Massachusetts State Lottery Commission

MASSACHUSETTS STATE LOTTERY COMMISSION

APRIL 2021 COMMISSION MEETING

DEBORAH B. GOLDBERG, CHAIR TREASURER AND RECEIVER GENERAL

THOMAS A. TURCO, III MEGHAN S. LIDDY SECRETARY OF PUBLIC SAFETY COMMISSIONER

ANTHONY J. SALVIDIO WILLIAM J. MCNAMARA COMMISSIONER COMPTROLLER

MICHAEL R. SWEENEY EXECUTIVE DIRECTOR APRIL 27, 2021

Massachusetts State Lottery Commission 150 Mount Vernon Street Dorchester, MA 02125

Tel: (781) 849-5555 Fax: (781) 849-5546 TTY: (781) 849-5678

NOTICE OF MEETING AND AGENDA

In accordance with G.L. c. 30A, §§ 18-25 and 940 CMR 29.03, but subject to the Order Suspending Certain Provisions of the Open Meeting Law, G.L. c. 30A, § 20 issued by Governor Baker on March 12, 2020, notice is hereby given of a meeting of the Massachusetts State Lottery Commission to be held remotely at the following time:

Tuesday, April 27, 2021 10:30 a.m.

Conference Call Meeting with Screen Sharing/Presentation This meeting is open to the public. To access, please contact the Lottery’s Legal Department at (781) 917-6057 or via email at [email protected] and you will be provided with a Phone Number and Conference ID and/or link.

I. Opening of Meeting

II. Approval of Minutes from March 30, 2021

III. Executive Director’s Report

IV. Matters Requiring Approval of the Massachusetts State Lottery Commission

VOTE (1): For the reasons set forth in the attached memorandum dated April 8, 2021, the Massachusetts State Lottery Commission is increasing the aggregate maximum obligation by an additional six hundred thousand dollars ($600,000.00) for the first option year of its contracts to purchase thermal roll ticket stock with the following vendors:

RMF Printing Technologies, Inc. 50 Pearl Street Lancaster, NY 14086

Total Business Systems d/b/a Deluxe Data Printers 30800 Montpelier Madison Heights, MI 48071

PAP Technologies, Inc. 1813 Colonial Village Lane Lancaster, PA 17601

This original award was made pursuant a competitive bid process (RFR LOT # 1714). The aggregate maximum obligation assumed hereunder for the first option year shall not exceed two million, three hundred thousand dollars ($2,300,000.00).

VOTE (2): For the reasons set forth in the attached memorandum dated April 12, 2021, the Executive Director is authorized to enter into a three-year contract with two (2) one-year extension options for the provision of managed network services to support the Lottery’s back office network systems in accordance with the attached memorandum with the following company:

Future Technologies Group, LLC d/b/a New Era Technology NE 2 Batterymarch Park, Suite 401 Quincy, MA 02169

This award is made pursuant to statewide contract ITC73 through a competitive bid process (RFQ LOT # 2111).

The maximum obligation assumed hereunder for these services during this three-year period will not exceed two hundred twenty thousand dollars ($220,000.00). VOTE (3): For the reasons set forth in the attached memorandum dated April 15, 2021, the Executive Director is authorized to encumber and expend five hundred thousand dollars ($500,000.00) for the provision of services from the below vendor for the Massachusetts State Lottery Commission’s Amazon Web Services (AWS) account pursuant to the Master Services Agreement RFR 16-21 between the Executive Office of Technology Security Services (EOTSS) and Smartronix, LLC:

Smartronix, LLC 44150 Smartronix Way Hollywood, MD 20636

The aggregate total maximum obligation assumed hereunder for the above services shall not exceed five hundred thousand dollars ($500,000.00). Any future encumbrance or expenditure pursuant to this vote is contingent upon appropriate availability of funding for the Lottery.

V. Other Business – Reserved for Matters the Chair did not Reasonably Anticipate at the Time of Posting

Date Posted to Website: Thursday, April 22, 2021 prior to 5:00 p.m.

Supporting the 351 Cities and Towns of Massachusetts Visit our Web Site: www.masslottery.com

TABLE OF CONTENTS

• APPROVAL OF MINUTES FROM MARCH 30, 2021

• MATTERS REQUIRING APPROVAL OF THE MASSACHUSETTS STATE LOTTERY COMMISSION

MINUTES

APPROVAL OF MINUTES FROM March 30, 2021

Massachusetts State Lottery Commission Draft/Unofficial Meeting Minutes for 03/30/2021 Meeting

Massachusetts State Lottery Commission 150 Mount Vernon Street, Suite 300 Dorchester, Massachusetts 02125 Tel: (781) 849-5555 Fax: (781) 849-5546 TTY: (781) 849-5678

Draft/Unofficial Meeting Minutes

DATE: Tuesday, March 30, 2021

TIME: 10:30 a.m.

