API (Application Program Interface) Focus on End-User Usability

Home , Kansas Lottery, Lottoland, Oregon Lottery, Vermont Lottery

SEPTEMBER/OCTOBER 2016

• The Private-Public Partnership in Action • How Regulatory Changes PGRI are Converging with Technology, the Internet, and Changing Consumer Behavior to Up-end the Games-of- Chance and Lottery Market-Place • Sales Force Automation as the Key to Improving Retail Performance

FEATURED INTERVIEWS

Changing the Game in 2016 and Beyond

As another NASPL conference approaches, and we look to the end of a historic year, PGRI spoke to Marco Tom DelacenserieTasso, Senior Vice PresidentKevin of Product Sheehan Marketing, and Paul Riley, Vice PresidentAlice of Innovation, Garland at IGT about Nikos Nikolakopoulos the major milestones of 2016 and the future of the lottery industry. P. Riley: Powerball was of course huge in so commitment to corporate social responsibility process begins with a series of insights and What is IGT doing to remain inmany ways. Operationally, the team and the and achieving WLA Level 4 Certification. trend diagnostics and ends with a complex the forefront of lottery services andsystems delivered. More than 234,000 rolls of methodology of consumer and retailer technology? paper were used; that’s enough to go around What are you most excited about for research. In addition, and to ensure we are the world 1.5 times. More than 15.5 million the year ahead? constantly on the forefront of interactive M. Tasso: Knowledge of the player andplayslips were produced, and our 185,000 games, we have pooled the resources of retailer is at the heart of how we approachterminals functioned at 99.9% uptime. From M. Tasso: Our business intelligence tools, 120 software engineers, artists, and game innovation at IGT. We will continue to investan awareness perspective, the media hype which are already the best in the industry, designers from around the world to create the in research and development to ensure thatsurrounding the record jackpot was priceless. keep getting stronger. Our BI tools create IGT Game Studio. By combining the staff’s our lottery partners receive the most cutting-The key question is how do we parlay that actionable insights that empower quicker, unique approach to art and science along with edge systems and terminals as well as theinterest into engaging new players on a repeat more effective decision-making. For the cultural nuances of our five worldwide most relevant game concepts. By combiningbasis. Monumental events like this provide example, the Retail Marketing Insight (RMI) studio locations, we release at least seven new our investment in innovation with our playeropportunities to engage more consumers platform is now capturing data from 21 U.S. game concepts per quarter. intelligence and our operational expertise, weand expand the player base, particularly with lotteries to provide visual comparisons across help our lottery partners achieve sustainable TM somethingAs much like the as mobile the U.S. apps whichlottery we industry just retail chains and jurisdictions. Aurora Sam Marco and responsiblePaul growth. Tracey Vernon Carole discussed.talks The about jackpot the wasimportance also a great of value interac- Performance Intel is using state-of-the-art Wakasugi Tasso Riley to retailers.Cohen Retailers had to acknowledge the analyticsKirk to turn mountains of dataHedinger into real- How does IGT stay in touch with the tive and omni-channel approaches, history-making lift in traffic and ancillary sales time strategies and tactics. Plus, with the Paul Riley,needs Vice President of players? of Innovation progress appears to be slow due to Marco Tasso, Senior Vice President of Product Marketing that the jackpot drove. acquisition of Hudson Alley, we have paired and games to deliver a compelling player legislation and other concerns. WhatOnePlace with AuroraTM Retailer Wizard to Last year at NASPL, IGT unveiledexperience M. Tasso: while still Our complying Player with Insights internet Team What advancement trends are you has beenseeing made in the in theprovide Lottery Representatives and their Aurora, your new business platwagering- constantly constraints. collaborates Our with PlaySpot our customers on- world last of year?gaming and lottery? retailers with the real-time data they need to form. What has been its reception premisein to solution, conduct which studies we hope to understand to deploy the efficiently manage and successfully grow their wants, needs, and expectations of retailers the industry? What progress have youlater this year, will allow players to use their P. Riley:P. Riley: There’s Slow a lot and of interest steady in are cashless, perhaps thebusinesses. All of these tools work together and players around the world. In the last 12 operative words for the U.S. with respect made in its development and rollout?mobile phones to play lottery games on which is good because so many of our to empower lotteries with a consistent and their months, own terms, we’ve without conducted having more to access than 260consumers to interactive are embracing wagering. cashless, Illinois, BUT Michigan, insightful view of their businesses. studies in the Americas and 62 internationally. and Georgia are still leading the industry TM the internet. We are also actively engaged in it is not a trivial topic due to regulatory P. Riley: The reception to Aurora has been with their respective deployments and are a pilotThat’s for proximity more than marketing 224,000 that people uses that an IGTconsiderations, technology aspects, and last, P. Riley: NASPL has signed a declaration overwhelmingly positive, due in no small being joined by Kentucky and Virginia. We existinghas lottery talked appwith and in the beacons last year. placed We are at alsobut not least, economic implications. We are to move forward with establishing a lottery part to two major items. The first is our laser have seen continued growth in the number lotterycontinuing retailers to our deliver World targeted Player messaging Study, whichdoing a pilot in conjunction with our customer, standard API (Application Program Interface) focus on end-user usability. Our completely of mobile apps that IGT is providing as well TM and offerscaptures (lottery the attitudes and retail and opinions partners) of to lottery Applicationthe Georgia Lottery Corporation, and are that could provide significant benefit to the revamped User Interface (Aurora Navigator) as the functionality that is deployed. We consumers,players andin 10 we countries. look forward It’s this tocomprehensive sharing collecting data on usage and transactions to industry in cost effectively increasing lottery that sits on top of our feature-rich back- currently support seven lottery apps on both some dataof what set thatwe have feeds learned the actionable there once insights we thatsupport better insights into the benefits and into under-penetrated or non-penetrated office suite of applications, makes the jobs of ProgrammingiOS and Android, all of which have a suite of Interface have beendrives operational growth for longour customers. enough to gather challenges concerning this topic. retailers. The initiative is about setting up a lottery personnel much more efficient and player convenience features, and some that effective. The expanded access to businesssome meaningful data. standard way for retailers to communicate How has that affected the develop-Howalso do allow you wagering stay current where permissible. on what These intelligence in a graphic, visualized approach (API)apps also supportas omni-channelthe interaction,keywith lottery to transaction a processing vendors Whatment were of new the games? biggest milestones players and retailers respond to? also makes folks’ jobs easier. The second is such as scanning for a winning ticket and thenin a uniform manner that more aligns with our Service Oriented Architecture. Lotteriesand developments of the past year? directing the consumer to the nearest retailerthe way in which they sell many of their other M. Tasso: As game portfolios and the are increasingly interested in a solution that sustainableM. Tasso:for redemption, Our Lottery orManagement creating digital Services playslipsfuture goods. If we penetrate more retailers and playerbase continue to age, lotteries need to supports omni-channel engagement withM. Tasso: One of the best examples of our groupthat continues are more to be user the friendly incubator as forwell profit- as fast andtradestyles and very importantly – offer our have a partner that is vested in the ongoing players, and the ability for lotteries to easily mixplayer-first thinking this year is the Gemini drivingeasy strategies for retailers and to tactics.use. Lottomatica products in the multi-lane environments – we development of game concepts. IGTfor has Lottery and match components from various vendorsTouch. We turned our understanding of the remains the standard for lottery growth have a chance to engage far more consumers created FutureGame, an eight-step game – and with Aurora, we can deliver on thoseshoppers’ need for convenience, simplicity, aroundWhat the world developments with more than are $16 you billion most and increase awareness of the lottery brand development and testing framework to key needs. We are in the process of rolling ourand interactivity into an immersive self- in annualexcited sales. about?The IGT Indiana and Hoosier and the good causes lotteries support. initial Aurora deployments out in the U.S. andservice satisfy vending our customers’ experience need featuring for a constant a Lottery teams also provide a great example have been having discussions with our globalhigh-definition, stream of new 42-inch games. touch To thoroughly monitor. Both leverage of theP. synergies Riley: We that are develop very excited when aboutyou have the To learn more about IGT’s plans for 2017 customer base about Aurora. playersplayer and needsnon-players and emotions, are attracted the FutureGame to the a solid potential portfolio toof games leverage working interactive along-side platforms and beyond, visit their booth at NASPL 2016 dynamic graphics and large touch screen business intelligence tools such as AuroraTM in Atlanta. that displays up to 28 instant games and a full OnePlace to track progress. We’ve increased complement of draw-based games. Plus, the average facings from 24 to 30, placed more device is easier for our retailers to use. The than 5,800 on-counter towers, and installed Dynamic Planogram functionality can modify more than 1,100 Aurora MultiMedia and the display in real-time to react to fluctuations mini-jackpot signs. 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GLI.11443 Leave nothing ad. PGRI 8.375x10.875 trim 8.5x11 bleed INSIDE THIS ISSUE DEPARTMENTS

