March/April 2018 Why Sports-Betting Matters to ALL U.S. State Lotteries Turning lottery business intelligence into action at retail Modernizing the field of Research and Development

This Issue’s Featured Interviews Lottery Industry Lifetime Achievement Award 2018 Recipients

Sarah Taylor Hoosier Lottery (Indiana) Andy Davis Tennessee Education Lottery Corporation

May Scheve Reardon Missouri Lottery

Becky Schroeder Idaho Lottery

Gerry Aubin Rhode Island Lottery

Greg Smith Gary Gonder Illinois Lottery Missouri Lottery

PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 1 2 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 3 DEPARTMENTS

8 | From The Publisher Paul Jason

10 | Lottery Industry Lifetime Achievement Award, Publisher & 2018 Recipients Chief Executive Officer Andy Davis, Chief Financial & Information Systems Officer, Paul Jason Tennessee Education Lottery Corporation Gary Gonder, Chief Branding Officer, Missouri Lottery [email protected] Becky Schroeder, Chief Operating Officer, Idaho Lottery President 12 | Women in Leadership Roles Susan Jason Generate Strategic Business Benefits [email protected] Rebecca Hargrove, President & Chief Executive Officer, Tennessee Education Lottery, Senior Vice President, World Lottery Association Brand and Design Chair of the Corporate Social Responsibility, World Lottery Association Lucky Rabbit Studio ​ Chair of Women’s Initiative in Lottery Leadership (WILL) Honored Founders 50 | Industry Spotlite Doris & Duane Burke Profiles of the Leaders of the Government-Gaming Industry 56 | PGRI SMART-Tech Miami Conference Program Contact Information T: +425.449.3000 60 | Pulse of the Industry: Synopsis of Recent Industry News F: +206.374.2600

For email address changes, subscription requests and FEATURED INTERVIEWS requests to be placed on our e-Newsletter distribution 14 | A Diverse Set of Stakeholders Work Together list, contact: to Produce Stability, Sustainability, and Growth [email protected] Gerry Aubin, Director, Rhode Island Lottery PGRI, Inc. 218 Main Street, #203 Kirkland, WA 98033 PublicGaming.com Subscriptions 16 | Modernizing the field of Annual Public Gaming Research and Development International magazine Sarah Taylor, Executive Director, Hoosier Lottery (Indiana) subscription rates: United States: $145 USD Canada & Mexico: $160 USD All other countries: $225 USD 18 | Why Sports-Betting Matters to Public Gaming ALL State Lotteries International Magazine May Scheve Reardon, Executive Director, Missouri Lottery Published six times a year and distributed to readers all around the world. Electronic version is e-mailed and is also available on our news website: 20 | Onward and Upward: PublicGaming.com. A New Era Begins at the Illinois Lottery Greg Smith, Executive Director, Illinois Lottery March/April 2018 Volume 45, Issue 2 ©2018 all rights reserved. Public Gaming Research Institute cISSN: 1042-1912

4 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 5 FEATURED INTERVIEWS CONTINUED Visit Our Family 24 | The Holistic Player Experience Of Websites Antonios Kerastaris, Chief Executive Officer, INTRALOT Group PUBLIC GAMINGGAMING PGPublicGaming.comRI industry news & information 28 | From the conference room to the corner store: Turning lottery business intelligence into PGRITalks.com action at retail videos of conference presentations Tom Stanek, Senior Director of PublicGaming.org Global Retail Sales and Marketing, IGT PGRI conference information PGRIDigitalLibrary.com magazine archive of past issues FEATURED ARTICLES PGRIDirectory.com listing of lotteries and vendors | PGRIAwards.com 22 Connecting with Millennials: Showcase of industry honorees Why the future business model of lotteries depends recognized by the on standing for more than just winning Lottery Industry Hall of Fame Jon Duschinsky, Founder and Chief Executive Officer, The Conversation Farm PGRI Lifetime Achievement Award 34 | Planning Ahead: Sharp Award for Good Causes The Most Wonderful Promotional Time of the Year Lottery Industry Statesman Scientific Games Corp. and Stateswoman Award 39 | Let the Games Begin: Rebecca Hargrove Mentorship Award Sports-Betting Leader Kambi Moves Into Virtual Sports Collaboration Award 40 | Will the Wire Act Prohibit Intrastate Online Sports Betting? Mark Hichar, Partner, Hinckley Allen Law Firm PUBLIC GAMING 44 | Willy Wonka: The Digital Second-Chance Game that DAILY NEWS DIGEST has been played over a billion times in less than a year PGRI Scientific Games Corp. Subscribe To Our Free Digital Newsletters 47 | Measuring Player Visits at Lottery Retail: Receive our daily newsletters at no E-Commerce Style Insights Now Available charge, published 5 times a week to Lottery Marketers to bring you the latest breaking Jon-Paul Bussoli, Vice President Technology, Carmanah Signs, news in the global lottery industry. a Division of STRATACACHE Send an e-mail to: [email protected] 66 | Ten Things U.S. Lotteries Need with “add to Daily Digest list” to Know About Sports-Betting in the subject line.

6 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 7 From the Publisher

Congratulations to Becky Schroeder, Andy Davis, and Gary corner store and decide whether to buy a lottery ticket? That is Gonder for their selection as the recipients of the 2018 Major the topic of many discussions I have had with Tom Stanek that Peter O’Connell Lottery Industry Lifetime Achievement Award. have now been turned into an interview. Andy Davis and Gary Gonder will be honored on March 28 at the upcoming SMART-Tech Conference in Miami. Becky A few months ago, I got in trouble for referring to Lottoland Schroeder will be honored at the Lottery EXPO conference in as an “illegal operator”. Lottoland does operate without New York City on October 24. See their biographies on page proper license in some jurisdictions. But the fact is they are 10. also properly licensed and therefore operating legally in other jurisdictions. Now for another wrinkle in the definition of May Scheve Reardon and Mark Hichar address the issue of “legal”: If an operator is not properly licensed to do business sports-betting. The turnover of the illegal spots-betting market but is operating out in the open for all to see and claim to not in the U.S. is more than double the sales of traditional lottery be in receipt of any advisory from legal authorities to cease and products. The impact on the entire games-of-chance industry desist, does that make them “legal”? Some online operators if the U.S. Supreme Court lifts the federal prohibition against hold the position that until and unless they are advised oth- sports-betting will be massive. erwise, they are operating “legally” regardless of whether they have proper license. Most of us in the government gaming Sarah Taylor was invited to present to an international com- industry would say that to operate without proper license is in munity of top lottery marketing executives at the European fact to be operating illegally. The argument may be semantic Lotteries Marketing Seminar in London. It was a mind-ex- legalese. But there are hundreds of millions of dollars of lottery panding presentation which she agreed to turn into an inter- tickets being bought from online operators which are operat- view about the ways that digital communications platforms ing without proper license. Of course, in the real-world, all have transformed the field of consumer research. this philosophical discussion does not change the fact that lack The Rhode Island Lottery operates casino gaming as well as tra- of action to stop the operators without license means that they ditional lottery. Operating in multiple gaming sectors, and in will continue to operate. an intensely competitive regional market-place, Gerry Aubin Thankfully, governments are beginning to take action. The manages a lot of moving parts in a no-nonsense straightforward UK Gaming Commission (UKGC) is taking multiple steps to manner that makes it all seem easy. I asked Gerry to explain reign in the activities of online operators. When Lottoland was how he has maintained stability and steady growth over the told they can’t take bets on the outcome of the EuroMillions course of his twenty + years career as lottery director. draw, they protested that they weren’t taking bets on the UK The Illinois Lottery is on its way again. Greg Smith shares EuroMillions draw, they were taking bets on the Spanish Eu- some of the plans in place for the Illinois Lottery to move past roMillions draw! Of course, it’s the same game so the UKGC the instability of the last few years and into a new era of decisive said this transparently silly work-around is not acceptable. The action-plans implemented by partners who are all pulling in the UKGC is taking aggressive action against others like William same direction. Hill for overly aggressive promotions that entice consumers to sign-up for free bonus plays, encourage problem gamblers to My discussion with Antonios Kerastaris at the ICE Gaming over-spend, propagate false and misleading advertising, make it Show in London revealed a new frontier for enhancing value to very difficult for players to withdraw their money, and other- the consumer: strategies that focus on integration of technolo- wise appeal to players to play irresponsibly. gies, consumer touch-points, gaming devices, and communica- tion channels to make the player journey more easily navigable, In another good sign of progress, Austria has decreed that it more intuitive, more … holistic. is perfectly appropriate to employ “IP blocking” to prevent access to websites that are not legal. This is an important For all the focus on sophisticated data-driven models that drive breakthrough. IP blocking and enlisting the cooperation of corporate strategy and operations, how do large enterprises merchant banks are two tools vital to the prevention of illegal stay connected to the real world of consumers who walk into a online selling and re-selling of lottery products.

Paul Jason, Publisher Public Gaming International Magazine

8 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 9 Honoring individuals who have distinguished themselves throughout their careers with important lottery industry contributions.

Andy Davis Becky Gary Gonder Chief Financial & Chief Branding Officer, Information Systems Schroeder Missouri Lottery Chief Operating Officer, Tennessee Officer, Idaho Lottery Education Lottery Corporation

ndy Davis was recruited in October utting-edge innovation is at the ary Gonder is a 27-year employee 2003 by the Tennessee Education heart of Becky Schroeder’s Idaho of the Missouri Lottery, where he Lottery Corporation to be part of Lottery career since becoming has served in various executive theA diverse and experienced executive team Groles, including Chief Branding Officer; CInformation Technology Director in 1992; that led a rapid and successful start-up. back when lotteries still functioned with Chief Operating Officer; Communications Director; and Interim Executive Director. As Chief Financial Officer, Mr. Davis green screens, command lines and green During that time, Mr. Gonder was part of a is responsible for planning, organizing bar printers. Born and raised in northern dedicated team of employees who increased and directing the corporation’s financial Idaho, Ms. Schroeder began her IT career Lottery sales and profits from $220 million activities. This includes general accounting in Coeur d’Alene. and $66 million, to $1.2 billion and $310 and reporting; accounts receivables; retailer Ms. Schroeder was promoted to Deputy million, while reducing the operating and product accounting; budgeting and Director of Administration and Chief percentage from 12% to 4.5%. financial planning; treasury management, Deputy in 2007 and graduated from the and purchasing activities, which include nationally accredited Certified Public Before the Lottery, Mr. Gonder worked soliciting qualified minority firms to Manager Program the same year. Her as the Director of the Missouri Film participate in the lottery’s non-major achievements include implementation Commission, where he marketed the procurement bid opportunities. of Scratch ticket automation in the early state as a location for feature films and ‘90s - one of the first states in the industry. commercial productions. Earlier he worked Additionally, Andy serves as Chief Informa- An Information Technology focus was at Cunningham & Walsh Advertising in tion Systems Officer and is responsible for key to the successful launch of many early San Francisco as shipboard editor aboard planning and directing the corporation’s Scratch games with merchandise and the Royal Viking Sky and Star cruise ships. information systems activities, including cross promotions, negotiated directly with operational oversight of the gaming Mr. Gonder has helped introduce many Hasbro, PepsiCo, Maritz and others. systems’ operations, electronic drawing Lottery innovations, including founding systems and operations, in-house data In 2007, Ms. Schroeder managed the the Missouri Alliance to Curb Problem processing, local and wide-area networking conversion of all Idaho Lottery system Gambling (an industry first), which and telecommunications, and software functionality to new-to-the-US-market- combined public, private and non-profit planning and testing. place gaming system vendor, Intralot, and organizations and their resources to address she recently did it all again in 2017 with a education, prevention and treatment of Mr. Davis’ professional experience spans new multimillion dollar Gaming System problem gamblers in Missouri. Gary more than 30 years in the auditing, contract, featuring all new servers, data co-produced more than 300 episodes accounting and information systems areas. migration and a statewide upgrade of all of a weekly, award-winning 30-minute He has 24 years of lottery experience, retail equipment. “Fun & Fortune” Game Show; converted serving 14 years with the Tennessee the Lottery’s mechanical draw system to Ms. Schroeder directed technologies used Education Lottery Corporation, and 10 computerized draws; and introduced the for the 2009 Special Olympic World Winter years with the Georgia Lottery Corpora- first My Lottery player’s loyalty program Games Scratch ticket, a North American tion. During his tenure in Georgia, he and mobile app. served in varying senior management first, where winners donated portions of capacities, including Senior Vice President their winnings to benefit these Games from Gary has served on numerous industry of Finance and Information Systems, Senior the retailer terminal. Seeing an opportunity panels and committees, including the Vice President of Operations/Management a year ago for both a cost saving benefit for MUSL Powerball Automated Draws and Information Systems, Vice President of the State of Idaho and more streamlined Game Show Evaluation committees, and Finance and Vice President of Internal workflow and team interaction, Becky led a the Product Development subcommittee, headquarter lease renegotiation and directed as well as NASPL’s Continuing Education Controls.

Continued on page 38 Continued on page 38 Continued on page 32

10 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 11 Women in Leadership Roles Generate Strategic Business Benefits perspective, build social capital, navigate Rebecca Hargrove organizational politics more strategically, Chief Executive Officer, and acquire the confidence to speak up Tennessee Education Lottery Corp. when it matters most. Senior Vice President, World Lottery Association (WLA) Another interesting benefit generated by women executives is enhanced organization- Chair of Corporate Social Responsibility Committee, WLA al performance on measures of Corporate Social Responsibility. CSR can represent Chair of Women’s Initiative in Lottery Leadership (WILL) numerous organizational behaviors, including actions on human rights, ecology, anti-corruption, legal and regulatory com- pliance, cultural and ethical accountability, he evidence is piling up: busi- and broad-based philanthropy. nesses that have women in senior Researchers at Harvard Business School found leadership roles are outperforming that having gender-inclusive leadership can Tpeer organizations on such important influence the level of philanthropic investment dimensions as profitability, Corporate that corporations make in CSR. Gender- Social Responsibility (CSR), and individual inclusive leadership also affects the quality of growth and development. CSR initiatives. By spotlighting gender issues Researchers with McKinsey & Co., the in their CSR strategies, leaders position their Harvard Business School, and the global organizations for sustained growth, and the executive search firm Heidrick & Struggles benefits extend beyond the company to the have discovered connections between superior communities in which they operate. organizational performance and the numbers Margie Warrell, author of Make Your Mark of women and minorities in leadership and Ambassador for Women in Global positions. These studies affirm the axiom The comparative lack of formal mentoring Business, says women who seek a mentor that promoting women and minorities into programs represents a great impediment. should: executive positions is not simply the “right Only about one-fourth of survey respon- thing to do,” it is also the best thing to do. dents said their organizations offer formal • Identify an ideal mentor. mentoring programs. In early 2018, McKinsey & Co. found that • Establish clear expectations for organizations in the top quartile for ethnic The worldwide financial consulting firm the relationship. and cultural diversity on their executive KMPG has identified seven strategic • Include men in their mentoring network. teams were 33 percent more likely to business benefits that derive from applying • Deliver value in return – doing what experience above-average profitability than a formal process to the goal of creating they can to support their mentor. companies in the bottom quartile. Ad- mentoring relationships: ditionally, for those organizations in the top As we approach the quarter point of the quartile for gender diversity, there was a 21 1. Developing new leaders 21st century, businesses are striving to percent likelihood of superior performance. evolve their practices to sustain growth. One researcher said the benefits can be at- 2. Retaining your best talent Today’s levels of performance won’t cut it— tributed to the fact that cultural and gender we all need to stretch to find new and better 3. Increasing diversity diversity can help firms make better decisions ways to improve. There is one undeniably and decrease the chance of making errors. 4. Improving employee satisfaction successful approach to carry forward: hire, train, mentor, and promote women into One important way to increase diversity 5. Transmitting corporate culture senior leadership roles so they can make in leadership roles is to improve mentoring their unique mark for the benefit of all. opportunities for women and minorities. 6. Recruiting new talent According to research conducted by Heidrick 7. With this in mind, we recently launched & Struggles, three in four survey respon- Producing “deep sensors” our own Lottery industry program to (listening capabilities to assess dents said their most impactful mentoring promote mentorship for women, which we the mood of the organization) relationship was important to their career call Women’s Initiative in Lottery Leader- development. But with the existing gender Mentorship programs help women build ship (WILL). With more involvement from and cultural disparities in leadership, it may networks, develop negotiating skills, industry leaders, the program will continue be problematic to find appropriate mentors. and learn to appropriately and effectively to develop to its full potential. So please Sixty-one percent of mentors surveyed were promote their talents and experiences. visit womeninlotteryleadership.com to learn men and 39 percent were women. Female proteges also can broaden their more and get involved.