All Attendees Participated Remotely through Cisco Webex Conferencing System

MEMBERS PRESENT: Deborah Goldberg, Treasurer and Receiver General William J. McNamara, Comptroller Meghan Liddy, Commissioner Anthony Salvidio, Commissioner Susan Terrey, General Counsel, Executive Office of Public Safety and Security, designee of Secretary Thomas A. Turco III

ALSO PRESENT: Michael Sweeney, Executive Director, Lottery Edward Farley, Chief Marketing Officer, Lottery David Falcone, Chief Operating Officer, Lottery Didier Bertola, Chief Financial Officer, Lottery Thomas Cream, Assistant Executive Director IT, Lottery Liz Giffen, Consultant, Lottery Judy Moore, Senior Executive Assistant, Lottery Gregory Polin, General Counsel, Lottery Christian Teja, Director of Communications, Lottery

Delwin Dickinson, Senior Consultant, Advizex Joshua Fredette, Senior Program Engagement Manager, Overture Partners, LLC

James MacDonald, First Deputy Treasurer Sarah Kim, General Counsel, Treasury Chandra Bork, Chief of Staff, Treasury Lizandra Gomes, Deputy Chief of Staff, Treasury Alethea Harney, Communications Director, Treasury Emily Kowtoniuk, Deputy Legislative Director, Treasury Steve Moore, Deputy Legislative Director, Treasury Andrew Napolitano, Deputy Communications Director, Treasury Mary E. Wilkins, Executive Assistant of Communications, Treasury

Massachusetts State Lottery Commission Draft/Unofficial Meeting Minutes for 03/30/2021 Meeting

Victor Ortiz, Director of Problem Gambling Services, Massachusetts Department of Public Health Chelsea Turner, Director of Responsible Gambling, Massachusetts Council on Gaming and Health Marlene Warner, Executive Director, Massachusetts Council on Gaming and Health

Kim Tunnicliffe, News Anchor/Reporter, WBZ Radio 1030 Colin Young, State House News Service

Michael Greene, Interested Member of the Public Dee Floreal, Interested Member of the Public

I. Opening of Meeting

Treasurer Deborah Goldberg opened the Massachusetts State Lottery Commission (“Commission”) meeting at 10:40 a.m.

Treasurer Goldberg stated:

Pursuant to the Massachusetts Open Meeting Law, Massachusetts General Laws, Chapter 30A, section 20, all of the Commissioners; Comptroller William J. McNamara, Commissioner Meghan Liddy, Commissioner Anthony Salvidio, General Counsel Susan Terrey, and myself, Treasurer Deborah Goldberg, will be participating remotely for this meeting because physical attendance is unreasonably difficult.

Normally, the Commissioners are able to participate remotely only when a quorum of the members are physically present at the meeting location, however, the Commission is relying on Governor Baker’s March 12, 2020 Executive Order that allows remote participation by all members of a public body and suspends the requirement that a quorum of the body and the chair be physically present at the specified meeting location.

Commissioners, we are all participating by a conference call. Commissioners, please let us know if you have any sort of technical difficulty. The Commissioners may participate in any and all votes scheduled to take place at today’s meeting. All votes must be taken by roll call.

Treasurer Goldberg then made the following statement:

Pursuant to the Commonwealth’s Open Meeting Law, Massachusetts General Laws, Chapter 30A, Section 20, as the Chair of the Massachusetts State Lottery Commission, I would like to advise that any person may make a video or audio recording of this open meeting. However, I am obligated to inform attendees of anyone recording at the beginning of the meeting, so I ask that those who are doing so identify themselves.”

Massachusetts State Lottery Commission Draft/Unofficial Meeting Minutes for 03/30/2021 Meeting

Judy Moore, Senior Executive Assistant, Lottery, identified herself as making a recording to assist in the preparation of the meeting minutes. Colin Young of State House News Service and Kim Tunnicliffe of WBZ Radio also stated that they would be making a recording.

II. Approval of the Minutes from February 23, 2021

Treasurer Goldberg asked the Commission to accept the minutes from its meeting held on February 23, 2021. Commissioner William McNamara made a motion to accept the minutes of the meeting and Commissioner Anthony Salvidio seconded the motion.

Treasurer Goldberg, recognizing there was no further discussion, moved the motion to a roll- call vote.

Commissioner William McNamara: yes; Commissioner Meghan Liddy: yes; Commissioner Anthony Salvidio: yes; General Counsel Susan Terrey: yes; and Treasurer Goldberg: yes. The Motion carried. The minutes were approved at 10:45 a.m.