10│ From the Publisher Paul Jason PUBLISHER & CHIEF EXECUTIVE OFFICER 71│ Conference in Review—EL Industry Days Paul Jason Scenes from the European Lottery (EL) Industry Days marketing seminar [email protected] in Marrakech, Morocco PRESIDENT Susan Jason 74│ Conference in Review—PGRI SMART-Tech [email protected] Scenes from PGRI SMART-Tech Conference in New York, USA. ART DIRECTION/DESIGN Lisa Robinson 78│ Pulse of the Industry www.whiteravendesign.studio Synopsis of the latest lottery Industry news from around the world. HONORED FOUNDERS 92│ Spotlight: Leaders of the Government-Gaming Industry Doris & Duane Burke CONTACT INFORMATION 98│ Conference Program: PGRI Lottery Expo in Miami T: +425.449.3000 F: +206.374.2600

For email address changes, subscription requests and requests to be placed on FEATURE INTERVIEWS our e-Newsletter distribution list, contact: 12│ Application Programming Interface (API) [email protected] as the Key to a Sustainable Future for Lottery PGRI, Inc. 218 Main Street, #203 Tom Delacenserie Kirkland, WA 98033 Secretary, Florida Lottery www.PublicGaming.com

SUBSCRIPTIONS Annual Public Gaming International magazine subscription rates: 20│ Meet Scientific Games’ New CEO United States: $145 USD Kevin Sheehan Canada & Mexico: $160 USD All other countries: $225 USD Chief Executive Officer, Scientific Games Corporation PUBLIC GAMING INTERNATIONAL MAGAZINE Published six times a year and distributed to readers all around the world. Electronic version is e-mailed and is also available on 25│ Responsible Gaming and Sales Maximization our news website: Go Hand-in-Hand www.PublicGaming.com. Alice Garland September/October 2016, Executive Director, North Carolina Education Volume 42, No. 5. Lottery (NCEL) © 2016 all rights reserved. Public Gaming Research Institute ISSN: 1042-1912

4 // PUBLIC GAMING INTERNATIONAL // September/October 2016

FEATURE INTERVIEWS (CONTINUED) VISIT Our Online Channels: 28│ Lessons from the Only U.S. Lottery which Sells All Manner of Casino-Style Games Online PUBLIC Vernon Kirk PGRI GAMING Executive Director, Delaware Lottery PublicGaming.com For industry news and information.

PUBLIC GAMING CONFERENCES 32│ The Private-Public Partnership in Action PGRI PublicGaming.org Carole Hedinger For conference information and Executive Director, New Jersey Lottery details.