12 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 PUBLIC GAMING INTERVIEWS

Gerry Aubin Director, Rhode Island Lottery A Diverse Set of Stakeholders Work Together to Produce Stability, Sustainability, and Growth

PGRI Introduction: In November of 1973, a constitutional During Gerry’s tenure as Director, the amendment was passed in Rhode Island Rhode Island Lottery has progressed from to allow lotteries to be operated by the offering five instant games a year to more State. The Rhode Island Lottery was than fifty. In addition to overseeing the established by legislation passed in March increase in the number of monitor and of 1974 with the first lottery ticket sold on-line game offerings, Rhode Island’s Paul Jason: in May of that same year. In an effort Video Lottery program has grown, with Rhode Island implemented the first to offset the declining attendance at the number of VLTs increasing by more Racino model almost twenty-six the State’s two pari-mutuel facilities, than 3,500 since he became Director. years ago. Was it a disadvantage to one dog-racing track, and one jai alai Upon becoming Director, Gerry developed be the first? fronton, legislation was passed in June a new model for the License Agreements Gerry Aubin: of 1992 to allow VLTs to be installed to with VLT Technology Providers, which Being the first meant that attract more players. In September of has since been copied and implemented there were no existing operations or set 1992, under the operational control of by many other States. of best-practices to model after. But in many ways, there is an advantage to the Lottery, 1,292 VLTs were installed being first-to-market. Think about all the and thus were born the first “Racinos” The sound practices employed by the Rhode moving parts involved in putting VLTs into in the U.S. Island Lottery earned consistent recogni- tion by the Government Finance Officers gaming facilities like horse-racing, dog- Gerry Aubin is the third Director to Association of the United States and racing, jai alai, etc. With no precedents to lead the Rhode Island Lottery, appointed Canada for achieving the highest standards predetermine our course, we perhaps had to the position in May 1996. Prior to in government accounting and financial more flexibility to clarify the objectives and overseeing the State’s Lottery, Gerry reporting. In doing so, the Rhode Island the pathways to achieve them. The terms served 21 years as a police officer for Lottery became the first State agency in and conditions that we determined were the City of Providence, Rhode Island, Rhode Island to receive the Comprehensive most favorable to the State were basically accepted because there weren’t competing retiring as Deputy Chief of Police, and Annual Financial Report (CAFR) Award models. The methods of implementation then served as the Director of the Rhode and has been successful in receiving this and operation were not subject to as much Island Municipal Police Academy. award for twenty-one consecutive years. debate because there weren’t other examples Under Gerry’s leadership as the Rhode Gerry has also served as Chair of to represent alternatives. One result is Island Lottery Director, revenues PowerBall® Group, president of the that the percentage of revenues that we increased more than fivefold, growing Multi-State Lottery Association (MUSL), turned over to the State was higher than is from $455 million to $3.7 billion, president of the National Association of typical today. And the Racino model was and net transfers to the State’s General State and Provincial Lotteries (NASPL), a life-saver for the State’s dog racing and jai Fund increased from $90.4 million to Chair of the Development Committee alai facilities so they were happy to accept whatever plans we thought worked best. $362.7 million. (MUSL) and currently serves as Chair of the Security Committee (NASPL). Continued on page 31

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Sarah Taylor Executive Director, Hoosier Lottery (Indiana) Modernizing the field of Research and Development our business, which in itself is valuable. PGRI Introduction: I envision an interactive dialogue that It wasn’t too many years ago when transforms the relationship between Lottery the field of R & D was straightfor- and consumer. Instead of buyers and sellers ward. You determine how and why of products, we become a highly dynamic the consumer behaves the way they and inter-networked family that shares ideas and aspirations, disagrees about things do, their likes and dislikes, and try and talks about it and maybe even “hugs to build products and marketing it out” in the virtual world … we function strategies that appeal to your like a family or a team or social network audience. The cost of failure was How has the business of which establishes shared interests and extremely high. Extensive testing Research and Development goals and are constantly working together and research was conducted to ensure changed over the last three years? to achieve those goals. Of course, one of that the massive costs of producing Sarah Taylor: While we continue to use those goals will always include optimizing the entertainment value and accessibility of TV and other traditional media traditional research methods to gain insights the Hoosier Lottery’s games. The highly campaigns was effective. The time into the business, we are also evolving our methods to better connect with players structured way we go about trying to it took to launch a new game with and potential players. Online is the most understand our players’ likes and dislikes this traditional marketing fanfare, effective platform to reach large numbers will evolve to be more fluid and flexible and and then measure market response, of consumers. It’s not expensive for us, and be redefined to unlock new dialogue threads made it imperative that everything it’s easy for the players to respond online. and open-ended avenues for communication be done to ensure the game itself was And it is invaluable to us because we get and will deepen the bond of our relationship optimized before launch. incredible feedback on a wide range of topics with the player. This will be key to building that help guide the direction of the lottery. the sustainable business of the future. Digital hasn’t changed the need for An example of how these new tools enable Are off-line surveys and deliberate and thoughtful planning new methods for research is our online focus groups still used? panel of engaged players, “Hoosier Lottery to minimize unprofitable allocation Sarah Taylor: We still use traditional off-line Insiders.” We reach out to this group once of resources. But it has blown up the focus groups about once every 18 months every 4-6 weeks with questions related to old model and replaced it with new to pulse-check upcoming product ideas. In our business, from product development to person focus groups can be tricky; you don’t tools that transform the connection responsible gaming to marketing ideas. I want a strong personality to lead to “group that Lottery has with its customers. think this is the tip of the iceberg as to the think” and so we’re really careful to use these The following interview is a follow-up potential for this kind of online engagement groups as directional support for our ideas. to a fabulous presentation made of players to impact the whole field of R & But they do provide us the opportunity to D. Digital channels are opening up entirely by Sarah Taylor to an audience of capture emotional nuances, reactions and new vistas for interacting with players. lottery professionals at the EL/WLA key drivers that can get lost in an online Marketing Seminar in London. I am especially excited about the potential survey. Most recently, we used focus groups for developing highly interactive relation- to help us clarify opportunities to turn ships with our players. Not just questions that elicit feedback that helps guide Continued on page 46

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May Scheve Reardon

Executive Director, Missouri Lottery Chair of the Government Relations Committee, NASPL Why Sports-Betting Matters to ALL State Lotteries he Supreme Court has now heard betting? The benefits to Good Causes piece of the picture that has not been given the arguments for and against the supported by Lottery would be huge. adequate attention. constitutionality of PASPA (Profes- n How will the explosion of sports- Tsional and Amateur Sports Protection Act For those who are authorized to offer sports- betting onto the games-of-chance market- of 1992) and the federal prohibition of betting, there is quite the steep learning curve. place impact the industry in general and sports-betting. They are deciding the role Thankfully, there is a wealth of best-practices individual lotteries? This question applies that the federal government should, and to draw upon. And our primary vendor to everyone, whether your Lottery is should not, play in the formulation and partners all have deep experience in the authorized to offer sports-betting or not. execution of regulatory policy as it applies business of sports-betting. The resources to guide us are there, the blueprints for success to sports-betting. Of course, the role the n What is the strategically effective course in sports-betting are well-known, and our federal government plays in all other forms to set for lotteries to drive sustainable growth commercial partners can help us get there. of gambling is that all games-of-chance in traditional games, in light of a games-of- are illegal according to federal law until chance industry re-shaped by sports-betting? But whether we are in the sports-betting and unless it is regulated by the state. That business or not, the community of lottery leaves it up to the states to decide whether It is likely that many U.S. lotteries will not operators needs to understand the implications and how to regulate games-of-chance – ALL be granted the right to offer sports-betting. of the potential impacts to our businesses. games-of-chance except sports-betting. This is unfortunate. Globally more than 70 We need to make it our business to under- Adding to this peculiar circumstance is that percent of government lotteries offer sports- stand the legal and regulatory issues involved, PASPA made an exception of four states, betting. Sports-betting is a tremendous how we might liaise with our political allowing four states to offer sports-betting source of funding for Good Causes all constituents on this topic, and how we might and prohibiting the other 46 states from around the world. Perhaps just as important, strategically guide our businesses during this regulating sports-betting. This is a most sports-betting is the gateway to the next time of change. Legalization of sports-betting curious situation that some think will be generation of consumers. The 20-some- will re-shape the entire games-of-chance rationalized with the Supreme Court ruling, things who are into sports-betting today industry, and we need to prepare for that. which is expected sometime before June. are going to grow into the mature lifestyle that is more receptive to lottery games. For those who may not be authorized to The underground sports-betting market Just like other young adults, sports-betters operate sports-betting directly, maybe there in the U.S. is estimated to exceed $150 eventually find they have less time to indulge will be a pathway towards partnering with billion. Many think it is much higher than in time-consuming activities, like sports- those who are operating sports-betting. that, which makes it more than twice the betting, and become prospects for migrating Lotteries have one of the most valuable and size of the traditional lottery business. And over to lottery games. It is important for proprietary assets in the industry. As an the amount wagered legally is less than 5 lotteries to do what they can to influence our industry, we should think about creative percent of what is wagered illegally. So, political constituents to look favorably on the ways to leverage our massive retail network a Supreme Court decision that opens the lottery as the agent to offer sports-betting. into new revenue-generating services. door to legalizing and regulating a $150 Providing a lottery’s network of consumer billion-plus market would transform the One reason why our state policy- touch-points for sports-betting operators games-of-chance industry. That poses three makers should look favorably on lotteries is may be one of those services. big questions for operators of state lotteries. their excellent track records for balancing the need to meet the demand for recreational None us knows exactly how all of this will n What can be done to influence gaming with the need to minimize social unfold. It’s not too soon, though, to sort out the Lottery’s political constituents to grant costs and problem gambling. In fact, issues and prepare our own game plans for how the state Lottery the right to offer sports- Responsible Gaming in sports-betting is a big to win in the games-of-chance marketplace.

18 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 19 PUBLIC GAMING INTERVIEWS

Gregory Smith

Executive Director, Illinois Lottery Onward and Upward: A New Era Begins at the Illinois Lottery Paul Jason: the partnership between the State and that require reference to who does the work With all the changes taking place at the new manager – Camelot Illinois. No and who is a party to the decision making. the Illinois Lottery now, and in the near guarantees for performance exist but we The gaming systems are not all designed future, it may be helpful to begin with a will work to create a smooth path, and see the same by the various gaming vendors, description of the current state of affairs. if they can successfully execute their plan. but they have strongly similar output. We Greg Smith: Northstar’s tenure as private We have had essentially flat sales for four spent significant time on drafting and manager ended on January 1, 2018. straight years, so all parties believe that reviewing specification documents used The termination agreement reached in good potential for growth exists. on system and process development. We September, 2015 was extended through to needed to replicate what existed as best that date to allow for the completion of possible and allow for potential modifica- the procurement process for a replacement tion in the future. Just like with the manager. Camelot Illinois began their contract negotiations, putting the time in tenure as private manager on Jan 2, 2018 up front should create better alignment and after reaching agreement with the State more clear understanding of execution and for their private management contract. performance by all parties – Lottery staff, Northstar’s primary subcontractors for Manager staff and subcontractors. the gaming system and iLottery platform We all know the thought that exists (IGT), and instant ticket printing (SGI), among lotteries – don’t be the first to do remain in place until the transition to something. Let another state blaze the Camelot’s primary subcontractors can be trail and learn from their missteps. Illinois completed (estimate by the end of 2018). was the first to try private management, Camelot’s primary subcontractors are and now the first to change managers. We Changing from one private manager to Intralot (gaming system), Camelot Global have looked at how NJ and IN approached another is something that no Lottery (iLottery platform), and SGI (instant private management, but also know that ticket printing). has ever done before. Are there some state statutes and collective bargaining learning lessons that might be of interest After a couple years of uncertainty, it agreements may not allow for adjustments to your colleagues, things that might seems like the Illinois Lottery has an to be made. We have learned a lot from the apply to broader issues of governance action-plan going forward. What are issues that arose over the past six years and that apply to all lotteries? some of the component parts and next seek to avoid repeating them. Ideally, our G. Smith: steps you will take to set a positive For starters, try to avoid changing agreement and partnership with Camelot private managers, gaming vendors, and course for growth and prosperity for the Illinois will enable that to occur. The developing a new i-lottery platform over a beneficiaries of the Illinois Lottery? private management approach is quite 15-month period. They are intense projects, different than State run models, and the G. Smith: We do not want the experience and it is an incredibly heavy lift for the transitions are complicated. Focusing on with our first private manager to define Lottery staff while simultaneously doing this work is important but we also had to the private management approach going their regular work. make sure Lottery customers and retailers forward. We now have more realistic were attended to. After stepping up in revenue and profit projections in place, a Setting clearly established roles and respon- stronger and more detailed contract, and sibilities of all parties is critical. While this aligned incentives that should strengthen seems incredibly basic, issues arise weekly Continued on page 32

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PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 21 Connecting with Millennials: Why the future business model of lotteries depends on standing for more than just winning Jon Duschinsky Founder and Chief Executive Officer, The Conversation Farm And Driver of Human, Social, Environmental and Financial Profit jonduschinsky.net

very night at bedtime, I settle down next to my kids and read them a Me, Me, Me has been replaced by MeToo. bedtime story. Together, we take a Ejourney together to worlds of adventure, “ It is not about me. It is about us. or fantasy, with naughty children and ghoulish characters, or small houses on ” And so have lotteries. These different behaviours and experiences prairies. include taking longer to marry, a greater You’ve been asking people to stand with But why do we do this? Why do we attach focus on health and wellness and a natural you by buying lottery tickets. such importance to the ability to disappear affinity to the digital world, which shapes down the rabbit hole? But what is it that you stand for? how they communicate and make purchas- ing decisions. It also includes lower wages Stories offer a unique moment of connec- The answer is simple: getting rich. than at any time in the last 50 years and tion between us. They give us the chance to unprecedented levels of debt. become absorbed in worlds with no bound- And this has been a remarkably effective aries and dream about what might be. thing to stand for: in 2015, lotteries in And these factors all contribute to a Europe generated combined income of fundamental shift in values. And so as children, we can learn about life $86.4bn. To put that number in some through the (often exaggerated) characters context, it is more than the GDP of Kenya, Millenials are choosing to leave the Me, in the books we are read by our loved Luxembourg or Tunisia. Me, Me world, with its trappings of wealth ones. We can explore our own personali- and ownership behind. They know that ties through the eyes of the characters we But herein lies the problem. for most of them, owning a house is out of reach, so they are happy to rent and be journey with, and we can develop and The average lottery player in Ontario, mobile. With the advent of ride-sharing, hone what is arguably the most important Canada is 50 years old and only a paltry they don’t need their own car (only 30% human skill of all – the ability to empathise 20% of those who play are under 35. with others – through the safety of the consider car ownership a priority). Their en- imagination. Rich is a pitch that works for baby boomers, tertainment comes not from racks of CDs and to a lesser extent Gen Xers (who are and DVDs but from streaming services, Empathy (or the awareness of the feelings now in their forties and early fifties), but it paid for by monthly subscriptions. And and emotions of other people) is where doesn’t resonate with Millennials. anyone who has tried to retain millennial our reptilian instincts of childhood meet talent will affirm that they care more about modern day emotional intelligence. It is The Millennial generation (those born making a difference than building a firm’s how we work out what others stand for and between 1980 and 2000) is the largest bottom line. whether we want to stand with them, and generation pool in US history. According as such is as important to a six year old as it to Goldman Sachs, “they have come of Me, Me, Me has been replaced by MeToo. is to a sixty year old. age during a time of technological change, And lotteries haven’t kept up. What globalization and economic disruption and lotteries stand for is yesterday’s dream. The professions of marketing and advertis- have a different set of behaviors and experi- ing have been built on this simple insight: ences than their parents”. build empathy and people will take action. Continued on page 38

22 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 23 PUBLIC GAMING INTERVIEWS

Antonios Kerastaris

Chief Executive Officer, INTRALOT Group The Holistic Player Experience

Paul Jason: presenting the ideas conceived in the lab PGRI Introduction: Your booth seems to be arranged to for consumers to express their opinions. highlite the way different devices, More games, more ways to We are now equipped with a wealth of access the games … increasing channels, and media work together to make it easier to navigate all the solutions that are based on technology, consumer options is good. different gaming categories. new ideas for how to improve products and methods of delivery that the consumer Increased complexity, not so Antonios Kerastaris: Digital Technol- can’t even imagine. Product development ogy has dramatically changed not only good. How do we reconcile the is now driven by these technology-enabled consumer habits but also the business solutions instead of being driven by consumer appetite for more model in many industries. In Lotteries consumer surveys and focus groups. options, more interesting game the application of technology makes the content, more access-points … product more visible, more appealing, and That’s why there are lots of technological with the desire for ease of use, more accessible to the consumer. It also innovations in your booth (here at ICE allows the gathering of information and Gaming Show in London) that are not in familiarity, and comfortable affects the way the consumer experiences the market-place yet? player experience? the products and play in general. A. Kerastaris: Exactly. We are presenting a new world of technology-enabled products Our discussion with and solutions which are now being subjected Mr. Kerastaris (at the to testing by the real-world market-place INTRALOT booth at ICE where consumers reside and decide. Totally Gaming) explores At INTRALOT we have designed the INTRALOT’s solution to next generation of products introducing In the pre-digital era product-development broader technological developments that this conundrum. teams used to survey consumers to try address efficiency and customization issues to discern what the players want. Then through modular, scalable, and parametri- product-development would propose ideas cal technologies that offer flexibility and to technologists and manufacturing for fast go-to-market, reduced costs, and no how to create products that appeal to the compromises in reliability and security. players. The problem is that the desires and guidance expressed by consumers Of course, in the end it is the consumer is limited to what they can imagine. who decides what works and what doesn’t, In the digital era new possibilities arise what is relevant and appeals to them and in such fast pace that ideas conceived what doesn’t. We just have to show it to and solutions developed by engineers, them to understand it. Then we must scientists, and technologists can’t even be apply systematic testing of new technology- imagined by consumers. Focus groups enabled solutions to discern consumer and surveys are not helpful without preferences.

24 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 This is the way to build economies of scale through reliable technologies and business Our goal is to make it easy to migrate among practices based on these technologies, either driven by sophisticated data analytics “ different gaming categories and to create a models or thin-client solutions. seamless player journey from mobile to desk-top But it is crucial to integrate field experi- ence in order to deliver a product that to self-serve play-station to retail POS. will be appealing to the consumer. With additional guidance from the market-place, ” we fine-tune the solutions so that they earn broad consumer acceptance. We are and ways to access those options. There journey that maximizes options and access showing what is technologically possible, is innovation in many of the products to content while minimizing complexity hoping to stimulate the imagination of the themselves. But the thing we are most and confusion. The protocols, commands, consumer to think about what would be enthusiastic about is the way we convert a and visuals should create a singular holistic amazing to actually have. We need to show complex variety of games and access-points environment that is comfortable to dwell in the consumer what is possible and then into a user-friendly player experience that and makes the entire experience intuitive. at the end of the day creates familiarity and analyze their response. Of course, closing The player can focus on the enjoyment the loop and clarifying what is relevant to comfort for the player. Even though tech- nology enables the solutions, the measure of of the game instead of the manner and the consumer is the most crucial step of the methods of navigating a complex system. whole process. success is how it enhances the overall player experience and how it creates efficiencies for A. Kerastaris: The consumer wants lots What are some examples of new the operator. Our goal is to make it easy to of different things, some of which can be technology that is stimulating new ideas? migrate among different gaming categories contradictory. Delivering the experience A. Kerastaris: The defining characteristic of and to create a seamless player journey that meets these different needs is where our approach is integration. What you see from mobile to desk-top to self-serve technology-enabled innovation really takes in our booth is a holistic approach towards play-station to retail POS. The distinctions over. As you point out, reconciling these creating a games-of-chance environment between product, content, distribution, and different consumer impulses makes it easy that enables the consumer to easily navigate access-devices should be invisible to the for the player to enjoy the games, to focus through a rich portfolio of gaming options consumer. It is all one seamless customer on and embrace the playing experience in

INTRALOT iconic pavilion at ICE Totally Gaming Show in London

PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 25 actions. Whether we produce something Are you hoping that lotteries in the ourselves or we get it from a supplier and U.S. will be authorized to offer integrate it, producing a better product or sports-betting in the near future? gaming experience or interactive channel or A. Kerastaris: Of course I do hope so and anything we do – in the end, it’s all decided to date we are closer to this possibility than by the player. We need to understand we were a year ago. It would be a great new how the parts work together. But in the product category for Lottery. INTRALOT end, whether it is a new game, a new POS is uniquely positioned to help our customers strategy, a new terminal, a new interactive launch it quickly and with minimal costs initiative – the player decides what works. because sports-betting can be added to the And unlike product development and those same central system and delivered with the of us in the business of creating great player same terminals that are used for Lottery. It experiences, the player does not deconstruct would be a massive addition with very little products and experiences into component cost or effort. Through the kind of technol- parts. We need to realize that the whole ogy we’ve been discussing here it would is not equal to the sum of the parts. be a matter of weeks for us to be able to Understanding the component parts may offer reliable betting products and services provide little insight into the overall holistic through a Lottery retail network in the US experience. That is why we need to fully with practically no additional Capex. understand the playing experience from the player point of view. Sports betting is perceived as lower margin product than Lottery. How But the player experience in would you go about that? sports-betting is so much different A. Kerastaris: from that of the Lottery. It is a lower margin but it is not low. The main difference is that in A. Kerastaris: The game maybe different sports betting there is the element of proper but the fundamental approach of the risk management. The payout will vary sports betting platform and infrastructure based on the quality of the odds, while can be exactly the same as in Lottery in in Lottery it is pretty much fixed payout. terms of the customer experience. It is a That’s a big difference that requires the different game, a different demographic proper trading experience and toolkit. Antonios Kerastaris group, but the way we think about the customer journey, our relationship with Congratulations for the appointment a holistic way. That makes the games more the retailer, the ways to optimize the POS to provide next generation technology exciting, and the variety of games to choose and messaging to produce a positive player to the Illinois Lottery. Are there from becomes attractive to the player experience … we are dealing with the same differences between this partnership and instead of an obstacle to enjoying issues for all gaming categories. In both other commercial partnerships the playing. cases, the platform must support positive that INTRALOT has in the U.S.? messaging that resonates with the consumer This has implications for the retailer and A. Kerastaris: We are very excited to have from the moment they approach the store. lottery operator as well. The holistic the opportunity to work with Camelot in The navigational properties must provide system that integrates seamless navigational Illinois. There is tremendous upside and familiar visuals and protocols throughout properties right into the player experience we look forward to achieving that together the entire player journey. makes everything more efficient from an with the Camelot Group and the Illinois operational point of view. New games can Retailer motivations and priorities do, Lottery. We have a lot of ideas on how to be launched, distributed, and integrated however, differ with product categories. grow sales and we already have established a into the portfolio with much less training Lottery can make up a relatively small very good chemistry and common thinking and lower costs. portion of retailers’ sales in non-exclusive with both the Lottery and Camelot. With Camelot we’ve had enormous success Corporate enterprises have always stores. They sell other products and the ability of Lottery to bring people into the working together in Ireland already. I been organized by functional disciplines. store to buy those other products goes into am also excited for this opportunity to Nobody is an expert in everything, so the calculus of the retailers’ assessment demonstrate that the Private Management people specialize. You have operations, of Lottery’s ability to drive profits. It’s model can work, and should be considered finance, manufacturing, marketing, important for us to realize that and leverage by others who are looking for innovative product development, etc. But with it to enlist greater retailer dedication to ways to optimize performance for Lottery. integration and creating a holistic Lottery. Sports-betting shops, on the other We’re very excited to have a chance to prove world … doesn’t that create a need hand, typically make 100% of their revenue that we can do a great job in Illinois. for somebody to have the broad from sports-betting. That’s why the overview? How does integration combination of margins and turnover must happen when everybody is specialized? yield more than the commissions made by A. Kerastaris: The unifying factor is the Lottery retailers. So the value these two player. We can all refer back to the player sectors seek from the gaming operator is as being the one who drives our focus and quite different.

