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Draw Games from the President NASPL Staff David B

Draw Games from the President NASPL Staff David B

LEADERSHIP IN THE LAND NASPL LAUNCHES NEW SITE

The Official Publication of the North American Association of State & Provincial

INSIGHTSMay/June 2016

Focus on: Draw Games From the President NASPL Staff David B. Gale Executive Director Thomas Tulloch Director of Administration Andrew White VP of Operations Tamika Ligon Director of Program Planning f you haven’t been NASPL’s website recently, you should check it out! The site has been refreshed John Koenig Graphic Designer Iand has a new colorful, tiled look that is now mobile Janine Hutzell Accounting friendly. Since nearly two-thirds of U.S. residents have Patricia McQueen Editor smartphones, this upgrade was critical. The redesign also included adding a rotating features box, a new Jake Coy Vendor Relations section on responsible and player protection, Mike Duff NSI Coordinator and a media center. The link to the Matrix from the website is new, too, and offers members quick Paul Corey I.T. / Software Development access to important research information. Also, check out the article in this issue about becoming the first U.S. lottery to license the British Columbia Lottery Corp.’s GameSense program, NASPL Executive Committee which offers positive materials to promote responsible May Scheve Reardon President play. One theme of the branding program is to be sure players see gambling as entertainment, and not a source of income. We all want players to have fun without Rose Hudson First Vice-President getting in over their heads. Charlie McIntyre Second Vice-President We’ve also compiled a section on draw games: a look at some of the game innovations out there, how lotteries advertise their jackpots and the promotions Alice Garland Treasurer they’ve launched. It’s interesting to see that in some ways lotteries promote these David Barden Secretary games in a similar fashion, but we all are using different strategies. In addition, there’s a look at how Canadian lotteries have refreshed their big national lotto games. Terry Rich Immediate Past President Speaking of strategies, NASPL’s expanded executive committee, which includes David Loeb Pres. Interprovincial Lotteries past presidents still in director roles, met recently to decide the top three long-term key strategic priorities. As we identified through a previous survey of members and Carole Hedinger Region I Director vendors, we needed a strategic plan with clear actionable items. We agreed the top Paula Harper Bethea Region II Director three anchors are training and professional development, the annual conference and big industry issues. First, members think training and professional development Randy Miller Region III Director events are relevant and have a clear purpose for attendees. Second, while they get Gary Grief Region IV Director a lot out of the annual conference, members would like to see more unique topics; presentations they can’t find at any other industry event. Third, we need to address big industry issues, like uniformity, along with NASPL developing positions on key issues. Members want NASPL to be the voice of the industry. So the next step is for members to develop an action plan for these anchors during May and June. Webinars will be held for directors and lottery staff in May to gather input. Then during the Spring Directors’ INSIGHTS Meeting in June, we will hold breakout sessions to develop detailed items to be included in the final action plan. So we have much work ahead of us. And like Henry Ford once said, “Coming Circulation: Insights ISSN 1528-123X, together is a beginning; keeping together is progress; working together is success!” May/June 2016, Volume No. Sixteen, Issue Three. Published bi-monthly by NASPL (North American Association of State and Provincial Lotteries)

7470 Auburn Road, LL1 May Scheve Reardon Concord, OH 44077 NASPL President © 2016 All rights reserved. Executive Director, NASPL Email: [email protected] Web Sites: www.naspl.org / www.nasplmatrix.org P. 440.361.7962 2 INSIGHTS May/June 2016 F. 440.867.2327 INSIGHTS May/June 2016 3 May/June 2016

Leadership in the LAND

In this Issue: Focus On: Draw Games

6 34 52 Around the Industry Lucky Watching While You Win News around the industry featuring the , Draw-based games may lack the pizzazz of Games offering both an instant win and Wheel of Fortune and Ghostbusters. their instant counterparts, but as we all saw nightly draw feature are popular in some in January, there’s nothing like an enormous jurisdictions, particularly in Canada. 12 jackpot to capture the attention of the entire By Patricia McQueen Q&A with Rose Hudson, President and Chief world. Executive Officer, Louisiana Lottery Corporation By Patricia McQueen 56 By Gabrielle Braud, Greater Baton Rouge Business Report Beyond the Draw 42 How lotteries are taking a different 18 Testing Draw Game Concepts in look at draw products. Making a Difference: North Carolina Carole Everett, Director of Communications, Q&A with Randy Spielman, Director of Product 60 and Gaming Control Agency Development, North Carolina Education Advertising Jackpot Games - Lottery Strategies That Sell 22 Roundup of jackpot advertising strategies Leadership in the Land 44 around North America. Lottery Leadership Institute is one of NASPL’s fastest-growing Harnessing the Power of events, and the Class of 2016 experienced another dynamic Paul Lauzon, Senior Vice President and 72 program. Managing Director with Ipsos Reid, and Jason Does Jackpot Advertising Work? Allsopp, Vice President with Ipsos’ Lottery & 26 Gaming practice. 76 A Field Guide to the Lottery Games Promotional Play of North America 48 Roundup of draw game promotions Stephen Wade, Research and Development Manager, Washington’s Orchestrating Lotto Success – around North America. Lottery and Principal, Lottery Management Consulting, LLC With a Little Luck – in Canada Canada’s two national lotto games soared in 28 FY16, with a number of factors contributing to GameSense Comes to Connecticut a miracle year. The is the first U.S. lottery to license By Patricia McQueen GameSense, a unique responsible gambling program developed by the British Columbia Lottery Corp.

30 NASPL Launches New Website

4 INSIGHTS May/June 2016 INSIGHTS July/August 2015 5

INSIGHTS May/June 2016 5 Around the Industry Wheel of Fortune delivering new fans – and sales – to lotteries

mmy award winning Wheel of Fortune is the number one syndicated game show in the United States with an Eunprecedented 33 year history of success. The Wheel of Fortune brand is also one of the most successful and well established brands in the multi-billion dollar gaming industry. 2016 marks the 20th anniversary of the Wheel of Fortune slot games. IGT has created over 200 WOF-themed games in multiple formats that have prominent placement in casinos across North America. IGT’s acquisition of the Wheel of Fortune lottery license has provided a strategic opportunity to further strengthen the Wheel of Fortune brand through convergence into the lottery industry with a focus on game innovation in multiple product channels including instant scratch games, draw games and interactive games. IGT research has confirmed the widespread appeal of the Wheel of Fortune brand with lottery players of all ages – including the highly sought after 18-34 year old age group. Research also shows that both quick-play and extended-play Wheel of Fortune games are appealing, with a Wheel of Fortune crossword game having significant appeal among extended-play players. Research conducted by Wheel of Fortune also confirms that Wheel of Fortune TV fans who watch 3+ times per week also have an affinity for crossword puzzles and play at least twice per week. That is 158 percent more likely than the average adult and far more often than other similar leisure activities, such as board games or playing cards. Fifteen US lotteries will launch a Wheel of Fortune instant scratch game in 2016 and participate in a linked 2nd chance promotion that will send 84 lucky winners to Los Angeles to participate in a lottery winner only, non-broadcast game of Wheel of Fortune. Current sales are showing the power of the brand with Lottery experiencing historical, record breaking sales results with their $5 Wheel of Fortune scratch game smashing the previous record by more than 10 percent. And after six weeks of sales, the ’s Wheel of Fortune instant scratch game is indexing at 124. Continuous innovation will be the key to sustaining the Wheel of Fortune brand in all formats – the TV game show, casino games and lottery games. Sony has done an outstanding job of keeping the game show relevant and popular with viewers and continues to invest in innovation. Likewise IGT will continue to invest in innovating the Wheel of Fortune games across all product channels to bring customers games that will deliver results.

6 INSIGHTS May/June 2016 The Dawn of a New Era

Built on our legacy, our learning, and our leadership, Aurora is the high-reliability, high-performance solution for lotteries the world over. Player-centric • Retail focused • Omnichannel • Responsible • Transformational

The tools you need to grow your business today… and tomorrow. That’s the brilliance of Aurora.

© 2015 IGT Global Solutions Corporation. The trademarks used herein are owned by IGT or its affiliates, may not be used without permission, and where indicated with a ®, are registered in the U.S. IGT is committed to socially responsible gaming. Our business solutions empower customers to choose parameters and practices that become the foundation of their Responsible Gaming programs. INSIGHTS May/June 2016 7 Around the Industry

Some Kentucky Lottery games now available for purchase via the internet

Ushering in a new era, in April the Kentucky Lottery launched sales of several products via the internet.

ligible players who register for an account at kylottery. com and are within the boundaries of the state are able Eto purchase Powerball, and Kentucky Cash Ball draw games. At launch there were five Instant Play games ranging in price from 50 cents to $3 available, with more being introduced in the future. “Our customers are aging, and in order to maintain our business, we need to be more attractive to a younger demographic who are accustomed to conducting a majority of their retail purchases online,” said Arch Gleason, President and Gleason also said the platform was designed with a number Chief Executive Officer of the Kentucky Lottery. “This group is of responsible gambling controls in place to protect players. very mobile, and they expect brands to be accessible online “Our system was designed to follow the Internet Responsible and on their devices. We’re delivering what they want.” Gambling Standards developed by the National Council on Gleason said the move to internet sales should not be Problem Gambling. Our limits are among some of the most interpreted as competition to the Kentucky Lottery’s 3200 conservative in the nation, and continue our long history of retailers. “Brick and mortar retailers are and will continue to be offering games in the Commonwealth in the most socially- the most important part of our business,” he said. To that end, responsible manner available,” Gleason said. Gleason announced: Safeguards include: • Players will be able to fund their online account for play at stores which sell lottery tickets. Retailers will receive • Account deposit maximum limits of $200 daily, $500 their standard 5 percent commission for the sale of these weekly and $1000 monthly. These limits can be lowered by products. players at any time, and if they subsequently raise them, a • For at least the first six months of internet lottery sales 24 hour cooling off period is in place before new limits are in Kentucky, players who add funds to their accounts by activated. purchasing at least $20 in account funding on a single • Identity verification to confirm a player is over 18. transaction at brick and mortar retailers will receive an • Self-exclusion from the site, meaning they will not be able extra $5 in Bonus Bucks in their online account. to access any of the site’s wagering functions. • The lottery will continue to invest in retailers, recently • In conjunction with the KY Council on Problem Gambling, adding 300 new Gemini ticket vending machines and 250 the Lottery will soon be underwriting the addition of text new jackpot signs. The lottery will also continue to partner and chat capability to the 1-800-GAMBLER service. Players with retailers in co-promotions which will help drive traffic who may not feel comfortable talking with someone with to their stores. questions about the issue will be able to text or chat with experts who can help. There are three other states currently selling lottery tickets • Other features such as visible play clock available at via the Internet – Michigan, and Illinois. “In the first all times showing length of play, the display of bets, full year of internet lottery sales in Michigan, they had a 6 wins, losses and account balances as cash, and free or percent increase in traditional brick and mortar business. In demonstration games with the same payout percentages the first full year of Internet lottery games in Georgia, they had and odds as games available for purchase. a 4 percent increase in traditional brick and mortar business,” Gleason said. “The key here is that overall sales increased at Sales for the platform in its first full year (FY17) are retail once internet sales was launched, and we expect this to estimated to be $7 million. In contrast, overall lottery sales for hold true in Kentucky.” the current fiscal year are projected to be $994.5 million.

8 INSIGHTS May/June 2016 INSIGHTS May/June 2016 9 Around the Industry launches Ghostbusters game and promotion in lead-up to summer movie

new Ghostbusters-themed scratch On May 13, a lottery promotion game has hit stores in Iowa and on began that players can enter using AMay 13 the Iowa Lottery launched non-winning tickets in the Ghostbusters a promotion based around the game that game. There will be three drawing will offer prizes of tickets to Wizard World dates during the 90-day Play It Again Comic Con in , home theater promotion, with each drawing featuring packages and cash. different prizes. The lottery game and promotion are The first drawing on June 14 will part of the celebration leading up to the feature 10 prize packages to the Wizard Ghostbusters movie that will open in World Comic Con fan convention Aug. theaters July 15. The Iowa Lottery is the 18-21 in Chicago. Each package, valued first in the United States to team up with at $1,700, will include a three-night stay Wizard World Comic Con and announced for two at the Hyatt Regency O’Hare its Ghostbusters promotion at the Des in Chicago, two VIP Experience tickets Moines installment of the fan convention to the four-day Comic Con event, that celebrates comic books, science $500 spending cash and Ghostbusters fiction and pop culture. merchandise. “Our new scratch game gives folks a The second drawing on July 14 will events at retail locations around the chance to reminisce about some of their feature 10 home movie prize packages. state. favorite Ghostbusters characters and Each package, valued at nearly $1,500 To enter the promotion, Iowa Lottery gear up for this summer’s new movie,” will include a Sony 40-inch HDTV with players must join or already be members Iowa Lottery CEO Terry Rich said. “And Wi-Fi; Sony sound bar with wireless of the lottery’s free VIP Club. On the our promotion gives players even more subwoofer; Sony Blu-ray Disc player; $150 Ghostbusters page at www.ialotteryvip. opportunities to win and celebrate being movie gift card; $150 spending cash for com, players will be asked to enter the fans. This is going to be a blast.” food and beverages; and Ghostbusters 10-digit entry number from the front of The $5 Ghostbusters scratch game merchandise. a non-winning ticket in the game along debuted May 2 in Iowa. Tickets in the The promotion’s third drawing and with the ticket number from the back. game feature iconic images from the grand-prize drawing will both be held on State and federal taxes for the prize movie, including Slimer the ghost, Aug. 16. The third drawing will feature packages also will be paid. Rules and the Stay Puft Marshmallow Man and 10 prizes of $1,000 and the grand-prize complete details are available on the silhouettes of a Ghostbusters team drawing will be for one prize of $5,000. lottery website at www.ialottery.com and member wearing a proton pack. The Throughout the promotion, the lottery drawing results also will be posted there. game offers prizes from $5 up to $50,000. also will hold Ghostbusters-themed Since the Iowa Lottery’s start in 1985, its players have won more than $3.6 billion in prizes while the lottery has raised more than $1.6 billion for the state programs that benefit all Iowans. Today, lottery proceeds in Iowa have three main purposes: They provide support for our state’s veterans and their families through the Iowa Veterans Trust Fund; help for a variety of significant projects through the state General Fund; and backing for the Vision Iowa program, which was implemented to create tourism destinations and community attractions in the state and build and repair schools.

10 INSIGHTS May/June 2016 PBL LG NeoPollard NASPL Ad Resize cs5.ai Friday, April 29, 2016, 12:13 PM REV:01

In a world where retail and online converge

SUCCESS TAKES FOCUS iLOTTERY SOLUTIONS. POWERFUL RESULTS. For more information: [email protected] INSIGHTS May/June 2016 11

Size: 8.25" x 10.75" 16-0772-1 SUBJECT TO TECHNICAL REVIEW

4-colour Process BASE COLOURS

NOTICE: When viewing this document as either a paper print or PDF, please note that the colours are not a true representation of the finished printed product. Our final contract proof is a Kodak Approval including ink colour swatches, that will more closely match the printed ticket. This document may contain Adobe Illustrator transparency effects and printed results may not match on-screen content. Shutterstock Image - #181805411 (cityscape), #353600180 (coloured glasses), #196462193 (glasses frame)- The photograph(s) in this design is a copyrighted work. Download under Shutterstock Enhanced License Agreement is required before print production. What was your first job, and what did you learn from it? Eager to have cash (and with parents who were adamant that I had to earn it), I babysat for neighbors and learned very early on to go the extra mile. My customers were grateful when I tidied up and washed dishes, in addition to taking care of the kids. I ended up working for a family with three children while I was in college. Those babysitting days paid off!

Please describe for our readers, in a few sentences, how you got to where you are today. What previous experience prepared you for the position of president/CEO? I was part of the startup team of the Louisiana Lottery Corp., which presented the good fortune of doing something of everything, from cleaning bathrooms to managing our initial $10 million line of credit. I left after a year but kept in touch with my lottery colleagues. Then in 2000, an opportunity came available to return to the corporation and manage the human resource function. Eventually, the CEO took another job, and the board of directors selected me as his successor.

The many jobs I have held have all played a role in preparing me for this position. I have been a sales person, so I understand sales goals/ quotas; I also have a deep HR background, and so managing human capital is very dear to me.

How many years have you been with the Louisiana Lottery Corp.? What are some of the biggest changes the organization has experienced during that time? I have been with the lottery 16 years, celebrating my 10th year as president. During my tenure, technology changes have transformed our business at every level. Some of those include completely Q&A with Rose converting the hardware and software used by our retailers to generate tickets to touch-screen, user-friendly interfacing. We are also using real-time data to drive strategic decision making Hudson, President throughout the organization. From a marketing perspective, the explosion of the digital space and social media has allowed us to and Chief Executive converse directly with our players and develop deeper brand loyalty. What is the most difficult part about holding the title of CEO? The absolute most difficult part is every decision backs up to me. I Officer, Louisiana know each employee, I worry about their families, and I worry about meeting our fiscal mission and all that goes along with that on a daily Lottery Corporation basis. What’s up next for the Louisiana Lottery Corp.? Historically, the Lottery has enjoyed great sales success with Louisiana themed scratch-offs. In fact, the $2 game Spice It Up!, a By Gabrielle Braud, Greater Baton partnership with Tony Chachere’s Creole Foods of Opelousas, won Rouge Business Report the Best Instant Game of 2015 among North American lotteries. Our partnership with the New Orleans Saints to produce a branded ticket and game-day prize experiences is in its seventh successful year as well. We will continue to pursue these types of win-win relationships The following interview with Rose Hudson was first with other Louisiana brands. On the technology front, the Lottery published in April by the Greater Baton Rouge Business is exploring a mobile phone application that would allow players to Report, and is reprinted here with permission. Copyright scan ticket bar codes to check their winnings, receive notifications on Greater Baton Rouge Business Report, published by jackpot thresholds, as well as create saved playslips on their phones Louisiana Business Inc. All rights reserved. to be scanned to generate tickets.

12 INSIGHTS May/June 2016 Polaris and its vehicle designs and names body are registered trademarks of Polaris Industries Inc. under license. used

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INSIGHTS May/June 2016 13

A3_Polaris Ad.indd 1 4/28/16 2:07 PM Fiscal year 2015 was the Lottery’s second best ever with Louisiana K-12 "I value the education transfers surpassing $158 million. To what do you attribute that success? At least 35 percent of every sale is transferred to the state for K-12 public opinions and education, so sales have a direct impact on our ability to maximize revenue for the state. Some of the most critical drivers of our sales success include expertise of the ability to use our unclaimed prize fund to strategically bump up the prize payout percentages on our scratch-off games. We cannot depend on record- breaking Powerball jackpots; they definitely drive sales, but their occurrence is others, so I unpredictable and unreliable. However, we have been able to grow scratch-off sales by 40 percent over the last five years by increasing prize payouts from 58.5 ask lots of percent to 62.75 percent during this time. Players love to win more, and the state has proven to benefit as well through recurring higher sales. Louisiana law directs unclaimed prizes to be used for prizes or player promotions; however, questions, but that ability is being threatened. In a last ditch effort to plug the state’s budget gap, lawmakers tapped $20 million of the Lottery’s unclaimed prize fund as a in the end, one-time solution during the last legislative session. What type of innovations have you moved forward since assuming the role of I am not afraid president/CEO in June 2006? The Louisiana Lottery has paved the way in our industry for technological innovation. We developed a Lottery-specific iPad application for our sales to make and representatives, which allows them to analyze individual retailer sales in real time by game and time frame, and also empowers them to make strategic stand by my decisions based on comparisons to other retailers in the area or per capita averages. Integrating retailer data with population, economic indicators and traffic patterns, we can more quickly spot trends and opportunities for decisions." improvement.

In addition, we developed a data-driven inventory management system that predicts which scratch-off games will sell the best in each retail location to ensure the right product reaches the right retailer at the right time. Using sophisticated algorithms and historical sales trends, we automatically ship the game price points and play styles that will sell fastest at specific locations and how many of those packs are needed before the next order. Through inventory management, we optimize product placement and get the freshest inventory into stores. This is one way we have been able to grow scratch-off sales to near startup levels, when the Lottery was the only form of gaming available, as well as control operational costs.

You hold numerous roles in the community and serve on a variety of boards. If you had to pick one, which role would you say you most passionate about or most proud of? I am so passionate about the work of Mary Bird Perkins Our Lady of the Lake Cancer Center. I have always been awe of the commitment to providing care and screening, but when cancer touched my family, the connection became more personal and important.

What is a typical day at the office like? No day is typical, but the first thing I have to do each day is informally check in with members of the management team. I try to attack a few phone calls and emails before I get to the office, because once I arrive, it can become a little like Grand Central Station. I deal with internal operational issues, personnel issues, and coupled with lots of ongoing matters on the national level.

How would you describe your leadership style? Various members of the team say I am quite inclusive. I value the opinions and expertise of others, so I ask lots of questions, but in the end, I am not afraid to make and stand by my decisions.

14 INSIGHTS May/June 2016 INSIGHTS May/June 2016 15 What has been the most fulfilling moment in your career to date? "I simply treat The selection by the Lottery Corp.’s Board of Directors as president and CEO was big. The board opted to conduct a national search, but ended up with a candidate right all as I would within the organization. I continue to look back on that process with gratitude. They put an incredible amount of faith and trust in me and my abilities, and I believe I want to be have honored their choice with my efforts. What is one thing about your job people don’t expect or know about? treated, even I encounter so many people who think all I do is give out money! We run a real business, with all of the challenges that go with it. I meet with bankers, consider contractual issues, legal issues, etc. Giving away the money is the fun part and the in difficult break that I get from the business part. situations or What is a great piece of advice you have personally received? Did you have occasion to put it to use? I look to the Spike Lee movie for advice … it is simple … Do the Right Thing. You can conversations. make it complicated and more verbose, but in the end, it is an excellent guiding I lead with principle. How many employees do you have? How would you describe your workplace culture, and what is your secret for managing employees? respect and Approximately 125 full-time employees work for the Louisiana Lottery. We have an interesting culture because of our regional offices spread out across the state. Over the past 10 years, we have grown over into an organization that is curious honesty, and innovative. One way that spirit is nurtured is through Innovation Station, an organizational web portal that offers each employee the opportunity to contribute and that is and weigh in on innovative ideas and solutions. We do get some interesting ideas, but it is also a great way to get conversation flowing between our employees all modeled by all over the state. I don’t necessarily have a secret for managing employees. I simply treat all as I of my team." would want to be treated, even in difficult situations or conversations. I lead with respect and honesty, and that is modeled by all of my team.

What is the next challenge you have planned? I am trying to learn French by taking lessons via podcasts … what a challenge! As for the Lottery, there are a number of challenges ahead. We set our sights on half a billion dollars in gross revenue five years ago, and we just might hit it this year! The elusive revenue goal is always the No. 1 challenge. I also look to find exciting marketing opportunities and ways to engage our players in a changing marketplace.

What gets your workday off to a good start? A prayer to make good decisions and some good tunes!

What is your favorite way to spend your time? I get energy from people, so I love to relax with good friends, sharing some laughs. I can blow an entire afternoon watching cooking shows with my son. We will sit and plan trips and meals based on the show we are watching.

What do you do to unwind? I can feel the stress and the weight of the world melt away when I am sitting on the beach with a book. That is my happy place, bar none.

If you had to be a teacher of something, what would you teach? I would probably teach something in business or public administration. Quality leadership skills are crucial but are billed as “soft skills.” I have seen too many disastrous leaders who could be successful if only they were thoughtful, prepared, emotional intelligent professionals.