PUBLIC GAMING PGRI TALKS PGRItalks.com For videos of our 40│ The Unique Governance Model of the Lottery conference presentations. in the Nation’s Capital Tracey Cohen Interim Executive Director DC Lottery and Charitable Games Control Board SUBSCRIBE Changing the Game in 2016 and Beyond To Our Free As another NASPL conference approaches, and we look to the end of a historic year, PGRI spoke to Marco e ewsletter Tasso, Senior Vice President of Product Marketing, and Paul Riley, Vice President of Innovation, at IGT about -N the major milestones of 2016 and the future of the lottery industry. P. Riley: Powerball was of course huge in so commitment to corporate social responsibility many ways. Operationally,What the team is IGT and the doing and to achieving remain WLA in Levelprocess 4 Certification. begins with a series of insights and systems delivered. Morethe than forefront 234,000 rolls of of lottery services and trend diagnostics and ends with a complex paper were used; that’s46 technology?enough to go│ around WhatChanging are you mostmethodology excited about the of consumer for Game and retailer in 2016 and Beyond the world 1.5 times. More than 15.5 million the year ahead? research. In addition, and to ensure we are PUBLIC GAMING playslips were produced,M. and Tasso: our Knowledge 185,000 of the player and constantly on the forefront of interactive DAILY NEWS DIGEST terminals functioned at retailer 99.9% is uptime. at the From heart of M. howMarco Tasso: we approach Our business games, Tasso intelligence we have pooled tools, the resources of an awareness perspective,innovation the media at IGT. hype We willwhich continue are to already invest the120 best software in the engineers, industry, artists, and game designers from around the world to create the PGRI surrounding the record injackpot research was and priceless. development keep to getting ensure thatstronger. Our BI tools create The key question is howour do lottery we partners parlay that receive actionable the most cutting- insights thatIGT Game empower Studio. quicker, By combining the staff’s unique approach to art and science along with Published 4 times a week interest into engaging newedge players systems on a and repeat terminals moreSenior as well effective as the decision-making.Vice President For of Product Marketing, Lottery, IGT the cultural nuances of our five worldwide basis. Monumental eventsmost likerelevant this game provide concepts. example, By combining the Retail Marketing Insight (RMI) studio locations, we release at least seven new to bring you the latest opportunities to engageour moreinvestment consumers in innovation platform with our is nowplayer capturing data from 21 U.S. game concepts per quarter. and expand the player base,intelligence particularly and our with operational lotteriesPaul expertise, to provide we visualRiley comparisons across help our lottery partners achieve sustainable TM breaking news in the global something like the mobile apps which we just retail chains and jurisdictions.As much as Aurorathe U.S. lottery industry and responsible growth. discussed. The jackpot was also a great value Performance Intel istalks using about state-of-the-art the importance of interac- lottery industry. to retailers. Retailers had How to acknowledge does IGT staythe inanalytics touchVice withto turn thePresident mountains tive and of data omni-channel into real- of approaches, Innovation, IGT history-making lift in trafficneeds and of ancillary players? sales time strategies and progress tactics. Plus, appears with the to be slow due to Paul Riley, Vice President of Innovation Marco Tasso, Senior Vice Presidentthat of theProduct jackpot Marketing drove. acquisition of Hudsonlegislation Alley, we haveand otherpaired concerns. What and games to deliver a compelling player OnePlace with AuroraTM Retailer Wizard to M. Tasso: Our Player Insights Team advancement has been made in the Last year at NASPL,What IGT trends unveiled are you seeing in the experience while still complying with internet constantly collaborates withprovide our customers Lottery Representativeslast year? and their wagering constraints. OurAurora, PlaySpot your on- new world business of gaming plat- and lottery? retailers with the real-time data they need to form. What has been its reception in to conduct studies to understand the premise solution, which we hope to deploy wants, needs, and expectationsefficiently of manage retailers and successfully grow their the industry? What progress have you P. Riley: Slow and steady are perhaps the PUBLIC GAMING later this year, will allow players to use their P. Riley: There’s a lot ofand interest players in aroundcashless, the world.businesses. In the Alllast of 12 theseoperative tools work words together for the U.S. with respect mobile phones to play made lottery in games its development on which and is good rollout? becausemonths, so many we’ve of conducted our to more empower than lotteries 260 to with interactive a consistent wagering. and Illinois, Michigan, MORNING REPORT their own terms, without having to access consumers are embracingstudies cashless, in the Americas BUT andinsightful 62 internationally. view of their and businesses. Georgia are still leading the industry The reception to Aurora TM has been the internet. We are also activelyP. Riley: engaged in it is not a trivial topicThat’s due more to regulatory than 224,000 people that IGT with their respective deployments and are PGRI overwhelmingly positive, due in no small a pilot for proximity marketing that uses an considerations, technologyhas talkedaspects, with and in last, the last year.True We NASPL are also Partnerships hasbeing signed joined a declarationby Kentucky and Virginia. WeDriving Growth in Instant Tickets 52 P. Riley: part to two major items. The first is our laser │ Comprehensive e-news existing lottery app and beacons placed at but not least, economiccontinuing implications. our We World are Playerto move Study, forward which withhave establishing seen continued a lottery growth in the number focus on end-user usability. Our completely captures the attitudes and opinions of lottery of mobile apps that IGT is providing as well lottery retailers to deliver targetedrevamped messaging User Interface doing (Aurora a pilotTM Navigator) in conjunction with our customer, standard API (Application Program Interface) players in 10 countries. It’s this comprehensive as the functionality that is deployed. We update sent every and offers (lottery and that retail sits partners) on top to of ourthe feature-rich Georgia Lottery back- Corporation, and are thatSam could provide significantWakasugi benefit to the data set that feeds the actionable insights that currently support seven lottery apps on both consumers, and we look office forward suite to of sharing applications, collecting makes thedata jobs on ofusage and transactions to industry in cost effectively increasing lottery drives growth for our customers. iOS and Android, all of which have a suite of Monday morning. some of what we have learnedlottery there personnel once we much support more efficientbetter insights and into the benefits and into under-penetratedplayer or convenience non-penetrated features, and some that have been operational longeffective. enough Theto gather expanded challenges access to concerning business thisHow topic. has that affectedretailers. the develop- The initiativealso is allow about wagering setting where up a permissible. These intelligence in a graphic, visualized approach Vice President, Cooperative Services Program, some meaningful data. ment of new games? standard way for retailersapps also to support communicate omni-channel interaction, also makes folks’ jobs easier.How The do second you stay is current on what with lottery transactionsuch processingas scanning vendorsfor a winning ticket and then What were the biggestour Service milestones Oriented Architecture.players and Lotteries retailers respond to? inScientific a uniform mannerdirecting that more theGames consumer aligns with to the nearest retailer are increasingly interested in a solution that M. Tasso: As game portfolios and the and developments of the past year? the way in which theyfor sell redemption, many of their or other creating digital playslips supports omni-channel engagement with playerbase continue to age, lotteries need to Request to be added to the M. Tasso: Our Lottery Management Services goods. If we penetratethat are more more retailers user friendly and as well as fast and players, and the ability for lotteries to easily mix have a partner that is vested in the ongoing M. Tasso: One of the best examples of our group continues to be the incubator for profit- easy for retailers to use. and match components from various vendors development of game concepts.tradestyles IGT and has very importantly – offer our player-first thinking this year is the Gemini driving strategies and tactics. Lottomatica – and with Aurora, we can deliver on those created FutureGame, anproducts eight-step in the game multi-lane What environments developments – we are you most distribution list by sending Touch. We turned our understanding of the remains the standard for lottery growth key needs. We are in the process of rolling our development and testinghave framework a chance to to engage excited far more about? consumers shoppers’ need for convenience,initial Aurora simplicity, deployments around out in the the worldU.S. and with satisfy more than our customers’$16 billion needand for increase a constant awareness of the lottery brand your e-mail address to: and interactivity into anhave immersive been having self- discussionsin annual with sales. our global The IGT stream Indiana of newand games.Hoosier To thoroughlyand the good leverage causes P.lotteries Riley: support. We are very excited about the service vending experiencecustomer featuring base about a Aurora.Lottery teams also provideplayer a needs great and example emotions, the FutureGame potential to leverage interactive platforms high-definition, 42-inch touch monitor. Both of the synergies that develop when you have To learn more about IGT’s plans for 2017 [email protected] players and non-players are attracted to the a solid portfolio of games working along-side and beyond, visit their booth at NASPL 2016 dynamic graphics and large touch screen business intelligence tools such as AuroraTM in Atlanta. that displays up to 28 instant games and a full OnePlace to track progress. We’ve increased complement of draw-based games. Plus, the average facings from 24 to 30, placed more device is easier for our retailers to use. The than 5,800 on-counter58 towers, and installed Applying Best-Practices from Other Industries Dynamic Planogram functionality can modify more than 1,100 Aurora MultiMedia│ and the display in real-time to react to fluctuations mini-jackpot signs. The Hoosier Lottery in demand, inventory, or market conditions. achieved record growth while maintaining a to Government-Gaming Nikos Nikolakopoulos Group Chief Operating Officer, INTRALOT Group