26 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 PUBLIC GAMING INTERVIEWS

Tom Stanek

Senior Director of Global Retail Sales and Marketing, IGT From the conference room to the corner store: Turning lottery business intelligence into action at retail Paul Jason: behaviors, and values that offer the best PGRI Introduction: How would you describe opportunities for lotteries to connect with For all the focus on sophisticated your “global-to-local” mission? consumers. For example, in Poland, it’s data-driven models that drive Tom Stanek: We know that consumer expected that 23% of the population will be corporate strategy and operations, play-styles, behavior, and gaming cultures over 65 by 2030. The country’s Żabka con- how do large enterprises stay differ from market to market. Retailers and venience store chain adjusted its strategy to adapt to the changing consumer landscape connected to the real world of business methods also differ from region to region. These differences provide a rich as the population ages. Or, to take another consumers who walk into a corner canvas for learning that allows us to better example, in Nutter Fort, West Virginia, the store and decide whether to buy a help our lottery customers. IGT’s unique distribution systems need to ensure that lottery ticket? I put this question experience as a lottery operator around the retailers have enough product during the to a person who has spanned both world servicing hundreds of thousands of annual blackberry festival. The lotteries have worlds. For a decade, Tom Stanek retailers gives us a strong basis to understand the most intimate knowledge of their own worked for IGT in Texas, leading what works and what doesn’t. My mission marketplace, consumer, and gaming culture. a team of 230 sales and marketing for IGT is to analyze that information and We work closely with them to help integrate what they know to work in their local staff tasked with maximizing sales insight, and turn it into practical strategies that enhance retail execution and perfor- markets with the successful initiatives we’ve for the Texas Lottery. Now managing mance, ultimately driving revenue growth identified globally. This draws on all our IGT’s corporate Retail Sales & for lotteries and their beneficiaries. informational resources, combining IGT’s Execution Team, he combines that research and development, our wealth of feet-on-the street perspective with It’s a dynamic process. We apply our business intelligence, decades of operational experience combined with business intel- the mission to integrate business experience, and a database of performance ligence to create strategies that fit our metrics from markets all around the world. intelligence from a variety of sources customers’ unique circumstances. The to optimize retail execution for models are flexible and the approach is agile. What is an example of how your lotteries and their retail partners We identify the attributes that make each experience in a jurisdiction outside around the world. situation unique and work to maximize each the U.S. informed your approach to a retailer’s potential. challenge within the U.S.? How do markets, retailer business T. Stanek: A great example is in-lane cultures, and consumer shopping sales. It’s just getting started in the U.S., behaviors vary throughout the world? but European lottery operators have been T. Stanek: First, there are far more com- selling in-lane for well over a decade. That’s monalities than there are differences. But years of testing numerous point-of-sale we do need to be clear on the differences, (POS) approaches and merchandising because it’s the local culture, shopping methodologies to find the best ways to sell

28 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 lottery products in the in-lane environment. This has involved a lot of time-consuming Instead of reinventing the wheel on the in-lane and costly trial-and-error, field-testing, and analysis. While there are differ- “purchase process, U.S. operators can work with ences between European and American consumers and retailers, there are enough us to apply the methods established as best practices important similarities that we can apply what we’ve learned to minimize the costs in Europe, New Zealand, and other markets. and the learning curve for lotteries that are just starting on that journey. ” It’s imperative to make every step of the What are some of the things you saw in Lottery has tremendous untapped check-out process easy and convenient for the field in Texas that gave you insight capacity to help retailers drive store traffic, the consumer, and that applies just as much into consumer and retailer behavior, or increase dwell time, enhance the shopping to the U.S. markets as it does in Europe. the retailer priorities that don’t necessar- experience, and otherwise help retailers So how exactly do you do that? We know ily get talked about in the headquarters of achieve their broader business objectives. from our experience in Europe how to multi-billion-dollar corporations? Lottery is also somewhat unique for the integrate a lottery promotional POS into T. Stanek: Throughout the decade I was in role it plays in drawing consumers into the an in-lane process to optimize for speed Texas, I witnessed firsthand the struggles store. We want to help lotteries leverage this and convenience, and be player-agnostic to retailers had with the operational issues, ability to enlist retailer support and enhance other lottery draw game purchases. There inventory control, and accounting methods lottery’s brand profile within the store. are ways to merchandize the products for that are unique to the lottery industry. Amazon transformed the world of digital optimal overall shopping speed and conve- I think the industry can earn retailers’ commerce. How will Amazon’s entry into nience. And we can integrate interruption- enthusiastic commitment to selling lottery the world of land-based retail impact the points into the consumer’s pathway by addressing these concerns and helping lottery industry? that capture attention and appeal to the them be more successful without overload- T. Stanek: Retail and lottery are both at a lapsed and casual player without creating ing retailers with cumbersome solutions. crossroad right now. The move of an online inconvenience or inefficiency in the in-lane giant like Amazon into physical stores is purchase process. Instead of reinventing the Think about how the industry currently certainly a factor and a catalyst for change, wheel, U.S. operators can apply some of the supports multi-state retailers. Lotteries talk and I have an optimistic view on it. There’s best practices established in Europe, New to them through many different voices: an opportunity to evolve with the modern Zealand, and other markets. Might some Each has a corporate account director consumer, based on trends that point to a of them need to be tweaked for application who takes care of major accounts. Major bright future for land-based retail. in the U.S.? Of course, but what a fabulous multi-state retailers, though, don’t want 44 head-start. different key account managers. They want Not only is retail the channel that connects one. When Speedway is dealing with a lottery to its customers, retail is now When it comes to merchandising lottery, consumer packaged-goods (CPG) company, coming back as the preferred choice for communicating with the consumer, and they don’t work on a state-by-state basis. the next generation of consumers. In 2017, integrating the most effective POS into the They have one person or one support team worldwide retail sales actually increased by in-lane process, the devil is in the details. they can call. IGT wants to help lotteries more than 6%. And e-commerce represents We have a crystal-clear picture of how it’s handle this more like traditional CPG only 10% of total retail sales. It might seem done to maximize sales growth. We are companies, so that lottery operators and the like we’re buying everything online, but helping lottery customers do that right wider community of commercial partners the fact is that 90% of purchases are still out of the gate, with no wasted time or are using collaborative systems that enable happening in stores (Worldwide Retail and resources. more efficient service and support. Ecommerce Sales: eMarketer’s Estimates for 2016–2021, 2017). MarketingLand. com published a survey indicating that 65% of Gen Zers (born after 1995) prefer to conduct their shopping in-store. Compared to Millennials, this is a big shift toward retail. That’s why convenience stores are actually coming back. The number of physical store openings in 2017 was more than 50% greater than in 2016. That’s huge, and the implications are quite important for lottery. So, retail is the place to invest resources for optimal impact on lottery consumers. To be sure, it’s vital for lottery to develop an omnichannel relationship with players,

IGT’s Retail Sales & Execution Team works with lotteries carving out a presence in all consumer to drive growth in three focus areas, shown. touchpoints, and certainly including digital

PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 29 and mobile devices. But retail will continue a personalized in-store experience will service and a faster, easier, more convenient to be a major purchase point of lottery for trigger their desire to share that experience. shopping experience. New store layouts, the next generation of consumers. Retailer resources will shift over to having clerk-less stores, shared footprint models, clerks assist shoppers in other, more new ways that consumers are identified You mentioned that Gen Zers prefer meaningful ways, or maybe having staff and connected to their loyalty/member/ shopping at land-based retail stores. provide other social amenities or entertain- player-club digital accounts, new ways to But they probably don’t mean the ment value. process transactions, capture data, retain retail store of their parents’ generation, customers—all represent a massive change do they? We think about this as an opportunity for in retail. T. Stanek: Good point. The expectations lottery to create a new and different role of young people keep raising the bar for for itself. Instead of being a product to Lottery absolutely has the inside track, the merchants to transform the retail shopping purchase we want people to see it first and most favored status with its retail partners. experience. Change is being driven by the foremost as a game to play. We want to help But we have to re-earn it every day, and we consumer, and retailers are embracing the customers leverage that quality of lottery to will lose it if we don’t take a prominent role challenge to meet their needs. We think enhance the retail environment with a fun as part of the modernizing solution going of this as a tremendous opportunity for us and social game-playing experience. forward. We want to help lotteries partner with retailers and execute at the level of to deliver innovative solutions to improve What do you see as the biggest retail execution and ensure that lottery’s their expectations. This turns what used to opportunity in the industry? And what be a risk into an even bigger opportunity. brands are represented in the best way has surprised you most since coming possible. to corporate, responsible for global Are lotteries willing to make Now more than ever, retailers are more retail operations, instead of focusing these investments to modernize? receptive to new ideas on how to meet their on Texas alone? T. Stanek: The industry needs to continue customers’ needs. And lottery already has a T. Stanek: The global picture reveals how building a broad-based foundation of great relationship and great profile within consumer-facing solutions, like personaliza- stakeholders who work together to define a the retail environment. There has never tion and convenience, are transforming course of action, with clear plans for how to been a better time to share new ideas with retail operations. The challenge to optimize execute with project management discipline retailers about how lottery can better drive the shopping experience for each and every and timelines. We’re involved in solutions store traffic, provide entertainment value consumer has led to an explosion of creative such as standardizing and automating retail for customers, and add to their bottom line. solutions that appeal to more focused accounting practices, which would include That’s core to my team’s work. consumer profiles, narrower slices of the all lotteries in the nationwide marketplace as well as other suppliers and our retail partners. For lotteries, there will be up-front The challenge to optimize the shopping experience costs to modernize, but the long-term ROI is extremely positive, while the costs of not “for each customer has led to an explosion of investing are potentially fatal. Making the investment is the only way to stay relevant creative solutions. There’s a fabulous opportunity at retail, and the upside is truly exciting for for lottery to lead the charge to modernize POS the future of lottery and its beneficiaries. Retailers are not a homogeneous group. The and methods of operation. needs of large, multi-state retail operations are different from the independents. ” Corporate retailers are open to partnering In this climate, all the major CPG consumer market. The number of retailers with lotteries, particularly if lotteries can marketers are also jockeying for position. measuring patterns of customer behavior deliver competitive opportunities that help They would love to carve out a higher POS in brick-and-mortar stores is growing at an them drive foot traffic. Maybe a state does profile for themselves. To avoid losing unprecedented pace, and they’re drawing a lot of business with a certain retailer. ground, lottery needs to take the lead in closer to understanding and personalizing We can offer that retailer an exclusive transforming operations and the consumer the consumer experience, aligning to troves that opens the door to additional promo- shopping experience. of data available in the ecommerce world. tional materials—that’s something a lot If the resurgence of retail is driven by Of course, this phenomenon of fracturing of retailers will actually pay for if you give desire for social interaction among some the mass market of consumers into smaller them a solution. Then there will be different younger groups of consumers, then why and smaller target groups applies to all eyes and more eyes on the lottery brand. industries. For retail, it represents a fabulous the trend towards self-serve and the That’s just one example, and we’re working opportunity for lottery to be a part of the clerk-less store? along these lines to make sure that the solution, to be the change-agent that leads T. Stanek: The kind of social interac- partnerships continue to grow and that we’re the charge to modernize POS and methods tion they want doesn’t have to do with leveraging every avenue of the retailers’ com- of operation. processing transactions at a cash register. munication channels, which will continue to What they’re looking for is continuous The solutions are largely operations- and make lottery much more attractive than a lot social interaction among their network. execution-driven. It’s all about finding of other products out there. Simply experiencing a new product or more efficient ways to deliver personalized

30 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 Gerry Aubin continued from page 14

The Lottery has always worked well with the Governor’s Office and Legislature, with the common goal of maximizing revenue while maintaining the trust and best interest of the citizens of Rhode Island. We do that by adhering to the highest standards of security, integrity, responsible gaming, and other performance objectives. The Lottery does not own and manage the physical facilities. Where do the Lottery’s operational responsibilities begin and end? G. Aubin: Private interests own and manage the facilities. They maintain the physical environment that allows the State Lottery to install and operate VLTs. The Rhode Island Lottery controls all aspects of the games themselves. The facilities ownership side of the business may undergo disrup- tions as investors buy and sell their way into and out of the business. But the lines of Gerry Aubin responsibility are so clearly drawn that there deploy, and everything that has to do with that our partners are in the business to is never any confusion or dispute over who the games. We consider the recommenda- make a profit. Insofar as there are sensible is responsible for what. The facility owner/ tions of the technology providers on games actions that increase efficiencies, enhance managers provide the physical space and to be deployed, but we decide. The facilities the consumer experience and non-gaming restaurants and overall consumer experience managers have no control over the games. revenues for the facility, enable our – basically everything except the games. technology providers to reduce their costs, How do you determine It is clear what their obligations are, and etc. … as long as the expectations of the which games to lease? it is always in the interests of the private State of Rhode Island come first and are G. Aubin: partners to maintain and operate a well-run We don’t lease games from the always met, we want to do what we can to facility because the alternative to that is Technology Providers. We have a License help our partners succeed as well. costly penalties which they want to avoid. Agreement that allows the Providers to By law, the Lottery has the ability to impose install their VLTs, and they receive a We also respect the fact that the process an administrative penalty of up to $1,000 percentage of the Net Terminal Income. of needing approval from us can be a a day for any infraction. To date, we have That percentage is set by Statute and is more cumbersome process than it is in the not had to impose a fine, and I don’t foresee currently 7%. We provide a free market world of private casinos where proposals that ever happening, because our partners environment for the games to compete to innovate can be acted on quickly. We are all very responsive. When there is an with each other. Revenues taken in by appreciate all the efforts of our partners and issue, they fix it immediately. the game are used as the measure of player do our best to clear a path to innovate and engagement and performance. During modernize. Our partners and the Rhode We work closely with our partners - the the first quarter of each calendar year, we Island Lottery all want to maximize profits facility managers and the technology conduct an evaluation of all games. The for our respective stakeholders. Our goals providers - in a highly collaborative way. I under-performing games are removed are aligned in the sense that the way to believe that the establishment of clear lines and replaced with either new games or maximize profits for each of us is to work of responsibility and authority frees us up more of the top-performing games. We together and operate efficiently, effectively, to work in a spirit of mutual respect and may exercise discretion to keep an under- and deliver the best consumer experience cooperation. performing game if it is serving a strategic possible. Key to achieving the Lottery’s purpose, like meeting the needs of an and the State’s goals is for us to help our The Lottery has licensing agreements with under-served demographic which we are partners achieve their goals. technology companies to provide VLTs, trying to attract. But otherwise, it is all other gaming equipment and communica- How much flexibility do you have to adjust by-the-numbers. tions infrastructure, and the central system for changing market-place dynamics and provider. So, with the Lottery dealing We, the Lottery, as the operator tasked consumer tastes and preferences? directly with the VLT vendors and central with the responsibility for ensuring that G. Aubin: Having full operational control of system provider, there is no space between the games offered at the facilities, as well the gaming facilities, we establish our own the Lottery and direct control over all as the traditional Lottery games in Rhode rules and procedures to ensure that changes aspects of the games. The Lottery decides Island, meet the highest standards of are in the best interests of all stakeholders. what the payout percentages will be, the performance based on a variety of metrics That being said, it is also in the best interest kinds of promotions to run, the kinds that include social responsibility as well as of CRM and player engagement tools to financial targets. But we also appreciate Continued on page 48

PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 31 Gregory Smith continued from page 20 someone with the Lottery or the Manager is evaluating our portfolio of daily number and digging into the details and reporting back draw games. Camelot-IL will bring forward Northstar’s final months to ensure continu- to me. The questions that need answering their plans to improve sales in all channels, ity until Camelot was prepared, we need to during a transition of manager or gaming improve existing games or offer new games, step back and let Camelot to do their job. system are the same whether you have 20 – and work with retailers on best practices for Implementing a private management model 40 staff members or 200 – 400. product placement and POS use. That is clearly their responsibility. The Lottery will involves a lot of time, costs, and uncertain- Once we are done with the private manager ties? Is it worth the effort? Do you project work with the Administration and Legisla- transition I need to fade back a bit and let ture to provide a clear playing field on which that in three or five years, the answer to Camelot take full responsibility for their that will be “Yes, it was worth it”?? to perform. We will make progress on those assigned duties. While I might do things basics, and hopefully see results in growth G. Smith: Yes it takes a lot of time and differently, we need to let them run their in sales and profits for our beneficiaries. expense, and a fair amount of uncer- plan as long as it is not detrimental to the Personally, I think there is great potential tainty exists under all management models, Lottery or the State. here, and believe that Camelot-IL and their including the state run model and public subcontractors feel similarly. benefit corporation model. Private man- How has your management style and agement creates another layer of required strategic thinking changed since assuming And to wrap up? this role that involves liaising between a oversight as the State ultimately maintains G. Smith: The next 12-18 months for the IL control over all decisions. We all seek to gaming commission, a state legislature, Lottery, Camelot-IL and its subcontractors develop confidence and trust in our staff, governor’s office, the Illinois Lottery staff, will be packed full of meeting transi- and a private manager is no exception in this and the private manager? tion milestones, getting used to working regard. But the State cannot just say “… G. Smith: Certainly the Illinois Lottery, together, and limiting the impact on players only tell me the important items and move with private management, almost $3 billion and retailers. All stakeholders will benefit forward on everything you think is right.” in annual sales, and the political climate in if we can provide a smooth, consistent the State has required me to “up my game”. The change process for private managers playing field on which the plan can be Illinois has proven itself as progressive with executed. And, while doing all of this, we following below average or poor perfor- its lottery: first to offer special benefit mance gets implemented more slowly, must maintain and improve our responsible instant games for organizations like veterans gaming effort to protect those who need and that can be costly to the State in two and Special Olympics; first to use the private ways: (1) the expense of changing out a assistance. If we can do all of this we will management model; and first to sell lottery have a very good story to tell. full company, and (2) likely stagnation of draw games online in the U.S. Most U.S. sales and profits during the transition. In lotteries face competing agendas for growth my opinion, it is much easier to change in profits, responsible gaming, and address- Gary Gonder continued from page 10 leadership and direction under the other ing or responding to the goals of their State management models than with private Legislature and Administration. I firmly and Responsible Gaming committees. Mr. management. It is important to remember believe that a well thought-out strategy with Gonder has helped host several NASPL that there are a number of situations where clear explanations can succeed even with events in Missouri and has actively presented the Manager can choose to walk away from resistance from various factions. Probably at numerous NASPL, WLA, PGRI and the engagement – slower growth may not all of us working for lotteries and vendors La Fleur’s conferences on a wide variety of reward their investment sufficiently. are 75% identical in thought or approach topics, including Branding, the Customer I project that we will know the answer in to successfully operate a U.S. lottery. The Journey, Retailer Modernization, Winner 3-5 years, but do not know what the answer remaining 25% comes down to which levers Awareness, Crisis Communications, Re- will be. to hit, and in what order. If the industry is sponsible Gaming and Underage Prevention. growing and your lottery is not, you need Mr. Gonder hopes his legacy at the Missouri How does your role as director of the to re-evaluate your plan. I have found that Lottery will be having led employees and Illinois Lottery, with its private manager mixing input from vendors (industry point stakeholders to discover the power of living structure, differ from your role as director of view) with the State’s knowledge (boots the “why” in the Lottery’s purpose. of the Vermont Lottery, with its more on the ground) yields the best plan that can conventional model as a state agency? withstand most pressures and conflicts. Gary holds bachelor’s degrees in advertising G. Smith: They are barely comparable. I and photojournalism from the University Anything specific to describe as to have always held the notion that directors of of Missouri School of Journalism and a plans to expand into new games, smaller lotteries (like VT) have to be more Master of Public Administration from the new channels of distribution, other involved in greater detail than directors of University of Missouri College of Business larger lotteries, largely due to staff size. My kinds of action-plans to increase sales? and Public Administration. Mr. Gonder is experience in Vermont was critical to devel- G. Smith: After spending 2+ years terminat- a graduate of NASPL’s first Lottery Futures oping my knowledge base to achieve success ing Northstar, and then transitioning to College, the BC Lottery’s Erehwon Case in IL, especially during the private manager Camelot-Illinois and all of their subcon- Studies Program and is a NASPL Powers transition and the technical transition tractors, I would describe IL as behind Award recipient. (changing gaming vendor). I cannot afford in offering or successfully applying some to dip too low into details myself without industry basics like 2nd chance drawings becoming a bottleneck and slowing things & extended play online game offerings, down. That said, I do need to ensure that cross channel and game promotions, and

32 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 33 34 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 35 36 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 Andy Davis continued from page 10 In 2015, Andy received The North American Association of State and Provincial Lotteries (NASPL) Powers Award, given in recogni- tion for outstanding performance by a lottery or vendor employee. He received his Bachelor of Business Administration Degree with a major in Accounting from Mercer University’s School of Business in Macon, Georgia. He is a licensed Certified Public Accountant.

Becky Schroeder continued from page 10 the resulting tenant improvements, space reallocation and an entire remodel of Lottery offices in Boise. In 2013, Ms. Schroeder was honored to be nominated and selected as a Women and Children’s Alliance (WCA) sponsored Tribute to Women and Industry (TWIN) recipient. The Idaho Lottery Team is proud to be nimble enough to pursue cutting edge initia- tives, and brave enough to go for them! Becky is proud to be a part of that team. lands, nearly 20% of the population play the just next month. It will become a central Postcode lottery regularly, a very respectable hub for digital donations, bringing like- number for a non-state lottery. minded people, grass roots organisations and Jon Duschinsky continued from page 22 beneficiaries together to create change. Tomorrow’s dream is not about one person For a generation that needs to feel firmly getting rich - it is about strengthening connected to the world around them and Social change as we know it is about to be community. It is not about the McMansion their influence upon it, lotteries need to offer revolutionised, as technology disintermedi- and Swarovski encrusted swimming pool something more than a quick win. And part ates the non profit sector in the same way as it tiles - it is about the massive social and of the answer may come from technology. has done with hotels, airlines, taxis and more. environmental issues (overlaid with huge New, socially driven cryptocurrencies are The need for lotteries to stand for stronger amounts of personal debt) that our societies emerging that deploy fully transparent communities has never been stronger. are facing. It is not about me. It is about us. blockchain technology to enable funds to be transferred directly to those in need, with no The future is collective. And the opportunity And while the full impact of this transfor- risk of corruption, no fees and no technical is huge. mation hasn’t yet hit lottery bottom lines, requirements above those of the ubiquitous let’s not forget how quickly seismic shifts can What if playing the lottery was not about cellphone with a data connection. and do happen in today’s world (remember one’s own personal gain, but a way to leave a legacy in the community? What if lotteries Kodak, anyone?). Instead of sitting on your couch feeling helpless as you watch the desperation of began to seek out people who play because Lotteries can and should see the growing those living in Syria, imagine you could they know that their few seconds of dopamine power of millennials as an opportunity to safely and securely send $50 to a family hit is actually a by-product of a much more stand for something else. Something bigger. hiding in a basement in East Ghota, so they meaningful way of impact those in need? Some in the private sector have already can buy the food they need, and maybe even What if lotteries began to inspire people to started gently embracing this. a spot on a bus or taxi out of there at the be losers, rather than winners? next cease-fire. Supporting others through a The Postcode lotteries give 50% of their digital currency means we can not only give For at the end of the day, when we sit ticket price to charities, which is almost quickly and easily, but track how and when back with our children and open up the double what national lotteries in Europe those funds are used in real time. storybooks, we invite them to a world where give. But their key-differentiating factor everything is possible, and where the only is not that higher figure. Rather it is that Donations are already being made via true winners are those with the strength neighbourhoods win together. So Postcode bitcoin, litecoin and Ethereum, and the to recognise that we is more important lotteries stand for community and growing world’s first charitable giving cryptocur- than me. together. And they are expanding, with rency, Giftcoin – which enables an end-to- revenue growing every year. In the Nether- end transparent donation facility – launches

38 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 Let the Games Begin: Sports-Betting Leader Kambi Moves Into Virtual Sports Kambi’s agreement with Kambi has made a strategic investment in so operators can, among other options, gaming start-up Virtus Sports, an agreement incorporate their own branding, modify Virtus Sports enables Kambi which will enable Kambi to offer a high- game content and adjust pay out margins. to offer a high-quality and quality virtual sports product to its growing customer base. Founded in 2014 and with Kambi chief executive, Kristian Nylen, complementary virtual said: “Despite being in its early stages of sports betting product offices in Malta and the UK, privately-held Virtus Sports delivers betting opportuni- development, Virtus Sports has shown to operators ties across a wide range of virtual sports, an ability to produce high-quality and including football, horseracing, greyhounds engaging virtual sports games. The realistic sports-playing experience of and motor sport. As part of its invest- “Through this investment, not only will Virtual Sports is the next huge frontier for ment, Kambi will integrate Virtus Sports’ Kambi close a product gap by integrating the games-of-chance industry. First, technol- 3D virtual sports product into the Kambi the games into the Kambi Sportsbook, but ogy has gamified the whole category that Sportsbook platform, in turn making it we will also support Virtus Sports’ ongoing engage the sports-betting and gaming enthu- available to Kambi’s network of operators. product development and sales to the wider siast. It’s new, it’s exciting, and it is taking market,” he added. the industry by storm. Second, the format enables a variety of betting styles, including Virtus Games founder and CEO, Andrea the random-generate outcome of Lottery. Brecevich, commented: “We are delighted This is key for a game category that needs to the management team at Kambi has rec- reach new and younger demographic groups. ognised the potential of the Virtus Sports’ The twenty-something player-profile that business and the high-quality production of our games. We are very excited about our loves sports-betting is still the same profile Virtus Sports’ high-quality virtual sports games being made available to the Kambi that grows into the thirty-something that portfolio will complement Kambi’s current network and look forward to releasing ad- migrates to Lottery. Engaging a more diverse offering and provide its customers with ditional sports and other product enhance- player profile is the key to a sustainable further opportunities to engage with ments very soon.” future for Lottery, and that is the promise of players. Developed for online and retail Virtual Sports. Let the Games Begin! channels, the games are fully customisable Kambi Booth at ICE Totally Gaming Show in London

PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 39 Even if the PASPA is Struck Down, the Wire Act will still Prohibit Sports Bets from Crossing State Lines. Will this Prohibit Intrastate Online Sports Betting? As long as the federal Wire Act exists, however, state online and mobile sports By Mark Hichar, betting systems can operate only on an Mark Hichar is a Partner with the Hinckley Allen intrastate basis. This means that sports law firm and is the Chair of its Gaming Law Practice Group. Mark represents operators bettors will be required to initiate all online of casinos, internet gaming and fantasy sports and mobile bets from within a state in which contest operators, and providers of lottery and such sports betting is lawful, and their bets gaming systems, software, equipment and services. must be received, accepted and processed HinckleyAllen.com by an operator using servers and other equipment located within that same state.7 Because internet information packets and mobile transmissions generally travel via the most efficient route existing at the time of y the end of June, 2018, the U.S. transmission, unless a sports betting operator Supreme Court is expected to rule in uses a private closed-loop system (which is the case of Murphy v. NCAA, et al1 At impractical given its cost and inconvenience) theB core of the case is the Professional and it is possible that sports bets will travel across Amateur Sports Protection Act (“PASPA”),2 state lines on an intermediate basis before the federal law that makes it unlawful returning to the state where such bets were for states to operate, promote, license or initiated and later accepted. As discussed authorize sports betting, and also prohibits Several states around the country anticipate below, such intermediate routing of sports non-state operators from conducting sports PASPA being struck down and are preparing bets may violate the Wire Act. betting pursuant to state law. The key legal for that possibility. As this writing, five Whether the intermediate routing of sports question to be decided is whether PASPA states – Connecticut, Mississippi, New “commandeers” states to maintain state-law bets across state lines violates the Wire Act Jersey, New York and Pennsylvania – depends on the interpretation given the prohibitions on sports betting in violation of have passed laws that would authorize the 10th Amendment to the U.S. Constitu- Act by applicable law enforcement bodies, sports betting if PASPA is struck down and ultimately by the relevant courts. In tion (which reserves to the states or the or amended. Several other states have people the powers not given to the federal Nevada, for example, where intrastate sport betting laws pending before their mobile sports betting exists today, “wireless government). If the Court upholds PASPA, legislatures. Pennsylvania’s law5 expressly it still may rule in favor of New Jersey by phone transmissions . . . including those authorizes slot machine licensees to conduct used for mobile sports wagering — often holding that PASPA is not violated by New sports betting. It provides: Jersey’s 2014 law which repealed the State’s travel through routers in Arizona, California or Utah because of the network topology sports betting prohibitions, but only to the The [Pennsylvania Gambling Control 8 extent applicable to Atlantic City casinos Board (“PGCB”)] may authorize a slot and function.” There, the relevant enforce- and New Jersey horse racetracks.3 machine licensee to conduct sports ment bodies and regulators apparently do wagering and to operate a system of not take the position that the intermediate Even if PASPA is struck down completely, routing of sports bets across state lines 4 wagering associated with the conduct however, the Wire Act will remain intact of sports wagering at the slot machine constitutes a Wire Act violation. (There and unaffected. The Wire Act prohibits the licensee’s licensed facility, . . . or through are no reported court rulings on the issue transmission of sports bets, and informa- an Internet-based system. pertaining to Nevada’s intrastate sports tion assisting in the placing of sports bets, wagering.) across state or international borders, using The [PGCB] may authorize a sports the internet or other wire communication wagering certificate holder [i.e., a slot It is not clear that this would be the case facility. An exception exists for information machine licensee which obtains a sports in other jurisdictions, however. Indeed, assisting in the placing of sports bets if the wagering certificate] to conduct sports before the U.S. Department of Justice information is transmitted from, and is wagering and to operate a system of (“DOJ”) issued its 2011 Wire Act opinion received in, a state or foreign country in wagering associated with the conduct of (opining that the Wire Act applies only to which betting on the particular sporting sports wagering as a form of interactive sports betting), the DOJ took the position event is legal, but no exception exists for the gaming authorized by the Common- that betting of all types (not only sports bets or wagers themselves. wealth.6 betting) was covered by the Wire Act, and

40 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 “that the acceptance of wagers through the in the same state, but routed out of carry messages beginning and ending use of a wire communication facility by a the state, are “interstate” transmissions in the same state “no matter how many gambling business, . . . from individuals for purposes of the Wire Act and thus other States the electrical impulses, located either outside a state or within the unlawful if such transmissions make up carried by the wires, traversed,”14 but borders of the state (but where transmission a bet or wager.... rather was to prohibit certain interstate is routed outside of the state) would violate wire transmissions that began and federal law.”9 While the Unlawful Internet Although no reported case is directly ended in different states. The court Gaming Enforcement Act (the “UIGEA”)10 on point, the DOJ’s position is rejected this argument, stating that “the contains an express exception for intermedi- supported by case law. In Yaquinta v. intermediate crossing of a State line 13 ate routing, the Wire Act contains no such United States, at issue was whether the provides enough of a peg of interstate exception, and the UIGEA states that Wire Act applied to the use of a wire commerce to serve as a resting place for “[n]o provision of [the UIGEA] shall be transmission facility to carry information the congressional hat, if that will serve construed as altering, limiting, or extending assisting in wagering on horse races, the congressional purpose.”15 The court any Federal or State law . . . prohibiting, where the messages were initiated and thus held the Wire Act applicable to the permitting, or regulating gambling within ended in West Virginia, but were routed wire transmissions at issue. the United States.”11 through Ohio. All defendants knew that the transmissions traveled through Ohio. The 10th U.S. Circuit Court of Appeals Thus, there is a significant risk that courts In West Virginia at the time, pari-mutuel reached a similar conclusion in United 16 outside Nevada would hold the intermediate wagering on horse races at licensed States v. Kammersell. The defendant routing of sports bets across state lines to racetracks was lawful, but off-track was charged under 18 U.S.C. § 875(c), violate the Wire Act. In 2009, when the wagering on such races was not. which prohibits the transmission “in DOJ considered the Wire Act to apply to all interstate or foreign commerce [of] wagering (not only sports wagering), I wrote The defendants argued that the congres- any communication containing any on this issue as follows:12 sional intent expressed in the Wire Act threat to kidnap any person or any [T]he DOJ may still take the position was not to make criminal the use of an threat to injure the person of another,” that transmissions beginning and ending interstate wire transmission facility to and at issue was whether a threatening

PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 41 “instant message” between two points Oklahoma, Utah and Wyoming.) However, was only whether the wire transmissions in Utah, but routed through other it would be contrary to the purpose of the constituting the illegal conduct were in states, constituted a transmission “in Wire Act to use it to prohibit online sports interstate commerce so as to make appli- interstate or foreign commerce.” The bets transmitted between two points in the cable the federal statute. This is different 10th Circuit affirmed the lower court’s same state, and incidentally routed outside from a situation where the underlying holding that the transmission was in the state, where the state has expressly wagering is legal in the state in which interstate commerce, notwithstanding legalized online sports betting within its the wire transmissions begin and end. the fact that the transmission originated boundaries. It was true before the DOJ’s In such a situation, the conduct clearly and was received in the same state. The 2011 Wire Act opinion and remains true would be legal under applicable state law defendant’s threat “was unquestionably today, that: if it all occurred within the state—i.e., if transmitted over interstate telephone the wagering-related transmissions never lines,” and thus fell “within the literal There has been no reported case of crossed the state’s boundaries. To make scope of the statute and [gave] rise to enforcement of the Wire Act against such conduct illegal merely because the federal jurisdiction.”817 gaming operators transmitting wagers wagering transmissions, although sent or information assisting in the placing and received in the same state, were Yaquinta and Kammersell provide support of wagers, between points in the same routed outside it, would not serve the for the view that a gambling operator’s state, where the underlying wagering purpose of the Wire Act. As stated by wire transmission of sports bets between was expressly authorized by the laws of the court in Yaquinta, the purpose of points in the same state, but where the the state. This is not surprising, because the Wire Act is: transmission is intermediately routed out to do so would be contrary to the of the state, constitute interstate transmis- intended purpose of the Wire Act. to assist the various States . . . in the sions for purposes of the Wire Act. Courts enforcement of their laws pertaining today could come to that same conclusion, In Yaquinta, there was no question as to gambling, bookmaking, and like particularly those in the 10th Circuit, where to the culpability of the underlying offenses and to aid in the oppression Kammersell was decided. (The 10th Circuit conduct. The wagering at issue was of organized gambling activities includes Colorado, Kansas, New Mexico, illegal under West Virginia law. At issue by prohibiting the use of . . . wire