16 INSIGHTS May/June 2016 INSIGHTS May/June 2016 17 Making a Difference

CAROLE EVERETT Director of Communications, Maryland Lottery and Gaming

lottery communications professional always has to expect the unexpected. A big winner could walk through the door at any time, a reporter might be on deadline, looking for information or interviews, irritable players might call and complain. A presentation, meeting, drawing issue or last-minute change on an upcoming event might occur and completely shift the day. It’s the perfect fit for Carole Everett, Director Aof Communications for the Maryland Lottery and Gaming. “I’m a high-energy multi-tasker, perpetually in motion. People have told me that I walk a little too fast, act a little too crazy and sometimes, to the irritation of my staff, get a little too impatient when things need to get done,” she said when thinking about her ever-changing role at the Lottery. But there’s no doubt that she and her staff get things done. “Carole has this wonderful ability to put everyone in a good mood – her empathy, her high-energy personality, her doggedness, her smile, her infectious humor – it all contributes to making everyone around her feel inspired and energized,” said Director Gordon Medenica. “She truly is also one of the funniest people I have ever met – when we go on road trips, everybody wants to be in the car with Carole! And behind the great personality is a serious professional – Carole manages media relations with superb skill, she is a highly creative marketing and promotions manager and she has excellent political instincts. Carole is a crackerjack!”

18 INSIGHTS May/June 2016 Everett joined the Lottery in 2003 after a career first as an ad agency copywriter (among other things she wrote for the old Sears catalog) and then as a political campaign manager and fund raiser for the Maryland Democratic Party. Her lottery career began as a product analyst but it wasn’t long before she decided that working with numbers was not her strong suit. She gravitated towards the communications department, eagerly reading everything that was produced, then passing along little corrections to the director. “I guess I wore him down with my unsolicited advice and edits because when a position opened up in his department, he figured it was better to have me on his staff instead of hassling him from across the agency. And the rest is history!” Her role changed dramatically in 2008, when voters approved gaming machines to be overseen by the Maryland Lottery, which became the Maryland Lottery and Gaming. “The Maryland Lottery’s mission has always been as a revenue generator for the state,” said Everett. “When gaming arrived on the scene, we also took on the responsibility of regulating the casino program. With two very different, yet related entities working side by side, it was important to define our dual role to the media and the public, and I think we have done a pretty good job with that.” The media is always focused on the casino activity, she noted, especially as new casinos have opened over the years, but stories about big jackpots and big lottery winners still pique public interest. Everett majored in communications at Ithaca College in New York, with an advertising/public relations focus and a minor in writing. Years ago, she co-authored “The After-College Guide to Life,” an alternative to the ubiquitous “What Color is Your Parachute,” which she felt lacked the practical nuts-and-bolts approach needed for helping new grads navigate all aspects of post- college life. “I learned more about promotions and public relations while hawking that book than any college course taught me.” Raised on a small chicken-turned-vegetable farm in New Jersey, (“Yes,” she said sarcastically, “there really ARE farms in New Jersey.”) Everett is an outdoor enthusiast, enjoying hiking, kayaking and traveling. She loves photography, especially nature photography, and prefers walking in the woods over watching TV any day. Two adult children, an eclectic mix of friends and a brand- new husband (they were just married in May) complete her life outside her lottery home.

INSIGHTS May/June 2016 19 What issues do you face in a state that allows anonymous claims? every identifiable feature was covered – even giving them gloves As one of only six states that allow players to remain anonymous, to wear. Then I created a catchy name for the trio and put it on the we wrestle with how to inform the public about our winners. The check. In the end, it was, literally, a win-win situation. They had a inability to show the face of an actual winner with a real name and a blast and thanked us for making the experience so much fun. And we story to go with it is a bit of a public relations handicap. People want were able to use that photo, along with the story, which appeared to see people – real people – winning. In order to convey honesty worldwide, despite the fact that there were no faces or actual names and integrity, it’s important to be transparent about what we do and of the winners. showing the public our winners is a big part of that. In fact, nothing works better. But we can’t force people to agree to publicity, so Who stands out in your mind as the most unusual lottery winner we’ve gotten a little more creative in how we promote our winners. you’ve come across? We always create a celebratory, fun atmosphere in our Winner’s Hands down, Ellwood “Bunky” Bartlett, an accountant who was a Lounge, greeting new winners with cheers and applause. We chat self-proclaimed Wiccan and owned a New Age bookstore. Bunky them up and encourage the photo, but if they decline (and they often won an $82.5 million Mega Millions jackpot in 2007 when that was do) we attempt to gently cajole them into taking a photo hidden considered a big jackpot. He was a real character and broke the behind a prop like an oversized check or a giant cut-out of the ticket. news to the media before we even knew he existed. He actually took The idea first came about with our “Three Amigos,” winners of the his winning ticket to the local car dealership, showed it to them and big $656 million Mega Millions jackpot in March 2012. They were, bought, on good faith, three cars for his family that day – even before understandably, nervous and flat out refused to do any publicity. I he came in to claim his winnings. He started a record label, opened a convinced them to take a completely anonymous photo in which pizza delivery franchise (because nobody delivered to his house) and

20 INSIGHTS May/June 2016 was working on developing a video game when we last caught up Rickles, Joan Rivers, Groucho Marx, Jack Benny – so I’ve been with him. groomed to appreciate one-liners, quick quips and goofy “shtick.” Doing on-air interviews, internal and external events, anything live or How can lotteries fight the popular notion that big lottery winners with a microphone, is tons of fun and allows me to stay in touch with end up worse off than before they became suddenly wealthy? my inner stand-up comic. When I first came to the Maryland Lottery, Unfortunately, media is far more interested in negative stories and I got a big kick out of then-director Buddy Roogow with his on- (and sensationalism, with TV shows and movies perpetuating the notion off-) camera antics. It was great to see that he could take the lottery that all big winners “blow” their money. Experience has shown that, business very seriously but still have tons of fun doing it. It is, after for the vast majority of winners, that’s just not the case. But nice all, an entertainment business and it’s important to project that when stories about real people saving their money and helping out their possible. families don’t get much attention. For us, we simply do our best to show the public that our winners, big and small, are real people – Is there anything you don’t like? just like them, who use their winnings to pay for bills and children’s The fact that I can never win the big jackpot and have my picture educations and yes, maybe take that dream vacation. taken with an oversized Maryland Lottery check that has my name on the front! What is your favorite part of the job? I work with a great group of people, so it makes it all fun. And if you’re getting paid to have fun, how can it get any better than that? I grew up with parents who were fans of the old comedians – Don

INSIGHTS May/June 2016 21 Photos by Heather White, White Sands Photography NASPL 2016 Lottery Leadership Institute Leadership Land Lottery Leadership Institute is one of NASPL’s fastest-growing events, and the Class of 2016 experienced another dynamic program.

f the many conferences into the activity as if and events in the lottery they were old friends Oindustry, NASPL’s Lottery and colleagues, tasked Leadership Institute (LLI) stands with assembling a tower alone. This unique program is using spaghetti, tape designed to bring together industry and a marshmallow. employees at all levels, teaching After lunch, NASPL’s them the leadership and personal top level associate relationship skills that will help members were invited them, and their employers, meet to speak to the group. the lottery challenges of the future. Intralot kicked off the This year’s event was again session, as Product held at the Renaissance Hotel in Marketing Manager Cleveland, Ohio. The Class of 2016 Tara Smith and Ohio brought together 80 attendees from throughout North Marketing Data Analyst Mark Mitchell talked about the America and from as far away as Africa. They included latest and greatest the company has to offer and the industry newcomers and veterans alike, representing exciting new products being introduced in Ohio. They many disciplines and management levels within lotteries were followed by Keith Cash, Vice President, Global and vendor organizations. CSP Services, for , who discussed the LLI kicked off with NASPL Executive Director David consumer trends and behaviors we are now seeing in the Gale and Director Dennis Berg welcoming industry. The consumer dialogue is rapidly changing due to the group to the great city of Cleveland. Berg talked about technology trends and lifestyle factors. The final speaker the evolution of the lottery and added some thoughts on was IGT’s Michele Carney, Vice President Marketing and his vision of the future. The attendees then participated Portfolio Management, who talked about current retail in an icebreaker exercise designed to make everyone and consumer trends and how they will influence the comfortable with working together. They jumped right future.

22 INSIGHTS May/June 2016 Also during the afternoon session, representatives of the Ohio Lottery talked about their long running game show, Cash What attendees are saying... Explosion. Their production team explained the long history of the show and shared the details that make it work. 2016 marks a landmark year for Cash Explosion, as it is in the 30th year of production.

The Doctor will see you now It was an awesome week and The second day of the seminar provided a leadership training program led by Dr. Kay Potetz, Ph.D – it was her fifth I will definitely recommend the year at Lottery Leadership. She started the day with the topic Emotional Intelligence as a Basis for Success. Potetz stated that NASPL LLI to other coworkers!

I thoroughly enjoyed myself and learned a great deal about the lottery industry. The networking alone was outstanding. successful leadership requires that you renovate your leadership style, take control of your day, get in touch with your power, improve your people skills and understand (not judge) others’ behavior. By understanding and grasping these traits, your Emotional Intelligence levels will rise. Those with high levels of E.I. also demonstrate certain traits that are necessary to become great leaders. They know themselves and their “triggers” and have the ability to deliver promises and obligations in a timely This was an excellent manner. They are trustworthy and have access to information, support and resources from their peers. They also never play conference. I gained valuable the power game. Potetz then put the attendees through an exercise to insight into the lottery industry determine their individual style. There are four possible individual styles: Analytical, Amiable, Driver and Expressive. and met many people with By determining the behaviors of each, attendees figured out what style applied to them. The rest of the afternoon was spent whom I hope to interact working within individual style groups, participating in different activities. with going forward. A great experience all around, and Escape! Cleveland was most gracious! That evening the Lottery Leadership class participated in an offsite event at Escape in 60! There each group had one hour to escape a room. The four rooms featured a prison break, a robbery, a sports fanatic’s attic and death row. The fastest group to escape their room got a prize, and this year we actually had a tie! Two groups escaped their room in 27 minutes, each only using one provided hint. Some of the other groups also escaped in time but others were not so lucky! In all, everyone had a great time and certainly the day’s training activities helped them work together to plan their escapes. The night was capped with dinner at the Barley House in downtown Cleveland.

Ask a Director

On Wednesday, May Sheve Reardon, Gerald Aubin, Alice Garland, David Barden, Terry Rich, Rebecca Hargrove, Jeff Anderson and Dennis Berg took part in a Director Panel, where the LLI delegates employees for the director’s role, along with advice they would give to anyone participated in a question and answer session. looking to become a lottery director. Some of the topics discussed were fantasy sports The directors also talked about the importance of the vendor community. The and lottery beneficiary programs. The directors NASPL Associate Membership program is a great way for vendors and lotteries to also offered advice about guiding and grooming come together for common goals, and we very much value this partnership.

24 INSIGHTS May/June 2016 Let’s design a game!

John Balash, MET Professor at Ohio University, put together a design-a-game exercise for the groups. They were given the rest of the day to create a game, focusing on game concept, game mechanics, general considerations and business opportunity. The game concepts included game description, product concept/channel/service, play style, graphics rationale and game mechanics (or what the player is doing). For game mechanics they were asked a series of questions:

1. Should the game be a draw, instant or other? 2. What does the player do in the game? 3. What happens to the player in the game? 4. What features should the game have?

The general considerations each game needed included an advertising and marketing strategy, distribution channels and technology or platform. Each group also had to explain their business opportunity, such as the target market, design a creative launch event and indicate relevance to market segment.

The big reveal

On Thursday morning the groups presented their games in front of a panel of judges from the Ohio Lottery in Shark Tank style. The panel included: Greg Bowers, Connie Miller, Sandy Lesko and Patty Vasil. Each group had 12 minutes to pitch their game and marketing plan. The judges were then given four minutes to ask questions. After all the groups completed their pitches, the judges then determined the top three games. The second runner up group was Team 1: Game of Thrones; the runner up was Team 7: See it Live and the grand prize winner was Team 8: Flick You. The decision on the top three was very difficult given that all the groups did a great job designing their games. A lot of teamwork and thought went into each game design and all groups completed the task at hand.

Wrapping it up

It was a very successful week at Lottery Leadership Institute, producing yet another graduating class ready to share their newly-acquired skills and ideas with their colleagues back home. It was a great opportunity for the attendees to meet and connect with other employees throughout the industry to create lasting relationships that will serve them well.

Visit the NASPL Matrix to view the presentations and more from Lottery Leadership at: www.nasplmatrix.org

INSIGHTS May/June 2016 25 A Field Guide to the Lottery Games of North America

Stephen Wade, Research and Development Manager, Washington’s Lottery and Principal, Lottery Management Consulting, LLC

s I related in the article that appeared in the 2) Do the player and the lottery choose the same number of March/April 2016 issue of Insights, I was glad symbols? Awhen Jade asked me for a chart that would lay out a. In many games (again, like Lotto) they do choose the relationships among the various draw games being the same number of symbols from the same field of sold in North America. Partly, I was just glad that she possible choices. thought it would be relevant to her as she worked for b. In other games, for example Keno, they may choose the ad agency serving the lottery account. At another fields of different sizes. level, I looked forward to the mental exercise of doing for lottery games what biologists of many generations 3) Do the player and the lottery choose more than one ago did for the plants and animals they encountered: symbol from each field of symbols? they constructed simple classification keys that served a. In many games, again like Lotto, they do. not only to identify the creatures by their differences, b. In other games, like the classic “Numbers” game, they but to reveal their relatedness through their similarities. do not. The recognition of natural groupings according to deep structural similarities is fundamental in the life sciences. The classic drawing is sometimes described As I got on with this work, it became clear to me as “select a number in the range 0 through 9 three times with that the structural organizing principle had to be how replacement.” However, I find it clearer to describe it as “select the drawing event determines the winning outcome. a single symbol from each of three fields; each field is numerals This may not be the way we usually think about draw 0 through 9.” Putting it this way helps us to realize that it games - we may tend to think more about the size of would be possible to use some other field definition than the top prize, or how often the drawing events are the numerals 1 through 9 – that is, we could find games with held, or whether the games is relatively old, or new. All different properties by using a base other than ten. These have these perspectives are fine, and they can be added as not been developed, as Jade’s note on the chart reminds us. descriptive notes to the chart that follows. In fact, once I Having laid out a chart using these three questions, I feel gave her the chart, Jade embellished her copy with sticky that I have identified three meaningful groups of matching notes, some of I reproduce here because I think they add games: the Keno (K), Lotto (L) and Numbers (N) groups. In order value. But the underlying questions are these: to describe the individual games within these groups further in their specifics, I propose a notation that adds the specifics 1) Does the winning event depend only upon a match of field sizes and number of symbols chosen from each field. between the player’s choice of symbols and the Classic Keno requires that we state the field size, the size of the lottery’s selection? lottery’s selection, and the size of the player’s selection: this a. In many games (like Lotto) it does. makes it clear that Keno is in fact several different games, from b. Sometimes matching is an element of the winning “K.1/20/80” (one-spot Keno) up through “K.10/20/80” (ten event, but there is another requirement like spot Keno) or even further in some jurisdictions. physical alignment of the symbols on a card, as in Writing it this way makes it clear to me that we could think Bingo. of Keno-type games with different selection sets, from different c. Sometimes not matching determines the win, as field sizes than 80. Some of these could have interesting in the child’s game of “Scissors, Paper, Rock.” properties.

26 INSIGHTS May/June 2016 In games of the Lotto type it is understood that the and the name and iconography all contribute to the character lottery and the player make selections of the same size. In of a game. But, as Jade said when I gave her the chart, “OK. the original Lotto game, these selections were made from This shows how they are the same; it shows some places a single field, so “L.6/49” is sufficient to describe how the where they could be different. That’s something to work winning event(s) are determined in classic Lotto. Cash Lottos with.” in the various states are usually L.5 of some field size. The “” game is “L.12/24.” Powerball is also a Lotto-type game but with two fields. It would be designated “L.5/69, 1/26.” MUSL’s is “L.5/47, 1/19.” We could think about Lotto games with more than two fields. Like Numbers games in bases other than ten, these have not been developed. Returning to the classic “Pick 3” game: in this shorthand Stephen Wade notation, it would be “N.10,10,10.” Research and Development Manager, Washington’s I hope this way of looking at our draw games adds something to the way you have understood them. Of course, Lottery and Principal, Lottery Management there is more to each game than is represented on the chart. Consulting, LLC The price, the frequency of drawings, the various prize tiers,

INSIGHTS May/June 2016 27 GameSense comes to Connecticut The Connecticut Lottery is the first U.S. lottery to license GameSense, a unique responsible gambling program developed by the British Columbia Lottery Corp. By Patricia McQueen

responsible gambling and corporate social responsibility programs, and won’t replace the tried and true ‘Please Play Responsibly’ campaign. “GameSense just adds another layer and a different approach, to make an even broader audience for us,” said Vice President of Marketing and Sales Diane Patterson, who noted that the television ads created by BCLC are cute and funny. “Who would think you could do that on a serious topic like responsible gambling? But that use of humor kind of beaks the ice and allows people to lower their defenses and say, ‘OK, let me engage my GameSense,’ so it really is pretty exciting.”

Proactive benefits

GameSense talks about responsible gambling in an upbeat, proactive and real way – not the gloom and doom you sometimes hear on the topic. The goal is to engage people before they have a problem, to get them thinking about their habits and learning how to make good decisions. “We want to talk to the same generation of people that we want to play the lottery,” explained “If you gamble, use your GameSense.” That is the message Noble – the emerging demographic, for example, that might Connecticut Lottery players have been hearing since early April when find keno appealing. “We want to encourage them to play in a the program was introduced across the state. Connecticut has always sustainable, healthy way.” been an industry leader in the area of responsible gambling, and After all, GameSense is all about making informed choices, GameSense adds an exciting new element to the mix. and informed gamblers are gamblers who play for fun, not for Just like lottery games, responsible gambling messages need money, and know when to stop. It can take many forms – printed freshening from time to time, and Connecticut was looking for educational materials, online and digital elements and on-site something different. President and Chief Executive Officer Anne kiosks. The latter work well in casino environments, and BCLC Noble and her team, including Chief of Strategy and Government and uses these throughout its gaming properties. The Connecticut Operational Affairs Chelsea Turner, explored different options and Lottery has different needs, so it has taken some of the traditional found GameSense to be very appealing; it also tested favorably in focus brochures – which will be showcased in retail environments – groups. Importantly, because the program was already well developed and adapted them to the restaurant, bar and club environments by the British Columbia Lottery Corp. (BCLC) and was being offered in which keno is played. For example, there is information on without a licensing fee, it provides a lot of bang for the buck. There was coasters and on a small piece designed to fit into players’ pockets. no need to reinvent the wheel. Still, GameSense really shines online – with the messages “We believe strongly that we stand on the shoulders of people who communicated directly to players through digital and social have good ideas,” said Noble. “The Canadians have for years led the media. GameSense is displayed on the consumer displays at all way in responsible gambling.” retail locations, and on keno monitors, information is shown While exploring its responsible gaming options, Connecticut was between games and also displayed overnight when the gaming also busy getting reach to launch keno, and the timing was right system is offline. “New products require different thoughts, so to introduce the two at the same time. “It just seemed like a great we are blending traditional and new ways of advertising,” said opportunity to marry GameSense with keno and really take a fresh Patterson. approach,” said Noble. “Responsible gambling is a core value of this “Our keno monitors are 42 inches,” added Noble. “I don’t organization. We believe strongly that as our gaming expands, we want think we’ve ever displayed a responsible gambling message on a our commitment to responsible gaming to expand and to remain fresh.” 42-inch monitor. It is far more prominent than anything we have The new program is being integrated with Connecticut’s existing ever done.”

28 INSIGHTS May/June 2016 All of these things help further develop GameSense – for Connecticut, for BCLC and for its other licensees: Alberta Gaming & Liquor Commission, SaskGaming, Saskatchewan Indian Gaming Authority, Manitoba Liquor & Lotteries and the Massachusetts Gaming Commission. “It’s been really great synergy in terms of our relationship with BCLC,” said Turner. “We GameSense tips to didn’t just take what they’ve done – our marketing department really hit it out of the park. keep gambling fun: The idea is that we will help each other. Together we are going to create a bigger suitcase, if you will, of tools from which we can each pick and choose. Some might fit Connecticut • Play for fun, not to make money. better, some might fit BCLC better.” If you gamble, the result is never certain and not winning is always a Unlimited potential possibility. Consider gambling as a form of entertainment, like going out Those GameSense tools have generated a lot of positive feedback from all industry for dinner or seeing a movie, not as a stakeholders in Connecticut, from politicians to the treatment community. source of income. “I really like the focus on responsible recreational gambling,” said Tamara Petro, Executive Director of the Connecticut Council on Problem Gambling. She said the • Set a budget and stick to it. Keeping it GameSense program of player education, which helps them make informed choices, fun means playing within your means. while leading players to help if necessary, is ideal. The emphasis on prevention, before When you set and stick to a budget, intervention is needed, is important. “That’s something that is really special about this.” you spend only what you can afford to Petro also loves the potential GameSense has to expand to other gaming industry spend. participants in Connecticut, including the tribal casinos and the off-track betting locations. She had already been talking to those operators, and ultimately would like to see it • Know how the game works and what embraced in all of these facilities, creating a strong statewide brand for the gambling the odds are before playing. The more consumer no matter what the location. “We were really excited the Lottery took it on,” you know about the games, the better she said. “Ideally I would love it if every industry player in the state would have some form equipped you are to make informed of GameSense,” said Petro. “There are parts of the campaign that would apply to each decisions before and while you play. industry.” She is enthusiastic about the potential of GameSense to focus on special populations. • Know when to stop. Not winning is BCLC has developed special programming for senior citizens, for example, and is working on the cost of entertainment. Wondering a campaign for gaming industry workers. Programming for tribal (First Nations) populations if you can win back money by playing is also on the agenda. To help with these, the organization added an employee who is more? It’s possible, but unlikely. Stop focused on developing these special campaigns, explained Candice May, BCLC’s GameSense gambling when you have spent your Product Manager. It’s all about finding the appropriate messaging that would best serve limit. Don’t try to win more to recover specific groups with specific needs. what you have spent. She noted that for the holiday season, there was also a strong focus on programing to help prevent lottery ticket gifting to minors, which included social media and reaching out • Balance gambling with other types to local “mommy bloggers” to get the message out. of leisure activities. Finding other BCLC itself is undergoing a transition from focusing simply on awareness – making sure types of entertainment to enjoy will people were seeing the campaigns – to a focus on harm minimization. That means making help make sure that gambling doesn’t sure that people not only saw the campaigns but changed their behavior because of them. become your main activity or too big All this information is now being tracked. “It’s really looking at whether the material we are a part of your life. putting out is relevant and is being delivered in an appropriate manner that is reaching our target audience,” said May. • Take frequent breaks. Every once in Everything that BCLC produces these days – from gaming products to responsible a while, it’s a good idea to walk away gambling messaging – now goes through the “GameSense lens,” so to speak, before hitting from the game you’re playing. Taking the marketplace. And in addition to ongoing work on special populations, the brand is a break can help you make smarter going through a bit of a refresh. “We just want to make sure what we are trying to do with decisions, so gambling stays what it GameSense is aligned with what people expect today,” said May, given that the brand was should be – a fun activity. first introduced in 2009. She is looking forward to working with the Connecticut Lottery, noting that • Set a time limit before you play. When BCLC’s primary emphasis to date has been with the casino and e-gaming applications you make a plan for how much time of GameSense. “We really want to work with Connecticut to enhance our lottery you can afford to spend gambling programming,” said May. “Now it’s time to shift gears and put some harm minimization (and stick to it), you are more likely to behind our lottery side of things.” She acknowledged that lottery is a difficult market stay within your set budget and not because of its anonymous play nature – it’s hard to know for sure if you are actually miss out on the other things you need reaching people. to do. Still, it’s an area critically important for American lotteries, which have embraced responsible gambling like no other gaming industry segment in the country. “We are hopeful that other lotteries will see the economics of GameSense and go along with it,” said Noble. “We think the more people that see the message, the more powerful it will be.”