III. Executive Director’s Report

Lottery Sales Update-February

Executive Director Sweeney reported that overall unadjusted sales for February of 2021 were up $3.6 million from February 2020. The estimated net profit and prize payout figures do not include accruals for prizes won that have not yet been paid. The estimated net profit for February 2021 was $76.2 million as compared to $83.3 million in February 2020, resulting in an estimated $7.1 million decrease in net profit. The estimated prize payout for February 2021 was 74.86 percent, as compared to 72.47 percent in February 2020.

Executive Director Sweeney then reported on the estimated FY21 year-to-date net profit and prize payout figures, which both include accruals for prizes won that have not yet been paid. The estimated year-to-date net profit for the first eight months of FY21is $747.9 million as compared to $697.9 million for the first eight months of FY20. The adjusted year-over-year change for the first eight months of FY21 versus the first eight months of FY20 is an estimated $56.2 million increase in net profit. The estimated year-to-date prize payout for the first eight months of FY21 is 73.06 percent, as compared to 73.60 percent for the first eight months of FY20.

Executive Director Sweeney provided a breakdown on the February 2021 sales. He reported that 6 of 9 products experienced sales increases in February of 2021 as compared to February of 2020. Numbers Game sales were up $3.3 million, Instant Ticket sales were up $1.3 million, Powerball sales were up $452,602 (high jackpot of $111.1 million as compared to $80 million in February 2020), Mass Cash sales were up $309,605, Lucky for Life sales were up $80,580, and Megabucks Doubler sales were up $78,254 (high jackpot of $9.10 million as compared to $9.67 million in February 2020).

As compared to February of 2020, Keno sales were down $1.7 million, Mega Millions sales were down $196,685 (high jackpot of $96 million as compared to $202 million in February 2020), and All or Nothing sales were down $30,388.

Massachusetts State Lottery Commission Draft/Unofficial Meeting Minutes for 03/30/2021 Meeting

Five Year Comparison Chart

Executive Director Sweeney provided a visual representation of a five-year comparison chart showing the highest payout as a percentage of the Lottery’s sales from the last five years. He remarked that the prize payout experienced an uptick from January and was up over 73 percent.

Gross Sales Results – February Sales

Executive Director Sweeney discussed the Gross Sales Results of February FY21 versus the February FY20 Unadjusted Non-Fiscal Year, as well as the year-to-date results for FY21versus FY20.

He reported that overall, February 2021 sales maintained its position in comparison to February 2020, and described the figures as, “impressive” and just below the 1 percent over mark as compared to February 2020. Instant tickets continued to perform well as well as Mass Cash. Powerball experienced strong numbers as a jackpot comparison to last year. Due to the impact of the pandemic, Keno and All or Nothing sales continue to lag.

Reporting on the figures for FY21 sales through February, Executive Director Sweeney announced that overall, sales were doing very well. Sales were approximately 4 percent over as compared to the prior year. Instant ticket sales showed a strong performance and were up over 6 percent. Mega Millions and Powerball experienced a significant bump earlier in the year due to large jackpots. Executive Director Sweeney reported that the restrictions from the pandemic has had a long-term negative impact on Keno and All or Nothing sales.

Weekly Keno Sales

Executive Director Sweeney shared a breakdown of weekly Keno sales from March 2019 through March 2021. He stated that in the beginning of March 2019, sales were steady throughout the month and running consistently from $20 to $23 million. In March of 2020, before the period of the pandemic, sales remained typically strong and within a $22.5 million weekly range, which he attributed to the initiatives that were implemented for Keno.

As the pandemic began, and as players curtailed their activity on a normal day-to-day basis, Keno sales experienced a significant drop. Executive Director Sweeney stated that the Lottery has done well to recover and he reported on the weekly figures for March 2021, which were above the level of where the figures were for 2019, but hadn’t reached the March 2020 level. He noted an upward movement towards the middle of March and credited the weather and the ease of some of the restrictions for the uptick.

Massachusetts State Lottery Performance 8-Month Comparison

Executive Director Sweeney reported on an 8-month comparison for the period of Lottery sales between the pre-pandemic period of July 2019 through February 2020, and the same time a year later during the pandemic.

Massachusetts State Lottery Commission Draft/Unofficial Meeting Minutes for 03/30/2021 Meeting

Executive Director Sweeney asked the Commission to be mindful that as the new Keno and All or Nothing numbers come in from March through the end of the fiscal year, the numbers are going to be compared to the huge drop-off which occurred the same time last year.

Although Keno sales have lagged and are down about 10 percent as compared to the last non- pandemic time period, total sales were up just over 4 percent and net profit was up 7.2 percent.

Executive Director Sweeney thanked the entire team at the Lottery and conveyed that everyone from the warehouse, to the regional managers, to the claim centers, and sales reps have all done an outstanding job.