6 // PUBLIC GAMING INTERNATIONAL // September/October 2016 PGRI EXPECT BETTER EXPECT MORE

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39│ Changing the Game at NASPL 2016 IGT

44│ How Regulatory Changes are Converging with Technology, the Internet, and Changing Consumer Behavior to Up-End the Games-of-Chance and Lottery Market-Place Panel Discussion at PGRI Smart-Tech NYC

61│ The Lottery Answer to the Appeal of Daily Fantasy Sports Brad Cummings, Founder & Chief Executive Officer, EquiLottery

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8 // PUBLIC GAMING INTERNATIONAL // September/October 2016

From the Publisher

Congratulations to the 2016 Lottery Industry Hall of Fame in- PGRI Smart-Tech NYC conference in April which was synopsized for ductees! The 68 members of the PGRI Lottery Industry Hall of a report published in our July issue. And will have another half-day Fame have voted for and elected five new members. session at PGRI Lottery Expo in Miami on Sept 13. The benefits of creating the common language and IT platform that facilitates digital The five 2016 Hall of Fame inductees: communication between lotteries, suppliers, and distribution channel • Dermot Griffin, Chief Executive of Premier Lotteries Ireland partners are so compelling as to make the API an indispensable part (PLI), Operator of the Irish National Lottery of our future. The challenge is that it requires collaboration between • Hansjörg Höltkemeier, Managing Director and Member of the many different parties to design and implement. There is nothing dif- Board of Deutsche Klassenlotterie Berlin (DKLB), President of ficult or problematic about implementing the API. Almost all other in- the European Lottery Association (EL) dustries deployed the API years ago. The challenge is that everyone (or • Rose J. Hudson, President & Chief Executive Officer, Louisi- at least a critical mass of lotteries) needs to agree to work together to ana Lottery Corporation Lotteries, First Vice President of the create a single IT platform and common language. It’s not hard to do, North American Association of State and Provincial (NASPL) it just requires the will to engage in an intensive collaborative effort. • Norman Lingle, Executive Director of the South Dakota Lottery PGRI conferences (two a year—one in March in New York and • Sue van der Merwe, Chief Operating Officer, Tatts Group Lotteries one in Miami in September) have evolved a rather unique brand for their focus on advocacy, the need to drive change and progress. PGRI conferences have evolved a rather Our events are really not about “education.” As vital as education unique brand for their focus on advocacy, is to the development of the future leaders of the lottery business, the need to drive change and progress. the industry associations provide a superlative and comprehensive Our events are really not about “education.” educational program to meet that need. The World Lottery Asso- As vital as education is to the development ciation (WLA), the European Lottery Association (EL), the North American Lottery Association (NASPL), Asia-Pacific (APLA), Lat- of the future leaders of the lottery business, in America (CIBELAE), and Africa (ALA)—all provide excellent the industry associations provide a seminars that cover every issue relevant to this business of operating superlative and comprehensive educational a government lottery. PGRI events endeavor to promote understand- program to meet that need. ing of and support for initiatives that will benefit the industry going forward. We cover regulatory, legal, and political issues. We explore ways to improve stakeholder relations. We drill down on ways to The Lottery Industry Hall of Fame was founded in 2005 as a engender more support from stakeholders like retail partners as well means of honoring those who have done the most to promote ex- as lawmakers and others who influence the shaping of public policy. cellence and integrity in our industry and make the world lottery We explore ways to carve out a bigger slice of media mind-share, industry the great success. The recipients of this award are all a especially national and global media sectors. credit to that ideal and are joining a select and distinguished group Thank you to all of our interviewees and editorial contributors! Your of world lottery industry professionals. The bio’s of the five 2016 insights are invaluable and we so appreciate your willingness to share. Our SMART-Tech New York event is still a few months away. inductees will be published in the November issue of this magazine. But we are getting started early to ensure a great program and to en- You can read more about the Lottery Industry Hall of Fame and the able you to plan ahead. Mark your calendars for March 20, 21, and members at www.LotteryIndustryHallofFame.com. 22 in NYC for this popular event. Visit PublicGaming.org for con- The Ceremony to induct the two North American industry lead- ference info, updates, and registration and room reservations links. ers into the Lottery Hall of Fame will be held Tuesday, October Thank you for your support and see you at PGRI Lottery Expo, 4th at 2:30 pm at NASPL Atlanta Conference (room TBA). NASPL Atlanta, G2E Las Vegas, and then the bi-annual World Lot- The Ceremony to induct the three Global industry leaders into the tery Summit in Singapore. This will be a busy and rewarding fall Lottery Hall of Fame will be held Tuesday, November 8th at 5:00 conference season! ■ pm at the World Lottery Summit Conference Marina Bay Sands in Singapore (room TBA). Our interview with Tom Delacenserie continues our focus and advocacy for the development of the API (Application Programming Interface) for government-lotteries across the world, and for U.S. Paul Jason, Publisher lotteries in particular. We had a half-day session on this topic at the Public Gaming International Magazine