INSIGHTS May/June 2016 29 NASPL Launches New Website at Lottery Leadership Institute

naspl.org and the NASPL Matrix Redesigned

n April 18 NASPL launched the newly redesigned websites, areas of focus started to emerge. It was determined website, naspl.org, at its 2016 Lottery Leadership that all of the industry-related information should be housed OInstitute held in Cleveland, Ohio. on the NASPL Matrix, the association’s password-protected This effort began as a result of the 2014 Lottery Leadership site. As a result, naspl.org became a consumer and media site. Institute held in St. Louis, Mo. NASPL Graphic Designer John Koenig and Paul Corey, I.T./ “I was listening to these great group presentations on Software Development, worked hard to create a visually branding the lottery industry,” said NASPL Vice President pleasing but user-friendly experience. of Operations Andrew White. “As I was taking notes the “I think the industry now has a variety of useful NASPL tools information pushed me to think about NASPL and the for daily activities,” said Executive Director David Gale. “We’ve lottery brand. How do we illustrate all of the good things our been able to collect and offer research electronically. Webinars, employees do on a daily basis? We needed to tell our story responsible gambling training, Insights magazine and lottery to consumers, media and North America. I started putting advertising examples are now available at the click of a mouse. ideas down on scratch paper. Because of the great job those It’s great to see how far we’ve come since sending out Fast attendees did, we were able to use at least one concept from Faxes to update the NASPL membership. We’ve eliminated the each group.” need to print almanacs that release outdated information. Best Shortly after that conference, the NASPL staff came of all it can all be viewed on a mobile device. The information together to figure out how to develop the idea into reality. we collect is now disseminated and available as close to real After researching other outside associations and industry time as possible.”

30 INSIGHTS May/June 2016 There are eight main sections to the new website. They include Player Protection, Responsible Gambling, Where the Money Goes, Myths, FAQ & History, About our Members, Media Center, Events and Associate Members.

Player Protection Synergy The Player Protection section promotes security, protection and The industry personnel website (NASPL Matrix) has also integrity. It offers consumers of lottery games information on scam been redesigned to mirror naspl.org alerts, where to report fraud and an informational video to avoid becoming a victim. It has been created with the same user-friendly feel and includes: Responsible Gambling The Responsible Gambling sections offers information on RG • Past keynote speaker webinars Events, terms related to problem gambling, a link to the NCPG • Responsible gambling tools website and how to use/contact the NCPG Problem Gambling • NASPL Resource Index with the most current sales Helpline. data available • Past NASPL conference presentations Where the Money Goes • Insights magazine issues • Advertising award entries and winners This is a jurisdictional listing of the beneficiary programs/services • Job postings supported by money transferred from each North American lottery.

Myths, FAQ & History One of the most unique areas of the website, this section contains Debunking Lottery Myths, a Glossary of Lottery Terms, Frequently Asked Questions and a History of North American Lotteries.

About our Members This snapshot of research opens to a main screen containing numbers of retailers, prizes paid to retailers, sales and transfers to beneficiaries for both the United States and Canada. Each lottery profile, containing the same information, can be reviewed. Their respective websites, Facebook pages (if available), and site (if available) can be accessed via live links.

Media Center A one-stop experience for media personnel, the Media Center contains many of the items requested on a daily basis including:

• Frequently Asked Questions • Myths, FAQ & History • Other Lottery Industry Organizations • NASPL Press Releases • Public Relations Contacts • Where the Money Goes

Events For more information or to see the great Any lottery industry event that appears in Insights magazine is listed under the events page. services offered by your association, visit:

Associate Members www.naspl.org A company-by-company listing of NASPL Associate Members includes links to respective websites, officer information, products -OR- and services description and contact information. A large number www.nasplmatrix.org of industry vendors and suppliers are associate members.

INSIGHTS May/June 2016 31 Join us in

The NASPL Professional Development Seminar is a unique event designed to Pittbring together lottery industry employeessburg at all levels in a small-group, hands- h on format. Workshops cover the primary disciplines in the industry accounting, audit, game developers, information technology, legal, product managers, public relations, research, sales and marketing, and security. The format allows for candid discussions and information-sharing among participants, and provides attendees with tangible ideas about how to take advantage of the industry's biggest opportunities and find solutions to its biggest challenges.

There is no better way to promote communication within the lottery industry, provide education through real-world problem solving, hear case study presentations and experience unsurpassed networking opportunities.

New this year: GAME DEVELOPERS

32 INSIGHTS May/June 2016 NASPL 2016 Professional Development Seminar August 2-5, 2016 Pittsburgh, PA wwww.nasplprofessionaldevelopment.com

Lottery Member: $650 Associate Member: $775 Non-Member: $875

Register Now! www.nasplprofessionaldevelopment.com

naspl professional development seminar

INSIGHTS May/June 2016 33 INSIGHTS PRESENTS:

Draw-based games are important to the lottery industry for a variety of reasons, but there are many challenges lotteries face to keep sales growing. Lotto game design to encourage larger and larger jackpots can work, but it also creates ever-increasing consumer expectations. New games take time to develop and it’s hard to know what will click with players; add-on games and promotions are easier paths to stimulate short- term interest that will hopefully translate to long-term growth. On the following pages, you will read about a lot of things happening on the draw side of the industry, including strategies lotteries have shared to address the challenges. We thank these lotteries for their participation.

34 INSIGHTS May/June 2016 Lucky Numbers Draw-based games may lack the pizzazz of their instant counterparts, but as we all saw in January, there’s nothing like an enormous jackpot to capture the attention of the entire world.

By Patricia McQueen

raw-based games. Terminal-based national games, FY16 will be good FY15, with $64.3 million in sales, down games. Lotto games. Jackpot thanks to the billion dollar Powerball 2.5 percent. Dgames. Lotteries have struggled jackpot in January. In total, about 37 percent of to come to a consensus as to what to Other lotto games and monitor traditional lottery sales in the United call this group of products after losing games were about equal at $3.7 billion States come from gaming system their beloved “online” nomenclature to for each category; lotto game sales were terminals in one form or another. the world wide web. Whatever you call down 4.8 percent while monitor games Instant games may bring in more sales, them, they provide lotteries with high- (primarily keno) were up five percent. but they also contribute less profit as profile games (what could be more high For the purposes of this discussion, a percentage of those sales. So draw- profile than a $1.6 billion jackpot?) that “lotto” includes all in-state games and a based games are critically important generate more profit per sales dollar few small multi-state games. in the never-ending need to increase than scratch tickets. Then it’s a long way down to the revenues to beneficiaries. Of course the challenge, short of next group of games, indicative of the They are just as important in those high jackpots that keep raising challenge of looking for that “next big Canada, but perhaps for a slightly consumer expectations, is how to keep thing.” With the spread of different reason. There, instant games pace with the “new and improved!” and and , the “for life” category haven’t reached the volume seen in instant gratification world we live in. Not came in with $327 million in sales during the United States – just 30 percent of to mention finding enough niche games FY15, up 207 percent with 21 states traditional game sales compared to 63 to help smooth out the natural ebb and reporting, compared to 10 in FY14. At percent in the U.S. So draw-based games flow of jackpots. this writing, there are now 26 lotteries are a much bigger part of the portfolio, In FY15, sales of the primary draw- offering these games. Terminal-based and Canadian lotteries must deal with based games in the U.S. were $24.8 instant games, most commonly called the whims of the jackpots even more so billion, a decline of 3.1 percent from the Fast Play but with other monikers as than their American counterparts and $25.6 billion reported in FY14. These well, produced $204 million in sales in focus on new ways to grow sales. include just about every game there is 12 jurisdictions, up 38 percent. (see chart) but for raffle games and a The long-running Hot Lotto, primarily Daily numbers games handful of highly specialized games like offered by smaller lotteries, was up bingo or tic tac toe style products in a 8.4 percent to $95.8 million in sales The venerable daily numbers games couple of jurisdictions each. with 16 participants. And the relative – from two-digit to five-digit – upon As a group, daily numbers games newcomers, hybrid games and All or which many lotteries depend a great brought in $9.9 billion in sales, up Nothing, each checked in with about deal, are doing quite well by all signs. $321 million or 3.3 percent over FY14. $90 million in sales, up 11.5 and 10.3 Thirty-five of the 41 lotteries which Together, Powerball and Mega Millions percent, respectively. Seven lotteries offered them last year reported gains, sales were just shy of $6.7 billion (not offered each of these game types some of them substantial. including sales outside the continental in FY15; two new jurisdictions have While most American lotteries offer U.S.), down $1.4 billion or 17.4 percent. recently added a hybrid game. Finally, both three-digit and four-digit games, As bad as FY15 was for these two daily keno was offered by five lotteries in only four offer a five-digit game and just

INSIGHTS May/June 2016 35 Selected U.S. Draw-Based Game Sales (Dollars in millions)

FY14 FY15 Change # of Lotteries Sales # of Lotteries Sales Dollars Percent

Daily Numbers 41 $9,593.3 41 $9,914.4 $321.1 3.3% Powerball* 44 4,827.2 45 3,950.3 (876.8) -18.2% Lotto** 43 3,893.8 45 3,706.8 (186.9) -4.8% Monitor Games 15 3,484.7 15 3,660.1 175.5 5.0% Mega Millions*** 44 3,242.0 45 2,718.5 (523.5) -16.1% For Life Games 10 106.5 21 326.8 220.3 206.9% Terminal-Based Instant 11 147.8 12 203.9 56.1 38.0% Games Hot Lotto 16 88.3 16 95.8 7.4 8.4% Hybrid Games 6 81.2 7 90.6 9.4 11.5% All or Nothing 6 81.2 7 89.5 8.3 10.3% Daily Keno 5 65.9 5 64.3 (1.7) -2.5%

Total Selected Draw $25,611.8 $24,821.0 ($790.8) -3.1% Games

* Powerball is also sold in Puerto Rico and the Virgin Islands; not included in these results. ** All lotto games not otherwise listed separately. *** Mega Millions is also sold in the Virgin Islands; not included in these results.

one (Pennsylvania) currently has a two-digit game. In Canada, new options and winning experiences for daily numbers games, most lotteries offer either a three or four digit game, but not and the introduction of these options often triggers strong sales both, although Ontario has two-, three-, and four-digit games. growth in the base game with the benefit of additional dollars Daily games have usually been similarly branded by lotteries from the add-on purchase. (i.e., Cash 3 and Cash 4, or Pick 3 and Pick 4), but in some cases developed over time with different names, like Pick 3 and Daily Add-on games 4. The last year eliminated that difference in an effort to take advantage of a single new “Pick” brand Add-on games are popular around the industry on just for marketing purposes and introduced a two-digit game to about all draw games, in fact. They are a fairly painless way complete the four-game numbers lineup. to add value to a game or refresh a game without having to “While we never intended for Pick 2 to be an aggressive change the underlying matrix. sales performer, we did hope that it would attract new players At least 38 lotteries in the U.S. offer one or more add-on seeking a simple and fun play experience,” said Executive games, not counting the multipliers offered on Powerball and Director Drew Svitko. “Overall, rebranding our numbers games Mega Millions in most jurisdictions. They may be instant-win as Pick games has enabled a more coordinated marketing games, multipliers, extra draws or other additional winning strategy and also allowed us to conduct second-chance opportunities. All Canadian lotteries use spiel games, on drawings for these games. All of these factors have contributed national lotto games but on regional games as well. They are a to moving our numbers game sales in a more positive significant percentage of game sales in the country, much more direction.” so than in the United States. The in August will be following As of early May, 11 lotteries were offering add-ons for their Pennsylvania’s example, rebranding its Cash 3 and Play 4 games daily numbers games, 27 have them on one or more lotto into a full Pick family, adding a Pick 2 and Pick 5 game. games and 15 of 16 lotteries with monitor games offer some Many lotteries take advantage of add-on games to provide sort of multiplier or bonus option. Some lotteries also have

36 INSIGHTS May/June 2016 special features, such as a periodic doubler or a designated day of the week to offer more prizes at no extra charge. When asked about add-on games, lotteries offered a diversity of opinion. Most lotteries are happy with their offerings; only a few reported minimal success. It is clear that add-ons do much better when launched at the same time as their host game – it takes a lot of effort to get player pick-up when added to an existing game. That said, the general consensus is that add-ons generally provide a good source of incremental revenue no matter when they are introduced, and allow lotteries to enhance current products without building an entirely new game.

A brief sampling of comments from lotteries about their experience with add- on games follows.

Idaho Lottery: In February, Sum it Up! Was added to Idaho Pick 3 for an extra $1; players can win not only if they match their numbers, but if the sum of their numbers matches the sum of the drawn numbers. It has been an incredibly successful addition to the game, increasing Idaho Pick 3 sales by more than 23 percent after 12 weeks in the market.

Louisiana Lottery:The instant win EZ Match option was launched at the same time as its host game, Easy 5, with the result that 35 percent of Easy 5 sales include the added EZ Match purchase.

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[email protected] www.jumbointeractive.com INSIGHTS May/June 2016 37 Maryland Lottery: Add-on games are particularly popular with : Player familiarity with the multipliers for Powerball players of the state’s two monitor games, Keno and Racetrax, and Mega Millions made it easy to introduce add-on games for where for an increased wager, winnings can be multiplied as much other products, and Texas currently offers Extra! on Lotto Texas as 20 times. They have high participation rates – Keno Bonus and and Sum It Up! on the daily numbers games. Players understand Keno Super Bonus account for approximately 10 percent and 38 the additional winning opportunities for their extra $1 per play. percent, respectively, of total keno sales; Racetrax Bonus sales Extra! has experienced positive sales growth every year since its account for approximately 14 percent of total Racetrax sales. introduction in 2013. Sum It Up!, launched with Daily 4 in 2007 and later added to Pick 3, is an easy to understand add-on game Missouri Lottery: EZ Match was added to Show Me Cash in 2011, that is unique in that you can win without winning on the base and winner awareness and great chances to win (1 in 4.21) are game. “When you consider the benefits that the add-ons provide keys to success for this add-on feature. Winner awareness is to players – increasing prize amounts, providing additional driven home at the lottery retailer terminal whenever a winning opportunities to win, etc. – and couple that with the sales levels EZ Match ticket is produced, since a special tune plays as the and that their prize payouts are consistently around 50 percent, winning ticket is printed. these add-ons are strong contributors to the Texas Lottery’s revenue generated for the Foundation School Fund in Texas,” said : XTRA was added to Pick-6 lotto in January Executive Director Gary Grief. 2015, multiplying non-jackpot prizes and adding a $2 prize for matching only two numbers, improving overall odds from 1:54 to Terminal-based instant games 1:7. That gives something back to the most loyal players as they dream about a jackpot win. In fact, players like XTRA so much that Some add-on games offer an instant-win component, the Lottery is considering adding it to Jersey Cash 5 as well. “We recognizing the importance of instant gratification to today’s hope XTRA will continue to grow and expand our core player base consumer. As lotteries look to add some of the strengths of across our draw game portfolio,” said Executive Director Carole scratch tickets to their draw game portfolios, terminal-based Hedinger. instant games are starting to come of age. With improved ticket printing capabilities, multiple themes and the technology to North Carolina Education Lottery:The add-on games SUM IT UP better manage those themes, and higher average payouts than (on Pick 3 and Pick 4) and EZ Match (on Carolina Cash 5) help to other draw-based games, this category has a lot of potential. keep in-state draw games, now going into their 10th year, fresh Just ask Rodney Paige, Strategic Development Analyst for the and fun. The additional revenue also boosts overall sales. For DC Lottery, which has embraced these games, called Fast Play in example, the addition of EZ Match resulted in a nine percent its market. Well, the players have embraced them, purchasing increase in overall Carolina Cash 5 sales at a time when that game more than $17 million in Fast Play tickets in FY15. Fully eight had not experienced significant growth for a couple of years. percent of the Lottery’s sales in FY15 came from Fast Play, more than any other lottery in terms of market share, and DC is working Ohio Lottery: A long-time proponent of the Kicker add-on, hard to keep that number strong and growing. Indeed, many Ohio paired this option with Classic Lotto in 2012. The payout of the innovations in this category are being utilized by the DC percentage has been 39.34 percent, so the game has been Lottery. profitable, and Kicker sales as a percentage of Classic Lotto sales On average, 17 to 21 Fast Play games are on the market at has been trending up. There has also been great success with any given time, although a current refresh of the self-service MP Booster, a multiplier for keno, with double-digit growth since terminals from Intralot will not only make the graphics pop, it will inception. Booster sales averaged 32 percent of keno sales in make it easier to have more games available. The whole display FY15; that percentage has edged up to 33 percent in the current layout will change, so players can easily view and select games – fiscal year. for example, by theme or by price point, or choose only seasonal or jackpot games. Price points range from $1 to $10; a $20 game

38 INSIGHTS May/June 2016 is scheduled to launch in June. The $5 price point is the most popular. Prize payouts are a bit higher than those for scratch tickets, and range from about 68 percent on $1 games to 82 percent on $10 progressive jackpot games. Jackpot games are a major driver of Fast Play success for DC, with the $1 Flaming Hot Dice and DC Jackpot, which has three price points – $2, $5 and $10. DC Jackpot alone accounts for 55 to 60 percent of Fast Play sales in the city. “Our Fast Play sales are really dictated by that jackpot,” said Paige. “I love it when the jackpot gets up there because it means we’re going to have a good sales week.” DC is also working hard to offer more seasonably relevant games – such as sports-themed games at times when interest in certain sports is highest, or holiday-themed games. The biggest challenges for Fast Play are the product’s “invisibility” and the limitation of black and white graphics. Unlike scratch tickets, which are displayed at retail, Fast Play games hide in the terminals, only to be seen when purchased. DC promotes its new games using keno and Race2Riches screens along with the player advertisement

INSIGHTS May/June 2016 39 displays at retail. The Lottery also has just introduced new play stations, which have a space dedicated to Fast Play POS material to provide more opportunities to build retail awareness. Although limited to black and white graphics, DC tries to make the graphics as bold as possible, drawing attention to the games. “Some of the newer tickets really pop,” said Paige. “We think that helps us.” The biggest potential boost could come from a work in progress – licensed products. Eight branded games are currently in the works, subject to contract approval by the powers at be in DC. “Once we get these games in market, we believe they are really going to take our Fast Play sales to another level,” said Paige. The brands were chosen with the help of an online players club survey asking about brands and licensed products. The games are expected to launch in FY17. All of these strategies are factors in DC’s success with Fast Play. “Keeping it fresh and staying on the cutting edge is important,” said Paige.

New game concepts

Hybrid games take Fast Play style games a step further, adding a later draw component to provide two chances to win with every ticket – a few lotteries have adopted this game format (see separate article beginning on page 44). Lotteries continue to look for other games to fill gaps in their lineups, provide some sense of stability without wild jackpot swings, offer novelty themes to attract a small but dedicated player base, or tempt players with innovative play styles. While some games don’t always work, that shouldn’t restrict continued innovation. And what doesn’t work in one jurisdiction may work very well in another. Still, expectations need to be managed – these games are likely small revenue producers that serve specific goals. One such innovative game is All or Nothing, first launched by the Texas Lottery in September 2012. Developed to address player disappointment when they don’t match any numbers in a lotto game, All or Nothing has an hourglass matrix where the top prize is won by matching all numbers drawn or none of the numbers drawn. For Texas, the game provides great opportunities to win a prize – 1 in 4.5. All or Nothing’s debut was “a significant point in the evolution of the Texas Lottery’s draw game portfolio,” said Grief. It was the first draw game to be drawn in Texas four times daily, greatly expanding the frequency that lottery players could participate in a lottery draw game. It was also the second draw game in Texas (after Powerball) to be offered at a $2 price point. The game was recognized in 2013 by NASPL as the industry’s Best New Draw Game. Due to its unique matrix structure, price point and draw frequency, All or Nothing is an important niche game in the Texas portfolio. While core games such as Powerball, Mega Millions, Lotto Texas, Texas Two Step, Pick 3, Daily 4 and Cash

40 INSIGHTS May/June 2016 5 have a very long life cycle, niche games are important as a means to reach lapsed players and new players and introduce them to lottery drawing games, explained Grief. “The challenge with niche games is that they may have a significantly shorter product life cycle than core offerings and may require Time for EquiLottery? replacement more frequently. While All or Nothing continues to support the overall nd now for something completely different. Well, not so much health of draw game sales, the Texas Lottery if you remember that the very first modern lottery in the United remains vigilant in pursuing new draw game AStates (New Hampshire) was based on the results of a horse race. opportunities in the niche category that might Of course, times have changed since then, and horse racing has declined one day replace existing niche game offerings as an industry. But a lot of that is due to the challenges of handicapping in the portfolio.” the races and betting that is just too difficult in this era of quick picks and Other lotteries have had mixed results with push-button slots. All or Nothing; the Illinois Lottery launched a EquiLottery aims to change all that, for the good of both the lottery similar game called Hit or Miss in September and racing industries. The brainchild of Founder and Chief Executive 2013 and discontinued it in February 2015. Officer Brad Cummings, EquiLottery recently entered into an agreement The “for life” category of games, led by with IGT Global Solutions Corp., allowing IGT to offer its unique game Lucky for Life and Cash4Life, resurrect an to current and potential lottery customers as an established game and old industry idea and seem to have found software solution. “IGT is the global leader in lottery services and this their niche this time around. There is strong arrangement shows their commitment to growing the industry through appeal for their prize structure, with a top third-party innovation,” said Cummings when the agreement was prize of $1,000 a day for life. That’s a number announced. “We are excited to pursue our goals of increasing support for the general public can appreciate – not lottery good causes and creating a new way for players to experience the stratospheric and almost incomprehensible thrill of live horse racing.” like $1.6 billion. The game is a daily $2 draw based on the results of a live horse race. Lotteries and their vendors keep looking Each EquiLottery quick pick ticket represents a three-number bet with towards the future. They are exploring ways horse numbers and names listed. The video of the daily live race may be to skin games to make it easier to change the delivered through a mobile app, website and in-store retail monitors, theme or appeal to maintain the appearance appealing to all demographics, especially the millennial generation. of “newness” in a draw-based game. That That was the conclusion of both qualitative and quantitative studies said, the underlying game structure has to be done in Kentucky by Ipsos last year. Projected player appeal and spend understood – and liked – by the player or no scores make EquiLottery a viable game for state lotteries searching for amount of dressing will make them purchase ways to increase lottery profits and appeal to new player bases. In the tickets. qualitative study, participants thought the live horse racing event felt There may also be a big future in attaching “more authentic” than traditional lottery games, and “more exciting than licensed property brands to draw-based watching three ping pong balls coming out of a machine.” Retailers loved games, as the DC Lottery expects with Fast the idea of showing live horse races in their stores. Play. We’ve already seen popular brands In the quantitative study, EquiLottery appealed to both lottery used in the Tap ‘n Play games in a couple of players and non-lottery players, with strong interest from non-players. jurisdictions, and they have been very good for Depending on awareness levels, first year sales projections range from sales. Ontario’s use of the Wheel of Fortune $18 million to $54 million, with a “high potential for stickiness” and brand in one of its Watch ‘n Win hybrid games limited cannibalization, according to Ipsos. Study participants liked the has also borne fruit. entertainment value, the ability to view races on a mobile app, good In the end, jackpots do drive sales, but chances to win prizes and the differentiation from other lottery products. there’s a whole lot more that can be done on Not surprisingly in Kentucky, they also liked that some revenue from the the draw-based side of the business than just game goes back to support the horse racing industry. sitting back and waiting for the luck of the “Our vision for EquiLottery has been to deliver an innovation to the draw. lottery industry that appeals to new and existing customers by bringing the excitement of live horse racing to millions who have not previously been exposed to it,” Cummings said. “We have never been closer to making this vision a reality and look forward to what the future holds for our game.”

INSIGHTS May/June 2016 41 Where did you learn about this research? We were not sure if other lotteries had tried this yet. But Frank Suarez, our Deputy Executive Director of Brand Management and Communications, had employed this research before in his previous work for brands in the consumer packaged goods and restaurant industries. It can be particularly helpful for companies with a large portfolio of well-established consumer products. If you think about it, lotteries with large portfolios of games are in the same situation.

Who did the research? The lottery issued an RFP for the kind of research we were looking for. Four companies bid. And we picked REPASS, a Cincinnati firm, to work on the research project.

How was the research done? REPASS did a two-week web-based survey of about 1,000 participants and provided the analysis of the results. Those surveyed included lapsed lottery players and current lottery players that play with different degrees of frequency. The research tested 11 game concepts, including the six draw games the lottery already marketed and five new concepts. One assumption, however, was that five of our existing draw games – Powerball, Mega Millions, and our Pick 3, Pick 4 and Cash 5 games – would stay in the portfolio. While the research allowed us to identify what overall mix of draw games was optimal, at this time we were only looking to identify the best game to add to TESTING DRAW GAME our current portfolio.

