Mike Veverka is CEO and Founder of JIN.  He owns 15%.  

All other directors seem to not have shares or options.

The chairman has resigned and is staying on until a replacement happens.  I dont think this represents a culture issue as he is getting on in his years.

The products that JIN sells have brand moats... eg "One Powerball" as well as OZlotto, lucky Lotteries ans Tatts Lotto

Also there could be scale benefits of the use of their digital platform.  

I think their moat is slowly being drained by Tabcorp, as they sell their lotto tickets cheaper, they just sold all of their Jumbo shareholding, renegotiated their terms for Jumbo to sell their tickets taking a bigger slice of the profit.

I am uncertain whether the Charity lotteries have a moat.

The restrictions by state and federal governments for lotteries keeps some companies out therefore keeping the Australian market to JIN and TAH.

Overseas there appears to be limited growth.  They do own 100% of Gatherwell which is UK's charity lotto provider.  This is a good start yet I am sceptical into how many other markets they may enter with government restrictions.

With Tabcorp (TAH:ASX) buying Tatts, Jumbo is pretty reliant on contract renewals, recently renewed under less favourable terms until July 2030.  In other words there is supplier risks there.  TAH could/did negotiate more favourable terms for itself and JIN would/did have their hands tied, squeezing their profit margins.

TAH just announced the sale of their JIN shares...All of their shares.. just under 11.6% of Jumbo  The reason Tabcorp's CEO said “Following the recent extension of our long-standing commercial distribution relationship with Jumbo for a ten year term to August 2030, there is no longer a strategic rationale for Tabcorp’s shareholding in Jumbo. As a result, we have decided to monetise this investment, with the resulting capital to be used to further strengthen the balance sheet and support the move towards our recently revised target gearing range.”  Personally this is an alarm bell for me, but the logic is sound.

Tabcorp competes with the "Lott" by selling their tickets cheaper!!!  Their user numbers are growing substantially also.  Perhaps TAH will widen their moat and drain Jumbo's.  

Other issues that could affect the earnings are the random size of the Jackpots.  There has been more than average big Jackpots which make folk buy more tickets... This leaves revenue more lumpy.

Another issue is gambling preferences... Is Sportsbetting and online poker stealing the market off lotteries?  Think about the randomness of lotteries and the percieved better odds of your own poker skills, or the social interactions of sports betting.

Regulations are a bit of of a win and a lose for JIN.  Lotteries are highly regulated by state and federal governments which limits competition yet limits growth also.  To grow internationally is hard with the roadblocks that Foreign Governments impose also.

They have no debt which is a great thing.  

They pay a dividend of 2.8% as of 17/02/20, however, their payout ratio was 78% in 2019, which may not be sustainable in the long term.

The most valueable asset JIN has is its software and product development.  They spend approx 60% of revenue on this alone.

The "powered by Jumbo" is an interesting idea, where JIN can SAAS their platform to overseas Lotto Companies.  This is a win win as the amount of time and capital to build and constantly improve a secure, functional platform that integrates with new tech like i-watches is something that could appeal to other companies.

Jumbo reckons that only 7-8% of the global market is online, which leaves a huge potential opportunity.

If Jumbo can increase the amount of Charity Lotteries (which JIN "taxes" anywhere from 3% to 10% of sales) than that might mitigate some of the supplier risks.