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Lottery.com eyeing blockchain for charity games to boost transparency

Online mobile lottery service Lottery.com wants to use blockchain as a service to bolster a new business initiative: expanding into games for charities. Read about the challenges and payoffs.

Executives at Lottery.com recognize that there's a trust issue they must overcome as they pursue plans to expand their business model to include sweepstakes and raffles benefiting charities.

Simply put: Many people are suspicious of such contests, Lottery.com president Ryan Dickinson said.

"People are afraid to put their money into a sweepstakes or put their name into a raffle, because so often it's seen as a scam," Dickinson said. "We want to diminish that fear as much as possible and highlight what we're doing here so people have faith in it."

Using blockchain for charity raffles could help solve this problem. Dickinson said he believes the distributed ledger technology -- designed to maintain a tamper-proof record of transactional data -- can create a level of transparency that donors, charity officials and others can use to track and confirm that the money going into the process lands with the intended recipients in the anticipated amounts.

Lottery.com, a four-year-old company based in Austin, Texas, and incorporated as AutoLotto, is an online mobile ticket management system. Customers can use its app to track lottery results, learn jackpot sizes and -- for residents in many states -- even play Powerball and Mega Millions.

The company now wants to work with charities by finding ways to, first, gamify the donating process and, second, to reward people for their giving, Dickinson said. Just recently, in summer 2018, Lottery.com partnered with singer Rihanna on a sweepstakes to benefit her Clara Lionel Foundation, which supports education, health and emergency response programs around the world.

Blockchain transparency

As Lottery.com moves ahead with more such endeavors, Dickinson said company executives recognize that many people worry whether gambling-like games for charities are legitimate, whether enough of their contributions end up with the charities and whether the charities put the money to good use.

Issuing statements and financial reports can only assuage such concerns so much, Lottery.com officials said. The transparency of blockchain technology could add another dimension of trust.

The goal is to leverage blockchain here for the user-facing perspective, so donors can see how it all works and provide some level of confidence.
Ryan Dickinsonpresident, Lottery.com

"The goal is to leverage blockchain here for the user-facing perspective, so donors can see how it all works and provide some level of confidence. So if a [donor] is inclined to see how everything got processed across an entire campaign, if they ask if they can see that, the answer will be, 'Yes,'" Dickinson said.

In addition to providing the assurances that many donors want, Lottery.com executives said that using blockchain for charity games would give the philanthropic organizations that use their platform, as well as regulators, government entities and business partners, better insight into the flow of money with sweepstakes and raffles. Blockchain's transparency could also improve the company's lottery games and other future products offered on the Lottery.com app.

Blockchain for charity games spurred by BaaS offerings

The company's vision for using blockchain for charity games is well-timed, as major technology vendors such as Amazon and Google are offering toolkits that enable enterprise IT departments to start using blockchain without building everything on their own and at prices that companies like Lottery.com can afford, said Kris Read, a technology consultant and advisorwith Lottery.com who is leading its blockchain initiative.

"Using blockchain for things like trust, auditing and record-keeping didn't enter our radar until we started to see support from the major vendors. That's what pushed us over the edge to where it's something that developers can responsibly build products on," Read said.

Lottery.com developers are still exploring their options. Read said he's leaning toward Amazon Web Services, which in 2018 launched Blockchain Templates, a blockchain as a service (BaaS) offering for Ethereum and Hyperledger Fabric frameworks.

Lottery.com is far from alone in its interest in using blockchain's transparency to solve business problems.

Csilla Zsigri, a senior analyst for blockchain and distributed databases at 451 Research, said the company's Voice of the Enterprise: Digital Pulse survey found that 5% of businesses are using blockchain in production, 17% are experimenting with it and the other 28% are considering implementing it.

"In addition, an uptick in M&A activity also points to a developing market," she said.

Top blockchain use cases, cloud as enabler

Zsigri said companies are primarily looking at using blockchain for trusted sharing of data within networks; tracking assets and products with greater assurance of data integrity; and asset transfer and certified claims -- "where it can be verified that you are who you say you are and have what you say you have."

"Supply chain management, in particular, is a combination of these," she added.

However, not everyone is eager to embrace blockchain. Zsigri noted that there are "challenges around confidence in the technology and governance issues, including [the need for a] mindset shift at industry level."

Additionally, companies interested in blockchain have said they face challenges finding technologists with the experience and skills needed to effectively work with blockchain; integrating it into existing enterprise IT stacks; and identifying use cases with positive returns on investment.

As a young company that uses cloud systems, Lottery.com doesn't have to worry about issues with legacy systems, Read said.

"That definitely makes blockchain more appealing. In fact, if we weren't already using cloud systems, we couldn't justify access to blockchain just yet," he said.

And while he doesn't see cloud as a specific prerequisite for adopting blockchain, access to cloud-centric partners like Amazon can help because they're adding blockchain platforms and tools. "Leveraging their tools and tech means we can stand on the shoulders of giants," Read added.

How to build skills

However, Lottery.com does have to contend with a skills gap. Read has experience working with cryptocurrency -- the space where blockchain as a technology first made its big splash nearly 10 years ago -- but he said the company will have to hire new workers with blockchain skills, train its developers on these new skills or both.

Read said his team will then have to use those skills to develop and implement technologies to integrate whatever BaaS the company chooses to integrate into its own IT stack. And the team will have to build systems that can take the data contained on the blockchain and then share that information with users, company workers, charity executives, business partners or government officials.

"If we want to translate the data we store in a distributed digital ledger into something we can consume, [for example] if we want a report for our accounting department using the blockchain, that's the kind of work that our engineering team has to do," he explained.

The company will also be challenged to identify areas other than using blockchain for charity games and determine whether the ROIs justify the use, he said.

On the other hand, Lottery.com officials said they're confident that such challenges won't slow their adoption and use of blockchain.

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How could blockchain's transparency be used to solve a business problem at your company?
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This looks appealing in one area of my industry. There is a large issue with wire fraud and I could see this eliminating some of the opportunities that hackers take advantage of to commit wire fraud. Can anyone speak to this type of implementation?
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