CONCEPTS IN NORTH CAROLINA What were the main things you learned? Q&A with Randy Spielman, Director of Product Two findings were particularly helpful to us. The research Development, North Carolina Education Lottery helped us see that a portfolio of six draw games would be the most successful for us at this time. It showed that based on the hen a lottery considers launching a new draw game, concepts we tested, the additional reach and sales generated for it’s important to know if the game will prove popular games beyond the sixth would not justify the additional expense Wwith lottery players. The North Carolina Education associated with supporting those games. Therefore, our portfolio Lottery recently faced that question as it studied what new draw will consist of six games at the start of our new fiscal year. And it game to start in North Carolina. For help, the Lottery employed indicated the game that would be most likely to improve both our for the first time a type of research designed to test not only new sales and reach was the Lucky for Life draw game. We launched game concepts, but how a new game will impact others that are that multi-state game in February and we’re pleased so far with already in the market. Director of Product Development Randy the results. Spielman talks about the research effort and how it helped North Carolina. What limitations, if any, did you find with this kind of research? The research is only based on the concepts you provide for What was the new research method and what were the testing. There could be concepts that were not included that questions you wanted to answer? may broaden reach and drive new sales. Each time a new game In April 2015, as the North Carolina Education Lottery considered is being considered that was not part of your original test, all adding a new draw game to its portfolio, we decided to try concepts have to be tested again, both current games and new for the first time a type of concept testing known as a Total games. This will provide an updated, optimal mix of games. Unduplicated Reach and Frequency study. That’s TURF for short. We had five new game concepts we wanted to research and Will you employ this kind of research again? test with players. We also wanted to answer some additional Yes. We were ready to move beyond the issue of what the next questions. Will adding a new draw game significantly increase best game is. We don’t want to just be moving money around. overall draw game sales? If so, which of the new game concepts Our goal is to build the best portfolio of draw games we have will add sales by broadening the reach of our overall draw game for the markets that we serve. Over time, smart management of portfolio? And which new concepts would provide the most our entire game portfolio should ensure our continued success incremental sales growth? It’s possible, we knew, to have a new with providing fun and exciting games for North Carolina lottery game launch, but not see overall draw game sales grow. players.

42 INSIGHTS May/June 2016 GoldFish_Ad_2016_FINAL_NASPL_LI.pdf 1 4/21/16 12:05 PM

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TM www.scientificgames.com Gold Fish and © 2016 ScientificINSIGHTS Games Corporation. May/June All Rights 2016 Reserved. 43 HARNESSING THE POWER OF POWERBALL

By Paul Lauzon and Jason Allsopp, Ipsos Reid

As far as jackpots go, this one was a whopper. Every news outlet in North America covered the story for days and weeks leading up to it. Millions of Americans who had never played the lottery before jumped into the mix. Record numbers of Canadians cross-border shopped to buy tickets, spurning a late night ribbing from Stephen Colbert. Tension mounted when the winners did not come forward at first after the numbers were announced. When the dust finally settled, three winning Powerball tickets split the $1.6 billion prize—the largest jackpot of all time—and the fever- pitched excitement that had been brewing for weeks finally ended.

ur analysis of the data reveals just Ohow effectively this particular jackpot caught the market by storm, drawing in record numbers and revealing new opportunities to grow and reach new players. In order to better understand the success and penetration of this particular Powerball jackpot, our Lottery and Gaming practice at Ipsos undertook a survey of Americans to look for trends, behaviours, purchasing tendencies and marketing avenues to attract new players. The results of our analysis, while affirming Americans’ habits to be enticed by larger jackpots, also indicated a shifting landscape being driven more and more through the

44 INSIGHTS May/June 2016 media, both traditional and social. The potential is there to expand the market reach of smaller jackpots, lower-tiered prizes, and to focus marketing efforts on attracting new and peripheral players.

Getting the Powerball Rolling

By the time it was all said and done, 60 percent of Americans had played in the $1.6 billion Powerball. That means almost 200 million people got in on the action, half of whom spent between $11 and $100 during the two month timeframe. Many of those people tried to maximize their chances of winning by participating both individually and in groups. In fact, 30 percent of all players surveyed diversified their approach by playing in both camps, while 5 percent played in groups only, and 64 percent played on their own. The data indicates that many previous non-players were drawn to this large jackpot, and that more regular players opted to spread their spending across group and individual play, in order to cover their bases for better odds. This tendency to embrace group purchasing seems to be associated with the size of the jackpot, since the winners would still be splitting a substantially large sum of money among the group.

New Players in the Game

As we mentioned previously, the enormity of this jackpot was too tempting for the majority of Americans to pass up. In fact, 12 percent of players had never purchased a Powerball ticket before—extrapolating that number to the entire US population means 7 percent of Americans bought the first Powerball ticket of their lives in the lead up to the January 13 jackpot. Lapsed players—individuals who have not played in more than 12 months—also came back in significant numbers, representing 21 percent of all players in the lottery. But what about the 40 percent of Americans who did not play? While a significant number of them—74 percent according to our data—have never played, 20 percent have played in the past, meaning there is potential to grow Powerball penetration by re-attracting some of those players.

INSIGHTS May/June 2016 45 Anticipated Future Play

On any typical month, nearly one third of Americans expect to play Powerball at least once. About 10 percent will play less frequently, while 25 percent typically would hold off until the jackpot is high. Of the 40 percent of Americans who did not play in this Powerball, seven out of 10 say they will never play. While we expect future core playership, and abstinence, to remain relatively consistent over time, there is an opportunity to leverage the excitement of more casual and peripheral players, many of whom jumped in with the recent jackpot roll, by creating messaging that brings them in at lower jackpot roll levels.

Betting on a New Market

In our survey, two thirds of respondents indicated that they would start playing Powerball when the jackpot reaches the $40 – $300 million range, with another 20 percent getting in before the jackpot hits $500 million. Interestingly, more than half of the respondents who did not play in the $1.6 billion Powerball would have played had they known about the size of the jackpot. In fact, those same respondents would play for jackpots in the $40 – $100 million range, provided they had any knowledge of them. While it is difficult to grasp how some respondents were not aware of the incredibly large jackpot given the significant earned media supporting Powerball during the weeks leading up to this draw, it certainly presents a challenge to many lotteries in how to communicate with these types of potential customers. Between casual players who might be interested in playing more frequently for smaller jackpots, and the millions who say they would play if only they knew about the jackpots in the first place, we see an opportunity to attract new players through targeted messaging that finds a way to reach them. According to our data, once the jackpot exceeds $100 million, there are millions of Americans who really want to know about it. States could be missing out on significant sources of revenue simply because people weren’t aware of the jackpot, or weren’t made to feel excited about it.

46 INSIGHTS May/June 2016 Dividing Up the Pie

When the survey turned to how respondents would like to see prize money distributed, a strong majority (81 percent) of Americans said that when the jackpot reaches $1 billion, they would prefer it if the money were spread across multiple prizes, rather than to a single winning set of numbers. Past data indicates that what really makes lottery tickets sell is a big jackpot, and the altruistic results of focus groups and surveys may not be an accurate reflection of how people actually behave when the jackpot swells. That being said, every Powerball has thousands of lower-tiered prizes, some amounting to significant prizes for the winners. What if these prizes were given more attention from marketers during a large roll pattern? Such efforts could appeal to people’s altruistic sides — this idea of multiple winners of significant amounts — and attract some of the more than 80 percent of Americans who would prefer multiple prizes over a single amount. Reaching out to these somewhat disparate groups of casual players, non-players and players who say they’d prefer a more shared lottery, could pay off. Most lotteries claim that after a certain jackpot, they step aside and let traditional and social media take over, but in so doing who are they missing out on? Based on our results, quite a large number of potential and peripheral players are not receiving the messaging they need to play. Promoting the smaller jackpots and the lower-tiered prizes could open new seams that lead to new players and even more excitement — seams that are not currently being targeted effectively.

Concluding Remarks

By the time the Powerball winning numbers were announced on January 13, 60 percent of the United States population had taken a shot at billions. New players had jumped in. Players who had sat on the fence for months and years had bought tickets. By every account it was a success. But our data indicates that while the numbers are impressive, there is room for potential growth, specifically with casual players and would-be players who are simply out of the loop. We have also noted that promoting the Powerball’s lower-tiered prizes could appeal to the majority of Americans who say they would prefer multiple smaller prizes over the current single prize format. While there is no question that as the jackpot rises, so too does playership, we see the market for even more, and for the Powerball lottery to roll to its full potential.

Methodology

These are findings from an Ipsos Lottery & Gaming study conducted from January 15 to 19, 2016. For the survey, a sample of 1,000 Americans was interviewed online. The precision of online polls is measured using a credibility interval. In this case, the poll has a credibility interval of plus or minus 3.5 percentage points. For more information about credibility intervals, please visit the Ipsos Public Affairs section of our website [http://www.ipsos-na.com/dl/pdf/research/public-affairs/IpsosPA_ CredibilityIntervals.pdf] at www.ipsos-na.com. The data were weighted to the general population of the United States by region, gender, and age. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error and measurement error. Where figures do not sum to 100, this is due to the effects of rounding.

About the Authors

Paul Lauzon is Senior Vice President and Managing Director with Ipsos Reid and head of the firm’s Lottery & Gaming practice that employs more than 10 full time lottery researchers. Based in Calgary, Paul leads the team of research experts dedicated to serving the market research needs of lottery and gaming organizations across Canada and the United States. Paul can be contacted at paul.lauzon@ ipsos.com or 403.294.7386. Jason Allsopp is a Vice President with Ipsos’ Lottery & Gaming practice. Based in Vancouver, Jason is part of a team of research experts dedicated to serving the market research needs of lottery and gaming organizations across Canada and the United States. Jason can be contacted at jason.allsopp@ ipsos.com or 778.373.5035.

INSIGHTS May/June 2016 47 ORCHESTRATING LOTTO SUCCESS – WITH A LITTLE LUCK – IN CANADA Canada’s two national lotto games soared in FY16, with a number of factors contributing to a miracle year.

By Patricia McQueen

48 INSIGHTS May/June 2016 it was very powerful,” said Schulzke about the sales window change.

Built-in opportunities

When Lotto 6/49 was relaunched in September 2013 at the $3 price point (up from $2), it included a feature that provides players with additional value for their extra buck – a $1 million guaranteed prize draw for every drawing. A unique identifying number is printed on each ticket sold, and one of those numbers will win $1 million in each drawing. That game structure also allows for Super Draws – periodic promotional drawings where there are additional guaranteed winners for even more prizes. The Super Draw promotional concept is nothing new, as other lotteries around the world have found value A year ago, both American and Canadian lotteries in that structure. There were two other changes to the game – the could be excused if they were scratching their base jackpot was raised from $3 million to $5 million, proverbial heads wondering what was going on and a new prize category was added; players can now win a free ticket by matching just two of the six with jackpots – or NOT going on, as FY15 was a numbers drawn. sub-par jackpot year for the national games in both “The game change was a success,” said Lou Pagnotta, Director of Marketing, National Games, countries. As a result, these highly jackpot-driven for the Ontario Lottery and Gaming Corp., and games experienced double-digit sales declines just Chair of the Draw-Based Games Committee of the Interprovincial Lottery Corp. “It did what it was about everywhere you looked. supposed to do and added a little more energy to the game.” Of course it didn’t hurt that Lotto 6/49 reached Y16 is proving to be a totally opposite experience. Of course Powerball’s a Canadian record $64 million jackpot in October $1.58 billion jackpot in January was a game-changer, but Canada’s lotteries 2015, a highly improbable sum for the population Fwere not to be denied their moment of glory. With a year ending March 31, base and game design, and had many more than Canada’s results are already in, and they are astounding. Across the country, the anticipated jackpots at the $20 million level during two national games Lotto 6/49 and Lotto Max were up a total of 33 percent over the year. There’s nothing like a little luck in a lotto FY15. Combined sales were C$3.86 billion, a new record for Canada’s national game! lotto games and their best year since FY11. (All remaining dollar amounts in this The Super Draw promotions, though, were article refer to Canadian dollars.) planned elements that paid off handsomely. During “In the last two years we have seen the bane and the boon of how jackpot FY16, there were four Super Draws: roll patterns can affect the business,” said Ken Schulzke, Vice President, Marketing Strategy and Advertising, for Western Canada Lottery Corp., which May 9, 2015: Two extra guaranteed prize draws for registered an eye-popping, and country-leading, 40 percent sales increase in $1 million each, for a total of three guaranteed $1 “big lotto” – the national game category that includes the two games. That went million prizes for the drawing. a long way towards an overall 20 percent sales increase for WCLC compared to the previous year. November 25 and 28, 2015: Every Lotto 6/49 ticket But FY16 wasn’t all about luck – changes in various elements of the games sold for these drawings had a chance to win not only had been implemented since 2013 and everything just fell into place. “It’s the guaranteed $1 million prize, but six additional a good thing when strategy, design and luck all come together,” marveled guaranteed $100,000 prizes and 49 additional Schulzke. The strategy and design elements included a relaunch of Lotto 6/49 to guaranteed $10,000 prizes. include a guaranteed $1 million prize in each drawing and periodic Super Draw promotions, along with an increase in the maximum jackpot for Lotto Max. Even December 23 and 26, 2015: Four extra guaranteed something as simple as extending the sales period by 90 minutes on draw days $1 million prize draws, so every Lotto 6/49 ticket sold factored into the equation – tickets on draw nights for all Canadian lotto games for these drawings had a chance to win one of five are now sold until 10:30pm ET instead of 9:00pm ET. “It was a subtle thing but guaranteed $1 million prizes.

INSIGHTS May/June 2016 49 February 13, 2016: Fourteen extra guaranteed prizes of $100,000 were offered in addition to the $1 million guaranteed prize draw. “We structure Super Draws around themes and high retail traffic days,” explained Pagnotta, like Black Friday, the Christmas holidays and Valentine’s Day. One thing the guaranteed draws – and Super Draws – do is help create more winners, especially big winners, and spread them throughout the country. The common complaint from players on any big multi-jurisdiction game is that winners are “always” from the larger participating jurisdictions. “Since the game changes have been put into place, Atlantic Lottery has experienced three times more million dollar winners,” said Atlantic Lottery Senior Manager, Jackpots and Regional Games, Shannon French-Demille. “These winners, combined with our strong media support of them across Atlantic Canada and hyper- locally, have resulted in strong sales and player participation rates for the brand.”

Putting the “Max” back into Lotto Max

Luck and strategy also paid dividends for Lotto Max. After a second-year peak in FY11, Lotto Max sales steadily declined, falling from $2.1 billion in FY11 to $1.4 billion in FY15. But it roared back in FY16, recording almost $2.2 billion in sales. There’s no denying luck contributed to that result, but also fortuitous was a change implemented in July 2015. The change was simple – increasing the maximum jackpot from $50 million to $60 Lotteries are trying new and unique advertising campaigns for Lotto Max, like this one from million. At $50 million, a portion of sales still Western Canada Lottery Corp. starts generating the MaxMillions $1 million prizes unique to the game. But the jackpot continues to grow until it hits $60 million, at The move to a $60 million cap was always part of the plan with Lotto Max, which point all additional sales start funding explained Pagnotta. “The original game design lets us play with the jackpot more and more MaxMillions. amount, as we know that the category requires that from time to time. We could It may not seem a lot by U.S. standards, have put all the Max Millions dollars into a big jackpot, but we didn’t want to but for Canada that change was significant. accelerate jackpot fatigue.” He expects that at some point in the future, the cap Combined with that incredible luck, “We will be adjusted upwards again. hit that $60 million a lot more than we anticipated,” said Pagnotta – eight times New campaigns and product differentiation in fact. When combined with 30 drawings where MaxMillions were in play, rather than With two national games, Canada’s lotteries have done a good job the typical 15 or 16 drawings over a one-year differentiating them in the eyes of consumers. Although Lotto 6/49 is now $3 period, sales went through the roof. instead of $2, which brings it a little closer to the $5 Lotto Max, price is still a

50 INSIGHTS May/June 2016 differential. Lotto 6/49 is drawn twice a week vs. once weekly The new approach for Lotto 6/49 showcases luck. for Lotto Max. And even though Lotto 6/49 can reach large “We wanted the population to be conscious that luck jackpots – like the record $64 million last fall – it takes a long is a part of their life and plays in their favor everyday,” time to do so. Lotto Max is still the king of the jackpots – “The said Janie Thériault, Department Manager, Marketing consumer here gets it,” said Pagnotta. “They get the fact that Communications. So the Lotto 6/49 campaign shows the games are different based on jackpots.” lucky moments in everyday life with the tagline #You There are also conscientious efforts to market the two should buy 6/49. “This campaign is a huge success in games differently. Lotto 6/49 is typically marketed to older Quebec.” consumers, whereas Lotto Max tends to attract younger players, Success was clearly the buzzword for Canada’s big with campaigns planned accordingly. As the brand that has been lotto games in FY16 – “It was a great ride if you were in around the longest, Lotto 6/49 also has a broader appeal than the national lotto business,” said Pagnotta. But as the Lotto Max, reaching a higher percentage of adult consumers. previous year demonstrated, sales could just as easily While Lotto 6/49 has some common creative used in regress in FY17 – it is always a challenge to follow up a advertising across most jurisdictions, the lotteries have recently record-breaking year. That’s where strategy comes into been ramping up individual creative on Lotto Max, testing new sharp focus, and Canada’s lotteries are confident about concepts and advertising themes. The unusual campaigns are the path they are on. bearing fruit, according to Schulzke, further helping the brand. With its population base much different than the rest of Canada, Loto-Quebec often has its own campaigns for the national games, and last year launched new creative for both. The traditional “Live your dreams to the Max” campaign for Lotto Max has shifted to a focus on how becoming a multi- millionaire changes your life – “Welcome to your new life.” And once players understood and accepted the new Lotto 6/49 – a game which has always done much better in Quebec relative to Lotto Max compared to other provinces – it was time for new creative on that game as well.

INSIGHTS May/June 2016 51 Watching While You Win Games offering both an instant win and nightly draw feature are popular in some jurisdictions, particularly in Canada.

By Patricia McQueen New Backlit

MINIMUM OR OTHER PRIZES AVAILABLE TO BE WON

ottery games that come from the takes it a step further – offering that your results. However, not all of the gaming system terminals have instant win component combined with American lotteries that have adopted this Lhistorically been “buy now and wait for an opportunity to win a second time in a game format use the animated portion of the draw” affairs. But with the tremendous drawing, usually later that day. Potentially play in stores, so the “watch” part doesn’t popularity of instant tickets, lotteries have even more compelling to the consumer, apply. For the sake of simplicity, let’s call looked for ways to adapt the best features the instant-win component often plays out them “hybrid” games, as they represent a of instant games to terminal-printed with entertaining animation on an in-store hybrid of both instant and draw games. tickets. monitor. Almost 20 years ago, in October 1996, One option is the Fast Play style of In fact, Canada’s lotteries call them the Lottery actually introduced games, sold under varying names by “Watch ‘n Win” games – you watch the the first such hybrid game – a ticket printed several North American lotteries. Another animation in the instant portion to see through the gaming system that included

52 INSIGHTS May/June 2016 an instant-win component combined with these sales paled compared to Ontario, Mega Dice Lotto was the second a later draw for a jackpot. Developed by where the recently-concluded FY16 saw game in the series, launched in October AWI, a legacy Scientific Games company C$148 million in sales across four games. 2012 and designed to keep the appealing acquired in 2003, Winning Hand was card- Still, that represented a decline from C$176 elements of a casino theme that worked based, much like Poker Lotto many years million in FY15, because nothing new was with poker. The next game, introduced in later. As we sometimes see in the lottery added to the category during the most November 2013, was Wheel of Fortune industry, that game was ahead of its time. recent year. This is a category – much like Lotto, a conscientious attempt to really A selling point of Watch ‘n Win is the instant games – that thrives on “new.” broaden the player base with a known animated video – it is what makes these brand. That brand recognition, plus the games unique and potentially attractive to Ontario Insights ease of understanding a spinning prize a younger customer base. “Even though wheel, made it accessible to more of the ‘two games in one’ is the most appealing It was all new in 2010, when Poker public. The fourth game introduced was and most motivational positioning for the Lotto debuted in Ontario – the game NHL Lotto, admittedly a game with much category, the instant win carries more of was ultimately honored as a Best New more limited appeal, even with hockey’s a weight,” noted Dante Anderson, Acting Draw Game in NASPL’s annual awards popularity in Canada, which debuted in Director, Regional Lotto, for the Ontario competition. Almost six years later, it is still October 2014. Lottery and Gaming Corp. (OLG) “We want the champ of the Watch ‘n Win category As each new game came to market, to tell people there are two games to play, for OLG with a small loyal player base that there was some cannibalization of the but we want to play up the instant win a thrives on the popular poker theme. But existing games in the category, but overall little more so than the nightly draw. It’s all that same theme is also a limiting factor there were always incremental sales. about instant gratification with our players, to its growth, noted Anderson, because Anderson thinks four is the magic number, and for the general population.” “poker is a game that you either love or as incremental sales from each new game In FY15, the category brought in $90.6 hate, and is viewed as intimidating by the have lessened. The effort now is focused million in sales across seven American general population.” About three to four on building awareness of the existing lotteries, an 11.5 percent increase over the percent of Ontario’s adult population play games. “There’s such an opportunity out previous year, when six lotteries generated the game, and it has been hard to move there for making the general population $81.2 million in sales. With one game each, that up. aware of these games because of their

INSIGHTS May/June 2016 53 newness. When people think of lottery and $10,000 top prize, there can be a $20,000 Like Ontario, Quebec currently has new lottery products, I don’t think they trip or a car. A short promotion with a four Watch ‘n Win games, although it also necessarily think ‘unique.’ This category, trip, six months after launch, doubled has additional games that only include the with the instant win and video component sales during that promotion. “When we animated instant draws without the second plus a nightly draw, is definitely non- design Watch ‘n Win games we are always evening drawing, sort of a Fast Play on traditional. It isn’t your ‘mom and pop’ thinking about the long term, building in steroids. For Quebec, it’s all about adding lottery.” features that will give it some longevity entertainment to a basic draw-type lottery, Much like instant tickets, Watch ‘n and ways of bringing something new to and they look for any opportunities they Win games are considered to be impulse players.” can find. purchases – people don’t go into a store Another example of that is the addition Its games include Lotto Poker, the first expressly to play them. And because they of an optional progressive jackpot for to launch in 2011; Lotto :D, a dice game; are terminal generated, they don’t have Poker Lotto. Called All In, for an extra $1 Sprinto, a race car themed game; and Lotto the visual presence a bank of instant players have a chance to instantly win a Hockey, a seasonal product. The category tickets does. But they do act much like growing jackpot, plus increase their base reaches the 18-34 age segment much more instant games in their sales pattern – instant-win prizes. “It gave us something so than more traditional lottery products, strong sales initially which then decline new to advertise to players, and it was also and games are displayed on the 19-inch as the “newness” fades. “In an ideal a new feature that wasn’t available on any screens in the lottery’s province-wide retail world, we could launch one of these other OLG product,” said Anderson. Since network. “Although the size of the screen is games every six months or so to keep its launch in March 2014, All In “really the primary element of entertainment for things fresh because we know that what’s breathed new life into that aging brand.” these games, creating an attraction around keeps players engaged and attracts new One of the things OLG is looking at for the display, it is their graphic and sound players, but because we build all of these the future is building a game that can be capabilities that bring the animations to a games internally, there just isn’t enough re-skinned. That solves the problem of not new level,” explained Brault. manpower to do that.” enough resources to design completely Also like OLG, Loto-Quebec launched One thing that really surprises new games. “It would allow us to change each game with advertising, but provided Anderson is that the games are attracting the theme multiple times a year without little post-launch support. And as OLG people from all walks of life. Even the two having to build an entirely new game, discovered, there is an ongoing awareness casino-themed games aren’t played by because that’s what brings freshness to the challenge, which presents an opportunity. predominantly casino-oriented players. table.” For example, Loto-Quebec set up a booth Playership is well distributed across the Another possibility is moving that during the Montréal Auto Show last population, although there is a slight instant-win experience outside the store year, giving consumers a free chance to tendency towards younger players. – a player could buy the ticket at retail but try Sprinto. And at this writing, it was Earlier this year, OLG launched its first then watch the instant game animation on expected that the late May launch of a new fully-integrated advertising campaign for a mobile device. While some players like progressive jackpot addition to Lotto Poker the Watch ‘n Win category, designed to the in-store experience, it can be a major will be promoted with a booth at Casino build awareness. Wheel of Fortune was barrier to expanded participation. It’s like a de Montréal following the World Series of designated the hero of the campaign double-edged sword – some players don’t Poker circuit event there. because it’s an easy point of entry with like it, but it remains the best way to give Loto-Quebec’s overall experience has a brand people are familiar with. And players that experience they are looking been quite similar to Ontario – strong sales although all the games saw sales rise, for, that unique offer that makes it so at introduction, followed by a predictable indicating a successful effort to encourage different from other games. decline, much like instant games. “It seems cross-sell across all four, not surprisingly that they reach a stability zone in a shorter Wheel of Fortune had the strongest Entertaining in Quebec period of time than instant games,” said growth, doubling its sales in FY16 to Brault. She agreed that at some point, become second only to Poker Lotto. Loto-Quebec, which has always been there will be enough games on the market Officials learned a lot from the campaign. a leader when it comes to interactive and and only the most popular games should “There’s an opportunity to optimize that entertaining game concepts, doesn’t see remain. advertising, so we are going to continue to the in-store win as a barrier for most of its look at category advertising as a means of players, although some will always reject American Experiences maintaining and growing our sales,” said the idea. “Since Loto-Quebec has three TV Anderson. lotteries, we know that our players want to Other lotteries offering hybrid games OLG also uses occasional promotional be in the spotlight sometimes,” said Rosalie have just one product, and in many prizes to boost interest. For example, Brault, Team Manager, Products and cases, particularly in the U.S., the instant- Wheel of Fortune has two built-in Development, for Loto-Quebec’s lottery win component is simply a terminal- promotional prize wheels, so instead of a division. printed ticket without the animation