Keno To-Go

Executive Director Sweeney provided an update on the Lottery’s recent efforts to alleviate some of the impact that the pandemic has had on Keno sales. He stated that it was going to take some time to get back to where the level of sales should be and he credited Michael Lorden, Assistant Executive Director of Sales at the Lottery, for his initiative to help recover Keno revenues.

The project focuses on expanding the Lottery’s Keno To-Go option which is already well received by players. Beginning February 2nd, the Lottery activated Keno To-Go at over 300 existing retailers, which generated over $75,000 in revenue to date. This creates a new revenue stream for small businesses as well as for the Commonwealth. The Lottery is now proactively discussing a Keno To-Go option for new retail agents. Although this effort won’t be a complete game changer, Executive Director Sweeney believes it will be one measure that will help to regain some of the losses that have occurred with Keno.

Disney shuttering at least 20% of Disney Stores as it shifts focus to e-commerce By Sarah Whitten, CNBC, March 3, 2021

Executive Director Sweeney reported on a current news item that relates to the impact from the pandemic. He informed the Commission that Disney is one of the latest companies that has closed some of its physical locations to focus more on the e-commerce side of the business, a trend that is being seen across the country.

Disney will be closing approximately 60 of its North American locations, citing changing consumer behaviors and a desire to link its online shopping experience to its Disney Parks apps and social media platforms. The pandemic has accelerated the shift away from physical stores to a digital shopping experience by about five years. The article provided data from IBM’s U.S. Retail Index which stated that industry wide e-commerce sales jumped 32.4% to $791.7 billion in 2020, and that figure is only expected to grow. Executive Director Sweeney concluded that all of the technology related changes that have been discussed for the past three to four years has greatly accelerated during this time period.

Massachusetts State Lottery Commission Draft/Unofficial Meeting Minutes for 03/30/2021 Meeting

Alcohol Deliveries Soar During Pandemic By Chris Lisinski, State House News, March 2, 2021

Executive Director Sweeney reported on a current news items from State House News Service regarding the Alcoholic Beverages Control Commission, which has seen direct-to-consumer alcohol deliveries increase 300 percent. Executive Director Sweeney stated that this is a great measure for the Commonwealth to have pursued in order to help some of these smaller businesses. He reported that one of the companies, Drizly, an alcohol e-commerce platform that facilitates the delivery of alcohol and lets users order a variety of beer, wine, and spirits directly from local retailers through a mobile app or website was purchased by Uber last month for $1.1 billion. Drizly grew more than 350 percent in 2020, as compared to a year prior, while the number of retail partners using the platform has doubled since Jan. 1, 2020.

Executive Director Sweeney concluded that many retail locations in Massachusetts, as well as across the country, continue to shift to a delivery system in order to meet consumer demand. He stated that when the consumer is availing itself for this type of delivery option, it creates a difficult place for the Lottery to be in as consumers will not be exposed to Lottery products if they are not leaving their home to travel to liquor or retail store settings. This is a continuing dynamic that creates a significant challenge for the Lottery, which is not allowed to sell its products on-line.

Virginia Online Games Made Up 21% of VA Lottery Income; Online Contests Launched Statewide Last July 1 By Kate Andrews, Virginia Business, March 17, 2021

Executive Director Sweeney updated the Commission on recent on-line Lottery efforts that are taking place across the country. He reported on an interesting article released in March by the Commonwealth of Virginia. Their on-line lottery games sales made up 21.8% of the state lottery’s total $2 billion revenue between their July 1, 2020 launch and through the end of February, pulling in more than $436 million. He reminded the Commission that the Massachusetts State Lottery is a $5 billion revenue lottery and what an on-line lottery system could mean to the Massachusetts cities and towns.

Executive Director Sweeney reported that over 163,000 players have won prizes playing the Virginia Lottery online, including the Mega Millions, Powerball and Cash4Life games. In addition, the Virginia retail counter has also seen a significant increase in sales over the same period. More than $1.6 billion in Virginia Lottery products have been sold at its 5,000 plus retail locations since July 1st. Executive Director Sweeney noted that there is not a single state that has an integrated on- line lottery that has seen a dip in the revenues produced by their retail agents. Every lottery which has introduced on-line lottery sales has seen an increase in sales at their retail brick and mortar locations.

Data in Motion: Marketing & Insights Provided by Scientific Games, March 16, 2021

Executive Director Sweeney reported that another way that the world is increasingly changing is the shift in how people consume information. He shared a marketing slide provided by Scientific Games which states that the daily time spent on major media in the U.S. has increased by 60 minutes since 2011. That increase came entirely from digital and internet services which overcame traditional TV usage for the first time in 2018. Shelter-in-place requirements accelerated the transition from traditional TV to digital engagement, especially for paid streaming, video, music, and gaming subscriptions. 6

Massachusetts State Lottery Commission Draft/Unofficial Meeting Minutes for 03/30/2021 Meeting

Executive Director Sweeney provided a visual chart which showed that in April 2020, digital formats were responsible for 57% of total daily media consumption in the U.S., 28 percentage points higher than TV and 45 points higher than radio. Additionally, 38% of consumers surveyed said they tried a new digital activity or subscription for the first time during the pandemic. More than two-thirds said they are likely to continue their new activity or subscription post-pandemic.

