lottery bundles. The move marks one of the rare instances where a large multinational retailer has been granted access to a product not available at traditional lottery outlets.
However, there is a catch. If you happen to get a winning ticket, you can't cash your prize at Costco. Instead, that ticket must be validated and redeemed at a standard lottery retailer. These lottery retailers happen to be the small businesses in Canada that are currently feeling sidelined with this promotion.
For many of these small businesses, the trial feels like a shift in the rules.
Small retailers want a level playing field
Chris Burger, vice-president of the Rural Licensee Retail Store Advisory Society (RLRSAS), which represents roughly 230 rural retailers across the province, stated:
We are completely opposed to exclusives, especially to large U.S.-based multinationals. We want fairness across the system…We don't want to see large companies be given special treatment over, born in B.C., often family-run retail stores.
Burger went on to argue that these independent retailers face strict requirements to sell lottery products. However, they fear these same standards may not be applied the same way when a corporate giant is involved.
These smaller retailers are also worried that even with a short-term trial, it could reshape customer habits. This could then permanently reduce store traffic.
BCLC says the trial is about player convenience
Meanwhile, BCLC spokesperson Shelly Wong defended the trial. She emphasized that Costco's Canadian entity has been a long-standing partner and serves a massive customer base, which is around 10 million members worldwide.
Wong went on to say that this trial is an experiment. They are trying to gauge the interest in a program like this, especially since Costco is a popular shopping destination in the province.
In addition, Wong went on to say that these winners having to claim their winnings at a smaller lottery retailer will help them increase foot traffic in their store. This could then result in secondary sales in those stores.
Could this model come to the United States?
While it may increase foot traffic for these stores, small business advocates state their concerns are about precedent and who gets access to the most lucrative products, like the holiday-themed bundles. Those are only available in Costco for this trial. Burger explained:
It's a lottery corporation here for the people of British Columbia. We are those folks, and so we should all be given the same access to products as anyone else. We don't really think there should be exclusives.
As lotteries in this country continue to expand partnerships with big-name retailers like Walmart and grocery-chain integrations, this trial in Canada offers a glimpse of what could come next. Costco is huge in the United States, so if they started offering exclusive scratch-offs, the mom-and-pop lottery retailers in this country might soon be asking the same questions.
For now, industry insiders have their eyes on B.C. If this trial with Costco Wholesale Canada boosts sales without alienating retailers, then it could become a model used in the United States. However, if it fuels resentment or shifts the buying patterns too much, then it may serve as a cautionary tale for lotteries on both sides of the border.
Enjoy playing the lottery, and please remember to play responsibly.
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