54 INSIGHTS May/June 2016 expectations with this game,” said Maglio, adding that it hasn’t cannibalized other products. The is another that is satisfied with the game, although officials marvel at how successful it has been in Ontario – something that they haven’t been able to duplicate. It’s not for lack of trying, as Michigan copied as much as possible from Ontario’s game, down to the name Poker Lotto. One key difference is that Michigan also has Club Keno, and Poker Lotto isn’t sold at those locations (bars and restaurants). Club Keno sites use a different network of displays than the traditional retail network, and the Lottery can’t run the Poker Lotto animation on the keno monitors. Therefore, Poker Lotto is only sold at traditional lottery retailers where the animation can be displayed. “We have compared Poker Lotto sales to Ontario since launch, and their high that characterizes the true Watch ‘n Win early in its life,” said Maglio, who noted per capitas are sort of confounding to us,” category. That is often due to a system or that sales were strong out of the gate, but said Draw Games Manager and Director equipment limitation. as expected dropped off shortly thereafter. of Advertising and Promotions Tim Shafer, One of those was the The limited time offer brought them back adding that Michigan’s results are more Lottery, which launched the game in up to a reasonable level. in line with other American lotteries. He April 2014 as 5 Card Cash without the “We knew prior to launch that this theorized that perhaps Watch ‘n Win animation portion since retailers there was going to be a niche game – not with games do better in a lottery without Club don’t have video monitors. For Wisconsin, significant annual sales, but a good game Keno, as they might fulfill the consumer the game’s advantage was the two-part that can fill a niche” in the portfolio. desire for a visual and entertaining game play – the instant-win portion and the Wisconsin’s strategy is to have a spot in its not otherwise available. evening draw portion. It was chosen as draw game portfolio where games like this Like Wisconsin, Michigan saw great the most appealing product from a group could rotate in and out every two years or success at launch, and then the typical of games being tested with consumers, so, providing incremental sales and variety decline in sales after the newness wore as players liked the ability to win twice, for the players. off and marketing support ran out. The the good overall odds and just the fact For now, 5 Card Cash is providing a game has stabilized, and Shafer thinks it that it was something new and different small but now steady sales volume, much has found its level and it does generate based on a card game. “This was a way to lower than its sales at launch, of course, incremental profits. “We’ll be keeping it give them something very different from but enough to keep officials happy – about in the lineup, because there are fewer what they had seen before,” said Product $123,000 a week at this writing. “The and fewer magic bullets in the draw game Development Director Saverio Maglio. big thing was to be realistic about our world.” He indicated that Michigan may try After talking with other lotteries, game enhancements in the future, perhaps Wisconsin knew that a lot of POS material the progressive add-on that is successful in would be needed – to help consumers Ontario. learn about the game and to help retail A few other lotteries in Canada and clerks learn enough to answer consumer the United States run hybrid games with questions. So the Lottery created two- varying degrees of success. They do so sided tear sheets that really helped explain because the games offer something the game and how it works. different for consumers. And while Ontario 5 Card Cash was launched with a was the modern pioneer in the category typical television campaign, but what with the video component that makes the wasn’t typical was a follow-up two months product so unique, others have proven after launch with a limited time offer. that it is not an absolute requirement to “That really helped stabilize the game provide incremental revenue.

INSIGHTS May/June 2016 55 Beyond the Draw What a new era we’ve entered. Hot off an historic Powerball run with a record-breaking jackpot that soared to $1.586 billion in January, many lotteries are taking a different look at draw products and how they can perform better in the overall product mix. There was possibly no other event in modern lottery history more talked about, and shared socially more often, than the recent Powerball jackpot, proving that draw games have the potential to drive significant player engagement and sales performance.

espite this incredible Powerball event, the draw product category has experienced lower sales Dperformance over the last few years. In contrast, instant products – often supported by promotions, innovations and interactive engagement – continue to produce the largest year-over-year revenue growth for U.S. lotteries and in many jurisdictions around the world. In the U.S. alone, the instant product market grew by more than $3.2 billion in 2015 (La Fleur’s Almanac). “Our focus is on total revenue growth of the game portfolio, and we are applying our learnings and best practices from instants to the draw game category for our systems customers,” said Leslie Badger, Vice President, Lottery Marketing Strategy for Scientific Games. “Licensed brands, loyalty, mobile apps, social and digital promotions add a ton of excitement to instants, and they can do the same for draw games. As a full-line provider, we understand the benefits to the lottery when all of these components integrate to enhance the overall player experience and drive growth.”

Insights into Player Motivation

It’s important to follow the consumer through the entire lottery eco-system at all touch points, connecting them with a deeper experience and technology that offers seamless movement across game entertainment verticals. Why? • 75 percent of casino slots machine players also play lottery For many years, the lottery industry believed that players were draw games different across the gaming verticals. New research from Scientific • 50 percent of lottery instant game players also play casino slots Games, a player segmentation study called One™ – one consumer, machines one wallet, endless opportunities – found a surprisingly large • 74 percent of casino players also play lottery crossover between lottery and gaming consumers: instant games

56 INSIGHTS May/June 2016 The One study, which included more than 10,000 respondents in the U.S. and Europe, identified six different gaming segments based on motivations for playing: Ultimate Gamers, Dabbling Gamer, Pre-Ultimate Gamer, Reserved Gamer, Dedicated Gamer, and Outgoing Gamer. “Our findings can help lotteries design strategic game portfolios for different player segments – not simply games that appeal to Millennials, women or other demographic characteristics,” says Badger. “We design games to appeal to player motivations, rather than simply to demographics like age, gender or income. This allows our customers to deliver games in a variety of ways that appeal to players’ likes and motivations.” The One study found that approximately 35 percent of the “Dedicated Gamers” segment play draw games on a weekly basis, and 76 percent show heavy engagement in online social games like Candy Crush or JACKPOT PARTY® Casino Slots, and they like to play puzzle and trivia games for fun. Dedicated Gamers play many different types of games for fun. They are motivated by the excitement and adrenaline rush that comes with gaming. Scientific Games leverages insights like these with fully integrated programs that include instant, fast-play draw games and digital components, innovating with successful brands and play styles from instant games.

Draw Games Offer More than Meets the Eye

nother longtime belief is that draw games are passive – that the player’s engagement ends after they pick their numbers. And while draw games Ahave always had the attraction of big prize monies and mega-jackpots, players really didn’t engage in the game until the few seconds before the excitement of the actual drawing when winning numbers were revealed. Over the years, more and more players began using Quick Pick for non-daily numbers games and the experience became more passive. By comparison, both casino games and lottery instant games provide players with more engagement and anticipation of winning. Unlike most draw games, they offer more of a “game” to play. “In the last decade or so, the draw game experience began to change. Working with our customers, we launched InstaWin™ or fast play games that gave players the chance to ‘play’ a game that was coming from a lottery machine at retail,” says Badger. “Next hybrid games arrived, offering the opportunity to play now for an instant win, and then extend play with the possibility of a win a few hours or days later when the drawing took place.” Today, player engagement at retail has advanced. Lotteries can integrate both in-store digital communication systems like Lottery InMotion™ and mobile into the player experience. Lottery InMotion brings the draw game to life at checkout by displaying an animated instant win reveal on the digital screen Top: Hybrid games like this one with a World for five to seven seconds. Lotteries also communicate directly with players via Poker Tour® theme offer the opportunity to play mobile through proximity marketing like the industry-first beacon technology now for an instant win, before a drawing takes that Scientific Games implemented for the Pennsylvania Lottery. Instant win place. prize structures put cash in the customer’s hand at retail and the technology reminds players about a growing jackpot and promotions such as “buy $10 Bottom: Short, fun YouPlay™ games offer players deeper interaction with lottery at a self-service in Powerball tickets, get a free instant game.” There’s also a lot of room for kiosk. Shown here, Call of the Moon™. creativity with retailer co-promotions offering free coffee or other items with the purchase of lottery games. And as consumer self-service has touched many other aspects of our lives, lottery is now no different. Whether in a convenience store, restaurant or bar,

INSIGHTS May/June 2016 57 Popular cross-over brands like Gold Fish™ can add excitement to traditional lottery games.

you can purchase lottery games from self- laws) would soon have the option to play a generate interest for similarly themed draw service technology like PlayCentral® HD game, such as Keno, through a mobile app products among a large group of gaming using credit, debit and mobile payment while in a busy store or crowded restaurant. consumers when it launches as a hybrid (as allowed by law). Players can buy a This frees up staff during busy periods, game this summer,” says Badger. “We have draw game ticket at the self-service kiosk enabling businesses to maintain customer over 100 licensed properties, so there’s and – more than just put it in their pocket satisfaction and commission- generating incredible innovation taking place with and wait for the drawing two days later sales. Players can view drawings on their cross-over brands.” – actually interact with lottery right away mobile where it may be easier to see. A Licensed properties that have already through YouPlay™ games. Players select a new twist in on-premise engagement brings proven omni-channel appeal include the theme – in many cases themes popular in the draw game to life, in app form, right in television game show brand The Price Is casino or lottery instant games – and can the hands of the player. This can perhaps Right®, which can be integrated into a play short, fun games at the kiosk. Win segue into being able to play game themes Keno promotion with the opportunity to or lose, they receive a game experience in an on-demand experience not linked to win experiential prizes, and the queen of voucher. the timeframe of the three-to-four-minute cartoons, Betty Boop™, which has been “As a full-line provider, there’s a certain draw cycle. applied to an InstaWin terminal-generated fluidity in what we can offer the consumer,” game. says Badger. “Players can engage with a Adding Big Brand Excitement There’s unlimited potential for Hasbro game at a retail terminal, at a self-service brands like SCRABBLE™, YAHTZEE™ and kiosk or on their mobile phone. They may “Who says draw games aren’t exciting? CONNECT 4™ in the draw product category. even see a different variation of their Licensed brands from casino games and Two Scientific Games casino brands, Life favorite game on a or lottery instant games brands are crossing of Luxury™ and Call of the Moon™ have slot machine at a or casino.” over to draw games, and there’s no better strong potential for crossover success. The Badger said players in some example than World Poker Tour® – a company’s wildly popular Gold Fish™ casino jurisdictions (depending on applicable popular brand that has the potential to game recently debuted in lottery instant

58 INSIGHTS May/June 2016 and interactive games in one U.S. jurisdiction, with more lotteries to follow. The $2 instant game indexed at 141 after just four weeks in the market.

Engaging Players on Their Terms: The Digital Movement

“No one has innovated more in the digital space for lotteries over the last 15 years than Scientific Games,” says Badger. “Our technology has enabled internet sales in three U.S. jurisdictions (Minnesota, North Carolina and North Dakota), 13 lotteries have deployed our mobile apps, we’ve created more than 600 websites for lotteries, we’re leading innovation in second-chance games and promotions, and we offer the only comprehensive loyalty rewards program with an online store where players can redeem points for merchandise and experiential prizes.” Initially, many lotteries offered web-based player loyalty and rewards clubs designed for instant games. In recent years, full product lines including draw games have been incorporated into loyalty programs. Targeted loyalty promotions that drive sales for a particular product category or price point during a promotional period can also be broadened to drive draw game sales. In fact, draw games can offer just as much player engagement in loyalty and promotions as an instant game. Interactive second-chance promotional games, which have been a successful addition to the instant game category, now extend to the draw game experience. For example, players can buy a World Poker Tour branded hybrid game, and then scan a bar code on the ticket with their mobile phone to play through a World Poker Tour branded mini game, with the opportunity to win cash or merchandise prizes, or generate and collect points for a bigger prize or more drawing entries. Mobile apps make it more convenient for players to engage in loyalty rewards and interactive promotions, as well as stay current on jackpots, winning numbers and lottery retail locations. Digital and mobile games with themed extension or “mini” games engage players with lottery products and drive the player back into the store. Mobile apps make it more convenient for lottery players “Players today expect a customized experience. We can make to engage in interactive games and promotions, as well their experience so much richer by applying their preferences to as loyalty rewards programs. interactive play. The knowledge gathered from analyzing digital experiences – as we’ve enabled the Pennsylvania Lottery to do from millions of player sessions – can be used to refine any product in any More Than a Paper Ticket market. We use our business intelligence to improve technology, messaging and the games offered via that technology, and follow It’s time for lotteries to look beyond the draw. consumer behaviors in price point, product and prize preferences,” Research confirms that the majority of consumers who says Badger. play lottery draw and instant games, also visit land-based The concept of consumers sharing lottery experiences on social or interactive casinos. There are lessons to be learned media, even lottery draw games, is still relatively novel. January’s from instant and casino games. Player experience, Powerball run was one of social media’s biggest trending topics in marketing, mobile, promotional, social media and retail recent years, with photos of the rising jackpot, stories about how technology can power innovation in the draw game players would spend the money, to crowd-sourced videos of excited category for the global lottery industry. How can your consumers. The possibilities and potential are seemingly endless draw games more optimally perform in your product when lotteries encourage more social sharing with interactive portfolio? Better yet, how do they fit into an increasingly promotions tied to draw games. omni-channel, consumer-driven world?

All ® notices signify marks registered in the United States. © 2016 Scientific Games Corporation. All Rights Reserved.

INSIGHTS May/June 2016 59 Advertising Jackpot Games – Strategies that Sell

Lotto games suffer from their own success – as the industry For example, the is working hard to designs games to create bigger and bigger jackpots, those demonstrate why players should continue to enjoy playing same jackpots make anything less seem “ho, hum” to the Powerball even when the jackpot is not at record highs. The average consumer. This was taken to a new level in January Lottery’s strategies include: after a $1.58 billion jackpot obliterated the previous • Increased winner awareness at the $50,000 prize level: record. Guess what, the game’s redesign last fall worked as working hard to get winner photos, issuing press releases intended. But what now to do with the monster? to hometown media, showcasing winners on in-store digital monitors and in retailer newsletters and increased website otteries around the United States are working hard to and social media exposure. capitalize on that Powerball run and the increased awareness Lof the game that it created. In the final two drawings alone, • Promote starting and lower level jackpots, using the there were 98 $1 million winners and 11 $2 million Power Play “Wouldn’t at Least $40 Million Change Your Life?” campaign, winners, plus millions of lower-tier prize winners. That’s a lot of with radio spots, increased in-store presence, web banners winning experiences in just two drawings of a single game. And as with media partners and community events throughout the the Ipsos Reid research shows (see article beginning on page 44), state. that presents lotteries with a great opportunity. To help counteract the feeling that $15 million, or $40 million, • Promote Powerball features other than the very large is not worth a second thought, or a buck or two, the Powerball jackpots, such as nine ways to win and the total number of group created a campaign for that game’s $40 million base Tennessee Powerball winners from previous night’s drawing, jackpot, which many lotteries have taken to heart along with a using social media, press releases and community events. renewed focus on winner awareness.

60 INSIGHTS May/June 2016 Even as these strategies bear fruit, there’s nothing like advertising, as any consumer brand will tell you. The format/media may have changed over the years – it’s no longer just television and radio – but lotteries need the awareness generated from advertising campaigns. For jackpot games, there are typically tiered programs in During high place, with paid media starting small and ramping up until, in many cases, it is pulled when a media frenzy develops at high jackpot levels. But just like no two lotteries are jackpots and exactly alike, neither are jackpot advertising strategies. We asked lotteries to summarize their strategies for advertising lotto games, and key promotional their edited responses follow. periods, BCLC will Atlantic Lottery Support of lotto games is focused on the two big national brands – 6/49 and Lotto also supplement Max. Currently Atlantic Lottery only supports regional lotto games through owned media and winners support if we have major winners. We maximize winners’ stories with additional through paid and earned media that includes a winners’ celebration and a news release that capitalizes on the winners’ personal experience and promoting their media such as particular story. Media coverage of winners is very consistent and positive. In fiscal 2017 we will be expanding our regional game category and these new games will print, OOH and receive full launch support. Our strategy to support the two national brands focuses on three areas: Core players – the objective is to maintain regular play with consistent jackpot radio to ensure reminders at all levels that align with their behavior. Key areas of support include out of home, television, radio and online (display and video). rapid mass reach. Jackpot chasers – the objective is to increase casual play at high jackpots by reaching them where they are, to surprise and delight them through a unique plan - British Columbia when Lotto Max is $50 million or Lotto 6/49 is $30 million. Key areas of support include – television snipes and bugs, radio with new station mix, cinema (digital Lottery Corporation lobby network), online (high impact custom roadblocks, niche content), mobile overlays and social media. New players – the objective is to shift non-players to casual players at all jackpot levels by following their unique media consumption behavior (the “not my father’s jackpot” plan). Key areas of support include online including social, Vice and Spotify. We support all jackpot levels, but the type and degree of support does increase/ change as the jackpot increases. For example, when we hit $50 million on Lotto Max, our Jackpot Chaser plan kicks in but the types of media we are using is not the same as our base plan. We have learned from past experience that more jackpot alert in the same channels will not influence Chasers.

British Columbia Lottery Corp. Nationally, BCLC collaborates on creative assets and purchases a base TV and digital buy together with our partners to support Lotto Max and Lotto 6/49. Regionally, BCLC has regional base TV, radio tag and out-of-home transit platform buys to layer on top of that and there will also be a persistent digital buy. During high jackpots and key promotional periods, BCLC will also supplement with additional media such as print, OOH and radio to ensure rapid mass reach. Regional games are promoted primarily through in-store, web and BCLC’s owned assets, with the exception of Keno (Quick Draw) which has a winners campaign supported by media. As a baseline, Lotto Max and Lotto 6/49 are supported by the national and regional TV base media buys regardless of jackpot levels. However, as jackpots grow to a certain level ($40 million for Lotto Max, $20 million for Lotto 6/49), BCLC purchases additional media (print, online, OOH, radio) before the draw to drive quick awareness to those jackpots. A tiered approach is used – as the jackpots get larger

INSIGHTS May/June 2016 61 beyond those levels, the additional media advertising kicks in. For Powerball and state. It creates this sense of optimism spend increases. Mega Millions, $100 million is still and winability since it’s only available for All of our ads include a call-out to the starting point for these additional purchase in the home state versus the jackpots, as that’s a main point of interest efforts, such as players’ club e-blasts whole country. Additionally, we find great for our consumer. For Lotto Max, there is a and increased social media activity. Even value in winner awareness by broadcasting specific TV spot that is aired starting at $50 though $100 million doesn’t really move winning prizes and locations via our Lotto million (when MAXMILLIONS start) to build the dial anymore, we still use that mark Vision. This creates a great buzz when excitement and drive home the jackpot to start talking about it. We also have an players see that people are winning in message. inventory of thousands of 10-second tags their area and enforces the winability of for radio, which we call our total traffic other prizes besides the top prize/jackpot inventory, as they play when local stations prize. With jackpot games, we really focus do their traffic reports. It gives us a chance We have been communicating the on jackpot level awareness. Powerball and to talk about something on the radio, message “Any Jackpot is a Good Jackpot.” Mega Millions jackpots are continuously such as when the jackpots roll. We also This is a message that we predominantly featured on outdoor billboards and point- advertise the jackpots on our “Lott Line,” communicate during low jackpot levels. of-sale signage in retail stores. If there our winning numbers telephone hotline. We also have efforts including radio reads is a specific change, such as last year’s that announce the evening’s jackpot Powerball 10x Power Play multiplier, we Florida Lottery drawing. Referencing the starting jackpots will create a media campaign to generate We advertise on digital boards and of $15 million or $40 million, the read will awareness. are testing in-store LED signage (around say, “The believes you’ll We do not currently have a program in 2,000 in select stores showing Powerball, be able to make it on just that.” Typically, place to support different jackpot levels. Mega Millions and Florida Lotto current during high jackpot periods, we focus on We have utilized a “trigger campaign” jackpot totals). We’ve noticed a 25 percent communicating the larger jackpots on our approach in the past. This campaign was sales increase (total jackpot games) in website. Our sales staff also executes all focused on jackpot-triggered digital and of the classic in-store tactics to remind radio campaigns for Powerball and Mega customers to play. We also reach out Millions. We ran the trigger campaign for to players heavily via social media and three days at a time for each game once Even though $100 million our Players Club database to thoroughly the trigger amount was met. On draw days doesn’t really move the dial communicate high jackpot levels; this for both games, all advertising was turned anymore, we still use that usually occurs above the $200 million off after 7pm. range. Historically, we turned the campaigns mark to start talking about it.

on when the jackpot reached $200 million Idaho Lottery and ended them when they hit $300 - DC Lottery Jackpot alert! The Idaho Lottery has million. We would occasionally make outdoor billboards plus in-store electronic game time decisions when to pull the jackpot display boards which show the advertising based on our instincts of when stores with the in-store jackpot signage current Powerball and Mega Millions news media would start talking about the vs. stores without and have plans to install jackpot amounts all year round. They all jackpot. more going forward. We only advertise feature both games’ jackpots together. Florida Lotto when the jackpot reaches We will also utilize live radio liners, $15 million and continue until someone jackpot alert television spots and the Currently, we do jackpot advertising. wins. We have static boards for Powerball Lottery’s owned media channels – in-store We advertise on transit for Mega Millions, and dual static boards for Powerball/Mega video displays, e-mail blasts to VIP Club Hot Lotto and Powerball for all jackpot Millions. We also advertise the jackpots on members, web banners, digital media, levels. We also have digital billboards for digital boards. We don’t go beyond these five-second billboards on our draw stations Mega Millions and Powerball. We use boards in our advertising, except the time and heavy messaging on our social media social media daily for jackpot advertising when there were changes to the Powerball channels. and have special graphics for the larger matrix. Typically, mass media is only used to jackpots. Radio jackpot advertising begins support Powerball and Mega Millions. at $275 million for Powerball and $225 Georgia Lottery However, if we are running a special million for Mega Millions. If the game(s) are in-state, we stress promotion, like our recent Lucky for Life the Georgia-only message. We have done promo, or we are introducing a new DC Lottery this successfully for our Jumbo Bucks draw game, we will support those games For the multistate games, we have the Lotto game, where we highlight that it’s with mass media to create interest and basic banner ads on our website and LED a Georgia-only game. We have found awareness. For our other draw games, jackpot signs in all of our agent locations. this is preferred by some players who including lower-jackpot, multi-state We do have a program where incremental like the idea of a game exclusive to their games and our daily and twice-weekly

62 INSIGHTS May/June 2016 in-state games, we will use our owned media channels to support awareness. Jackpot alert messaging for us begins when jackpots reach $100 million with e-mail blasts to our VIP Club members on draw days. When the jackpots surpass $150 million we introduce live read radio liners and jackpot alert television spots on draw days. These will typically run until earned media kicks in, which is usually around the $400 to $500 million mark.