Digital Engagement Figures, Twilio State of Customer Engagement Report 2021

Executive Director Sweeney reported on data figures from Twilio, a leading cloud communication platform that engages customers across channels such as SMS, voice, video, and email. Twilio, which has roots in Massachusetts, reported on their state of customer engagement 2021.

The report shows that 87% of companies reported that digital communications have become critically or very important to survival during the pandemic. 96% reported that not digitizing customer engagement would have negatively impacted business. 87% reported digital communications will remain critically or very important to success going forward. 95% reported they are increasing or maintaining investment in digital customer engagement after the pandemic. Executive Director Sweeney stated that the world has shifted completely for both the consumer and the business world to an on-line digital platform in one form or another. He stated that this is where commerce is increasingly going. The Lottery has been doing its best to keep up with these trends as much as legally allowed to.

Liz Giffen –AED/Digital Operations

Executive Director Sweeney was happy to announce that in pursuit of expanding into these digital areas, and after months of search and negotiations, the Lottery was able to bring on a new hire with extensive experience in digital operations. He introduced Liz Giffen as the new Assistant Executive Director of Digital Operations and stated that she will be working alongside the marketing team, as well as the Lottery in general, to move the Lottery forward into a digital platform with greater coordination and efforts and with a focus on customer engagement. He stated that Assistant Executive Director Giffen has prior lottery experience with one of the early adopters in this space by leading the digital advertising program at the Michigan Lottery.

Assistant Executive Director Giffen thanked Executive Director Sweeney for the introduction and expressed her excitement in joining the Massachusetts State Lottery as the Digital Director and as being the first Digital Director for the organization.

Executive Director Sweeney concluded that part of the transition is to move towards the digitalization of the Lottery. He stated that the Lottery is preparing for the potential day when it is allowed to sell Lottery products on-line.

March is Problem Gambling Awareness Month

Executive Director Sweeney highlighted the Lottery’s strong involvement during March’s National Compulsive Gambling Awareness Month. He reminded the Commission of the Lottery’s partnership with the Massachusetts Department of Public Health’s Office of Problem Gambling Services. 7

Massachusetts State Lottery Commission Draft/Unofficial Meeting Minutes for 03/30/2021 Meeting

Executive Director Sweeney reported that Christian Teja, Lottery Assistant Executive Director of Communications, works very closely with the department to provide appropriate messaging and he highlighted the numerous ways in which Lottery helped to get the message out. He related that the Lottery was successful in securing approximately 800 radio spots which were valued at an estimated $64,000. In addition, the Lottery is also displaying appropriate messaging in the following areas: Keno and All or Nothing Monitor displays, signage in the customer service areas of the Dorchester headquarters and the regional offices, emails to Lottery VIP Club members and retailers, flex terminals, social media, and the banner on the Lottery website. He thanked Victor Ortiz, Director of the Office of Problem Gambling Services, and informed the Commission that he was in attendance and invited him to address the Commission.

Director Ortiz thanked the team at the Lottery for its collaboration and partnership. He stated that this year the partnership with the Lottery was instrumental in promoting the new and enhanced integrated helpline. He added that the expansion came directly on time with Problem Gambling Awareness month, and its collective effort to promote problem gambling as a public health issue. He reminded the Commission that the helpline is now integrated with the substance abuse helpline. The department is now screening 15,000 to 20,000 individuals, who are calling for substance abuse services, for problem gambling, which represents one of the largest expansions of problem gambling screening in the country. That accomplishment is about a team effort and partnership with the Massachusetts State Lottery Commission, the Massachusetts Gaming Commission, and others to continue to ensure that the Commonwealth continues to work towards mitigating problems that are associated with gambling.

Social Media

Executive Director Sweeney shared the creative ways in which the Lottery uses social media to connect with players. Executive Director Sweeney also highlighted the Lottery’s efforts in raising awareness on responsible gambling and the various ways to address it.

IV. Matters Requiring Approval of the Massachusetts State Lottery Commission

VOTE (1): For the reasons set forth in the attached memorandum dated March 25, 2021 and pursuant to Massachusetts General Laws Chapter 10, § 24 and 961 CMR 2.46, the Commission authorizes the Executive Director to amend 961 CMR 2.00 as described in the attached memorandum and/or as otherwise deemed necessary by the Executive Director to facilitate remote ticket cashing; further, is directed to file such regulation and/or amendment thereof with the Office of the Secretary of State.