42 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 communication facilities which are Wire Act to prohibit intrastate wagering from David Marshall Nissman, United States Attorney, or will be used for the transmission (except for the routing of transmissions) District of the Virgin Islands, to Judge Eileen R. Petersen, Chair, Virgin Islands Casino Control Commission. of certain gambling information in expressly authorized by a state would 18 10 interstate...commerce. ... actually thwart that state’s laws, directly 31 U.S.C. §§ 5361 – 5367. 11 31 U.S.C. § 5361(b). Moreover, and more to the point, the contrary to the stated purpose of the 12 court stated: “[T]he objective of the Wire Act. The Wire Act should not be “The Wire Act Should Not be Used to Prohibit Internet Gambling Carried out Under the UIGEA [Wire] Act is not to assist in enforcing used toward such ends inconsistent with its intended purpose. 22 Intrastate Wagering Exception,” by Mark Hichar, Gam- the laws of the States through which ing Law Review and Economics, Vol. 13, No. 2 (2009), the electrical impulses traversing the pp. 112-113, https://www.researchgate.net/publica- telephone wires pass, but the laws of tion/247565503_The_Wire_Act_Should_Not_Be_ the State where the communication is Used_to_Prohibit_Internet_Gambling_Carried_Out_ 19 20 under_the_UIGEA_Intrastate_Wagering_Exception received. 1 Formerly, “Christie v. NCAA,” before Phil Murphy (last accessed February 8, 2018). succeeded Chris Christie as Governor of New Jersey on In addition, if the state through which 13 January 16, 2018. Christie v. NCAA, et al., 832 F.3d 204 F. Supp. 276 (N.D. W.Va. 1962). the transmissions were intermediately 389, 396-397 (3rd Cir. 2016), cert. granted, 2017 U.S. 14 Yaquinta, 204 F. Supp. at 277. routed attempted to prohibit such digital LEXIS 4279 (2017) and consolidated with New Jersey 15 Id. at 278. traffic through their state, even though it Thoroughbred Horsemen’s Association, Inc. v. NCAA, only traveled through the state and was et al., U.S. Sup. Ct. Nos. 16-476 and 16-477. Respon- 16 196 F.3d 1137, 1139 (10th Cir. 1999), cert. denied, not initiated, received or processed there, dents are the National Collegiate Athletic Association, 530 U.S. 1231, 120 S. Ct. 2664, 147 L. Ed. 2d 277 such action could violate the “Dormant the National Basketball Association, the National Foot- (2000). Commerce Clause” of the U.S. Constitu- ball League, the National Hockey League and Major 17 196 F.3d at 1139. League Baseball. tion, which bars states from discriminating 18 Yaquinta, 204 F. Supp. at 279 (quoting from U.S. 2 against interstate commerce and favoring 28 U.S.C. §§ 3701 – 3704. Attorney General Robert F. Kennedy’s letter to the in-state economic interests over out-of-state 3 N.J. 2014 P.L. c. 62, § 1. branches of Congress dated Apr. 6, 1961). economic interests. 4 18 U.S.C. §§ 1081, 1084. 19 Id. at 279. Subsequent cases have established that the Wire Act is violated by the knowing sending of interstate 5 2017 PA Act No. 72. In summary, a business that accepts online wire transmissions assisting in wagering, where the un- sports bets initiated and received in a state 6 Pa.C.S. § 13C11(a). derlying wagering, although legal in the state where the in which such betting is legal, but interme- 7 The Pennsylvania Gaming Law enacted in 2017 transmission is received, is illegal in the state from which diately routed through a state in which such provides: “Except as provided in this part [of the Law the transmissions are sent. See, for example, Martin v. betting is illegal, may be held to violate the relating to sports wagering], all individuals wagering United States, 389 F.2d 895 (5th Cir), cert. denied, 391 U.S. 919, 88 S. Ct. 1808 (1968). Wire Act, depending on the relevant court’s on sporting events through authorized sports wagering 20 interpretation of that law. However, this must be physically located within this Commonwealth Hichar, at p. 113. or within a state or jurisdiction with which the board 21 As noted above, the Yaquinta court determined that form of intrastate sports betting appears to has entered a sports wagering agreement.” Pa.C.S. § the out-of-state routing of communications beginning be happening in Nevada without challenge 13C11(a)(3)(i). from regulators or law enforcement, and and ending in the same state was sufficient to consider 8 See: Howard Stutz, Las Vegas Review-Journal May the communications “in interstate or foreign commerce” if a court were to hold that the Wire Act 20, 2015, at https://www.reviewjournal.com/business/ for purposes of the Wire Act, “if that will serve the prohibited such conduct, such would be casinos-gaming/analysis-net-gambling-bill-accidentally- congressional purpose.” Yaquinta, 204 F. Supp. at 278 contrary to the Wire Act’s stated purpose. criminalizes-some-nevada-sports-bets/ , quoting Las (emphasis added). If the communications at issue in As I wrote before: Vegas gaming attorney Greg Gemignani. (Last accessed Yaquinta had related to wagering expressly authorized February 6, 2018.) by the state, then applying the Wire Act to prohibit such Had the underlying wagering in 9 Letter dated May 13, 2005 from Laura H. Parsky, Deputy communications would not have served the congressio- Yaquinta been legal, it seems unlikely Assistant Attorney General, U.S. Department of Justice, nal purpose, and the court’s statement suggests it would that the prosecution would have been Criminal Division, to Carolyn Adams, Illinois Lottery have decided the case differently. brought, and if it had been brought, Superintendent. See also, letter dated January 2, 2004, 22 Hichar, at p. 114. it seems unlikely that the court would have found the defendants guilty under the Wire Act, even if the wagering- related information constituted actual bets and wagers (as opposed to mere in- formation assisting in the placing of bets and wagers). If the underlying wagering had been legal in West Virginia, there would have been no need to assist the State in the enforcement of its laws, and using the Wire Act to prohibit communications that began and ended in that State, and assisted in wagering authorized by that State, would not have served the purpose for which the Wire Act was enacted.21 Moreover, use of the

PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 43 44 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 45 Sarah Taylor continued from page 16 marketing and communication efforts opportunity to create more value for our helped overcome educational barriers. players. Now and Later gives players the around the performance of our $1 and $2 chance to experience both sides of our games. Like most lotteries, we are seeing This ability to adjust course so quickly is portfolio, with an instant portion on one declines in these price points. These players quite a quantum leap from how product side that feels like a traditional Scratch-off helped shape some of our game designs for and marketing launches used to be done. experience and a Draw portion on the other our upcoming business plan. Players were The model used to be that the cost of side of the ticket. Players scratch to reveal even asked to design their own Scratch-off launching a new product was so high, and their draw numbers and can choose when game based on what was most important to the ability to change course so restricted, they would like to enter our nightly Black them. And overwhelmingly, they told us that that you did whatever amount of testing, Pearl Draw, based on their Draw numbers. having multiple play areas or chances to win incurred whatever amount of R & D costs, (Sarah: could I bother you to add a couple were key drivers, even at these price points. to minimize the risk of failure. And you more sentences about Black Pearl and how had to work really far ahead. In the digital it works. To my mind, combining the But digital technology has expanded the world, we have two things going on that player experience of Scratch-offs and draw range of options for how surveys and completely change that picture. One, we games is a powerful concept and I want our focus groups are conducted. The Hoosier have instant feedback that enables us to readers to understand it. Is it an “instant- Lottery’s online panel of currently engaged know how to adjust course. Two, the cost reveal” of a draw? How does that work? players is leveraged for quick insights into of modifying the messaging and even the Had the draw already taken place?) a wide range of topics from game concept product is manageable. In the old world, testing to responsible gaming awareness. The potential for online interaction to transform R & D is almost unlimited. Digital technology has expanded the In addition to finding new ways to reach “range of options for how surveys and our players, we have made it easier for them to provide us that feedback by moving to focus groups are conducted. device agnostic online survey tools that can be taken via mobile or on a computer. What are some of the most promising” consumers would be surveyed to measure How is the Hoosier Lottery applying the impact of a TV or radio or billboard games or initiatives that you are some of the methods of Big Data to campaign long before a campaign launched. launching over the next 12 months? discern consumer/player trends and We are now able to be much more nimble S. Taylor: We are in the final stages of our sharpen your messaging, product with our product plan; we can more quickly fiscal year planning. But I can say that development, portfolio management, make changes to our launch plans and I am excited about partnering with the messaging in response to market demand. and marketing strategies? property “The Voice” in the fall. Attracting light/lapsed and new players is always on S. Taylor: We monitor data constantly What are some of the trends in our minds given our mature brand. I’m with a much higher level of precision and play-styles and general consumer excited to bring this property forward granularity. As a result, we know more about behavior that are shaping your product and offer players a great Scratch-off game our players, the market reaction to new and market planning going forward? with a really fun 2nd Chance opportunity game concepts or promotions or messaging S. Taylor: The Hoosier Lottery is facing a jux- – a chance to see the finale of The Voice. or POS merchandising ideas, game per- taposition of being a brick and mortar reliant Connecting with contemporary Pop culture formance and effectiveness, retailer level business in a world where players are increas- is key to being relevant to the modern performance, media performance, and so on. ingly dependent on digital technology. For us, consumer. It always has been, of course, As I shared at EL/WLA, our approach to this means continuing to layer our marketing but it will be even more true for the next data utilization is focused on first identify- efforts with a strong retail foundation – and generation of consumers! ing barriers, gaps, and opportunities, and an equally strong digital base. We have also had a lot of success optimizing then determining the best way to gather Consumers expect brands to communicate our Scratch-off portfolio with the introduc- insights and trends. And we recommend to them with personalized content. So we tion of exciting prize structures that offer this as a starting block for anyone contem- will continue to evolve by tailoring commu- many cashable at retail winning experiences plating how to get on the big data bus. nication to players based on their preferenc- for our players. I expect that we’ll continue This approach has allowed us to be focused, es and behaviors identified across multiple to launch additional games like these across yet nimble, and to efficiently and effectively channels – including our myLOTTERY multiple price points. Examples include our respond to the needs of the business. For loyalty database, website, and paid digital Cash Blowout and Winfall games which example, through our media monitoring, buys. These paid digital buys include an have quickly become core games within our we constantly adjust digital buys in-flight increase in spend on Mobile. portfolio. These games offer strong mid-tier based on performance allowing us greater In terms of product development, we were prize structures with winning experiences efficiency of our spend while reaching the first in the world to launch the Now that players can bring back to their retailers players who respond to our messages. & Later category with the game Black to cash. This gets our retailers buzzing about Pearl. This new category brings together these games with players and sales of these When there has been player or retailer Scratch-off and Draw game experiences, on games have remained consistent. So much confusion related to a product, we one ticket. Players are looking for added so that we’ve launched them across multiple have quickly addressed it to ensure our value and this game was a response to the price points, most recently as a $30 game.

46 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 Measuring Player Visits at Lottery Retail E-Commerce Style Insights Now Available to Lottery Marketers The Walkbase system can incorporate other Jon-Paul Bussoli STRATACACHE retail technologies, such Vice President Technology as cameras that anonymously measure age Carmanah Signs, a Division of STRATACACHE range and gender, increasing the depth of insights for lottery marketers. Additional data, such as retailer sales data or weather data, can also be integrated into the Walkbase reporting and analytics tool for even deeper insights. A Lottery can choose to gain additional individualized player insights by integrat- ing the Walkbase App SDK into its lottery mobile app. Walkbase data can also Carmanah Signs, the Lottery & automatically trigger real-time smartphone Gaming Division of STRATACACHE, push messages to in-store players who have is proud to introduce the newest the Lottery’s app. member of the STRATACACHE What Does This Technology in-store marketing technology family: Mean for Lottery Marketers? Walkbase. The Walkbase solution has been designed Lottery marketers can now learn from an evergreen database of individual, Walkbase advances the Lottery I from the ground up to be fully compliant with both US and European consumer anonymous player insights. Individual ndustry’s player experience strategies privacy legislation. Walkbase measure- player personas are developed based on by enabling personalized shopping ment does not require any action by the visit time, visit duration, frequency of visit, experiences through real time mobile consumer, and does not require download and cross-site visits, while aggregate retail tracking, analysis, and action. or use of the Lottery’s app on their phone. optimization insights are gleaned from a Walkbase is a proven solution that is store’s overall foot traffic (including reports on high/low traffic periods). Walkbase Overview: working today at retailers and in interna- Retail Traffic Measurement & Insights tional airport terminals. Examples of Lottery insights and Walkbase provides bricks & mortar retail How Walkbase Works actions provided by Walkbase include: with consumer behavior insights that, At just 2” (5 cm) in size, Walkbase sensors • Determining whether high traffic until now, were only available in the realm are easy to place at retail. Walkbase sensors periods result in higher Lottery revenue of e-commerce. Walkbase anonymously locate an individual’s smartphone in real • Increasing investments where consumer measures lottery player behavior in real time by sensing the WiFi pings automati- traffic is highest time, providing a retailer visit database for cally sent out by that smartphone. • Changing digital sign content when both ongoing insights and instantaneous a player with known preferences is calls-to-action. When the Walkbase system identifies a in-store new consumer for the first time, the sensor • Identifying potential monitor game sites The Walkbase system works by placing a assigns a unique “Walkbase ID” which by measuring customer dwell times Walkbase sensor at each retailer in a lottery ensures the consumer remains anonymous. • Using real time visit data to trigger jurisdiction. Powerful long term insights are From that point on, the Walkbase system is in-person customer intercepts at retail then developed based on each anonymous able to gather a variety of valuable in-store consumer’s retail visit patterns. As the visit behavioral insights across all Walkbase What benefits would your Lottery capture data of each player builds over time, lottery enabled lottery retailers. with the real time retail visitor database the marketers gain information and insights to Walkbase platform provides? drive deeper engagement and optimize the Marketers gain access to extensive reporting retail footprint. and analytics tools, including metrics such as heat maps, repeat visits, dwell times, and Carmanah Signs VP Technology, Jon-Paul In addition, because Walkbase works in real path analysis. Campaigns can be created for Bussoli, will be speaking at PGRI SMART-TECH time, player engagement can also happen in dashboard and email reporting purposes. 2018 in Miami, March 27-29. Bussoli will present real time. For instance, a content change on Additionally, player engagement rules (i.e. on real time audience measurement at retail and digital signage can be triggered while the calls-to-action) can be created and managed how this technology can help lotteries thrive in the consumer is still in-store. within the Walkbase system. evolution taking place at retail.

PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 47 Gerry Aubin continued from page 31 lose, it’s important to include games with and judged by other players as could be the extended play that prolongs the playing case with a traditional table game. So, it of society that we manage the business for experience. is a great way for new players to learn the long-term sustainable success. That means games at their own pace. It is also fun for modernization to compete in a dynamic Do you think that the consumer is the experienced player, because stadium and competitive marketplace, innovation migrating across different game gaming offers a wider variety of betting to meet the needs of the modern consumer, categories more than they did 20 options along with the feeling of playing and to anticipate the tastes and preferences years ago? in a game with lots of players with little to of the next generation of players. G. Aubin: Yes, I believe that more people no interaction. It’s great for the facilities We are currently in the process of planning who play the traditional lottery products are because it is less costly, more secure, and the relocation of our gaming facility in now going to casinos and vice-versa. And we easier to manage than traditional live table Newport to a brand-new facility being built often cross promote to different player groups games; and it offers a fun new playstyle for in Tiverton. This facility, with an antici- to encourage the consumer to try new games. consumers looking for something different. pated September 1 opening, will have 30 One recent example of cross promotion It is becoming very popular, especially with table games and a 1,000 VLTs. This new would be our promotion marking the 25th young adults. We expect to launch stadium casino could be described as a boutique anniversary of Powerball, which was designed gaming in October. to bring traditional lottery players into the facility compared to Twin River, which has Are you able to launch sports-betting casino. Players purchasing a Powerball ticket 129 tables and 4,200 VLTs. As you know, if the Supreme Court removes the receive a voucher that can be entered into a the casino gaming market is dramatically federal prohibition? different than it was back in 1992; and second-chance drawing to win tickets to the G. Aubin: While that’s a question for the competition will only be increasing in Lottery’s celebration event featuring John the lawyers, the Rhode Island Lottery is the coming years. We work closely with O’Hurley. Do you remember the guy who authorized to operate Class III Gaming our partners to ensure that we deliver the played Mr. Peterman on the show Seinfeld? which is the category of gaming that sports very best experience to our players so they That’s John O’Hurley, and the Lottery is betting will be if it is allowed. The Twin will be excited about returning to play at hosting a performance by him as well as River facility is renovating their building Rhode Island casinos. Our competitors in a drawing for $25,000. This event will to accommodate stadium gaming, and contiguous states are doing the same, which take place at Twin River Casino. We have will allow for the necessary room needed means the consumer benefits, as we all seek already had a tremendous number of entries if sports-betting is allowed. We are also to raise the standards of performance. on this drawing. Our facility partners are providing the space, the staging and sets, and looking at “skill VLT games”, which are in Do the payout percentages in casinos in everything we need to host the event. We the early stages of development. As they Connecticut and Massachusetts differ provide the prizes as well as extensive promo- gain market acceptance, and we understand from those in Rhode Island casinos? tional support with our website advertising best practices for this new product, we will G. Aubin: We’re all similarly competitive - and radio and TV spots. This is a current certainly be looking into that as well. we need to be in order to attract the players. example of how we’re cross promoting. We Are there operational synergies Nobody has very low payout percentages, will likely be increasing this type of cross between casino and traditional lottery? because if the player loses money in a promotion as the players’ response has been G. Aubin: Only insofar as they are all games- short period of time, you end up with an very positive. We want players to engage of-chance and need to be managed properly to unhappy player who doesn’t come back. It with us on as many different levels, and ensure they comply with the highest standards is important to deliver value to the player. with as wide a variety of games, as they are of security, integrity, and responsible gaming. A payout percentage that enables the willing. Clearly, leveraging Lottery to attract Not so much from a marketing or operational player to spend more time on the machine new consumer groups to casinos benefits our POV. As described above with the Powerball produces a much better player experience. casino and technology partners as well as promotion, we run some cross-promotions; And time-on-device is not just the source generate new revenues for the State’s General but generally, the two sectors are managed by of value for the player, it also delivers profit Fund. I also believe it expands the market two separate groups in the organization, and for the facility, the Technology Providers, without cannibalizing the sales of traditional there is limited overlap between the casino and the State. Long-term sustainability will lottery products. and traditional lottery management teams. be greatly enhanced if we do our best to deliver a positive player experience. What’s new and innovative in the The Lottery allocates more of its human casino gaming business? resources to the traditional lottery side of Keep in mind that it is very rare that all G. Aubin: There is a new playing experience the business even though it doesn’t generate the VLTs are fully occupied. Even on busy called “stadium gaming”. Instead of a the as much revenue as the casinos. With a weekend nights, there is almost always traditional table game setup with a live broad base of stakeholders that includes at least 10% or 15% of the VLTs that are dealer interacting with a handful of players 1,200 retailers, along with a broad base unoccupied, so we can afford to let players - in stadium gaming, the player sits at an of consumers who love to play the lottery, enjoy the playing experience for as long as individual monitor, which displays a dealer traditional lottery is a part of the fabric they want; and the higher payout/longer and the game. The player’s bet goes into of society that continues to have great time-on-device model results in a satisfied a bill acceptor at the individual monitor. potential to grow and prosper. and loyal customer. There are no chips to rake or cards to The same logic actually applies to scratch handle. One benefit of stadium play is tickets. Instead of offering just simple that it enables the novice to play alone, scratch-off to reveal numbers that win or without worrying about being observed

48 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 Thank you to our Sponsors! Spotlight on the Leaders of the Government-Gaming Industry

It’s the collaboration between operators and their commercial partners which drives innova- tion and progress and makes this industry work. PGRI endeavors to support and nurture that relation- ship, confident that together we can all build successful businesses that meet the needs of our stake- holders and customers. The leaders of the commercial community play a vital role in our industry and we are thankful for their invaluable contributions to the exchange of ideas that happens at PGRI confer- ences, and all industry events and conferences. Their products and services are the result of a tremen- dous investment in R & D, and their insights and capabilities are informed by a deep experience in all aspects of the lottery business. Following is their story. Please also visit the conference website (www. PGRItalks.com) to see their presen- tations from PGRI conferences.

PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 49 International Game Technology PLC (IGT) INTRALOT www.IGT.com www.Intralot.com A global leader in lottery and gaming, IGT is uniquely po- INTRALOT, a public listed company established in 1992, is sitioned to modernize play by leveraging a substantial in- a leading gaming solutions supplier and operator active in 52 vestment in innovation and a wealth of premium content, regulated jurisdictions around the globe. With $1.64 bn turnover player insights, operational expertise, and leading-edge and a global workforce of more than 5,300 employees in 2016, technology. Our gaming platforms and solutions anticipate INTRALOT is a robust corporation uniquely positioned to the demands of players and enable them to experience their offer to lottery and gaming organizations across geographies favorite games across all channels and regulated segments, flexible, stable, and secure gaming products and services. from lotteries and gaming machines to interactive and INTRALOT handles an average of $29 bn of wagers per year social gaming. and has installed and operates more than 300,000 of its propri- etary terminals around the world. INTRALOT entered the US IGT has a well-established local presence and relation- market in 2003, owning a production facility in Mason Ohio ships with governments and regulators in more than 100 and winning 13 contracts in 12 States nationwide to provide countries around the world. We help our customers create online systems and services, warehousing and distribution of value by adhering to the highest standards of service, instant tickets and VLT/COAM monitoring. In January 2018, integrity, and responsibility. IGT has more than 12,000 INTRALOT signed a new contract with CAMELOT for the employees and approximately $5 billion in revenues, and Illinois State Lottery to provide technology services in line with is listed on the New York Stock Exchange under the ticker the Private Management Agreement (PMA) held between the symbol IGT. State of Illinois, the Department of the Lottery and CAMELOT Lottery – We enable our customers to drive profit growth Illinois LLC.

and deliver innovation in all aspects of lottery, from the INTRALOT has recently invested in a next-generation portfolio player experience to lottery and retail management. of intelligent products and services to support Lotteries’ modern- Gaming – We develop and deliver dynamic systems, ization in the digital era that focus on the players’ modern needs gaming machines, and other technology-packed while offering entertainment experiences through all distribu- innovations to gaming venues around the world. tion channels, across all verticals (Lottery, Betting, Interactive,

VLT). The new “All about the Player” product design strategy Interactive – We provide new game and system solutions Platinum Sponsors Platinum Sponsors addresses modern consumer trends and harnesses IT potential for mobile, web, and retail that support the growth of casinos, lotteries, and online operators. for big data analytics and a personalized playing experience. INTRALOT adopted a global growth strategy designed around Betting – We create the technological and real-time synergies with local partners that aims to expand our market operational solutions for all aspects of customers’ sports penetration capacity and diversify our product portfolio in local betting operations. markets.

Marco Sala, Chief Executive Officer, As member of the UN Global Compact, INTRALOT is a global International Game Technology PLC corporate citizen committed to sustainable development, and is an Marco Sala a.i., Chief Executive Officer, active proponent of the principles of responsible gaming, possess- North America Lottery ing the WLA Responsible Gaming Framework Certificate. Renato Ascoli, Chief Executive Officer, North America Gaming/Interactive The company maintains the highest security certifications. Walter Bugno, Chief Executive Officer, International INTRALOT is the first international vendor in the gaming sector Fabio Cairoli, Chief Executive Officer, Italy that has been certified according to the WLA Security Control DOUBLE Platinum Sponsor Jay Gendron, Chief Operating Officer, Lottery Standard in 2012, and has been awarded with its renewal in

2016. Moreover, the Company has been certified with the ISO Corporate Headquarters: 27001 for its Information Security Management System (ISMS) 66 Seymour Street London, U.K. WH1 5BT and maintains the ISO 20000-1 certification on Information Phone +44 02075353200 Technology Service Management.

Providence Operating Headquarters: INTRALOT contributes decisively to the future developments of 10 Memorial Boulevard the industry being a member of the major Lottery and Gaming Providence, RI 02903 Associations around the globe: Platinum Contributor of WLA, Phone (401) 392-1000; Media line (401) 392-7452 Premium Partner of European Lotteries, Top Sponsor of North Fax (401) 392-1234 American Association of State & Provincial Lotteries, Star Contributor of CIBELAE (Lottery Association for South America Contact: and the Iberian Peninsula), Gold Sponsor of Asia Pacific Lottery Reach our employees by email at Association, Member of Gaming Standards Association and Gold [email protected] Member of the Association of Gaming Equipment Manufacturers.

50 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 Linq3 Pollard Banknote Limited www.Linq3.com www.pollardbanknote.com Linq3 is a technology solution provider that holds regula- For more than over 30 years, Pollard Banknote has been tory approvals and state licenses that allow it to generate a full-service instant ticket partner that lotteries trust to and distribute lottery tickets through a proprietary provide high quality products and related services. The technology platform. This platform uses existing point company serves over 60 clients worldwide, providing of sale (POS) devices at major retailers across the United value-added strategic marketing and management services States. The company has offices in Atlanta, Ga. and Long for both traditional instant games and the emerging interac- Beach, Ca. tive space. Pollard Banknote has an established presence in both North American and international markets, with the U.S. shoppers will soon be able to purchase jackpot games privilege of serving 26 NASPL/WLA lotteries as a primary such as Powerball and Mega Millions at grocery retail or sole supplier of instant games. The company’s successes are checkout and have the numbers sent to their mobile device, grounded in its unrivaled ability to form strong partnerships making playing the lottery more convenient and fun. This with its customers, focusing on maximizing player engage- unique innovation is the result of an exclusive partnership ment, sales and proceeds for good causes. between lottery technology provider Linq3 and Blackhawk Network, a global financial technology company and a As the only vendor that specializes in instant games, Pollard leader in connecting brands and people through branded Banknote is able to focus on pushing the boundaries of how value solutions. The program is subject to individual state a traditional ticket looks and plays. The company is a proven lottery approval and is expected be available in select states innovator, having introduced important, revenue-generating at participating grocery retailers starting in late 2017. product innovations to the lottery industry. Pollard Banknote continues this trend by constantly introducing fresh and in- “With the live ticket technology, shoppers will be able to novative print features, as well as digital products and services easily purchase lottery tickets in the grocery locations they that send players back to retail, effectively bridging brick-and- regularly frequent and have lottery numbers sent to their mortar products with the Internet. mobile phone, providing them with a streamlined experi- ence,” said David Tate, Blackhawk Network senior vice Pollard Banknote offers sales-driving licensed brands that president, U.S. Business. “Additionally, it simplifies the appeal to existing lottery players and brand-loyal consumers.

Platinum Sponsors lottery purchasing path, which is expected to make this a These licensed brands are supported with integrated more popular choice among retailers’ customers.” marketing programs that maximize success at retail.

Big jackpot games will be available for sale at participat- Pollard Banknote and NeoGames, a leading global Internet ing retail checkout lanes across the U.S. as states approve. lottery provider with expertise in online and mobile products, Shoppers playing lottery games in this new way will have partnered to form NeoPollard Interactive. NeoPol- activate their purchase via text and have their lottery lard Interactive leverages the strengths of both companies numbers delivered in real time to a mobile phone with text to develop, implement, operate and maintain innovative and picture messaging capability. Shoppers will also be able iLottery solutions. to track their results virtually and have most prizes paid electronically. In 2017, Pollard Banknote acquired Diamond Game, a company that designs, produces, and services games, gaming “We look forward to leveraging our leading-edge lottery systems, and tickets for various North American lotteries and platform within Blackhawk Network’s vast distribution charitable and other gaming markets. This acquisition, as well footprint of premier retailers. This provides lottery a new as the more recent acquisition of International Gamco, has and efficient way to offer products to their customers, helped Pollard Banknote expand its role in providing pull-tab giving them access to a new lottery experience that’s tickets, bingo paper, and now Diamond Game- and Oasis- interesting and exciting,” said Daniel Cage, founder and branded electronic ticket machines, to charitable and other president of Linq3. “This program is designed to operate gaming markets in North America. within current regulatory guidelines and provides lotteries the ability to significantly impact the growth of lottery revenues for their states.”

PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 51 Scientific Games Corporation ABACUS Solutions International www.scientificgames.com/lottery www.lotteryeverywhere.com As a world leader in gaming entertainment, Scientific Games’ mission is Lottery Everywhere by Abacus to empower our customers by creating the world’s best gaming and lottery Abacus offers lotteries the opportu- experiences. Our casino, lottery and digital games reach players wherever nity to reach 100% of their potential they are, whenever they want to play, and in any channel they choose: players in-store with the Abacus In-Lane retail, casino, digital or sports. Solution. Implementation of the Abacus In-Lane Solution means that potential For more than 84 years through our acquired companies, Scientific Games players are exposed to the opportunity to has delivered what customers and players value most: trusted security, play lottery at every till point as they’re creative content and innovative technology. Beginning with the world’s first checking out their shopping – unlike slot machine, the “Bally Baby” in 1936, to our development of the worlds the current 5% of shoppers playing at very first secure lottery instant game in 1974, and our revolutionary SCiQ™ a dedicated in-store terminal. Abacus lottery retail ecosystem in 2018, we are a trusted business partner to more manages the integration of the lottery’s than 1,500 customers around the globe. existing or new games into the retailers’ Headquartered in Las Vegas, Nevada, with over 10,000 employees EPoS systems from start to finish, making worldwide, Scientific Games serves our customers from manufacturing and it easy and painless to implement. Abacus is

commercial facilities on six continents. We offer a fully-integrated portfolio Silver Sponsors the leading supplier of in-lane solutions with Silver Sponsors of technology, platforms, content, and services for gaming and lottery more than 25,000 lanes live in Europe. industries. ABACUS is unique, employing experts Scientific Games’ history of success has been driven by our highly experi- from both the lottery world and the enced professionals who are committed to excellence. Our products have payment processing industry. Our solutions been developed by some of the world’s top game designers, mathematicians, have simplicity at their core, with impressive

Platinum Sponsors marketing research analysts and product managers. speed to market and high levels of lottery and payment industry compliant security. We are an industry leader in developing and applying market research, analytics and consumer insights to gain a deeper understanding of player Our solutions, games and technology work demand and preferences. As a result, we continue to generate new ideas and in partnership with lottery organisations, innovative gaming solutions that provide players with exciting experiences – their suppliers and the retailers, enabling all and retailers with operational efficiencies. parties to benefit from increased sales. Scientific Games is committed to corporate social responsibility, and we Our fully managed service offering includes: work closely with our customers, governments, regulators and industry • Lottery In-Lane, Self-Checkout, associations to support player protection and responsible gaming. and Self-Serve • E-commerce and Mobile solutions We drive the global lottery and gaming industry forward by maximizing • Abacus games including Bill Paid our customers’ performance with a proven portfolio of products, technology • Retailer loyalty solutions, follow-on and services featuring: promotions & 2nd chance draws

• Instant, draw and hybrid games Contact: Simon Butler, CEO • Sports betting Email: [email protected] • Interactive games and promotions Telephone +44 1604 846777 • iLottery (eDraw and eInstants) • Licensed brands • Loyalty programs + online rewards store • Gaming systems technology • Retail point-of-sale technology • Mobile apps • Internet platform + CRM • Retail development programs • Managed services Visit www.scientificgames.com/lottery

52 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 Carmanah Signs InComm Lazlo www.CarmanahSigns.com www.incomm.com PlayLazlo.com The retail environment is rapidly Leveraging deep integrations into As the U.S. Lottery industry entered evolving. The need to increase sales and retailers’ point-of-sale systems, the new century, digital formats, gaming appeal to younger players, while deliver- InComm provides connectivity systems and the internet became the ing engaging and informative experiences, to a variety of service providers primary source for shopping and entertain- is key for lotteries. Carmanah Signs that allow consumers to conduct ment for younger consumers. Research has combines a deep understanding of the everyday business at more than indicated that younger audiences are less Lottery Industry with globally leading 500,000 points of retail distribu- likely to engage in lottery offerings and retail optimization expertise, helping tion. Whether those consumers are believe lottery is something that doesn’t fit lotteries engage with their players and activating prepaid products, paying their lifestyle. New game styles, new pro- grow sales. bills, enjoying real-time discounts motional strategies, and new distribution through a membership card, platforms are required to attract a younger A leading supplier for over 20 years, purchasing digital goods in-store or generation of players. Carmanah Signs (Carmanah) is the adding funds to an online account, Lottery & Gaming Division of STRATA- InComm is there to provide unique Lazlo™ provides a digital content delivery CACHE—the world’s leading provider gift-gifting opportunities, cater to platform powered by Mobile CryptoImag- of digital signage network software, ing™ (CI), a patent pending technology

Silver Sponsors on-the-go shoppers, deliver added hardware, and services. Together, value through loyalty programs that allows Lazlo to transform the existing STRATACACHE and Carmanah have and serve cash-based consumers. paper lottery wager into a highly secure, over 2.1 million connected media players With 246 global patents, InComm trackable and redeemable digital ticket on and 140,000 wireless jackpot signs at is headquartered in Atlanta with a mobile phones. All lottery transactions retailers around the world. presence in more than 30 countries. are anonymous and are tendered at lottery retail locations. An active member of the global lottery Learn more at www.incomm.com. community, Carmanah serves 51 lottery Lazlo brings the lottery industry a new customers in four continents. Carmanah business model that provides lottery focuses solely on solutions for the Lottery with a new product distribution channel, Industry, providing everything from motivates retailers promote lottery and digital signage software and hardware leverages the marketing support from (media players, screens, tablets, network- consumer package goods companies. ing equipment, and jackpot signs) to Vision services (content creation, scheduling and The Lazlo team includes professionals with distribution, network monitoring, and vast experience in lottery, technology, retail, technical support). consumer products and marketing. Lazlo provides exciting game content, attracts Carmanah is a long-time associate Leadership new audiences and delivers products in member of five global lottery associa- a manner that is easy, safe and secure for tions (WLA, NASPL, EL, APLA, and lotteries, retailers, brands and consumers. CIBELAE), and is an ongoing sponsor and content contributor to numerous Lottery Industry events. The team Teamwork includes professionals with a breadth of experience and deep roots in lottery, including team members from vendor, agency, and lottery backgrounds. Carmanah is the only digital signage provider committed to the Lottery Industry at this level.

PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 Worldpay.com Schafer Systems Inc. [email protected] schafersystemsinc.com Payment products and services for Lotteries that extend well beyond a Schafer Systems Inc. is the leading provider of physical location. plastic products for dispensing and point of purchase items for lottery products. Founded in 1986, Schafer With the successful closing of the merger of Vantiv and Worldpay Systems is worldwide currently working with all in January, the new Worldpay now represents the largest payments U.S. lotteries and over 69 International clients and company in the world and the global leader in payments processing is constantly adding to its portfolio of products and technology and solutions for our merchant customers. clients. We operate reliable and secure proprietary technology platforms At Schafer Systems Inc. we are committed to our that enable merchants to accept a vast array of payment types, across clients and their unique needs in creating products multiple channels, anywhere in the world. Cashless Gaming has to emphasize brand recognition and loyalty toward become a reality across the regulated gaming space, improving player their customers. Starting with our sales team taking convenience and operator efficiency. We connect the dots with a single, the time to get to know you, your team and your highly-secure platform for all points-of-sale, optimizing your payments need for new products. To the expert engineers using environment to providing valuable player-level analytics and enrich the a wide variety of design and manufacturing processes lottery playing experience. to produce your custom design. All the way to our We are pioneering innovation in the U.S. Lottery market through production team to get your product just the way you partnerships with the leading technology companies, including IGT, are expecting it and our warehousing and shipping Intralot, Linq3, NeoPollard Interactive, and Scientific Games, along teams committed to exceeding your expectations. Silver Sponsors with world-class point of sale providers, Verifone and Ingenico. Product design, quality, and durability do make a dif- The newly combined company moves over $1.5 trillion on an annual ference on your bottom line and we understand that. basis, processing over 40 billion electronic transactions, operating The business of Schafer Systems Inc. is to understand in 146 countries while supporting over 126 currencies and over 300 retail, branding, and customer engagement to ensure different payment methods. No matter where people play the lottery we are producing the highest quality products that — in-person, online, or via their mobile devices — our comprehensive produce more sales results for you. solutions support player choice in payments across all your channels of At Schafer Systems Inc. we are ready for engagement, responsibly generating incremental profits for good causes. your challenge. Our Vivid Data Engine™ brings true science to the world of payments combining demographic, financial and lifestyle data to give you a view of your customer through a single lens made possible only by Worldpay. worldpay Leaders in Modern Money PGRI LOTTERY EXPO 2018 • Conference Info & Details: www.PublicGaming.org OCTOBER 23-25 • News website: www.PublicGaming.com New York City • View video-recorded presentations: www.PGRItalks.com Conference Hotel TBA • e-mail: [email protected]

Lotteries Reshape the Games-of-Chance Industry PGRI Conferences are about pushing fearlessly into a future that is rich with opportunity. It’s about keeping up with a consumer that expects more than ever, and with a competitive environment that is changing rapidly to meet those expectations. Team Lottery is already setting the highest standard for the entire games-of-chance industry and is bracing to raise the bar higher. It has all the tools to make it happen, and the courageous leadership to show us the way. Lotteries are building out the infrastructure, innovative game content, and strategies that connect the lottery operator to the consumer across an increasing variety of distribution channels and consumer touch-points. And that is a good thing because now more than ever, Lottery must prepare for industry-wide disruption. What can Lottery do to be the ones who anticipate the future and lead the way? Lottery Expo provides a unique forum for industry leaders to address the most challenging issues, and intriguing opportunities, that face our industry today. We hope to see you there! Visit PublicGaming.org for updates and conference info

PUBLIC PGRI GAMINGGAMING A Special Thank You to All the Lottery Directors PGRI SMART-Tech 2018

Arthur Alexander Rocky Gonzales Charles Phillips Chief Financial Officer, Minnesota Lottery District Manager, Florida Lottery Chief Audit Executive and Jorge Alfonso Amy Gray Ethics Officer, MUSL District Manager, Florida Lottery West Palm Beach District Manager, Jim Poppell Jeff Anderson Florida Lottery Secretary, Florida Lottery Executive Director, Idaho Lottery Gary Grief Barry Pack Gerald Aubin Executive Director, Texas Lottery Director, Oregon Lottery Director, Rhode Island Lottery Kristopher Gutknecht, Cindy Polzin David Barden, Field Marketing Representative, Director, Wisconsin Lottery President and CEO, New Mexico Lottery Wisconsin Lottery Mike Purcell Richard Bateson Kevin Hall Deputy Director Sales, Florida Lottery Commercial Director, Camelot Group UK Executive Director, Virginia Lottery Terry Presta Tonya Beenders Bill Hancock Executive Director, Kansas Lottery State Sales Manager, Missouri Lottery District Manager, Florida Lottery Adam Prock, Gregory Bowers, Wes Harms Director of Communications, Deputy Director of Finance, Ohio Lottery Director of Operations, Minnesota Lottery Minnesota State Lottery Beth Bresnahan Rebecca Paul Hargrove Daniel Rachek Executive Director, DC Lottery President & CEO, Tennessee Education Executive Director, Vermont Lottery Hogan Brown Lottery Corp., Executive Vice President, May Scheve Reardon Interim Executive Director, World Lottery Association Executive Director, Missouri Lottery South Carolina Education Lottery Rose Hudson Michelle Reeves Kristin Cleveland President & CEO, Louisiana Lottery Director Legal Services, Missouri Lottery Florida Lottery Alan Hussey Rusty Reid John Clontz Director of Business Planning, District Manager, Florida Lottery President and CEO, Wyoming Lottery Virginia Lottery Terry Rich Tracey Cohen Barbara Hutchins-Miller President & CEO, Iowa Lottery Chief Operating Officer, DC Lottery Assistant Director, Delaware Lottery Julio Rodriguez-Diaz Deborah Courtney Melissa Juhnowski Sales Manager, Florida Lottery Director of Finance, Virginia Lottery Marketing Manager, Rhode Island Lottery Lynne Roiter Andy Davis Vernon Kirk President and CEO, Loto-Quebec Chief Financial & Information Systems Executive Director, Delaware Lottery Nancy Rollins Officer, Tennessee Lottery Corp. Pat Lantz Marketing Manager, Missouri Lottery Jamie Davison General Counsel, MUSL Peg Rose Vice President, Digital Gaming Alan Larrick, Director, Deputy Director, Rhode Island Lottery & Innovation, Atlantic Lottery West Virginia Lottery Amber Seale Shannon DeHaven Andrew Leeper Chief of Brand Management, Florida Deputy Director of Digital Operations, Creative and Brand Strategy Lottery Michigan Lottery Coordinator, Texas Lottery MacGregor Sealey Tom Delacenserie Larry Loss, General Manager, National Lotteries President and Chief Executive Officer, Executive Vice President, Authority SVG Kentucky Lottery Corporation Iowa Lottery Alexandre Manoel Angelo da Silva Wayne Dolezal Hugo Lopez Deputy Secretary of Fiscal Governance Deputy Executive Director, MUSL Director, California Lottery and Lottery Regulation Brazilian Ministry Anna Domoto, Harold Mays of Finance Spokesperson, MUSL Chief of Operations & Technology, Gregory Smith Robert Doty Illinois Lottery Executive Director, Illinois Lottery Executive Director, Gordon Medenica, Director, Nicole Soluri Minnesota Lottery Maryland Lottery Chief Deputy Director, Gregg Edgar David Mica California Lottery Executive Director, Arizona Lottery Chief of Staff, Florida Lottery Carrie Stroud Samantha Ferrin, Mark Michalko Chief of Staff, Hoosier Lottery Florida Lottery Incoming Executive Director, Bret Toyne, Executive Director, MUSL Kevin Gass North Carolina Education Lottery Rob Wesley, Director of Digital, Virginia Vice President Lottery Gaming, Gregg Mineo Lottery BCLC Lottery Director, Maine Lottery Bishop Woosley, Executive Director, Alice Garland Barb Niccum Arkansas Lottery Executive Director, Project Manager, MUSL Wanda Young Wilson North Carolina Education Lottery Altair Mendanha de Oliveira Executive Vice President & General Susan Goedde Coordinator of the Ministry Counsel, Tennessee Lottery Corp. Communications Director, Missouri Lottery of Finance of Brazil Marty Zuniga Gary Gonder Community Relations Manager, Chief Branding Officer, Missouri Lottery Missouri Lottery