Iowa Lottery The Iowa Lottery rolls out an integrated marketing campaign as new lotto games are introduced. This includes TV/cable and radio commercials, online ads and outdoor along with social media outreach and website features. We produce a ‘How To Play’ Once the jackpot estimate reaches a level where the national video that’s delivered in e-mail communication to the VIP Club, media starts chattering about it, Iowa pulls back on its paid and it’s posted to our website and YouTube Channel. Iowa utilizes messages. At that point it’s time to introduce ‘Play Responsibly’ Lottery InMotion screens, retailer info cards, player brochures messages through the website, blog and social platforms. plus an additional piece of point-of-sale material at each retailer. When the estimated Powerball or Mega Millions jackpot reaches the $250 to $300 million range, we deliver awareness The Kansas Lottery’s strategy for advertising draw games messages with the Lottery InMotion screens, a heightened starts in the store. In the past couple of years, we made a major presence on www.ialottery.com, and through our five social investment to place electronic jackpot signs in our top retail media platforms. We also insert jackpot awareness into our 52- locations. So far, we have installed 250 electronic signs and week buys including radio adlets and sponsorship IDs. are set to install 250 more in the coming months. Jackpots are At $300 million TV and radio commercials will begin to air also advertised on our in-store ad shows, with “jackpot alerts” along with either newspaper ads or online ads, with placement initiated each time jackpots reach certain levels. Outdoor on the day prior to and the day of the draw. We switch our digital advertising continues to be an essential element in our strategy. outdoor messages from the side-by-side Powerball and Mega We recently added nine new billboards with dual jackpot displays Millions jackpot estimates to messages that feature the single and the ability to advertise jackpots of a billion dollars or more. game with the highest jackpot. We distribute coupons through We currently have a yearly sustaining TV advertising campaign media promotions and the ‘top of the ticket’ messages printed on underway strictly for Powerball jackpot awareness using the lotto tickets will showcase the jackpot estimate. national Powerball spots. For our radio advertising we have

INSIGHTS May/June 2016 63 started producing :60 spots that are Maryland Lottery million has been the mark where we end actually two :30s, the first :30 to promote Our advertising for jackpot games it and let traditional and social media carry a specific game and the second to promote focuses on the jackpot amount, as we’ve the message. Similar to our Facebook Powerball jackpots. found that to be the primary reason strategy, we use this advertising as an We start promoting jackpots at $100 consumers play these games. Like most opportunity to promote both jackpots, million and continue until around $400 lotteries, Maryland begins jackpot regardless of where the other jackpot may million or when the news media takes advertising at about the $200 million level. be. over. We utilize a network of digital billboards and short-format radio (10 and 15 Michigan Lottery Kentucky Lottery seconds) to communicate the key selling For the multi-state games, we start We advertise the Powerball and/or points, including the jackpot amount and advertising them on a small scale basis at Mega Millions jackpot amounts when one the dates of drawings. Fifteen-second $100 million. Those are typically digital or both amounts are over $150 million. We television commercials prominently ads, newspaper ads and some of our do jackpot advisories on radio as well. We featuring the upcoming jackpot amount in-house assets, all of which we have advertise the jackpot amount year-round commitments to 52 weeks a year and we on buses and billboards. can frequently change copy in and out. Broadcast media (TV and radio across the Louisiana Lottery Our jackpot advertising state) kicks in a little later – at $125 million Our overarching marketing strategies consists of multiple for Mega Millions and $175 million for for all of our lotto-style games primarily Powerball (because of the matrix change include jackpot alerts, game education and digital platforms, radio last fall). Once those games get to $300 winner awareness, playing to the unique and social media. million, we turn off paid advertising and let features and benefits of each game. the public relations people run with it. As with all lotto-style games, jackpots - We don’t support our in-state games drive sales. We do not have a systematic with broadcast media, but at certain advertising program for advertising . thresholds we use the same group of at certain jackpot levels, as there are smaller outlets where we have 52-week multiple factors at work that can affect begin airing at the $300 million jackpot commitments – $3 million for Lotto 47 and play decisions even during high jackpots. It level. Typically, we stop advertising when $300,000 for Fantasy 5. truly is based on what we’re experiencing the jackpot becomes large enough to from a sales and PR standpoint during any attract significant media coverage. But Missouri Lottery given jackpot run, budgets, and what’s after the recent $1.58 billion world-record Missouri’s strategy for advertising our happening with other products in our Powerball jackpot, we decided that a more draw games is multi-level. Our retailers portfolio. However, in general we find effective approach would be to monitor have electronic signs displaying the jackpot awareness strategies work well earned media, watch sales and be flexible. Powerball and Mega Millions jackpots for jackpots between $200-$300 million at the point of purchase. Most retailers for Powerball, over $100 million for Mega Massachusetts Lottery also have an electronic window sign that Millions and over $1 million for our instate Our jackpot advertising consists of displays jackpot amounts for Powerball, Lotto game. multiple digital platforms, radio and Mega Millions and Show Me Cash. When We also employ player advertising social media. Within the last year, we’ve the jackpots reach certain levels – $100 displays (PADs) at the point-of-sale at implemented an “always on” strategy to million for Powerball/Mega Millions, $4 each retailer to advertise games, winners, promote Mega Millions and Powerball million for our in-state Lotto game, and promotions and other core messages. jackpots on mobile devices and tablets for $100,000 for the Show Me Cash in-state When the jackpots reach certain levels, every drawing. When the jackpots are less daily game – signage is auto-generated we insert a jackpot awareness spot in the than $50 million, the scrolling message on our retailer portal. Our lottery sales digital ad rotation, in addition to a standing asks users to tap on the message to find representatives also begin their jackpot spot that includes all games/jackpots. out what the current jackpot is. Once a alert strategy by placing the preprinted Those jackpots thresholds are $1 million jackpot is $50 million or more, the actual paper signage at point-of-purchase, on for Lotto and $250 million for Powerball amount appears on the scroll. Once either doors, on windows and other places in and Mega Millions. We also have a spot the Mega Millions or Powerball jackpot the store. Corporate sales managers email that advertises the 10x multiplier available hits $100 million, we run paid posts on signage to corporate retailers as well. on Power Play anytime the Powerball Facebook that promote both jackpots, We have outdoor billboards jackpot is between $40 million and $150 regardless of where the other jackpot may throughout the state that display the million. be. multi-state jackpot amounts all day, every The $140 million mark has been the day. When one of the multi-state games trigger for radio advertising, while $300 reaches $175 million, we begin paid

64 INSIGHTS May/June 2016 NASPL Business Development and Product Innovations Conference October 4-6, 2016

INSIGHTS May/June 2016 65 New Jersey Lottery For Mega Millions and Powerball, we apply a comprehensive tiered support strategy to both our owned channels (retail network footprint, website, mobile app) and paid media channels (radio, television and digital advertising). Additionally, we ensure that when discussing or talking about the jackpots, we always reinforce Where The Money Goes and Responsible Play messaging. This is of particular importance during epic jackpot rolls as players should be reminded to be responsible, but also be aware that any non-winning experience helps support state-run beneficiary programs. For our in-state Pick-6 XTRA Lotto game, we use a combination of tactics when supporting consumer facing promotions and game-specific brand communication. Our strongest channel in New Jersey is our owned channel – our current network of retailer partners. We leverage these brick and mortar locations advertising through radio DJ reads, digital billboards, web banners heavily and typically create multi-touch point point-of-sale display and Facebook posts. This paid media support continues until the to educate, inform and attract players around any given initiative. jackpot is won or until the jackpot reaches $500 million. This is When either national game (or both) roll to $150 million, our the only time we advertise our jackpot games. support plan kicks in. Our first tier of communication is television Though we encourage responsible play at all jackpot levels, we advertising. We contract with WPIX (a New York broadcast station make sure to include these messages once a jackpot exceeds $300 that covers northern New Jersey) for our nightly televised draws. million. We remind players to play within their means in news Part of this contract includes bonus snipes and a media bank that releases, sound bites and social media. we can use to support jackpots when needed. We also utilize our year-long accumulation of cable bonus television spots to advertise the large jackpot levels. For Powerball, we have a dual strategy. When the jackpot is between $40-$99 million, we focus on an ongoing positioning statement, “Why Wait to Win?” These messages highlight the fact that the starting jackpot of $40 million is a lot of money – enough to make all of your dreams come true, so why wait to win? This message is seen across all platforms from traditional to digital to POS. The second strategy is simply focused on jackpot awareness. Once the jackpot hits $100 million, we focus solely on the jackpot amount in a multimedia blast that includes radio, outdoor, dynamic web/mobile and social. With Mega Millions, we have a more recent branding campaign that focuses on its key main benefit and differentiator from Powerball: it’s only one dollar. We use the positioning statement, “It All Starts with a Buck,” in our messaging for Mega Millions regardless of the jackpot level. This message is seen across all platforms from traditional to digital to POS. With that said, we trigger the multimedia jackpot amount awareness blast The second tier of support includes radio and digital as we do with Powerball at the $100 million level. advertising and affords us approximately 35 full rolls a year in For our sole in-state jackpot game, Nebraska Pick 5, we focus radio. We run a mix of :10 and :15 ads that announce the game on a couple key points outside of the jackpot, with the biggest and the current jackpot level on a mix of New Jersey, Philadelphia that it’s a local game only played in our state. This plays out with and New York stations. We also use digital media to support our our branding “spokescreatures,” aliens Zendar and Marlex, who jackpots – in particular, we push digital ad units with Pandora come to Nebraska because it the “only place in the universe” you while our radio flights are in market to cast a wider net to reach a can play Nebraska Pick 5. Besides ongoing branding, we highlight greater audience. the jackpot once it hits $100,000 in the same multimedia Our third tier of support is out of home (billboard) and retail approach as we would with Powerball and Mega Millions. advertising. We have 12 permanent billboards throughout the We don’t have a maximum jackpot where our advertising state that are dedicated to Mega Millions and Powerball (and stops. The radio mentions that kick in after the $100 million mark were updated to reflect billion dollar jackpots prior to the epic talk combine jackpot awareness with a play responsibly message, $1.58 billion Powerball roll). During the summer along the Jersey which is a good message to keep repeating as the jackpot grows. shore, we run aerial banners on Fridays, Saturdays and Sundays

66 INSIGHTS May/June 2016 NASPL 2016 Professional Development Seminar August 2-5, 2016 Pittsburgh, PA Register Now: wwww.nasplprofessionaldevelopment.com INSIGHTS May/June 2016 67 for both Mega Millions and Powerball, awareness of the jackpot at all levels. giving preference to whichever jackpot Research indicates that players do rely is higher at the time. In the retail space, heavily on the LED signs for finding out the Research we arm our lottery sales representatives current jackpots. with jackpot tear pads, stickers and extra For our in-state jackpot game, Lotto, indicates that terminal paper, and ensure that the we recently ran an extensive advertising jackpot levels are heavily represented on campaign to generate excitement around our video display units. the brand as a New York icon and to players do rely We typically will turn off paid media encourage average New Yorkers to play when the jackpots reach levels of $300 the game. With average jackpots far lower heavily on the or $350 million, as earned media kicks than the big games, Lotto needed a boost in and helps support the message to a beyond simply announcing the jackpot LED signs for wider audience. However, we continue to amount. To make Lotto more relevant to support jackpot rolls long after this point the lives of every day New Yorkers, we finding out the using our owned channels. As the jackpots focused on the fact that over the years, roll, we dedicate additional real estate to Lotto has made more New York multi- current jackpots. this messaging on our website, mobile app, millionaires than any other jackpot game. VIP club emails and social channels. The campaign, “You’d Make A Way Better - Rich Person,” ran in November-December New York Lottery 2015 and looked at the eccentric lives of While we believe that Powerball and Rich People and showcased some of the Mega Millions are currently being led crazy things they do with their money by the jackpot amount, it is necessary (e.g., buy a penthouse for their yorkie, to get the word out on current jackpot buy solid gold staples, take therapeutic levels between certain thresholds that are baths in wine, etc.) then acknowledged meaningful to players. For us, we begin that we savvy New Yorkers would spend jackpot announcement advertising at $150 it way better if we won the Lotto jackpot. million and continue until the media begins Each ad signed off with the line “With two to pick up the story. Typically, we stop paid plays for a dollar, Lotto makes more New advertising support of jackpots around Yorkers rich than any other game.” We ran $300 million. Although we recognize that television, radio, OOH, print and robust for most players, that threshold is creeping digital and social efforts, which included an upwards. To that end, we plan to do some illustrated digital field guide and interactive strategic work later in the year on the quiz playfully depicting our loveable, effects of “jackpot fatigue” to determine eccentric Rich People of New York. Sales if there is a way for us to encourage for the game were up by 3 percent during New Yorkers to play at lower jackpots, in the campaign after years of declines in the addition to the giant ones. After all, there double digits. The campaign received high is nothing wrong with a $75 million win! marks within the advertising industry, as In the past, we used to support well as with consumers. high jackpot amounts with television advertising, radio and newspaper. North Carolina Education Lottery However, in analyzing the data, we We have focused on providing determined that the jackpot itself was information on current jackpot levels and the true driver of sales. As such, we have raising general awareness for Powerball modified our approach so we now leverage and Mega Millions. As the jackpots for radio live reads and newspaper cover these games grow, we add communication strip ads to build awareness of jackpot channels to aid awareness. Outdoor amounts for Powerball and Mega Millions billboards are used year-round on high for a much more cost effective approach. traffic interstates for top visibility and We also have a significant network of secondary roads to reach consumers while out-of-home jackpot billboards across the they are near a sales location. Many lottery state, plus electronic kiosk units in the five retailers also have jackpot signage at their boroughs of New York City. This, combined location which displays the current jackpot with our extensive network of retailers for these games. bearing dual jackpot LED signs, builds

68 INSIGHTS May/June 2016 The jackpot message is provided at the to product relaunches in order to point of purchase through multi-media increase awareness and play of existing monitors beginning at $150 million. It also games. This approach has a multiplier displays on all draw game tickets when the effect by informing existing players of The strategy is to jackpot reaches $200 million. new enhancements to the game and by At $150 million, the script for the live motivating non-players to try games they keep the jackpots evening drawing is used and studio talent were previously unaware of. Subsequent provides the jackpot following the draws. annual support campaigns (2-3 months top-of-mind Also at $150 million, metro radio is added duration) have helped to keep current with a focus on morning and evening drive players engaged while also attracting new time. Radio has been an effective mass players and building a stronger baseline for through multiple reach vehicle to connect with consumers the business each time they are executed. while they are on the go and close to a For national games we employ a touchpoints and lottery retail location. “Message Management Strategy” to deliver Although radio ads typically begin the right message at the right time. For add additional at $150 million, we have opted in some example, when Lotto Max hits $50 million instances to start earlier in a roll. Ads and additional MAXMILLIONS prizes are paid media layers have come off air between $500 million to added, our advertising focuses on delivering $600 million or when local/national media the big jackpot news. At base jackpot levels as the jackpots coverage has taken over. we might support a winner campaign. Lottario is the only regional product increase. Ohio Lottery that has a dynamic jackpot from week to The strategy is to keep the jackpots week. This year we are testing a jackpot top-of-mind through multiple touchpoints optimization strategy similar to national - Ohio Lottery and add additional paid media layers as the that utilizes reactive digital media to drive jackpots increase. We use our owned media awareness of jackpots over $500,000. platforms (website, closed-loop video retail All jackpots are supported through network, mobile app, mobile website, advertising which is increased as the Facebook, Twitter, Instagram, in-store jackpot grows. For Lotto 6/49 we increase signage, etc.) and out-of-home billboards support at $20 million and again at $30 to promote current jackpot amounts, then million. Lotto Max has base support until add radio, updatable digital video pre-roll the jackpot hits $30 million. Support and paid Facebook on draw days when a increases again at $50 million when jackpot exceeds $125 million. We typically MAXMILLIONS are available, and then we stop paid media once the jackpot reaches have a third optimization level when we $500 million. hit key thresholds such as total top prizing (main jackpot plus MAXMILLIONS) of $100 Ontario Lottery and Gaming Corp. million or more. For our national lotto products, we bucket jackpots into key thresholds (typically levels that show good consumer We heavy up advertising at “Jackpot response) and optimize sales through Alerts” – essentially hitting all our major graduated media and promotional support media (TV, digital, billboards/outdoor, to achieve the best result. To do this we digital billboards, limited radio, social put in place a base layer of 52 week ready media) when the jackpot levels rise above media to ensure that we have minimum $150 million for Powerball/MegaMillions support levels locked in. As jackpots reach and at $5 million for our in-state game, optimization levels, we increase media Oregon’s Game Megabucks. support to build reach and create market We currently turn off paid advertising at excitement. This strategy is employed $300 million on the national games and at across all media including owned assets $8 million on our in-state game. (e.g. jackpot message rotation increases as jackpots grow in OLG owned web/mobile/ Pennsylvania Lottery in-store digital screen assets). The Pennsylvania Lottery advertises via For regional products, the strategy is permanent out of home jackpot boards, to anchor major advertising campaigns digital boards, online banners and triggered

INSIGHTS MaY/June 2016 69 radio and TV. On our draw game tickets, times, how the multiplier option works, marketing messages advertise lotto We typically advertise when the etc.) to jackpot alerts depending on the games.For digital out of home, we begin jackpots are high, but we did run the amount. We also post winner counts on advertising at $200 million. For triggered advertising campaign when the Powerball our website and social media after every radio and TV, we begin advertising at the game changed in October 2015. We will two-day draw period (Tues-Wed, Fri-Sat) $300 million level. We include a “Please also typically advertise any promotions we showing the number of South Dakota Play Responsibly” message at that jackpot run. Lottery winners for each game on that level. We do not have an end level for paid We are evaluating the best levels in specific draw night and the total amount advertising. which to implement advertising since the of prizes won in South Dakota for each matrix changed, but we have been starting game for that draw night. Loto-Québec our radio buys when the jackpot is around For Powerball and Mega Millions, Our advertising strategy for both $140 million and then adding television we’ve utilized jackpot alerts via :30 radio national games is to make sure the brands when the jackpots reach $180 million. We ads and digital billboards once the jackpot are always top of mind by having a media usually stop running TV ads first when the reaches $250 million. For additional presence in TV, web and billboards all year. jackpots reach the point where they may exposure, we promote the growing jackpot Each week, depending on the jackpot level change prior to the drawing. We stop both through the website, social media, Players of each brand, we decide to advertise one radio and TV ads when the PR picks up Club emails and the issuance of press or both games. Above that, we have a and there is no longer a need to spend the releases if the jackpot amount is raised media plan for each brand that we activate money for awareness. in-between draws due to increasing ticket depending on the jackpot level. When the sales. For our other lotto games – Hot Lotto 6/49 jackpot reaches $20 million, or Lotto and Dakota Cash – we’d consider when Lotto Max reaches $50 million, we We continuously advertise our lotto digital billboards if the jackpots reached activate a media plan that includes print, games via our website, social media record levels for the game. radio, web and outdoor. The media plan platforms, jackpot signs, Players Club We end paid advertising when changes slightly from a level to another, emails and our retail monitors. The traditional media coverage, social media and we invest more and more as the message varies from informational (cost coverage and overall “chatter” about jackpot keeps getting higher. per play, reminder about draw days and the jackpot has reached such a level of

70 INSIGHTS May/June 2016 public saturation that paid advertising to the game. In periods of low jackpot winners a week. is unnecessary to promote the jackpot activity and days when lotto draws do Powerball and Mega Millions are further. For Hot Lotto and Dakota Cash, not occur, the media is reallocated to supported primarily through trigger the jackpot ads would begin when the other messages such as winners, scratch jackpot marketing and communications jackpot reached a record level and tickets, etc. We also have ‘heavy up’ ad efforts. It is important that our continue until the jackpot was won. dollars to employ for very large jackpots advertising strategy is designed to to further increase our message reach promote varying jackpot levels. At Texas Lottery and frequency. different jackpot triggers, we use For our lotto-style jackpot games, different tactics to motivate play and real time jackpot communication is bring awareness to high prize levels. utilized via radio live reads, social media We use a variety of strategies. We run When the Powerball game changed and digital point of sale. Geo-fenced television continuity branding programs we focused on those changes and mobile ads and dynamic out of home for Powerball and Mega Millions and the benefit to the players beyond our billboards are also used to support multi- digital outdoor, social media and emails standard trigger tactics. We did this by state games communicating their high for jackpot updates. We use sports launching the “Bigger” campaign that jackpots. Mobile advertising promotes packages that include radio, in-stadium focused on how everything Powerball- the multi-state jackpot game with the elements, ribbon boards, game programs related was getting bigger. highest jackpot. Radio live read calendars and social media: Powerball is supported Our trigger advertising strategies are developed with a mix of scratch and with the Brewers; Mega direct that different tactics and spends draw. Millions is supported with the Green Bay be executed depending on the game Once jackpots hit the $200 million Packers; and Wisconsin’s Megabucks is and jackpot level at hand. Tactics jackpot level messaging supersedes supported with the Milwaukee Bucks. include mass media, digital advertising, previously scheduled product messaging. Limited time offers on lotto games email marketing, PR and social media Out of home jackpot billboards and are supported by television ads and outreach. Our tactics at each level stay digital signage run year around regardless point-of-sale. We utilize free earned consistent until the jackpots reach $400 of jackpot. media statewide through press releases million. Once they exceed that level, Jackpot radio live reads begin at $200 and interviews – issuing targeted press the buzz throughout the country begins million and end once the jackpot is hit. releases when winners come forward to happen organically and awareness is who have won $50,000 or more and generated through the media at a high Western Canada Lottery Corp. statewide press releases for large level and doesn’t require state-specific National lotto games are our #1 jackpots and winners of large jackpots. advertising. So we rely more heavily on priority. Almost all media is directed to All Powerball and Mega Millions PR and earned media efforts and back support lotto jackpots when warranted. jackpots are supported by digital off of mass and other paid advertising We believe in a three-pronged outdoor. When the jackpots reach techniques. advertising platform for lotto: brand $100 million, we begin digital display Also, to allow us to be the most (compelling consumer benefit, for ads, mobile display and paid social efficient with marketing budgets, we example HOPE for Lotto Max), jackpot posts. All jackpot levels are shown on strategize and evaluate the need for and winners (the more regional/recent digital outdoor on draw days. For digital executing trigger campaigns based on the better). Regional games cannot outdoor on non-draw days, Powerball defined criteria which could include deliver as strong an advertising ROI jackpots begin at $240 million and Mega current sales, competing promotions, and as a result we do not invest heavily Millions at $100 million. performance of all products in the in advertising them other than when portfolio, etc. launched. The regional lotto games For Powerball and Mega Millions, tend to mirror the national games for The Cowboy Draw in-state game jackpot ads are created at $100 million, sales growth, as many are purchased was developed to reflect the state of $200 million and $300 million. For as a package with the national games. Wyoming and its pioneer spirit. Because Cowboy Draw, ads are created at Jackpot messaging should be baked into residents of our state value loyalty $350,000 and $500,000. all creative. All media should be able to and supporting home grown products, traffic jackpot brands when necessary. WyoLotto players embrace and support The trafficking of our base media buy our state game. We focus our marketing is done by daypart/by day. As a general efforts on the value that this game rule of thumb we begin at $20 million for brings to the Wyoming Lottery and we Lotto 6/49 and $50 million for Lotto Max. highlight our Cowboy Draw winners as As the jackpot grows and/or as the draw often as possible. We have a high payout day nears, more TV, radio, digital outdoor percentage of 68 percent and typically online and mobile advertising is allocated produce between 15 and 30 $1,000

INSIGHTS May/June 2016 71 Does Jackpot Advertising Work?