Commissioner Meghan Liddy made a motion which authorizes the Executive Director to amend 961 CMR 2.00 and Commissioner William McNamara seconded the motion.

Executive Director Sweeney reminded the Commission of the Lottery’s successful launch of phase one of remote ticket cashing. Lottery players are now able to check if their Lottery product is a winner, as well as how much has been won, by using the app. During late spring, the Lottery will slowly transition into phase two that will allow individuals the ability to remotely cash their tickets for prizes in excess of $600.00 to approximately the $5,000 range. This will be a slow rollout in which extensive testing will be conducted. There is a lot of involvement with this feature, including many banking and security matters. The Lottery will continue to honor its obligations for tax collecting and child support. Intercepts will continue unabated through this program. The 8

Massachusetts State Lottery Commission Draft/Unofficial Meeting Minutes for 03/30/2021 Meeting

memorandum by Lottery General Counsel, Greg Polin, explains the matter in great detail with excellent language. The Code of Massachusetts Regulations (CMR’s) that are currently on the book were promulgated during the 1970’s to 1990’s and were reflective of what the Lottery business model was during that time. The Lottery model is changing to keep up with consumer interest and demand.

In looking at the actual language of the CMR’s that regulate the Lottery, it was realized that there needed to be a lot of updating. Executive Director Sweeney noted that when a player wins a prize of $600 or more, they are required to travel to a physical Lottery location. This will no longer be the case. The language adjustments are to primarily reconcile the release of the remote ticket cashing opportunity as well as the first attempt at modernizing some of the language within the CMR’s to reflect the way in which the Lottery operates in 2020 and 2021, and expects to operate going forward. Executive Director Sweeney told the Commission that multiple times during the next year or two, additional CMR language changes will be brought forth to reflect the new reality of the Lottery business model. Executive Director Sweeney complimented General Counsel Polin in doing an excellent job in highlighting the areas where the language changes are made.

Commissioner William McNamara stated that he viewed this as a straightforward vote proceeding directly from earlier conversations. Commissioner Meghan Liddy praised Executive Director Sweeney as well as the entire team at the Lottery for this effort. She added that there are things that can be controlled as well as those that cannot and the management and leadership has been excellent. She added that she has full confidence in the Lottery and acknowledged that there has been a fundamental shift in the consumer marketplace in which the Lottery has had to change in order to stay relevant. She extended her appreciation to the entire Lottery team on this effort.

Treasurer Goldberg, recognizing there was no further discussion, moved the motion to a roll- call vote. Commissioner William McNamara: yes; General Counsel Susan Terrey: yes; Commissioner Meghan Liddy: yes; Commissioner Anthony Salvidio: yes; and Treasurer Goldberg: yes. The Motion carried.

V. Other Business – Reserved for matters the Chair did not reasonably anticipate at the time of posting

Treasurer Goldberg asked if there was any other business to discuss. Executive Director Sweeney took a minute to expand on the success of and excitement around the new remote ticket app. He provided a screenshot from a Lottery customer who used the app to determine if his Lottery product was a winner. The customer, in the privacy of his own home, was able to realize that he had just won $10 million. Needless to say, the customer was completely ecstatic and appreciated the opportunity to receive this information in the privacy of his home. The customer was enthusiastic to share how he used the new Lottery app with the customer service department when he came to the Lottery headquarters in Dorchester.

Executive Director Sweeney concluded that none of this would be possible without the leadership of Treasurer Goldberg and the leadership at the Commission level for allowing the Lottery to take the risks needed to move this business forward.

Treasurer Goldberg asked if there was any other business to discuss. Kim Tunnicliffe, News Anchor/Reporter for WBZ Radio asked if the Executive Director had any statistics on how many lotteries are using the app and specifically, how would the cashing out part of the app work.

Massachusetts State Lottery Commission Draft/Unofficial Meeting Minutes for 03/30/2021 Meeting

Executive Director Sweeney said that he would provide News Reporter Tunnicliffe with statistics following the meeting and added that there has been an enthusiastic response by the players as the app was released. The Lottery has been pleased with the player adoption and usage of the app. He explained that the cashing portion of the app was in phase two and has not yet been fully implemented. He stated that it will work similar to a lot of the financial transactions which are seen in the e-commerce world today. The Lottery will conduct customer verification and has worked specifically with the bank used by the Commonwealth. One of the key aspects is that the Lottery will continue its mandate to collect any type of unpaid taxes or child support. For the time being, the cashing portion will only be available for prizes within the $600 to $5,000 range. Executive Director Sweeney added that this should also result in a very significant environmental impact, as its usage will potentially decrease the amount of individuals who are using their vehicles to drive to one of the Lottery locations across the Commonwealth.