10 // PUBLIC GAMING INTERNATIONAL // September/October 2016

Tom

PUBLIC GAMING INTERVIEWS DELACENSERIE Secretary, Florida Lottery

Application Programming Interface (API) as the Key to a Sustainable Future for Lottery

Paul Jason: You come from the consumer can realize the category’s full potential. suasive to a corporate account. Having to products industry. What are their strate- Think about that. Mascara already has extrapolate potential from limited data gies for garnering more favorable treatment more space and makes a much stronger samples is not what motivates corporate from retailers? statement than Lottery, which generates accounts to act and they don’t have to Tom Delacenserie: I’ll give you an ex- more sales. Yet, timely sales data allowed do it because CPG companies and the ample. I was reviewing a recent report on Walmart to quickly identify a strong corporate accounts have actual data that the personal care category which includes trend and up their commitment to in- includes product/category sales for all hair accessories, suntan, soaps, cosmet- crease those 49 million unit sales. How stores nationally. The technology that en- ics, mouthwash, etc. Annual sales from does that happen? It happens because the ables them to do all of this is the API. Ap- mass outlets i.e. multi-state drug, super- CPG brands have the data to prove to plication Programming Interface is the markets, discount retailers like Walmart, Target, military stores etc. were around $49 billion. About $21 billion less than Lottery, right? Yet, look at the space retail Without the data that API technology provided, allocates to personal care compared to the sales trend isn’t identified and the opportunity Lottery. The report highlighted the hot is lost. Scanned sales data rolled up nationally trending mascara category making the point that Walmart alone sells 1.6 tubes can be very persuasive to a corporate account. of mascara every second of every day. 49 million units a year, just in Walmart. Now here’s the interesting part. Walmart’s take-away from the statistic Walmart that mascara is a “hot” trending common language that enables scanned was not the significant number of units item and the ROI on increasing its com- data to be captured, transmitted, and or- sold but they feel they’re leaving money mitment to mascara will be positive. ganized to inform the decision-making on the table! So, together, Walmart and Without the data that API technology process. Without the API, we don’t have the CPG (consumer packaged goods) provided, the sales trend isn’t identified the data, we don’t have a story to tell, mascara vendors are investing to en- and the opportunity is lost. Scanned sales and we don’t have the attention of our hance their beauty department so they data rolled up nationally can be very per- corporate retail partners. With that data,

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IGT.com/wheeloffortunetrue3D

All other trademarks used herein are owned by IGT or its affiliates, may not be used without permission, and where indicated with a ®, are registered in the U.S. Patent and Trademark Office. IGT is committed to socially responsible gaming. Our business solutions empower customers to choose parameters and practices that become the foundation of their Responsible Gaming programs. our story is so much more compelling. How important is it for Lottery to be visible where impulse intersects with payment— We’re able to convince our retail partners at the check-out counter, and how does API at the check-out lane. of Lottery’s potential and make a stronger contribute to that goal? Now let’s just take Powerball. Is it a category impact by getting premium floor T. Delacenserie: It’s very important. staple like Heinz that is purchased with space and a secondary selling location at Let’s take a look at what goes into a pur- very little thought or emotional engage- the coveted check-out counter. This is the chase decision. Retailer surveys show that ment because we know it must be there tool the industry needs to consistently for most brands, the average consumer on the table when it is time to eat din- generate the sustainable growth that good spends seconds deciding on an in-store ner? Or is it like Wrigley’s gum, something causes depend upon. brand purchase in part because they al- that we want but will not be missed if we don’t get it? Brand awareness of Powerball is conditioned by billboards and other advertising. But the decision to buy or not to Without the API, we don’t have the data, buy a lottery ticket is often made right in the store. Just like Wrigley’s gum, Lottery we don’t have a story to tell, and we don’t have needs that visibility and easy access right the attention of our corporate retail partners. at the check-out counter. It is the repeti- With that data, our story is so much tion of exposure to the brand that condi- more compelling. We’re able to convince tions the shopper to look for and buy it. The consumer needs to know that every our retail partners of Lottery’s potential and time they are in the check-out lane, they make a stronger category impact by getting will have the opportunity or be reminded premium floor space and a secondary selling to buy Lottery. We all know how hard it location at the coveted check-out counter. is to procure the premium position. The API is the mission-critical component to this picture that enables all the functionality that the modern corporate account retailer needs to support a product. Wow. It is exciting to imagine what could be ready know what brand they want to So the API eliminates some of the issues accomplished. It’s also scary to imagine how buy before they go into the store. For ex- that make vending the product laborious we will fare if we do not modernize. ample, the condiment section of the su- for the retailer. T. Delacenserie: When it comes to permarket makes a large statement with T. Delacenserie: Yes, but it’s much using sales data to promote the category, many brands and sizes. But it shrinks dra- more than that. The bar-coded ticket is we’re still working with an abacus while matically in the mind and perception of scanned and that transaction data is trans- everyone else is using high speed comput- the shopper when their attention is drawn mitted to the Retailer’s system as well as to ers. I believe as an industry, we know what to the brand of choice. A behavior condi- Lottery’s central server for processing, all we have to do. We just have to start some- tioned from repeat past patterns. People done automatically. By capturing trans- where. Right now, we just need to move who buy Heinz catsup probably could action information in digital form, the the dialogue forward, address the ques- not even tell you the names of the other data can be used in a variety of ways from tions and concerns, and do it all with a brands because they literally do not even improving inventory management to pro- sense of urgency. The beauty is that the see them on the shelf even though they viding an understanding of the complex blueprint is crystal clear. APIs are already are right next to Heinz. The purchase de- relationships between advertising, promo- being used to great effect, have been for cision is made quickly. tion, merchandising, and product sales. many years, and so we have thoroughly A buying decision can also be condi- The business of calibrating the optimal vetted best-practices to model after. Obvi- tioned by seeing a product at multiple product mix becomes a science instead ously, there are obstacles, like how to fund consumer touch-points. Let’s take Wrig- of an art. Improving the accounting rec- it and what is the organizational structure ley’s gum. They reinforce brand awareness onciliation alone would create incredible that hosts, maintains, and operates the through advertising, as well as with prod- efficiencies that currently aren’t being re- API apparatus. But the ROI on the invest- uct shelf placement in the aisles where the alized at retail with Lottery. This is the ment is so emphatically clear, the conse- consumer sees Wrigley’s next to the other type of information CPG brands provide quence of failing to invest is dire indeed, brands of chewing gum, and then again for their retail partners and it is what the and so the will to make it happen should on the racks at the check-out lane. The retailer expects us to provide. The thing is be resoundingly embraced by all of us. key touch-point for the product though is we need to do this for ourselves, not just