Can advertising lotto games “move the needle” or are sales of these games driven entirely by jackpot levels? That is the question we asked lotteries, and not surprisingly, given differences in markets, game mix and demographics, opinions vary, with “yes,” “no” and “maybe” scattered among the responses. The consensus seems to be that advertising is important to keep the games top of mind no matter what the jackpot level, but that jackpots are the ultimate driver of sales. Here’s a sampling of lottery opinions, from the succinct to the elaborate:

Atlantic Lottery: Advertising of lotto own research and review industry Delaware Lottery:We have found that games is essential. These games are research that supports the effects sales are driven by jackpots. highly impulsive in nature and it is that advertising has on consumer essential to keep them top of mind. perception and purchase intent. As for DC Lottery: No it can’t. At least we We are putting out a new advertising high jackpots, yes they do generate can’t identify any perceptible increase campaign three times every week with buzz and excitement that drives sales, in sales when we start kicking in a little a new message. and advertising support is needed to more advertising when the jackpot capitalize on that buzz and increase crosses $100 million. Before the billion British Columbia Lottery Corp.: awareness about the jackpot. dollar jackpot, it took as much as $500 Definitely, advertising plays a critical million before the needle started role in moving the needle on sales. Colorado Lottery:Jackpot levels are moving. I guess that won’t be a big The bottom line is, if no one knows clearly the driving force for sales. deal anymore. We all wanted that and about or is engaged with your brands, However, there is something to be said we got it – now what’s next? it doesn’t matter what the jackpot about feeding the fire. Since higher levels are because the consumers jackpots are motivating, we do believe Florida Lottery: It brings a little more will not be interested. Building advertising can serve as a tool to awareness and we see a slight bump strong brand equity and staying alert players when the jackpot is high, in sales. top-of-mind is crucial to stay in the and remind them in a timely fashion consumer’s consideration set. To (i.e. on their drive home) to stop and Georgia Lottery: Advertising definitely this end, we continually conduct our purchase a ticket. drives awareness, which drives sales.

72 INSIGHTS May/June 2016 However, we see the major increases games, we do believe consistent increased sales from frequent players, in sales once jackpots start getting in strong advertising can also boost but you are also starting to get some the $300 million-plus range. At this sales in the long run. We have seen a interest by infrequent players as well. time much of this sales lift is organic continuation of increased sales since though the media does drive a lot of the $1.58 billion jackpot was hit with Nebraska Lottery: These games are the “lotto fever” phenomenon, which the jackpot awareness campaign. jackpot-driven for the most part. self-perpetuates. With that said, we would see less Kentucky Lottery:Advertising and sales without jackpot awareness Idaho Lottery: About a year ago, the awareness are extremely important advertising. How noticeable of a sales Idaho Lottery introduced a special for these games at base jackpot and decrease is a question that would promotion to support Mega Millions high jackpot levels. It is Kentucky’s be hard to measure for a variety of sales. Based on initial success in the strategy that the fear of loss resonates variables. While it may not “move testing phase, the Lottery continued no matter what the jackpot amount the needle,” jackpot advertising does to offer the promotion year round and is. And jackpots are more frequently pay for itself by reminding the core have supported it with mass media “low” as opposed to “high,” which is player to purchase, and encouraging and social media advertising. Players why we keep a 52 week schedule with the infrequent player to play or at who participate in Mega Mondays buy Powerball and Mega Millions. least keep the game top-of-mind or at least $5 in Mega Millions tickets on the radar when it comes time on Monday and receive a voucher to play for a big jackpot with a pool they enter online or through tele- or otherwise. We have a total of 25 entry for a chance to win $1,000 cash jackpot billboards for Powerball and the following week. This promotion Advertising and awareness Mega Millions across Nebraska that, encourages players on two fronts: are extremely important for combined with the lighted jackpot to increase their normal purchase these games at base jackpot signs at 60 percent of our retailers, are from about $3/transaction to $5/ very effective in providing awareness transaction, and it also encourages and high jackpot levels. for our jackpot games. If jackpot growth in the regular player base for awareness advertising were to stop Mega Millions. Although the average - Kentucky Lottery across the board, we would see daily announced jackpot for Mega noticeable decreases in sales at similar Millions has been lower than the jackpot amounts over the course of a previous two years, Mega Mondays three to five year time period. in Idaho has been successful. On Louisiana Lottery: As with all lotto- average, 42 percent of the tickets style games, jackpots drive sales. New Jersey Lottery: Yes, within eligible for the weekly draw are reason. While the jackpot levels entered. Year over year, Mega Millions Maryland Lottery: Our advertising for are the true drivers of participation sales on Mondays are up 14 percent. jackpot games focuses on the jackpot rates, offering incentives of value to Other than draw days, Mondays are amount, as we’ve found that to be the players can help drive momentum now the highest selling days for this primary reason consumers play these after a jackpot roll or during periods game. games. where jackpots have been hit with high frequency. Typically successful Iowa Lottery:We do believe Michigan Lottery: Our experience is incentives include couponing and advertising lotto games can generate that it’s all jackpot-driven. There’s a bundling jackpot games together with added sales from occasional and core group of players that play every some value proposition (e.g., savings new players, and from our customers single draw. As the jackpot increases or extra offering). that play scratch games regularly. for these games, they will play a little Advertising will kick-start play from the more, because they are very sensitive North Carolina Education Lottery: jackpot chasers. The core lotto players to that jackpot growth. It doesn’t Absolutely. We analyzed per capita will purchase regularly regardless of make sense to advertise those games sales for our Powerball game to see the jackpot estimate. before you get to certain thresholds how radio advertising on just the where we see sales sensitivity. At jackpot amounts boosted per capita Kansas Lottery: While it cannot be those levels, that’s when you really sales. When the radio advertising denied that high jackpots are always start to see the uptick in sales, and started, North Carolina’s per capita the primary drivers for draw-based that’s probably when you are getting Powerball sales were trailing

INSIGHTS May/June 2016 73 the national average. During the Pennsylvania Lottery: Advertising can In order to increase sales at lower campaign, the Powerball jackpot build awareness, especially for new jackpot levels, it is paramount to have climbed from $194 million to $380 games, but largely sales are jackpot- a 360° advertising approach in place million. North Carolina per capita sales driven. We have seen success with to keep the jackpot amounts front and climbed 18 percent during that same advertising promotions (Buy X, get Y center in the minds of our consumers. time period and ended up beating the free). Consumers must see these amounts national average by three percentage in retail, out running errands and points. Jackpot levels are a huge driver Loto-Québec: Of course, the sales are hear them in their car, home and/or of sales, but awareness through point- driven by the jackpot level, but also by at work. Our consumers who utilize of-purchase channels has not been a lot of different variables. We believe digital content must also see these enough for us. With the addition of that advertising helps us “move the jackpot amounts while navigating traditional broadcast media (radio), needle.” It helps us keep the brand through their digital and social we have been able to boost sales top of mind all through the year, but media content. While we can never significantly. Promotions have also it also communicates the jackpot guarantee which of these advertising been quite successful. That said, which is an important driver. Also, we touch points will trigger a purchase we believe that greater familiarity notice that when the jackpot is won in at retail, working in combination and understanding of how to play our region, it has an impact. In 2015, we can create strong awareness Powerball and Mega Millions can the Lotto Max then-record jackpot of among consumers and create optimal also drive sales. We hope to pursue a $55 million was won in Québec and opportunities to trigger that reminder branding campaign in our next fiscal this great news was highly supported to play. Texas will be adding another year. by our public relations activities and digital touch point this year with the advertising. We saw an increased in launch of our mobile app. With all Ohio Lottery: Advertising helps sustain our sales after that – not only for Lotto of this in place it allows us to keep your sales pace until a large jackpot Max but also for Lotto 6/49. We made jackpot game sales steady and growing roll occurs. a TV spot about all the winners the big until that big “roll up” happens again. lotto brands had created in one year. Ontario Lottery and Gaming Corp.: We believe it had also an impact on Western Canada Lottery Corp.: Absolutely. OLG has conducted several sales and on purchase intent. Both. Jackpot level is the #1 factor. Return On Marketing Investment But brand advertising and winner (ROMI) studies which clearly show a Rhode Island Lottery: Jackpot levels advertising can also be effective. direct link between advertising media seem to have the biggest impact, but spend for big national jackpots and the advertising at those jackpots is Wisconsin Lottery:When we increases in sales. In fact, we used certainly necessary to get the word expanded our use of digital outdoor this work to inform our optimization out and increase awareness. advertising, average sales at strategy including which media comparable jackpot levels increased deliver the best results. Advertising South Dakota Lottery: In our about 13 percent. Media coverage at of regional games with fixed or small experience, our players are mainly high jackpot levels is very important, jackpots like Ontario 49 and Lottario motivated by the jackpot levels but and digital outdoor advertising also has proven to be very successful. advertising those jackpots can also helps make consumers aware of the move the needle. For example, in jackpots. Oregon Lottery:We’ve been keeping 2014, analysis of lotto sales at retailers a close eye this and it seems that the near the digital billboards advertising Wyoming Lottery:We have seen biggest sales leaps always kick in at the jackpots showed a difference in success in moving the needle during the $100 million tier for the national overall sales at jackpot levels about new product and game change games. We’re certain that advertising $250 million as compared to retailers launches – with an appropriate could move the needle at lower not located by the billboards. media buy for maximized reach and amounts, but the cost is prohibitive awareness, we have exceeded sales based on the need to advertise our Texas Lottery: There is no question forecasts at these launches. However, other products, not to mention the very large jackpot levels are a similar to other lotteries around the cost/benefit and profitability of other significant driver of draw game country, we understand the most seasonal/campaign based products. sales. The threshold to gain “free important factor to increase sales is That said, we are researching what advertising” (media coverage) by maximizing high jackpot levels, ways we could advertise at the jackpot on lotto-style jackpot games has bringing greater awareness of these resets to see if there is a way to increased significantly with the recent levels to support these key times to increase awareness and sales. $1.58 billion Powerball jackpot. motivate play.

74 INSIGHTS May/June 2016 PGRI LOTTERY EXPO 2 0 1 6

Unlocking the Power of Integration Connecting New Media, Modern Lifestyles, and the Lottery

Conference Sessions September 13th & 14th Evening Receptions September 12th, 13th & 14th

First there were the four P’s (Price, Product, Promotion, Place), then the more consumer-centric four C’s (Consumer, Cost, Communication, Convenience). Or maybe you prefer Shimizu’s four C’s (Commodity, Cost, Communication, Channel)?

In the modern world of Mobile, social media, lifestyle diversity, and the explosion of consumer options - it’s time for an update. We need a coherent vision, a model that grounds our thinking, for how the modern consumer marketplace actually functions, and how to build the relationship with the consumer that will blossom well into the future.

At Lottery Expo 2016 we’ll start to connect these dots, with a large dose of practicality and focus on the specific needs of Lottery. Think futurist Alvin Toffler meets pragmatist Peter Drucker to build the marketing model that connects Lottery with the modern consumer and the marketplace of the future.

Lottery Expo provides a unique forum for industry leaders to address the challenges and opportunities that face our industry today. We hope to see you there!

Eden Roc Miami Beach Hotel Visit PublicGaming.org to register, reserve hotel rooms, and for conference updates Gaming news website: PublicGaming.com Video presentation website: PGRItalks.com [email protected] Call: U.S. + 425-449-3000INSIGHTS May/June 2016 75 76 INSIGHTS May/June 2016 Promotional Play

Lotteries are always hard at work looking for ways to put We have offered promotions on some sparkle in draw-based games. Lacking the infinite our regional game Atlantic 49 in which variety of scratch tickets, and in many cases subject we doubled the guaranteed prize. This to extreme swings in jackpots, draw games present a promotion had limited success because of the limited amount of marketing challenge for every lottery. Because these games are support we put behind it and the so critical to bottom-line profitability, lotteries have met smaller, niche player base associated this challenge head-on with a number of tools in their with this game. arsenals to encourage trial and longer-term game loyalty. British Columbia Lottery Corp. Our regional brand, Keno (Quick Draw), has had a lot of success with ot surprisingly, promotions in influenced by promotions and to share promotions given the very engaged which players can win extra examples of promotions that worked and active player base. Nationally, the Ncash are the most popular, well, and perhaps not so well. You will Lotto 6/49 Super Draw promotions but experience varies with respect to find a lot of ideas – and widely varied (where additional guaranteed prizes are what games work the best even for experiences – in their responses. offered) have also been quite successful. these opportunities. Those lotteries This fiscal year, we will be running with monitor games (mostly keno) Atlantic Lottery Keno Doubler for a 10th time, where on generally find the players are very Our most successful promotions random tickets a Doubler message will receptive to promotions on those have been associated with our national appear which doubles your win. It drives products. Elsewhere, what works for game portfolio and specifically Super a lot of excitement with our player base, some lotteries may not work at all for Draws on Lotto 6/49. These promotions which is one of the key reasons why it’s others. Buy One, Get One promotions are offered nationally each year and been so successful. are common, as are reduced-rate are designed to provide frequent Regionally for Lotto Max, there is Sampler offers and Doubler or market events (talk value), reinforce the a Free Extra promotion where during Tripler winning bonuses. In Canada, Guaranteed Prize Draw (GPD) aspect a specific time period consumers get a the relaunch of Lotto 6/49 in 2013 of the game, maintain long-term brand free Extra (spiel game) if they purchase included a guaranteed $1 million prize health, generate incremental revenue the $20 Lotto Max package. This draw, and that has given them the and return money to player. Since 2013 promotion works particularly well when opportunity to schedule periodic Super we have tested various GPD promotional jackpot levels are high and retailers help Draw promotions, which have been a permutations. These promotions are upsell consumers to this package. resounding success. the most successful because they are Ultimately, it’s up to each lottery national, so the prizing we offer can be Colorado Lottery to find what games and promotions significant and the prizing is guaranteed. We tend to see that Powerball is its players respond to the most. In this The promotions are generally centered more influenced by promotions than any roundup, we asked NASPL members on key times of year such as Christmas other game in our portfolio, especially what draw-based games are most and Valentine’s Day. when there are larger jackpots. We

INSIGHTS May/June 2016 77 we do, so sometimes we just refer to it as “defensive marketing.” We have to get out there in the marketplace and promote the games, so it’s more of a rewards program to the extent that we are offering a deal, or a discount, or a promotion on a draw game. Something to reward the players and keep them engaged; we don’t always see an actual sales lift. Here in DC, numbers games are still about 55 percent of our total sales. We have tried every promotion that exists in the lottery industry for numbers games, but we never see a sales lift for those games, with one exception. That was a promotion we did last year called Tax Time Bonus. We identified the top 50 numbers games retailers in DC and for a four-week period at those retailers, utilize Powerball as a qualifier and one retailer and consumer promotions. there were vouchers for cash prizes of our in state games as the reward. In Second chance drawings are the most printed on an nth basis. We actually addition, promotions are very effective successful. Two promotions to note: saw a 10 percent sales lift for Pick 3 and when launching a new game. Keno Doubler – On Thursdays in Pick 4 during that four week period, and When we launched Pick 3, we gave June, we doubled the winnings on the that was a very significant lift for us. It away a Pick 3 ticket with every purchase 1-6 spots prizes. Of course, players love was definitely the most successful thing of one of our in-state games (Lotto and to win more, but during this particular we’ve ever done for numbers games. Cash 5). This promotion really got the promotion sales increased about 30 word out about the new game; we had percent. Florida Lottery the highest unaided recall of Pick 3 that Keno Hottest Spots – Players were In the early years, our most we have ever had for a game in our able to send in non-winning tickets for successful promotions were second portfolio. six weeks for a chance to win a four-day chance drawings in our Florida Lotto We recently did a Jackpot Sampler, trip to the beach or tickets to a music game. We gave away 50 cars in the where a purchase of all five of our festival. This promotion produced about annual Lottomobile promotions that ran jackpot games saves $1. The Sampler a 20 percent increase in sales during the from 1994-1998. From 2006 through did great and we actually ended it a six week period. 2012, we had a great deal of success little earlier than we planned, because Sampler promotions have been least with promotional raffle games in $20, it overlapped with the huge Powerball successful. They tend to be more of a $10 and $5 price points. Prizes have jackpot in January. (There was never a reward to players than a promotion to included cash of up to $1 million, cars, set end date given to players or listed drive/increase sales. and gas for life. Since 2008, we have on POS.) We set the sales goal for the conducted annual strategic alliance Sampler way back when, and once that DC Lottery promotions with Florida college football was met, it made sense to end it a little Our monitor games Keno and teams to give away game tickets, team early. But we did have it active for more Race2Riches are the two games most merchandise and trips. than two months! We’ll likely bring it influenced by promotions. We do In an effort to reach younger back another time because it was quite promotions once a year for each game, players, we have conducted two Collect popular once the word got out about it. called Sprinkler promotions, or Doubler & Win promotions using mobile app We frequently do Buy X in Powerball or Tripler promotions. On an nth basis, technology, giving away cruises, tablets or Mega Millions, Get Y (generally Lotto). a winning ticket is doubled or tripled. and cash. We had tens of thousands of Those types of promotions are planned When we do that, we get double-digit players participate by downloading the about a month in advance. sales increases, anywhere from 10 to 20 app or visiting the promotion websites percent, every time. The players love it. to collect symbols and earn entries. Delaware Lottery Outside that, it can be very Over one million Florida Lotto tickets Keno is most influenced by challenging to really see a true sales were entered in each Collect & Win promotions, and we have monthly lift from some of the promotions that promotion.

78 INSIGHTS May/June 2016 INSIGHTS May/June 2016 79 All of the promotions we do bring to whichever bowl game Boise State awareness to the product. We don’t attends. Today, this is called the Bronco always see a direct correlation to an Bowl Bash, where players purchase incremental sales lift. However, we often a $10 Powerball ticket and receive a position those promotions as branding voucher to enter online or through tele- exercises, strategically speaking. entry for their chance to win the trip. This promotion is an outgrowth of Idaho Lottery one of the single best promotions we Our secondary games are not always offered back in 2006 when Boise State jackpot driven and are not always top of first went to the Fiesta Bowl. Called mind for players. Promotions are a great Fiesta Bowl Fever, that promotion was way to refresh interest and broaden put together in less than 72 hours and the player base of any particular game. saw nearly 10,000 entries in just 18 They need to be relevant and capitalize days with support from only live radio In recent years, two of our most on opportunities. For example, a year liners, e-mail blasts to our VIP Club and successful promotions are a Grouper ago on St. Patrick’s Day we offered a very limited point-of-sale materials in (sampler) promotion and an EZmatch buy three get one free Lucky for Life retail locations in and around Boise. promotion. In the Grouper promotion promotion. Sales were off the charts for So successful, that when Boise State players get a $6 value for $5 including the game that day. During a big jackpot returned to the Fiesta Bowl in 2009, we Florida Lotto, Fantasy 5 with EZmatch, run on Mega Millions in December offered the promotion again with similar Cash 3, Play 4 plus a free Lucky Money 2014, we offered a Lucky Friday the 13th success. ticket. It cross-promotes all of Florida’s promotion where, for two hours from In the past three years, Bronco Bowl in-state draw games and provides added 4pm to 6pm, players who purchased Bash promotional winners have seen value to players since they get a free a $10 Idaho $1,000,000 Raffle ticket the Hawaii Bowl in Honolulu, the Fiesta ticket. Since 2007, we have offered received a free Mega Millions ticket for Bowl in Phoenix and the Poinsettia Bowl periodic EZmatch promotions with an that night’s $425 million jackpot. During in San Diego. Typically for the fall Bronco increased promotional prize structure in the two hours, we sold 9,187 Idaho Bowl Bash, the Idaho Lottery averages which the top prize doubles from $500 $1,000,000 Raffle tickets. about 20,000 entries over an eight to to $1,000. Now that we have EZmatch The Idaho Lottery sponsors college ten week period. on Fantasy 5 and Lucky Money, we can athletics at Idaho’s public colleges and promote two games at once to maximize universities, including the Boise State Kansas Lottery our returns. Offering these promotions Broncos football program. Over the During the NCAA tournament a couple of times a year allows us the years, we have provided a bowl trip when many players gather in social opportunity to add a little excitement experience for one lucky fan and a guest environments to watch their favorite to the games and increase the brand who receive a VIP treatment and a trip schools, we run Keno Madness recognition and player loyalty. Draw games promotions involving the jackpot games are more difficult to show a return because the jackpot size has such an effect on sales.

Georgia Lottery KENO! is probably one of the most sensitive to promotion. When we conduct KENO! Bonus Hours, which are well received by our core players, we always see an increase in sales during the actual promotional period. During these KENO! hours, we pay higher payouts by either 30 percent or 50 percent on prizes over the period. All winning tickets during the two- to three- hour period would be increased by 30 percent or 50 percent, depending on the promotion.

80 INSIGHTS May/June 2016 We ran a second chance promotion where we gave away tickets to the iHeart Radio Music Festival in Las Vegas courtesy of our media partnership with iHeart Media. Players could enter non- winning Powerball or Mega Millions tickets worth $10 or more for a chance to win. We were surprised that we only received 2,000 entries between both games for this promotion as we expected several more entries given the total prize/trip value. However, this may have been a result of the $10 minimum purchase requirement, which is higher than most of our qualifying purchase amounts for second chance promotions. promotions in which players can enter their Keno tickets to win second-chance Louisiana Lottery prizes such as autographed merchandise We find draw-style game promotions from their favorite teams. We have also work on a limited basis and rarely have offered Keno Tripler promotions in which a lasting or residual impact on sales every nth ticket is designated a tripler beyond the promotional period. Perhaps ticket on which the player can triple a that is why states that launch games winning prize. with an add-on component seem to We had a promotion a couple of have higher sales for the add-on than years ago where with $5 in Super Kansas those who launch the add-on product Cash purchases, you’d get a voucher at later time. This has been true with to enter for one of 25 $2,500 gift cards our Easy 5 game, which we launched from a company selling Kansas sporting in conjunction with the instant-win apparel and more. In the five month EZmatch add-on component. Sales of promotion, we had nearly 270,000 EZmatch run about 35 percent of Easy 5 entries. The promotion generated nearly sales, as players became accustomed to $1.4 million in Super Kansas Cash sales the whole package. To further promote just from the tickets entered. the add-on, we have run EZday$ of April promotions, where we increase the Kentucky Lottery promotion, regardless of the draw game payout percentage on EZmatch, resulting Keno and Lucky for Life do well that serves as the eligible ticket for entry in a 36 percent increase in EZmatch with second chance promotions, while into the promotion. sales and a 27 percent increase the Buy X get Y promotions work well for Last year we executed a Start Your percentage of EZmatch to Easy 5 sales Powerball and Mega Millions. We usually Engines promotion with the Kentucky for the month. reach our liability when running these Speedway where the grand prize winner The 10X promotion that MUSL used terminal game promotions. received a VIP Experience at the July to run for Powerball always did well for Every year we execute a second NASCAR Race Weekend at the Kentucky us, and we saw a slight yet sustained chance promotion through our Speedway. This prize included best- increase in Power Play sales as a result. partnership with the Kentucky Derby seats-in-the-house tickets for the race The promotion provided an opportunity Festival, where one lucky player is in an exclusive Kentucky Lottery VIP to draw attention to the add-on feature named the Festival Fanatic and enjoys area, pace car rides and passes to the and gave players a reason to try it out. If several Derby Festival VIP experiences, driver/owner meeting. Similar to the during the promotion, they found they including the opportunity to push the Festival Fanatic promotion, these are enjoyed the Power Play or had a winning ignition switch to start Thunder Over all unique experiences that cannot be experience, they were more likely to Louisville, the largest annual fireworks purchased and are only offered through continue to play after the promotion display in North America. This is truly this Kentucky Lottery promotion. Players ended. These types of promotions a once in a lifetime opportunity that entered with Lucky for Life tickets worth that encourage product trial can be money cannot buy. Every year we $2 or more, and we received roughly successful if the player has a good receive roughly 8,000 entries for the 5,000 entries. experience.