After asking if there was any other business to discuss, Treasurer Goldberg sought a motion to adjourn the meeting. Commissioner McNamara moved to adjourn and Commissioner Salvidio seconded the motion.

Treasurer Goldberg moved the motion to a roll-call vote. Commissioner William McNamara: yes; Commissioner Salvidio yes; Commissioner Meghan Liddy: yes; General Counsel Susan Terrey: yes; and Treasurer Goldberg: yes. The Motion carried.

The Commission meeting adjourned at 11:28 a.m.

List of Documents and Exhibits Used:

• MSLC March 2021 Commission Meeting Book • MSLC Meeting Executive Director’s Report, March 30, 2021 – PowerPoint Presentation • Photo of Lottery App Screen Shot

VOTES

MATTERS REQUIRING APPROVAL OF THE MASSACHUSETTS STATE LOTTERY COMMISSION

VOTE: For the reasons set forth in the attached memorandum dated April 8, 2021, the Massachusetts State Lottery Commission is increasing the aggregate maximum obligation by an additional six hundred thousand dollars ($600,000.00) for the first option year of its contracts to purchase thermal roll ticket stock with the following vendors:

RMF Printing Technologies, Inc. 50 Pearl Street Lancaster, NY 14086

Total Business Systems d/b/a Deluxe Data Printers 30800 Montpelier Madison Heights, MI 48071

PAP Technologies, Inc. 1813 Colonial Village Lane Lancaster, PA 17601

This original award was made pursuant a competitive bid process (RFR LOT # 1714).

The aggregate maximum obligation assumed hereunder for the first option year shall not exceed two million, three hundred thousand dollars ($2,300,000.00).

Dated: April 27, 2021 MEMORANDUM

To: Michael Sweeney Executive Director

From: Matthew DiFrancesco Assistant Executive Director of Operations

CC: Greg Polin General Counsel

Date: April 8, 2021

Ref: RFR 1714 Thermal Roll Ticket Stock – Option Year 1 – Amendment to Vote

On June 27, 2017, the Massachusetts State Lottery issued RFR 1714 for the purpose of purchasing thermal roll ticket stock to supply the Lottery’s terminals at our agent locations. This product is used to print the on-line game tickets as well as printing hard copy reports for the Sales Agents.

In August 2017, the Massachusetts State Lottery Commission (“Commission”) authorized the Executive Director to enter into three separate three-year contracts, each with two (2) one-year extension options, for thermal roll ticket stock with the following vendors:

RMF Printing Technologies, Inc. 50 Pearl Street Lancaster, NY 14086

Total Business Systems d/b/a Deluxe Data Printers 30800 Montpelier Madison Heights, MI 48071

PAP Technologies, Inc. 1813 Colonial Village Lane Lancaster, PA 17601

This award was made pursuant to a competitive bid process (RFR LOT # 1714). Initially the Commission approved an aggregate maximum obligations not to exceed five million, ten thousand dollars ($5,010,000.00) for the three-year contract terms. In light of the COVID-19 pandemic, in March 2020, the Commission increased this aggregate maximum obligation to an amount not to exceed six million, seventy thousand dollars ($6,070,000.00).

On August 25, 2020, the Commission authorized the Lottery to engage in Option Year 1 with all three vendors and the Commission approved an aggregated maximum obligation not to exceed one million, seven hundred thousand dollars ($1,700,000.00) for fiscal year 2021.

Page 1 of 2

Due to an expected industry wide price increase of 5% - 8% this summer, the Lottery would like to purchase additional thermal paper at this time to take advantage of the current pricing. Therefore, the Lottery is requesting the Commission increase the aggregate maximum obligation for these contracts by an additional six hundred thousand dollars ($600,000.00) to take advantage of the lower pricing levels. This would increase the aggregate maximum obligation for fiscal year 2021 to an amount not to exceed two million, three hundred thousand dollars ($2,300,000.00).

Page 2 of 2

VOTE: For the reasons set forth in the attached memorandum dated April 12, 2021, the Executive Director is authorized to enter into a three-year contract with two (2) one-year extension options for the provision of managed network services to support the Lottery’s back office network systems in accordance with the attached memorandum with the following company: Future Technologies Group, LLC d/b/a New Era Technology NE 2 Batterymarch Park, Suite 401 Quincy, MA 02169

This award is made pursuant to statewide contract ITC73 through a competitive bid process (RFQ LOT # 2111).

The maximum obligation assumed hereunder for these services during this three- year period will not exceed two hundred twenty thousand dollars ($220,000.00).