14 // PUBLIC GAMING INTERNATIONAL // September/October 2016 because the retailer requires it. We need Publix voiced concern about adding fac- sure any discussion of rolling out lottery to capture this data and render it into the ings and inventory and after addressing nationwide would at a minimum require forms that drive our own decision-making them we discovered one of the most im- the category provide the most basic lev- processes. Collectively, Lottery spends portant concerns to Publix was the time it els of data and reporting capabilities, hundreds of millions of dollars on adver- would take employees to write down the which an API could provide. No matter tising, product development, merchandis- beginning and ending book numbers for how compelling the performance in one ing, distributional logistics, and every- their tracking purposes. A solution they store or even multiple stores within one thing else that goes into supporting this could embrace involved a wand that would state, a national or multi-state retailer $70+ billion dollar industry in the U.S. scan the books for number entry and save must be able to accumulate sales data However, the return on that spending is employees time. Publix has agreed to pilot consistently across their universe to see much less than it could or should be. The additional facings in a small number of the big sales/profit picture for products rudimentary tools we use for data collec- stores to test the idea. Retailers need more it sells. That is why we need to work to- tion are just not adequate in today’s marketplace—not for our retail partners and not for us either. The result is sub-optimal performance which is in effect costing us When it comes to using sales data to promote hundreds of millions of dollars in sales, the category, we’re still working with an abacus operational efficiencies, and ultimately while everyone else is using high speed computers. net funding. The API is the bridge to the future in which Lottery becomes a profit- driver for both our retail partners and the beneficiaries of lottery funds. The defining characteristic of Amazon, efficiencies and standardizing API’s would gether as a community of lotteries to in- for instance, is the sophistication of its provide those efficiencies and increase the vest in API to achieve our shared objec- data analytics that powers its superiority opportunity for product growth. tive of expanding distribution of lottery in logistics, its understanding of the con- products in national accounts. sumer, and its ability to identify trends Without the technology to effectively manage and develop market strategies at break- our category, we are ill-equipped to sell to I would think that it is not just a matter of neck speed. All made possible by technol- corporate accounts like Walmart. getting our products into a Walmart. Don’t ogy that records transactions in a common T. Delacenserie: It certainly puts us they analyze performance on an ongoing ba- language and converts data into business at a disadvantage. The intent of a su- sis and adjust their support accordingly? intelligence. That technology is the API. percenter model is to meet all the cus- T. Delacenserie: Getting your prod- I realize we do not aspire to be Amazon. tomer’s shopping needs once they enter uct in the store is just the first step and But corporate account retailers are rapidly the store. A retailer like Walmart knows does nothing more than give you the op- adopting the best practices established a significant percentage of their custom- portunity to deliver on the potential you by Amazon, Walmart and other indus- ers buy lottery. They also know not hav- promised. The “Power of Powerball,” for try leaders. Our competitors in the CPG ing those products could mean the cus- example, was on full display last January world are making sure their IT meets the tomer they work hard to attract goes to a in many stores including Walmart Neigh- expectations of these retailers and we need competitor for lottery and maybe some- borhood Markets. Retailers like Walmart to work to keep up with them. thing else they might have purchased at see the potential Lottery has to drive store Although not completely API related, Walmart. At the same time, they need traffic and residual sales and not just dur- I’ll give you another example of how sell- to know Lottery will operate with the ing big jackpot runs. Yet we fail to clearly ing a product that retailers consider too same level of consistency and efficiency articulate that potential and, by extension, labor intensive can have a negative effect as their other vendors, especially when what the retailer’s potential with lottery is on growing that product. it comes to sales data. We’ve had dis- because our reporting capabilities are so Publix Supermarkets is one of our larg- cussions with Walmart in the past few inconsistent and fractured. We need to be est and finest retailers. They sell Scratch years about doing a supercenter lottery able to give corporate retailers real-time Offs from both a vending machine and pilot in Florida and, while not approved data on a national scale for them to fully an in-counter dispenser with a higher yet, we remain hopeful. However, even grasp the impact that Lottery would have percentage of sales coming from the vend- if they did approve the idea, a success- as both a standalone product and traffic ing machine. We projected Publix could ful pilot and a “national rollout” are two driver. Go back to my mascara example of increase their sales from the in-counter very different things. While I wouldn’t 1.6 tubes sold in Walmart every second. dispenser by adding product facings. presume to speak for Walmart, I’m quite Impressive, but Walmart saw potential

16 // PUBLIC GAMING INTERNATIONAL // September/October 2016 Is your lottery ...