56 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 Program for PGRI SMART-Tech Miami

Public Gaming preserving stability and maximizing the life-cycle value of current products, and Basic Agenda/ Research Institute current operational and distributional SMART – Tech 2018 infrastructures? Preliminary Draft Program Schedule March 27, 28, 29 at the Conrad Hilton • Receptions on Tuesday and Boutique Miami Hotel Wednesday nights, and Thursday Tuesday March 27; SMART-Tech Miami 2018 is off to a great afternoon in Level 25, the beautiful start and will be a refreshed, updated top-floor lounge of the Conrad Hotel 5:00 to 7:00 pm: conference event. PGRI is partnering Reception • Luncheons Wednesday and Thursday with the leadership of the Florida Lottery to be in the Lisbon Ballroom to set the highest standard for delivering Wednesday March 28 a uniquely great program and overall • All conference sessions in the 8:30 am to 5:00 pm: conference experience. Conrad Main Ballroom • Double Platinum Sponsor: IGT Conference Sessions Platinum Sponsors: INTRALOT, Linq3, Strategic Innovation: Pollard Banknote, Scientific Games Wednesday March 28 Charting a Course between Silver: Carmanah Signs, InComm, 5:30 to 7:30 pm: Disruption and Stability Lazlo 326, Schafer Systems, Vantiv Reception The headlines all proclaim the wonders Entertainment, Reception Sponsor: of disruption - “disrupt or be disrupted” Abacus Lottery Solutions , Hospitality being the business mantra du jour. But Sponsor: IGT Thursday March 29 does everyone want to be the next Uber? 8:30 am to 1:00 pm: If you are a start-up with nothing to lose Tuesday, March 27 and everything to gain, it’s easy to be 5:00 to 7:00 pm: Conference Sessions the bold change-agent disruptor. If you Opening Night Reception, are a multi-billion-dollar business with Upper Pool Terrace Thursday March 29 dominant market share and millions of 1:00 pm to 3:00 pm: loyal customers who love your product, the Wednesday, March 28 posture should probably be more measured Main Park Ballroom 2nd Floor Lunch and reception and strategic. How do we chart a course 7:30 to 8:30 am: of positive, purposeful innovation while Continental Breakfast

PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 57 Program for PGRI SMART-Tech Miami

8:30 am in-lane sales. Lotteries are meeting the Integrating that with in-store digital vehicles Paul Jason expectations of the modern consumer for like Branded Gift Cards and Player Payment Chief Executive, PGRI, digital tools that personalize the messaging and awards solutions and further digitizing Opens the conference sessions and enhance the shopping experience. the retail shopping experience is another How can Lottery apply these Point-of-Sale part. What is being done to optimize the Bright Futures tools to “up-sell” and otherwise get the potential of these efforts? What are the Welcome to the Sunshine State! attention of, and engage the shopper in the measures of success? How can lotteries’ Jim Poppell store? How can technology and POS tools digital connection be used to drive retail Secretary, Florida Lottery be used to make it easier for the consumer foot traffic, and how can that be leveraged to understand the portfolio of different to further drive retailer commitment and Keynote Speech: products and make their selection? What increase lottery sales? Gordon Medenica else are progressive Lotteries doing to Moderator: Director, Maryland Lottery modernize, support their retail partners, Jeff Anderson IGT Update: Commitment and engage their players? Executive Director, Idaho Lottery to Customer First Moderator: Panelists: Jay Gendron Kevin Gass Jamie Davison Chief Operating Officer, Lottery, IGT Vice President, Lottery Gaming, Vice President, Digital Gaming and BCLC Canada Innovation, Atlantic Lottery The Big Leap Toward Lottery Panelists: Shannon DeHaven Modernization at Retail Alice Garland, Deputy Director of Digital Operations, Randall Lex Executive Director, Michigan Lottery Vice President, Retail Solutions, Scientific North Carolina Education Lottery Jessica DiOrio Dunn Games Corp. and Terry Presta Senior Director, Business Planning Mark Hagen Executive Director, Kansas Lottery and Customer Engagement, Senior Category Manager, 7-Eleven Mike Purcell Scientific Games Corporation Deputy Director Sales, Florida Lottery Andrew Leeper 10:15 am Nat Worley Creative and Brand Strategy Coordinator, Coffee Break Vice President, Marketing & Retail Texas Lottery Execution, IGT Fivi Rondiri 10:30 am Jarrod Cummins, the Kroger Co. Corporate Marketing Manager, Real Time Audience Intralot USA Measurement at Retail 12:30 pm to 1:30 pm Lunch Presentation: Beyond the Dollars: Jon-Paul Bussoli Maximizing Impact for our Beneficiaries Vice President Product development, 1:30 pm. Gregg Edgar Carmanah Signs Presentation: Update on the iLottery Executive Director, Arizona Lottery Retail Disruption & Stability Success Story in Michigan Jennifer Westbury Shannon DeHaven 3:00 pm. Executive Vice President, Sales & Customer Deputy Director of Digital Operations, Coffee Break Development, Pollard Banknote Michigan Lottery Innovations Driving Results Keno Revolutionizes the Games-of- Panel Discussion: Forging the Teresa Immel Chance Market-Place in New Hampshire Digital Connection with Consumers Director Sales & Marketing, Fivi Rondiri Progressive U.S. lotteries are leveraging the Schafer Systems Corporate Marketing Manager, massive traffic they have on their websites to Christopher Granger Intralot USA build the digital relationship with the players Business Development Manager, VISA Inc. that is the foundation for long-term success. Mark Smith Panel Discussion: Consumers now expect seamless hand-offs Chief Marketing Officer, Linq3 Retail Marketing, Merchandising, between technology and in-store visits. and Optimization Heightened expectations for enhanced 4:00 pm Retailers are modernizing Signage and shopping experiences are driving the need Panel Discussion: Multi-State Touchpoints both inside and outside of the for lotteries to leverage all consumer touch- Collaboration store; and modernizing the physical retail points in unprecedented ways. Building A cornerstone to modernization is to work environment in many other ways: Digital digital relationships with players through together to standardize business process, Menu Board; Digital Play-Stations, Mobile website traffic, loyalty programs, and second procedure, and technologies across juris- Apps, Social apps, Digitizing the POS, chance promotions is part of the process. dictional boundaries. Significant progress

58 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 Program for PGRI SMART-Tech Miami

has been made, and the industry is on the Moderator: Moderator: cusp of important breakthroughs. How Paul Jason Rebecca Hargrove are costs, responsibilities, and authority Chief Executive Officer President & CEO, Tennessee Education allocated when the costs and benefits vary PGRI Public Gaming Lottery Corp., Executive Vice President, by jurisdiction? What are the governance Mark Hichar World Lottery Association (WLA) issues that need to be addressed? How are Partner, Hinkley, Allen Law Firm, Panelists: these being applied to implementation of Chair of Gaming Law Practice Bill Breslo API and to further meet the needs of multi- Vernon Kirk President, Diamond Game state retailers? How might the community Executive Director, Delaware Lottery Michelle Carney of lotteries share resources for nation-wide May Scheve Reardon Vice President, Strategic Customer (or at least multi-jurisdictional) branding, Executive Director, Missouri Lottery Initiatives, IGT messaging, advertising, and promotion, And Chair of the Government Relations Bret Toyne and capture and organization of data for Committee for NASPL Executive Director, MUSL NASPL Matrix, etc.? Lynne Roiter Moderator: President & Chief Executive Officer, Rebecca Hargrove: Tom Delacenserie Loto-Québec WILL (Women’s Initiative President and CEO, in Lottery Leadership) Keynote Speech: Kentucky Lottery Corporation Invitation to World Lottery Summit in Panelists: Gregory Smith Buenos Aires, Argentina Gerald Aubin Executive Director, Illinois Lottery Executive Director, Rhode Island Lottery Tim Richardson 12:30 pm to 3:30 Andy Davis SVP of Financial Services, InComm Luncheon, Reception, & Chief Financial & Information Systems Networking Time in the Lisbon Ballroom Officer, Tennessee Lottery Corp. Presentation: Make Your Jim Poppell Retailer Partnerships Work Secretary, Florida Lottery Mark Castellana Paul Riley Senior Vice President, Vice President, Innovation Partner Development, Lazlo326 & Transformation, IGT Terry Rich 10:15 am President & CEO, Iowa Lottery Coffee Break PGRI Lifetime Achievement Award for 10:30 Decades of Distinguished Public Service: Presentation Andy Davis Michelle Carney Chief Financial & Information Systems Vice President, Strategic Customer Officer, Tennessee Lottery Corp. Initiatives, IGT Gary Gonder Kevin Gass Chief Branding Officer, Missouri Lottery Vice President Lottery Gaming, BCLC Lottery 5:30 pm – 7:00 pm Panel Discussion: Creating the Reception at Level 25, Conrad Hotel next generation of Instant and Thursday March 29 Draw-Game Products How are Lotteries integrating the new play PGRI Lisbon Ballroom styles of the modern consumer into the traditional lottery games? How can the 7:30 to 8:30 am: product be modernized to put the impulse Continental Breakfast back into draw games, excite the core players, and attract new consumer groups? 8:30 am How can Product Life-cycle Management Panel Discussion: What are the drive sales? How about integrating social implications for Lottery and the broader networking into lottery gaming? Is optimi- games-of-chance industry if the federal zation of current portfolio taking a back to prohibition of Sports-Betting is lifted? basics approach?

PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 59 Pulse of the Industry

industry, he has been involved in the launch of Carolina Education Lottery to provide a NORTH AMERICAN new gaming companies, product innovations, new draw-based central system, new lottery NEWS international market launches, and strategic terminals, a back-up, multifaceted commu- alliances. He has worked with IGT since nications network, and ongoing services. The 2012, and assumed his current role in 2017. Contract will run for 10 years from the “go Mark Michalko live” date of May 13, 2018 and is the result named North While based out of IGT’s London office, of the State’s competitive procurement. Michalko chose to make his home in Chapel Carolina Lottery Hill. He received a bachelor’s in government Executive Director and political science from John Carroll Uni- The N.C. Education Lottery Commission versity and a law degree from the Cleveland- named M. Mark Michalko, a 30-year Marshall College of Law. Michalko will gaming industry veteran with both U.S. join the Education Lottery on March 26. Under the terms of the Contract, IGT will lottery and international gaming experience, The Education Lottery has grown into a provide the SCEL with industry-leading as the new executive director of the N.C. tools including components of IGT’s Education Lottery. $2.4 billion business, increasing sales every year of operations and raising now more Aurora™ platform. Aurora Open Retail, a The appointment of Michalko, vice than $600 million a year for education. In new retail solution software architecture, president and managing director of Inter- December, the lottery’s commitment to will enable the SCEL to support multiple national Game Technology’s operations in building the best practices in responsible types of retailer solution devices in an Europe, the Middle East and Africa, came gaming into all of its operations earned efficient manner, improving time to market. as the commission concluded a search to it the highest level of responsible gaming Additionally, the SCEL will receive Aurora replace the current director, Alice Garland. certification recognized internationally. Navigator user interface and a new set of Garland is retiring at the end of March after back-office components for lottery personnel more than seven years as executive director. Laura Solano retires as who will have the ability to customize the executive director of the look and feel of the interface to meet their Michalko becomes the third executive exact needs, help them better manage their director of the N.C. Education Lottery and Colorado Lottery business, and enhance productivity. assumes the top job as the lottery completes Laura Solano has been on administrative leave its 12th year of operations. from the job for months. The acting director The SCEL will also receive IGT’s Altura™ of the state lottery is Brendon Reese. Solano Flex draw-based lottery terminal which Michalko’s experience with two state was named director of the lottery in 2014. features a highly-configurable platform lotteries, his perspective from working on derived from the successful Altura GT1200 both the customer and supplier sides of the Michigan’s legislature product, and a smaller footprint. A new gaming industry, and his leadership skills assessing the merits of reader for play slips is designed to reduce singled him out from other candidates. maintenance cycles and improve through- bills that will change the put. A high-resolution wide-screen retailer “Mark’s decades of service in the lottery rules for gambling online display will enhance the ease of use and industry, both nationally and internation- productivity of retailers. ally, brings a wealth of experience to the within the state N.C. Education Lottery,” said commission Rep. Brandt Iden, R-Oshtemo, said he Pollard Banknote receives chair Courtney Crowder. “He’s a proven wants to set up online gambling through the leader. We’re looking forward to our lottery existing casinos in the state. 10-year contract extension benefiting from that experience, leadership, from the Western Canada and his commitment to excellence.” IGT Awarded 10-year Contract with the South Lottery Corporation (“WCLC”) Michalko served early in his career as an Pollard Banknote contract with the Western attorney with the Ohio Lottery and was the Carolina Education Lottery Canada Lottery Corporation for the produc- founding executive director of the California IGT was awarded the lottery system and tion of instant lottery tickets and provision Lottery. During his career in the gaming other services contract with the South of related services has been extended for 10

60 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 years, to April 29, 2028, lengthening the Scientific Games is the fastest growing Cdn. since 2002: late 2015 an Iraqi client total duration of the agreement to 15 years. lottery systems provider in North America won the $6.4 million US jackpot in Oregon. Based on average annual sales, this extension and the leading lottery systems provider In the wake of his prize collection in Oregon, will increase the estimated value of the entire in Europe. The Company provides games, theLotter established a large operation in contract to more than $130 million. technology, and services to more than 150 that state from which it safely and securely lotteries globally, including most North purchases its clients’ US lottery tickets! Scientific Games Awarded American lotteries. Most recently, theLotter has helped create Contract to Provide Arizona lottery millionaires in Canada, El Salvador, Lottery’s Administrative theLotter.com continues expansion in Canada: Russia, Ukraine & Australia, and a Panamani- Systems Technology an pensioner won $30 million in a US lottery! The Arizona Lottery’s administrative “We Used to See Canadian All big winner stories can be found here. systems will be integrated with its new, Men Play US Lotteries, SOURCE TheLotter.com advanced gaming system and retail technol- but Increasingly it’s the ogy launched successfully by Scientific Arizona Lottery Wins Big, Games in 2016. The Company also provides Women Who Find Us” Lands 10 ADDY Awards, the Lottery with lottery instant games, as theLotter.com website sees demographics change after woman wins $30M US lottery Recognizing Premier well as a second chance program and future Creative in Advertising mobile functionality. jackpot. theLotter’s spokesman Austin Weaver: “Canada continues to be our “We are incredibly honored to receive this strongest growth market in 2018. After last recognition for our industry-leading creativ- year’s 60% growth, the figures for the first ity and innovation,” said Executive Director quarter of 2018 look even more promising. of the Arizona Lottery, Gregg Edgar. “We An entirely new trend we’re seeing as well worked tirelessly with our advertising is the massive increase in the number of partner, OH Partners, to bring originality women who buy online US Powerball tickets and trailblazing creative to our campaigns “The Arizona Lottery trusts the innovative from Canada. One possible reason for this and products. It was a thrilling process to systems solutions that Scientific Games is that our two most recent multi-million- develop these campaigns and it has been a has customized for our business,” said dollar jackpot winners were both women - a privilege to see our players excited too.” Gregg Edgar, Executive Director of the Panamanian woman won US$30 million in Arizona Lottery. “Integrating the Lottery’s Florida through us, for example.” administrative system with our new gaming system supports our objectives to continu- ally improve productivity and accelerate responsible growth to increase our contribu- tions to state beneficiaries.”