INSIGHTS May/June 2016 81 promotion to Lotto 47 and Fantasy 5 this fall. We also have a Straight Back Bonus promotion for Daily 4 that has run from time to time. A straight bet player who matches their numbers in a reverse order wins $1,000. With that additional way to win, we have seen sales growth in the 10 percent range in the month we run this promotion. We don’t usually do second chance promotions for draw games because draw players like their games simple and their promotions simple – and they like to win cash. So the simpler we can make it for them to win money, we will get the best results.

Missouri Lottery Promotions that have the greatest influence on draw game sales are those We have also run a four-month try because it has worked successfully involving our daily games – Pick 3, Pick Lotto Lagniappe promotion where those in other states and because we have 4 and Show Me Cash. All games respond who purchased a five-board, single- a strong daily numbers category. We positively to promotions both during and draw Lotto ticket also received a raffle overcame the challenges of needing after the promotional period. The Bonus entry ticket for a drawing for $60,000 in additional televised drawing time and Numbers promotions we’ve conducted additional cash prizes. We saw about a educating the public, but our players just with Pick 3 and Pick 4 have been five percent increase in average monthly didn’t respond. especially successful. Bonus Numbers Lotto sales during the promotion, but promotions – also known as red-, green- it was difficult to analyze the results Michigan Lottery or orange-ball promotions – involve a for differences in jackpot size, and We run a fair amount of promotions separate drawing in which several white the lift was not sustained beyond the for our Daily 3 and Daily 4 games, and balls and one colored ball are placed into promotion. those players react quite well. We try a drawing drum. In Missouri, whenever to stay out of second chance and non- the orange ball is selected, a second set Maryland Lottery winning ticket promotions for draw of Pick 3 or Pick 4 winning numbers are While the Maryland Lottery has games, so our promotions are focused drawn, which gives players two chances implemented many successful draw on paying out more prizes. That’s to win with the same ticket purchase; it game promotions, Keno and Racetrax typically in the way of 20 percent bonus can double the number of winners for (both monitor games) are perhaps the payout or doubler payouts. When we that drawing. Pick 3 and Pick 4 players most responsive. We typically run Keno run those promotions for Daily 3 and follow the results closely to see how Sprinkler promotions several times a Daily 4, we typically get 10 to 15 percent many white balls are left and gauge year. On an nth ticket basis, Doubler or sales increases. the chances of the orange ball being Tripler messages are randomly printed Four or five times a year we also run selected. Bonus Numbers promotions in on Keno tickets, and any prizes won a Doubler Days promotion for Club Keno, Missouri have average increases of 15 on those specially marked tickets are in which an nth ticket is a designated as percent during the promotional period doubled or tripled. These promotions a doubler ticket, and if they win a prize, and 6.58 percent for the 13 weeks run for a minimum of four weeks, and that prize is doubled. We are seeing 15 following the promotion. we’ve found that it takes about 10 days to 17 percent sales increases during to two weeks for players to become the month when those doubler days Nebraska Lottery aware of the promotions and begin promotions run, so Club Keno players We’ve had good results with taking advantage of them. really respond. promotions for our in-state games and The Pick 3 Green Ball Double Draw, Because of these successes, and the multi-state game. We used to which gave players an extra opportunity because we get a residual sales lift for run a yearly promotion on our in-state to win, did not do well in Maryland. a few weeks after the promotions end, jackpot game, Nebraska Pick 5, where We decided to give this promotion a we are looking at expanding the Doubler prizes were doubled during a specific

82 INSIGHTS May/June 2016 key role in our strategy to ensure these games remain a part of the conversation at retail. Specifically, the daily games (Pick-3 and Pick-4) and Cash4Life have responded well to promotions. The Collect ‘N Win promotion, developed in partnership with Alchemy3, has been our most successful promotion in support of the daily games. The first iteration, run in December 2014, allowed players to enter Pick-3, Pick-4 and Jersey Cash 5 tickets (winning and non-winning) for a chance to win weekly prizes as well as a Grand Prize of $50,000. Coupons awarded at random throughout the duration of the promotion enabled us to support the entire draw-based game portfolio by encouraging cross-play of all games. The promotion returned a 223 percent ROI and we received very positive feedback from players and retailers. Following some enhancements to the program, we ran a second iteration from March 7 to April 3, 2016. Once again, players were able to enter Pick-3, Pick-4 and Jersey Cash 5 tickets month. While some players looked coupon at retailers for $3 worth of for weekly prizes as well as two Grand forward to the Pick 5 Doubler promotion Nebraska Pick 3 for $2 – a $1 discount. Prizes of $25,000. The promotion was year after year, it didn’t achieve our Redemption rates for this coupon were met with the same positive feedback goal of increasing Pick 5 sales. So we’ve excellent, and Pick 3 sales increased while from players and retailers and while the replaced the Doubler with a new $10K the coupon was available – a great result final sales analysis is not complete yet at Jackpot Roll promotion. given that the game has a low top prize this writing, we did see a bump in sales We’ve run the $10K Jackpot Roll ($600) and therefore less sales variability three times since March 2015, and during compared to a jackpot-based game. the month-long promotion, jackpots Our successful 2by2 Tuesday $30,000 for Nebraska Pick 5 increase by $10,000 Cash Blast! promotion that ended April instead of the regular $4,000. The result 24 encouraged players to purchase is larger, faster-growing jackpots. multi-draw tickets with the 2by2 The $10K Jackpot Roll promotion has Tuesday doubler feature, and required several advantages over the previous Pick the purchase of a 7-draw 2by2 ticket 5 Doubler. The promotion can be run with to enter. A follow-up coupon, launched a minimum of marketing support because at the beginning of May, allows players it is jackpot-based: players notice the to purchase the same 7-draw ticket for higher jackpot amounts and purchase $5 – a $2 discount. We hope that the tickets accordingly. The additional prize combination of promotion and coupon cost of the $10,000 Jackpot Roll promo is will encourage players to continue buying offset by the increase in Nebraska Pick 5 2by2 Tuesday-eligible tickets so they can sales. And while sales declined after the win double prizes on Tuesdays. promotion ended, the $10K Jackpot Roll promotion had some “stickiness” because New Jersey Lottery a segment of players who started playing New Jersey has traditionally been a during the promotion continued to buy jackpot-centric state. Because of this, Pick 5 tickets after the promo was over. the non-jackpot games tend to fall into We’ve also seen some great results the background and it becomes difficult with in-store couponing. In the first three to keep them top of mind for players months of 2016, we offered a padded and retailers. Promotions have played a

INSIGHTS May/June 2016 83 value to the regular Cash 5 purchases. - Buy 2, Get 1 Free promotions. The lottery has conducted this type of promotion to support new draw game introductions, driving trial and awareness.

Ohio Lottery Quick-turn, social play games such as Keno benefit the most from promotions. Our Keno Double Win promotion and Keno March Mania promotion helped us reach sales levels that were above projections. By providing more winning experiences during fixed time frames, players tend to invest more in the game and play the game longer. After several successful years with our Pick 3 Red Ball promotion, we have discontinued that offer. It did not increase game play or spending, which resulted in flat, even negative, sales during the promotional period. promotion is over. However with Pick 3 results in recent fiscal years. We are in We have run several promotions promotions, the sales increase that we the process of exploring a few different in support of Cash4Life, but the most experienced during the promotion was add-on features that will jumpstart our successful was a cross-promotion sustained for a period of time beyond the daily draw games. run primarily to support the recently promotion period. launched Fast Play product line. The The North Carolina Education Lottery Ontario Lottery and Gaming Corp. promotion ran from August 24 through has offered several different promotions We have demonstrated through the September 6, 2015, and offered players with its draw games, including: Lotto 6/49 guaranteed prize draw feature a chance to win a free $1 Fast Play - A Double Draw promotion this that we can create Super Draws offering with every nth Cash4Life purchase. The year for the Carolina Pick 3 game. The additional guaranteed prizes of up to $1 promotion rotated through the two $1 promotion gave players two chances to million during high retail traffic periods Fast Play games available at that time, win through the drawing of a second set (Christmas, Valentine’s Day, Black Friday Fast Cash and Red Hot Numbers, in order of numbers during the evening drawing. etc.), where we see a significant sales to force trial of the new games with Two Pick 3 drawings were held whenever boost and solid ROI. In fiscal 2016, Lotto players. Prior to the promotion, Cash4Life a Red Ball, one of seven, was drawn. 6/49 saw an overall 22 percent increase sales had been declining at a rate of One Double Draw was guaranteed each in sales during Super Draws. about two percent week over week. week. The promotion added excitement During the promotion, we were not only to the game because Pick 3 players got able to stave off that decline, but we an additional chance to win on Double grew sales by two percent each week Draw nights. of the promotion. The promotion also - A Carolina Cash 5 Bonus Bucks increased trial of Fast Play, making it an promotion in fiscal years 2012, 2013 and overall success for draw-based games. 2014. The promotion provided a free ticket in special Bonus Bucks drawings for North Carolina Education Lottery Cash 5 players who spent $5 on a single Based on our recent experience with ticket. Players could win a $50,000 prize, draw game promotions, the greatest a $5,000 prize or one of three $1,000 impact has been with our numbers prizes in the Bonus Bucks drawings. The games, specifically Pick 3. Overall we promotion boosted what was at that time have found that promotions drive flat Cash 5 sales and proved so popular interest and trial of the game during the with players that we did three rounds. promotion period, but sales return back The promotion provided a second way to pre-promotion levels quickly once the to win – essentially a raffle – and added

84 INSIGHTS May/June 2016 The most common regional promotions incremental) with a lasting effect after the are trial tactics like couponing and BOGOs promotion had ended. Over the nine- (i.e. Buy one Lotto 6/49 with Encore ticket week promotion, seven trip prizes were and get one Ontario 49 free play). These awarded. To date, the trial programs are executed to support new launches and relaunches like Watch Oregon Lottery Pennsylvania ‘N Win games, Ontario 49 and Lottario. Our in state game sales grew when we ran The programs are proven influencers that a seasonal campaign about a year ago. Lottery has increase motivation to try a game and It has been a very long time since we’ve future purchase intent. For example, of done any promotions other than jackpot conducted six those that received a Wheel of Fortune awareness for the national games. When Lotto free play coupon, 37 percent had we did, there was an increase in sales, but second-chance not played the game and later went on the campaigns were far too costly to justify to buy the game on their own. Similarly, that level of spend. drawings involving 31 percent said they were more likely to We upgraded the outdoor/billboard buy a Wheel of Fortune ticket as a result advertising to add a digital component/ terminal-based of using the coupon. BOGOs are also jackpot reminder a few years ago and effective at reaching a mass audience recently refreshed those boards. According games... Based on quickly by coupling regional games with to our research, this is the most impactful high participation national games. These draw game advertising amongst all of our promotions help generate awareness with media offerings. this success, we existing lotto players, drive incremental These games already garner such sales on the host product (i.e. Lotto 6/49) attention because of the eye-popping plan to increase and have a similar impact on future jackpot levels. So spending on an ongoing purchase intent as the free play coupons. awareness seems to be a bit like helping a the number of Trial Promotions:Generally speaking, boulder roll faster down a hill. That said, trial promotions are effective at increasing we feel good about our strategy, just want drawings featuring motivation to play, driving meaningful to refine it to see greater gains, especially product engagement and influencing in the “new world” of a $1.58 billion terminal-based future purchase intent. These programs jackpot. tend to yield redemption rates of 60 to games. 90 percent and can drive trial with over Pennsylvania Lottery 500,000 players when incorporated into The Pennsylvania Lottery introduced - Pennsylvania Lottery a fully-integrated advertising campaign. webcodes for terminal-based game The most successful examples are tickets in September 2014 to enable us to Wheel of Fortune free play coupons offer second-chance drawings for those (190,000 coupons redeemed, 76 percent products. Our first such drawing, the Cash redemption rate) and Ontario 49 BOGO 5 Cash Vault Second-Chance Drawing, (772,000 coupons redeemed, combined featured our popular Cash 5 game and ran $400,000 incremental sales on host from Sept. 2 to Oct. 2, 2014. It was wildly product Lotto 6/49 and Encore). successful, with an overall participation Limited Time Prize Promotions: Wheel rate of nearly 27 percent and a total of of Fortune has a promotional feature that over 196,000 entries. As a bonus, the allows for the top prize ($10,000) to be drawing increased our VIP Players Club swapped for a trip ($20,000 value) or a enrollment by over 50,000 new players. car ($50,000 value). In July 2014, the trip To date, the Pennsylvania Lottery has promotion was activated to keep players conducted six second-chance drawings engaged and offer an exciting promotional involving terminal-based games. In June prize. It was executed on a modest 2015, we launched our first second-chance advertising budget and support included drawing featuring all terminal-based tactical in-store advertising only (POS games. The Pickup Luck Second-Chance and Backwalls) to capitalize on impulse Drawing awarded two truck prizes as well purchases. The program increased player as cash. The overall participation rate was participation by one point to 3.4 percent 12.01 percent and over 1.4 million entries and sales by 38 percent ($1.2 million were received. In general, participation

INSIGHTS May/June 2016 85 for every $10 or higher Powerball wager made on a single ticket. The coupon could be redeemed in a two week time frame in October 2015 after the game changed. We saw a sales increase in the two week time frame when the coupons were distributed and also when they were being redeemed, for a total profit of $54,940 (this profit does not take into account any advertising spent promoting the game change in October). Quick Pick Pack/Bundler – We ran this promotion for two weeks in June 2014. For $5, players received one Powerball, one Mega Millions, one Lucky for Life and one Wild Money quick pick ticket. The Mega Millions ticket was free, so they received a $6 value for $5. The offer was available every day until 9:30pm. For the first few days of the promotion, the Powerball jackpot was $259.8 million, which had a positive effect on sales for Lucky for Life and Wild Money. In fact the non-draw days for Lucky for Life and Wild Money saw a 12 to 36 percent or a 14 to 42 percent increase, respectively. When the Powerball jackpot was hit, Lucky for Life continued to see increased sales on non-draw days, between 8.9 percent and 23.9 percent. Wild Money also saw an increase. As Mega Millions was the free ticket given away for the promotion, it did not experience the same sales increase as the other products. The final comparison we ran was total sales of all games involved during the Quick Pick Pack promotion compared to the rates have matched or surpassed guaranteed prize draw message. The total sales of all of the games during those for drawings involving instant strategy is to offer four Super Draws per similar Powerball jackpot periods. games. Based on this success, we plan year and they are dispersed throughout When we compared the sales to the to increase the number of drawings the year leveraging high retail traffic April 20-May 3, 2014, period (when the featuring terminal-based games, with events. Powerball jackpot was $148 million), one currently slated for mid-summer we saw a 10.76 percent increase. That and one in the fall. Rhode Island Lottery translated to a profit of $193,122 (after No matter the game, there always the cost of the free Mega Millions tickets Loto-Québec seems to be a positive impact when is deducted). Then when comparing The national Lotto 6/49 Super we run a promotion. Some promotions the sales to the September 11, 2013, Draw promotions are designed to we’ve run in the past include: Powerball drawing ($248 million offer additional guaranteed prizes. The Buy X, Get Y – We’ve done a lot of jackpot), the total sales were down 5.21 objectives are to build brand excitement these and they always increase sales percent. through frequent market events and during the promotional period. Every nth – We did a Lucky for Life to create a large number of winners Coupon – For two weeks in promotion in June 2015 for two weeks in a short period in order to reinforce September 2015, players received a where a players making a $10 wager the winability of Lotto 6/49 and the coupon for a free $2 Powerball ticket on one ticket would randomly receive

86 INSIGHTS May/June 2016 In a one-month nth promotion in sales during promotions. The large involving Dakota Cash, our in-state jackpot games have a higher brand draw game, players who purchased a recall with consumers and at times, $5 or higher Dakota Cash ticket could a large jackpot amount may occur randomly get a coupon good for $5, during the promotional period and $10 or $20 in cash. Sales increased positively influence a player’s decision by 11 percent during the term of the to participate. The daily 3- and 4- digit promotion. games are very strong in Texas and Big jackpot runs can make we have found that we can encourage promotions involving Powerball trial and base sales growth through purchases tricky. South Dakota free ticket buy X, get Y offers creating participated in a Buy $5 in Powerball, opportunities to play and win prizes in Get a Tri-West Ticket Free! promotion these games. that was scheduled months in advance. The free ticket player promotions When the promotion dates rolled we offer at our promotional selling around, we were in the middle of a events held throughout the state always high jackpot run for Powerball. As a produce great results when the focus is result, Tri-West states gave away a lot on our jackpot portfolio. For example, of free tickets because people were players who purchase $10 or more of purchasing more Powerball tickets in Powerball on one ticket receive one free anticipation of a big jackpot win. South Mega Millions Quick Pick and one free Dakota alone gave away nearly $200,000 Lotto Texas Quick Pick ($2 value). This in Tri-West lotto tickets during the promotion provides motivation to our a voucher for a $100 instant win to be promotion, making it more successful jackpot game players and gives them a redeemed at the Lottery and also be than anticipated. sample of the three big games in Texas. entered to win an additional $1,000 In the spring of 2015, we launched a prize. We gave away 200 $100 prizes Texas Lottery refresh media campaign on our popular and five $1,000 prizes. The amount of We see that the large jackpot games Pick 3 daily game. In combination with $10 wagers increased by 97.5 percent (Powerball, Mega Millions and Lotto the media campaign, we offered a player during the two weeks the promotion Texas) and daily numbers games (Pick promotion. Players that purchased $5 ran and the five drawings following the 3, Daily 4) have the largest increase or more Pick 3 on one ticket received promotion dates also had higher sales compared to the previous month. Raffle – We did a Lucky Raffle promotion for Lucky for Life in 2014 where every $8 or higher Lucky for Life wager received a raffle ticket. Each day we drew a winner for $400. Sales increased by six percent during the promotion, but four out of the 15 prizes went unclaimed, and there was no residual sales increase. Second Chance Drawings – We don’t typically see much impact on sales for these promotions with our draw games. These more often help increase our VIP Club growth and member activity.

South Dakota Lottery With Powerball’s loyal player following and high brand recognition, any draw-based game that’s attached to a Powerball promotion tends to draw attention whether it be a Buy One, Get One or nth promotion.

INSIGHTS May/June 2016 87 retail traffic periods such as Black Friday, pre-Christmas, etc. Years and years ago, offering cars as bonus prizes was not successful. Players were hoping and playing for million dollar windfalls, and a car didn’t meet their expectations. Even of those interested, they may balk at the type of car offered

Wisconsin Lottery We focus on our in-state product for limited-time offers (LTOs). Our three best LTOs in terms of increased sales during the limited time offer were:

• Badger 5 (Lightning Ball, 2015): 44 percent sales increase • Megabucks (Buy $5, get $1, 2002): 41 percent sales increase • 5 Card Cash (nth ticket, 2014): 39 percent sales increase

Wisconsin players like a deal and each of these LTOs offered a better likelihood of winning for the same investment. The Lightning Ball LTO increased sales enough that Badger 5 had one of its largest ever jackpots during the offer period. This elevated it to the top of our list of LTOs for return. Our LTO on the newly launched 5 Card a free $0.50 Pick 3 Quick Pick with a promotion following a player promotion Cash game also performed well. Running $0.50 Sum It Up! add-on play included. to keep our retailers engaged and an LTO on a new game shortly after This promotion increased product trial focused on a new draw game or a launch may reinforce new game habits. and brought visibility to the Sum It Up! draw game for which we are providing feature available on our Pick 3 and Daily a strategic focus. Clerks receive a 4 games. voucher from the sales terminal after Starting in April, we implemented an a specific product sales criteria is met. eight-week Fridays-only free ticket player The voucher can be redeemed with the promotion on our newest draw game, retailer’s Lottery Sales Representative Texas Triple Chance. To add a sense of for a promotional item such as a exclusivity to the promotion, we will only stainless steel mug, cap, t-shirt, etc. Our offer the promotions on Fridays. The most recent clerk promotion provided very first Friday, April 8, resulted in an the lowest results to date for a clerk approximate 20 percent sales increase incentive. We are currently evaluating for Texas Triple Chance compared to different ideas to motivate retail the previous four-week Friday sales personnel. average. Players receive a free $2 Texas Triple Chance Quick Pick with their $6 Western Canada Lottery Corp. or more purchase of Texas Triple Chance We run jackpot bonuses on both during the Free Fridays promotion. If national games when warranted and the success of this promotion continues, run bonus draws on Lotto 6/49 roughly we will look to implement this or similar four times a year. All of which have been promotions on other draw games. very successful. Our Lotto 6/49 bonuses We normally run a clerk voucher are usually timed to coincide with major

88 INSIGHTS May/June 2016 Our 25th Anniversary Package LTO Nevertheless, our players absolutely only experienced a 0.6 percent sales loved it. The promo happened April increase. This LTO offered a Buy $5 of a 22, 2015 (Wednesday) and was for one Game, and Get $1 of That Same Game day only. We sent out handbills to our Each time a – but it did not focus on any particular supermarkets and c-stores to hand out to game. In Wisconsin, we have found that players in the days prior to the promotion, player purchased focusing on one game per LTO delivers and also sent out an email blast to our better returns. players the day before and the day of. a Cowboy Draw Each time a player purchased a Wyoming Lottery Cowboy Draw ticket, a free QP Cowboy We had great luck with our in-state Draw ticket would automatically print. We ticket, a free QP game (Cowboy Draw) promotion. It is our utilized our LSRs and terminal messaging most expensive game and giving them to inform clerks that this would be Cowboy Draw away as a BOGO was unprecedented, happening. though we do have great success Our total net sales were $335,980 ticket would launching promotions for all of our games. and the draw happened the next day. Our BOGO was a very successful The jackpot did not hit, but with the high automatically print. promotion in terms of getting players amount of sales we saw more than double interested. However, we were probably the average number of winners for the - Wyoming Lottery victims of our own success as we have a second tier prize of $1,000. 68 percent payout percentage for Cowboy Draw, so the risk to us was very high.

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INSIGHTS May/June 2016 89 Save the Dates!

October 4-6, 2016 NASPL 2016 Hosted by the Georgia Lottery Corporation , GA

2016 CONFERENCE CALENDAR 2017 CONFERENCE CALENDAR

June 13-17, 2016 October 4-6, 2016 March 2017 NASPL Directors’ Meeting NASPL 2016 Annual Conference Problem Gambling Awareness Month Cleveland, OH Georgia World Congress Center Hosted by the Ohio Lottery Omni Hotel Atlanta, GA April 2-7, 2017 Hosted by Georgia Lottery Corp. NASPL Lottery Leadership July 15-16, 2016 Embassy Suites Downtown 30th National Conference St. Louis, MO on Problem Gambling October 18-21, 2016 Hosted by Missouri Lottery NCPG NACS West Chester Marriott Georgia World Congress Center Tarrytown, NY Atlanta, GA June 19-22, 2017 NASPL Spring Directors’ Meeting Metropolitan 9 Aug 1-5, 2016 November 6-9, 2016 Cleveland, OH NASPL Professional Development Seminar World Lottery Summit Hosted by Ohio Lottery Commission Omni William Penn Singapore Pittsburgh, PA Hosted by Pennsylvania Lottery July 24-28, 2017 NASPL Professional Development Seminar Renaissance Hotel September 12-14, 2016 Nashville, TN PGRI Lottery Expo Hosted by Tennessee Education Lottery Corp. Eden Roc Hotel Miami Beach, FL September 2017 NASPL 2017 Annual Conference September 26-29, 2016 Location to be determined G2E Las Vegas, NV October 17-20, 2017 NACS McCormick Place Chicago, IL

90 INSIGHTS May/June 2016 NASPL Associate Membership Become a NASPL Associate Member!

“An Associate Membership is a way for your For More Information Contact: organization to be ‘at the table’ to hear about Jake Coy Vendor Relations the key issues affecting our Industry and how we [email protected] 440.361.7962 can better service and grow our industry.” www.naspl.org

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INSIGHTS May/June 2016 91 Felipe operates ahead of the game with integrated systems solutions.

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