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www.camelotglobal.com for more sales by improving their in-store lottery is being purchased disproportion- T. Delacenserie: Actually, they do and presentation. This is how a product or ately by the lower-income segment of so- rightfully so, continually prod us for bet- category convinces a national account it’s ciety. A few years ago we worked with a ter information and data integration. At a worth the space it occupies and more im- corporate supermarket account on a pro- recent business review we did with Publix, portantly grows. Identify a trend, show the motional idea. The idea was to cross pro- they included a vendor performance ap- account how the trend is affecting prod- mote lottery with an in-store non-lottery praisal they do with all of their suppliers. uct movement, store traffic, and profit, product. We also worked with an inde- Their scorecard has six categories grading and make a case for growing those num- pendent marketing organization to track performance on a scale from one to five, bers by improving space and positioning. the “other products” that were in a basket five being the highest. For the last three or I would submit Lottery could tell a very when someone bought a lottery ticket. four years, we have received all fives except impressive story. The facts are on our side The results contradicted the perception. in one category. That category is technol- and our corporate partners are starting to We saw high-end olive oils, specialty ogy and data collection. While they un- understand lottery’s potential, but unless breads from the store’s bakery, and other derstand as a Lottery we’re at least partly we utilize real time data analytics enabled products that didn’t fit the narrative of dependent on industry technology, their by API technology to harness and success- lower-income consumers buying lottery expectation is that we work with both the fully manage sales data from a $70 billion along with beer and cigarettes. The lottery vendor community and the industry to category, we’ll be left with nothing more player was just as likely as the non-lottery than unrealized potential. player to buy high-end products. This is improve inefficiencies and inconsistencies When you consider sales and profit at the kind of information that is especially relative to equipment and data collection. retail are measured down to the square valuable to corporate accounts. I strongly dislike not meeting Publix or inch (shelf and floor), you start to real- any account’s expectations, and with that ize how important data is. Implement- Knowing what is in the basket would also in mind, respectfully submit that all lot- ing API to get into an account is just the help us to substantiate our claim that Lottery teries all around the country could ben- beginning. Applying new technologies is a driver of store traffic and residual sales. efit by collaborating to meet the needs of and improving our ability to leverage T. Delacenserie: True story: When we these corporate accounts. Every state has data-analytics to drive performance is an did the first Walmart Neighborhood Mar- large corporate accounts with the same on-going process. And yes, every vendor ket test, I was in a store at 6:00 a.m. with needs, and frankly, we’re in jeopardy of must constantly defend their product two executives from Bentonville to wit- not being able to increase our sales and space with real time data. And not just ness the sale of the first lottery ticket. One net funding to Lottery’s beneficiaries if we big picture sales data. Corporate retail- of the first tickets sold was to a customer fail to provide it to them. ers also expect their vendors to be able to who, seeing three guys in suits at the end drill down in a granular way to look for of the check lane, approached us unsolic- What about the obstacles to implementa- ways to improve performance. ited and asked if we were with Walmart. tion? How can consensus be built to move She thanked the gentlemen from Walmart forward with an action-plan? What kinds of granular data are they look- for adding Lottery to the store’s product T. Delacenserie: I don’t presume to ing for? mix explaining how she had to drive past have all the answers to that question. I T. Delacenserie: Knowing what other the store each morning to a less convenient would just point out that we’ve done it be- products are in the basket with lottery retailer to buy her tickets. She continued fore and we just need to do it again. Imag- products for example. “Other products” saying, “I’m really happy knowing I’ll be ine what it must have been like for the share so much about a consumer and pro- able to get my lottery tickets at Neighbor- handful of states which started Powerball vide a rich canvass of opportunities for hood Market.” Now think about the vol- back in 1988. These states were all operat- both retailers and manufacturers includ- ume of customer traffic that enters a store ing independent businesses, with diverse ing cross sell promotions and marketing/ like a Walmart Super-Store each week. operating systems and IT, and methods of merchandising strategies. Basket size, oth- What percent of those customers leave to accounting and reporting, and contractual er product types, cost, frequency of store go to a competitor to buy a lottery ticket relationships with retailers and all manner visits, purchase time of day … frankly, the or worse, go past the store because they of obstacles to overcome. The issues they kinds of data, intelligence, and insights it don’t carry lottery? provides is limited only by our imagina- had to wrestle down were no less formi- tion. It all helps us to understand consum- Publix is a grocery store that sells a bil- dable than the ones we need to deal with er behavior and to fine-tune our strategies lion dollars a year in lottery products in to modernize now. And the urgency of our to match product, place, price, and pro- Florida alone. Why don’t they require the current challenges is at least as pressing as motion to synchronize with that behavior. higher level of data reporting that other theirs were then. They did it back in 1988, For instance, it has been claimed that multi-state retailers require? and we should be able to do it now. ■

18 // PUBLIC GAMING INTERNATIONAL // September/October 2016

Kevin SHEEHAN Chief Executive Officer and President PUBLIC GAMING INTERVIEWS Scientific Games Corporation

Meet Scientific Games’ New CEO …

Kevin Sheehan joined Scientific Games Corporation as Chief Executive Officer and President in August 2016 as the Com- pany’s previous CEO, Gavin Isaacs, moved to a more strategic role as Vice Chairman of the Board of Directors. Previously Kevin served as Chief Executive Officer and President of Norwegian Cruise Line Holding Ltd., comprised of Norwegian Cruise Line and Prestige Cruises International, Inc., which operates Oceania Cruises and Regent Seven Seas. At Norwe- gian, Kevin led major initiatives to expand the company’s revenues and increase profitability in the midst of a difficult economic climate. He also focused the organization on delivering increased guest services, raising guest satisfaction scores to record levels. In 2013, Sheehan completed Norwegian’s successful initial public offering on NASDAQ, and in 2014, he completed the acquisition of Prestige Cruises International, the market leader in the upscale cruise segment. Kevin’s management philosophy of leading by example enabled him to reinvigorate Norwegian by opening lines of communication and creating a positive corporate culture. Prior to Norwegian, Kevin was with Cendant. His last role was Chief Executive Officer of Vehicle Services, which included global responsibilities of Avis, Budget, PHH Vehicle Management Services, and Wright Express. Kevin‘s earlier career included nearly 10 years in the media industry. He served as President of STT Video Partners, a joint venture between Time Warner, HBO and Sega, to offer interactive cable services directly into consumers’ homes. He was also instrumental in the creation and launch of Telemundo. In 2011, Kevin was named “Miami Ultimate CEO” by the South Florida Business Journal, and in 2014 EY named him an “Entrepreneur of the Year.” Kevin holds a Bachelor of Science degree in Accounting from Hunter College and an MBA from New York Uni- versity’s Graduate School of Business. He is also a Certified Public Accountant.