As part of the new administrative system Meanwhile this week, US news outlets The Arizona Lottery landed 10 ADDY from Scientific Games, the Arizona Lottery reported on ‘Jane Doe’, the winner of the awards for campaigns including Ultimate will benefit from a flexible back-office largest Powerball jackpot in history. The Millions Scratchers® ticket, Royal Millions platform aligned with its business priori- woman, who had scooped up a stagger- Scratchers ticket, Cardinals Scratchers ties, a fully integrated suite of applications ing US$560 million, was so scared after ticket, Holiday Scratchers ticket and and a proven application architecture and her win that she hired bodyguards. This Welcome Back, Willie. These campaigns platform. Additionally, the Company has week, news came out that she’s suing the were recognized in the direct mail, public proven implementation, customization and New Hampshire Lottery Commission transit ad, 60 second local television, 30 ongoing updates to its agile systems technol- to “maintain her privacy and to have the second local television, integrated advertis- ogy for lotteries around the world. trustee of a designated trust be the public ing campaign, copywriting, photography face of the winning ticket.” and video editing categories. “Scientific Games’ systems technology makes it easier and more efficient for the Arizona Weaver also notices that many female lottery The Lottery was among the few most Lottery to manage their business. By integrat- winners are keen on anonymity: “Thankfully awarded brands across a variety of cat- ing solutions from our recent acquisition of theLotter is experienced in handling such egories for this year’s awards. The agency Lapis Software Associates, the enterprise system privacy-related requests. Our Iraqi US jackpot is committed to elevating the brand and improves the Lottery’s engagement with retail winner’s identity was kept secret by the Oregon producing industry-leading work in order to partners, offers faster and more convenient Lottery to protect his safety. But at theLotter maximize its growth and brand awareness. experiences for Arizona players, including we also refrain from publishing surnames prize payments,” said Patrick McHugh, Senior of winners if those winners prefer to remain OH Partners is the Agency of Record for Vice President, Lottery Systems for Scientific anonymous. It’s standard courtesy for us.” the Arizona Lottery and concepted, directed Games. “The new enterprise system ensures and executed the recognized work. To learn the Lottery’s visibility, control, and financial theLotter.com, a messenger service which more about the Arizona Lottery, auditing continue to operate with the highest legally purchases lottery tickets for overseas visit www.arizonalottery.com. level of efficiency and integrity.” players, has helped people win $115 million

PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 61 Possible Outcomes constitute the majority. Murphy succeeded Petitioner Christopher J. Roberts assigns the drafting of the opinion Christie as Governor of New Jersey.” from the Supreme Court to Breyer. Breyer’s resulting decision favors The caption of the case will now be Murphy, Sports-Betting Case New Jersey and other states seeking to et al. v. NCAA, etc. The U.S. Supreme Court decision in the legalize sports betting, but the ruling stop New Jersey sports betting case is expected there: it makes clear that the underlying 97% of Expected the $10 to be released in the next few months, and rationale only applies to PASPA and should Billion Wagered on March when it is, it will probably be like most other not be construed to attach to anything Madness to be bet Illegally court opinions: very difficult to read, to broader, such as federal enforcement of The American Gaming Association parse, and to understand. So here is a helpful marijuana laws. overview of how Supreme Court decisions (AGA) estimate usually are written. Gorsuch, Alito and Thomas all agree with Breyer’s decision, but would further With the exception of “plurality” decisions, reinforce state rights vis-à-vis Congressional which are rare, Supreme Court rulings must power. Together, the three right-leaning garner the support of at least five justices. All justices submit a separate concurrence to nine justices participated in the New Jersey explain why the PASPA-related decision States Rev Up Sports Betting sports betting case, so the resulting vote should have broader implications. could be 5-4, 6-3, 7-2, 8-1, or 9-0. Legislation during Wait for Ginsburg, Sonia Sotomayor and Elena Kagan Supreme Court Decision One of the justices in the majority is then collectively write a dissent in support of A U.S. Supreme Court ruling that could assigned to write the decision for the Congressional power over sports betting, but eliminate the federal ban on sports gambling court. If Chief Justice John Roberts is in make clear that their dissent does not extend in 46 states is not expected for a few more the majority, he makes the assignment to issues like federal immigration policy. months, but that timetable has done nothing and can assign the ruling to himself or to to deter numerous legislatures from taking another justice. If the Chief Justice is in the Of course, the court could simply dismiss the action to legalize betting in their states. minority, then the most senior justice in the case if a majority of the justices determine majority would assign the decision. Justices that the lawsuit contains some defect making Proposals that would open the door to Anthony Kennedy, Clarence Thomas, and it a poor vehicle for a conclusive decision legal sports betting are under consideration Ruth Bader Ginsburg — in that order — about the constitutionality of PASPA or in 15 states, including most recently in are the three most senior justices. the permissibility of New Jersey’s “partial West Virginia. Connecticut, Mississippi, repeal.” If this happens, the lower court’s New Jersey, and Pennsylvania already In some cases, a specific justice is not named decision in favor of the five sports leagues have enacted laws that permit some forms as the lead author for the majority. These are who initiated the case will remain in place. of sports betting. Those measures may be called “per curiam” decisions. The majority altered by the Supreme Court’s pending decision reflects the controlling ruling of The court also could schedule the case for decision. the Supreme Court. In the pending sports re-argument at a future date, with instruc- betting case, the majority decision will tions that both sides file briefs to address Rhode Island has taken a bold step. Gov. determine if New Jersey — and other states an additional issue that was not adequately Gina Raimondo’s $9.38 billion budget — will be able to allow sports wagering. addressed before. An example of such includes an assumption of $23.5 million of an issue could be the concept of “equal new revenue from sports gambling. In addition to the majority decision, sovereignty” between the states and PASPA’s individual justices are permitted to write a mandate that Nevada and a few other states If the high court rules in favor of former “concurrence” or a “dissent.” be exempt from the law’s restrictions. New Jersey Gov. Chris Christie, who brought the landmark case, it would invali- Concurrences are written if one or more of The New Jersey defendants could try to date the 1992 Professional and Amateur the justices agree with the result in the case, prevent a Supreme Court decision from Sports Protection Act banning states from but would have reached the result using a being released at all. A rule - #46 - allows authorizing or licensing sports betting. Four different rationale. the parties to settle the case prior to a states -- Delaware, Montana, Nevada and decision. Although former New Jersey A dissent is submitted if a justice in the Oregon -- met a deadline to approve sports governor Chris Christie opened the door to minority wants to explain why the majority betting before the federal ban took effect. settlement talks before the oral argument is incorrect. hearing, there were no public comments New Jersey argues that the federal ban Based on the oral argument in the New Jersey from sports league executives expressing a violates the 10th Amendment, which says case, one plausible outcome could be this: willingness to discuss a resolution. that any powers not granted to the federal The court votes 6-3 in favor of New Jersey, government become the purview of the states. Whenever the Supreme Court releases its finding the partial federal sports betting ban decision, Christie’s name will no longer The additional money that sports gambling in the Professional and Amateur Sports Pro- appear in the case heading. could generate for state coffers is alluring. tection Act (PASPA) to be unconstitutional. Other legal forms of betting constitute a Roberts and Kennedy, Thomas, Stephen Lawyers for New Jersey recently notified the $28 billion industry in the United States. Breyer, Samuel Alito and Neil Gorsuch court that “on January 16, 2018, Philip D. Sports betting could increase that by $41

62 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 billion -- including $3.4 billion in taxes to WHG will pay more than £5m for breaching A customer was identified by WHG as state and local governments -- according to regulations and divest themselves of the having an escalating gambling spend with the American Gaming Association, which £1.2m they earned from transactions with deposit levels exceeding £100,000. WHG in- supports lifting the ban. the ten customers. Where victims of the teracted with the customer seeking assurance ten customers are identified, they will be that the customer was ‘comfortable with A factor that clouds the revenue projections reimbursed. If further incidents of failures their level of spend’. After receiving verbal is the continued expansion of casinos. relating to this case emerge, WHG will divest assurance and without investigating the There is growing evidence that the market any money made from these transactions. wider circumstances the operator continued is oversaturated, which has led to stagnant to allow the customer to gamble. In our view gaming revenues for states. So, adding sports WHG will also appoint external auditors to that interaction was inadequate and did not betting to the revenue stream could curtail review the effectiveness and implementation review the customer’s behaviour sufficiently the revenue drop-off, but it is likely to lead of its anti-money laundering and social to identify if their behaviour was indicative to the same oversaturation seen in other responsibility policies and procedures and of problem gambling. types of gambling. share learning with the wider industry. A customer exceeded deposits of £147,000 in Global online iGaming Neil McArthur, Executive Director, said: “We an 18 month period with an escalating spend operators who joined will use the full range of our enforcement and losses of £112,000. WHG systems iden- powers to make gambling fairer and safer. tified the issue but its only response over a the American Gaming 12 month period was to send two automated Association (AGA) just “This was a systemic failing at William Hill social responsibility emails. Our view is that which went on for nearly two years and today’s this month: bwin.party, Paddy Power this action alone was not sufficient given the penalty package – which could exceed £6.2m - Betfair, PokerStars, PokerStars Casino, customer’s gambling behaviour coupled with reflects the seriousness of the breaches. BetStars and Full Tilt. Moving in for the severity of the losses. the land grab that may be unleashed with “Gambling businesses have a responsibil- All operators are advised to read William Supreme Court decision on sports-betting ity to ensure that they keep crime out of Hill International: Regulatory Settlement gambling and tackle problem gambling for further details and lessons to be learned. - and as part of that they must be constantly Our approach to enforcement. WORLD NEWS curious about where the money they are More information about how we regulate taking is coming from.” A rounding error in the cost the gambling industry. of doing business? William Examples of WHG’s failures include (all Useful statistics on the gambling industry figures are approximate): Earlier this month the Commission wrote to Hill to pay £6.2m penalty A customer was allowed to deposit £654,000 all online casino operators to raise concerns package for systemic social over nine months without source of funds about the sector’s approach to anti-money responsibility and money checks being carried out. The customer lived laundering and social responsibility. in rented accommodation and was employed Journalists can contact our press office on laundering failures within the accounts department of a business 0121 230 6700 or email: communications@ Systemic senior management failure to earning around £30,000 per annum. gamblingcommission.gov.uk protect consumers and prevent money laundering will result in William Hill Group A customer was allowed to deposit £541,000 Regulators Investigate (WHG) paying a penalty package of at least over 14 months after the operator made the £6.2m. A Gambling Commission investiga- assumption that the customer’s potential Withdrawal Policies of tion revealed that between November 2014 income could be £365,000 per annum based Online Gambling Firms and August 2016 the gambling business on a verbal conversation and without further The Competition and Markets Authority breached anti-money laundering and social probing. The reality was that the customer (CMA) is investigating the withdrawal policies responsibility regulations. was earning around £30,000 a year and was of several online gambling firms. Concerns funding his gambling habit by stealing from have been expressed about potentially unfair his employer. obstacles that may be placed in the way of A customer who was allowed to deposit betters who wish to withdraw their money. Senior management failed to mitigate £653,000 in an 18 month period activated risks and have sufficient numbers of staff a financial alert at WHG. The alert resulted to ensure their anti-money laundering and in a grading of ‘amber risk’ which required, social responsibility processes were effective. in accordance with the licensee’s anti-money This resulted in ten customers being allowed laundering policy, a customer profile to be reviewed. The file was marked as passed to to deposit large sums of money linked to The CMA highlighted three areas managers for review but this did not occur criminal offences which resulted in gains of concern: due to a systems failure. The customer was for WHG of around £1.2m. WHG did 1. Daily, weekly, or monthly limits on with- able to continue gambling for a further not adequately seek information about the drawing funds that appear unreasonably low six months despite continuing to activate source of their funds or establish whether 2. Potentially arbitrary short deadlines on financial alerts. they were problem gamblers. the time customers have to verify their

PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 MARCH/APRIL 2018 • PUBLIC GAMING INTERNATIONAL 63 identity as a condition of withdrawing Centre. In addition, through their own was born when the three former gaming funds, sometimes causing forfeiture of controls, the financial police are providing operators Veikkaus, RAY, and Fintoto were consumers’ funds very significant support in the fight against integrated at the beginning of 2017. 3. Dormancy terms that allow firms to illegal gambling machines. Through the confiscate funds or impose excessive charges 2018 Amendment to the Austrian Gambling Turnover EUR 3 230.9 million. Profit EUR after a certain period of consumer inactivity Act, the Austrian Finance Ministry is reso- 1 021.3 million. lutely continuing its efforts to provide the The United Kingdom Gambling Commis- A new veikkaus.fi online store was launched greatest possible protection for young people in 2017. All the games were united under sion (UKGC) announced its support of the and players in Austria,” concludes Löger. CMA investigation. one game account. Recently operators were told to take World Lottery Summit 2018, Veikkaus has over 2 million Loyal “immediate steps” to comply with consumer BUENOS AIRES - ARGENTINA! Customers. Slot Machines, Instant Games, protection law, following a joint UKGC and and Skill Games are especially popular Gaining the edge in the new among our customers. CMA investigation. world - it takes you to tango! Three operators, Ladbrokes, William Hill Visit worldlotterysummit.org Of the turnover, 58% come from the and PT Entertainment, a Playtech subsid- retail sales network, 42% from the digital iary, agreed to change the way in which and world-lotteries.org channels. Dear WLA members, bonus promotions are offered, ensuring The share of identified gaming of all playing players can always access their money. Are you ready to experience the biggest lottery event in of Veikkaus games went up to 40.6% (+1.6 the world? percentage points). Increasing identified 2018 Amendment gaming is one of Veikkaus’ core strategic Austrian Gambling Act: The World Lottery Summit objectives. “In the fight against illegal internet 2018 (WLS 2018), will be – Identified gaming helps us to offer our gambling, the 2018 Amendment to the held November 18 - 22 in Buenos Aires, customers even more responsible tools for Austrian Gambling Act marks a further Argentina. For more information about gaming management. Last year we renewed important step in ensuring the protection WLS 2018, please go to the official website the Veikkaus Card, which now enables our of young people and players,” declared www.worldlotterysummit.org where you customers to play identified even on slot Austrian Finance Minister Löger, comment- will also find the latest on the Advertising machines, says Sarekoski. ing on the draft law sent for review today. and RG Awards and the Volunteer Program, Through the future implementation of a as well as practical information about In 2017 we also adopted tools for the blocking procedure for illegal IP addresses Buenos Aires. Online registration and links management of online gaming, which are (so-called “IP blocking”), illegal internet to discounted conference hotels will be unique in an international setting; and the gambling will be significantly reduced. In available shortly. Loyal Customer Programme, which has two addition, a provision will be incorporated million members, was supplemented with into the Austrian Gambling Act to the effect The WLS 2018 business program has been new features supporting responsible gaming. that contracts previously concluded between built around exciting and enlightening Further, Veikkaus made a decision to launch players and illegal providers are null and topics relevant to our industry. A team of a strategic project, which aims at as extensive void. This will enable players to claim their seven world-class speakers are keynoting identification as possible on decentralised stakes back retrospectively. the event. Keynote speakers of this year’s slot machines starting from 1 January 2023. summit will include: “Since unlicensed providers of online Kambi Group plc signs games of chance are offering such games in Everyone is also encouraged to start posting with innovative gaming Austria without having the required national your comments about the WLS program company Casumo to deliver a permits, significant objectives of public to our LinkedIn, Facebook, Twitter pages gamified sports betting product that leverages interest are being endangered,” adds Löger. marking your comments with Kambi’s market-leading operator empower- According to market studies, the number #worldlotterysummit. ment technology. Casumo’s rapid growth of illegal gambling sites is estimated to Visit worldlotterysummit.org has been built on its incorporation of social number around 2,000. Most of these illegal and world-lotteries.org gaming features, such as player achievements gambling sites do not comply with the strict and leaderboards, into real-money games to Austrian standards aimed at protecting Veikkaus’ year 2017 meets create entertaining gaming experiences. young people and players, nor do they fulfil projections and expectations the duties of diligence in relation to money During its first year of laundering and the financing of terrorism. operations, Veikkaus “So far, we have already taken numerous invested especially in the measures to protect young people and smooth functioning of As part of the multi-year deal, Kambi will players, which began with connecting legal the gaming operations, provide its Sportsbook and technology gambling machines to the data processing integration of the game systems and ways services, including open APIs, to Casumo to centre at the Austrian Federal Computing of operating, as well as the development of build a sports betting experience with gami- responsible gaming tools. The new Veikkaus

64 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2018 fication at its core. The new sports product the Lotteries (GLMS-EL-WLA), Ethisport, that prohibit accepting bets on the outcome will primarily target casual bettors and RC3 and Partners and a number of states, of EuroMillions draw. the millions of sports fans who have never including France, Switzerland, Norway, placed a bet, with a focus on offering players and Cyprus, launched today the follow-up Lotto Betting Group formally requested the fun and playful betting opportunities. project which will seek to go even deeper UK government to suspend the approval and further and have a world-wide impact. process for the new regulations before Kambi’s Sportsbook will be integrated into The KCOOS+ project will seek to provide the UK parliament. The group includes Casumo’s proprietary platform ahead of the an indispensable contribution to assisting Lottoland, an operator that has been critical initial release of a football-focused mobile active stakeholders to get in contact and of the government’s plans on this issue. product, the result of a close collaboration form networks. It will ensure that all Lotto Betting Group said the new regula- in product and technology between the two relevant ministries are sufficiently informed tions would breach EU rules that provide companies. of the gravity of the phenomenon and its businesses with freedom to provide services links to criminal offences and thus raise across the entire EU and described the UK The deal is further evidence of Kambi’s awareness of the priority to sign, ratify and government’s decision to introduce the Sportsbook flexibility, with the platform implement the Convention. Additional legislation as “unreasonable.” fully adaptable to a wide variety of operator support will be provided also to states in requirements and player demands. The Department for Digital, Culture, Media terms of the setting up of national platforms, and Sport has stated that betting on Eu- “As one of the fastest growing and most as well as structured communication and roMillions draws outside the UK is “clearly innovative operators in Europe, I’m delighted cooperation processes. GLMS will be an as- contrary to the spirit” of section 95 of the to welcome Casumo to the Kambi network,” sociated partner of the project, while EL and Gambling Act of 2005 – the legislation that Kristian Nylen, Kambi Chief Executive, WLA will be also contributing financially. prohibits betting on the outcome of The said. “A combination of the Kambi Sports- Links: National Lottery and on the EuroMillions book and Casumo’s gamification expertise The text of the Council of Europe Conven- UK draw. will attract a different player segment than tion of the manipulation of Sport Competi- what we’ve been used to, further strengthen- The government also has said that enabling tions can be accessed here bets on non-UK EuroMillions draws “poses ing the Kambi network. Moreover, this deal Website of the Keep Crime out of Sport illustrates the flexibility of the Kambi tech- a potential threat to good cause returns,” Project+ can be accessed here but it has admitted that the “current nology, with Casumo widening the spectrum The 1st version of the KCOOS Guidebook of operators currently adapting our technol- evidence base is not conclusive on the future can be accessed here impact on lottery revenues (and therefore ogy to meet their own specific product and contact: marketing requirements,” he added. the returns to good causes) attributable to Giancarlo Sergi, GLMS General Secretary betting on lotteries.” Daniel Durrans, Head of Sportsbook at [email protected] Casumo, commented: “We’re delighted to Evangelos Alexandrakis, GLMS Deputy Tabcorp Revenue have signed this deal with Kambi. This is an General Secretary increases driven by Lottery [email protected] exciting and collaborative partnership across Tabcorp Holdings has published the final product and technology. Casumo is creating Lotto Betting trading statement of Tatts Group Limited as a brand new, more intuitive product experi- the companies undertake actions to combine ence for sports, built on Kambi’s leading Companies Challenge their operations in 2018. sportsbook platform.” New Restrictions in UK Several lotto betting companies in the GLMS and Lotteries join United Kingdom may challenge new laws forces with the Council of that would prohibit them from accepting Europe and key stakeholders wagers on the outcome of EuroMillions Tatts reported a 19% increase in period to keep crime out of sport lottery draws. revenues (ending December 31) generated According to regulatory requirements from ordinary activities of AUS $ 1.37 that will take effect on April 6, gambling billion. operators in Great Britain would be Tatts revenue increases were driven by its considered to be in breach of their licensing lottery division, which recorded a strong run conditions if they offer bets on EuroMillions of 18 jackpots above AUS $15 million mark draws. Existing gambling legislation in the and the resultant boost in ticket sales. UK prohibits the operators from accepting Following the success of the KCOOS project bets on the outcome of The National Lottery which sought to promote the Council of and on the EuroMillions UK draw. So as a Europe Convention on the Manipulation work-around, operators accept wagers from of Sport Competitions and support states UK-based customers on the outcome of with the implementation of its provisions, EuroMillions draws in other countries. It the CoE together with key partners and is the same game and the same draw, so this stakeholders, including the INTERPOL, solution would seem to violate the same laws

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