Dated: April 27, 2021

TO: Michael Sweeney, Executive Director

FROM: RFQ. 2111. Managed Network Services Procurement Management Team

DATE: April 12, 2021

Re: Managed Network Services

It is requested that the Massachusetts State Lottery Commission (MSLC) authorize the Executive Director to enter into a contract with Future Technologies Group, LLC dba. New Era Technology NE (Future Technologies) of Quincy, MA to provide managed network services to support the MSLC’s back office systems, users and Lottery locations throughout the Commonwealth.

This purchase results from the MSLC’s Request for Quotes (RFQ) LOT # 2111 – Managed Network Services, which utilized Massachusetts State Contract ITC73 Category 3 for IT Hardware and Services. Only pre- qualified vendors on ITC73 were permitted to submit quotes for the requested services.

Due to a shift in both internal and external resources, the MSLC IT team identified the need for a vendor to provide managed network services to support the existing 24x7 enterprise back office systems for its nine regional locations and entire user community. The scope of work includes maintaining a network operations center, management, monitoring, remediation, and administration of the MSLC’s critical network infrastructure. These services are specific to back office network systems, and there is no requirement for the vendor to support the Central Gaming Systems network or retailer systems network.

The RFQ for Managed Network Services was issued and posted on the State’s Procurement System, COMMBUYS to ITC73 vendors on March 4, 2021. A Bidders’ conference was held March 9, 2021 that covered general bid information, project requirements, and allowed prospective Bidders to ask questions of the Procurement Management Team (PMT). Bid responses were due on March 19, 2021 by 3:00 P.M.

The MSLC received five (5) responses by the required deadline from the following vendors:

• Bredy Network Management Corporation (BNMC) • IntraSystems, Inc. • Future Technologies Group, LLC dba. New Era Technology NE • NWN Corporation • Presidio Networked Solutions, LLC

The PMT convened to collectively evaluate the business and technical responses. After careful review of the proposals, supporting bid documents, and cost tables, the PMT determined the submission by Future Technologies sufficiently met all necessary specifications and requirements as described in RFQ 2111. Future Technologies provided a comprehensive proposal which included ample detail on their current processes and policies that corresponded to the MSLC’s emphasis on sustaining a secure, current, and efficient network environment. The PMT is confident the demonstrated experience providing similar services and qualified internal staff possessed by Future Technologies will ensure an effective transition of services and meet the MSLC’s operational and technical goals of the procurement.

It is requested the Executive Director be authorized to enter into a contract period of three (3) years with the option to extend the contract term for up to two (2) one (1) year periods with Future Technologies to procure services under Massachusetts State Contract ITC73 and as described in RFQ LOT# 2111 for Managed Network Services - COMMBUYS Bid Number: BD-21-1062-LOT-LOTDO-59407. The maximum contract term shall not exceed five (5) years or as allowed by the terms of ITC73. Expenditures are not to exceed $220,000.000 during the initial 3 year term.

VOTE: For the reasons set forth in the attached memorandum dated April 15, 2021, the Executive Director is authorized to encumber and expend five hundred thousand dollars ($500,000.00) for the provision of services from the below vendor for the Massachusetts State Lottery Commission’s Amazon Web Services (AWS) account pursuant to the Master Services Agreement RFR 16-21 between the Executive Office of Technology Security Services (EOTSS) and Smartronix, LLC:

Smartronix, LLC 44150 Smartronix Way Hollywood, MD 20636

Dated: April 27, 2021

MEMORANDUM

TO: Michael Sweeney, Executive Director, Massachusetts State Lottery Commission

FROM: Joshua Fredette, MSLC Senior Program Engagement Manager

RE: Massachusetts State Lottery Commission Technology Modernization Program

DATE: April 15, 2021

Request:

It is requested that the Massachusetts State Lottery Commission (MSLC) authorize the Executive Director to encumber and expend up to five hundred thousand dollars ($500,000.00) for Smartronix, LLC for the provision of services for the MSLC’s Amazon Web Services (AWS) account pursuant the Master Services Agreement RFR 16-21 between the Commonwealth’s Executive Office for Technology Security Services (“EOTSS”) and Smartronix, LLC. Smartronix, LLC and EOTSS have entered into a Master Services Agreement pursuant to RFR 16-21, Brokered IaaS/PaaS Cloud Services. Per the Master Services Agreement, Smartronix, LLC provides various services to the Commonwealth, including but not limited to AWS-related services. The MSLC is able to utilize these services through an AWS Account Agreement with EOTSS and Smartronix, LLC. This funding will allow MSLC to continue to utilize the EOTSS contracting vehicle for ongoing digital enhancements including remote ticket cashing along with re-platforming some of the critical functions from the legacy mainframe that is responsible for $3.7B in annual revenue and includes critical functions such as Season tickets. Smartronix, LLC is located at 44150 Smartronix Way, Hollywood, MD 20636.

This funding request will allow MSLC to continue critical modernization efforts while remaining relevant in a highly competitive market space.