Paul Jason: You resurrected Norwegian lottery operator customers become the gold Fortunately, Scientic Games already Cruise Lines (NCL) from mediocrity to be- standard in the games-of-chance industry? has a strong foundation, having just an- ing best-in-class. The innovations you spear- Kevin Sheehan: Thanks, Paul, I ap- nounced its third consecutive quarter of headed and your tenacious focus on execution preciate the kind words. When I joined year-over-year increases in revenue, operat- elevated NCL to setting the gold standard for Norwegian Cruise Line we certainly had ing income, and cash flows from operating the entire industry. That is a matter of re- our challenges, and I am very proud that activities. Importantly, Lottery is a big con- cord, both as a universal customer experience under my leadership we went from being, tributor to our success. In our recently an- and as per the metrics that reflect the market as you said, mediocre and not considered nounced second quarter, Lottery revenue share and financial performance of NCL. a formidable competitor to being best-in- increased $13.7 million; operating income How might some of that leadership experi- class and the most profitable company in increased $8.9 million, and our instant ence inform your approach to helping your our industry. games business is performing exceptionally

20 // PUBLIC GAMING INTERNATIONAL // September/October 2016 well, with revenue growth of 11 percent or management team in place. Jim Kennedy and generate higher overall store sales. Lot- $15.4 million—reflecting our continued and his team have been fantastic about pro- tery is a journey that begins at retail with market leadership in instant games. viding me with insights into the company the purchase of a game and continues as We already set a high bar and are stead- and our industry. I’ll continue to lean on consumers go about their lives, embracing fastly delivering the world’s best lottery ex- them for their support and counsel. Over mobile and internet. periences through our focus on innovation the next few months, I look forward to at- and customer partnership. I’ll leverage my tending the Global Gaming Expo (G2E), At NCL, you fearlessly confronted the short- experience, my passion, and financial acu- NASPL, and ICE Totally Gaming early in comings that needed to be improved. Can we men to support the proven leadership of 2017. These trade shows and conferences expect the same as you address the opportu- Jim Kennedy and his long tenured team. will be great platforms for me to meet our nities for improvement that you see in the My charge is to ensure that our Lottery divi- customers and our team members in both Lottery industry? sion has the tools and support needed to be professional and social settings. And I’m al- K. Sheehan: Absolutely, we will con- the industry-leading gold standard: design- ready traveling quite extensively, getting to front our opportunities to enter our next ing innovative, engaging games, expanding know customers and employees across the phase of growth and development. How- our successful Cooperative Services Pro- globe. Understanding our business, trust- ever, my focus for the remainder of 2016 is gram, and supporting our retailers to help ing our leadership, listening to our custom- to spend time with customers and employ- increase state lotteries’ sales and profits for ers and leveraging my extensive business ees, doing a deep dive into the industry and their beneficiaries. I’m really looking for- experience will help reveal our underlying business of Scientic Games. We have three ward to working with the Scientic Games opportunities to propel our growth and de- strong businesses – Lottery, Gaming, and Lottery team to add even greater value for velopment. Interactive. I look forward to building on our customers, our players and our employ- that momentum to drive continued growth ees; collaboration is what I’m all about. Just like in the cruise line industry, gaming across the company, foster an even stron- is all about delivering the best customer ex- ger company culture, capitalize on conver- For the television show, Undercover Boss, you perience. Lottery operators depend on their gence opportunities in our three business took two weeks to perform in a wide variety of retail partners to be the face of Lottery to the lines and execute fiscal discipline. jobs to see for yourself how performance and customer, the players. How might Scientic operations at NCL could be improved. I don’t Games and lottery operators engender a more What is your vision or pathway forward for think you’ll be able to go “undercover” in our in- collaborative and mutually rewarding rela- Scientific Games? dustry, so how will you get insight into the inner tionship with their retail partners? K. Sheehan: Our mission is to empow- workings of our industry to reveal those kinds of K. Sheehan: At Scientific Games, our er our customers by creating the world’s underlying opportunities for improvement? focus is on delivering the world’s best lot- best gaming and lottery experiences. I K. Sheehan: You are right, Paul, going tery experiences and our teams live up to don’t see that mission changing. This is “undercover” as part of Undercover Boss this mission every day. I think we are do- a promise that the Scientic Games brand was a great opportunity for me to really ex- ing pretty well at that given the growth has made. My vision and path forward perience what it was like to work at Norwe- and success of our instant games business, will be set in the coming months. Right gian Cruise Line through the eyes of differ- the development of innovative technolo- now, my focus is to rely on my already ent groups of employees. It was an amazing gies, and the performance of our Lottery strong team to continue their leadership experience to serve as an assistant waiter, division as a whole. But we can always im- of our day-to-day business; build on the a deck swabber, and part of the entertain- prove. I believe the three most important momentum that the team and company ment staff, to name a few of my under- things we can do are to 1) Ensure that we has already achieved; enhance our culture; cover roles. A lot of the work was demand- have a strong understanding of the con- execute fiscal discipline, and ensure that ing and quite taxing, from both a physical sumer and retail channel, and we do this our focus on innovation and customer ser- and mental standpoint. I truly appreciated through our Lottery Insights group; 2) vice does not waver. getting the “inside scoop” from all the col- Based on those insights and our years of This is a strong company, with an expe- leagues I was fortunate to work with … the experience, ensure that the products we rienced and passionate team in place; they experience made me realize how important innovate for lottery operators and retailers know their business, our customers and it is to get perspective from employees of are appealing to consumers; and 3) Edu- our employees. The industry is exciting, all levels, value teamwork, and realize that cate retailers that lottery is one of the top vibrant, and has a lot of opportunities for it takes a village to impact change and ac- retail product categories in terms of actual growth. I feel honored and humbled at the complish a vision. sales, especially when promoted and posi- same time to be a part of the next stage of When it comes to getting insight into the tioned effectively. We want retailers to un- Scientic Games’ journey and the next era inner workings of our industry, I already derstand that Lottery customers typically of helping our lottery customers grow their know how lucky I am to have such a strong spend more at retail, boost other categories net proceeds to beneficiaries. ■

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 21 Empower YOUR Sales Te a m

With IGT’s recent purchase of Hudson Alley Software, Aurora™ OnePlace – the mobile app and website that puts insights and compelling data into the hands of lottery sales reps – has joined IGT’s suite of growth tools. Aurora OnePlace’s visualized, up-to-the minute reporting, routing and tracking modules, and actionable alerts help lotteries identify challenges and opportunities at retail, drive best practices, and grow retail sales and profits. The tools and content you need to transform, manage, and grow your business today…and tomorrow. That’s the brilliance of Aurora.

With IGT’s July 2016 acquisition of Hudson Alley Software, Top 10 Ways Aurora™ OnePlace – the leading sales force automation Aurora OnePlace solution in the industry – has joined the suite of smart, open, Helps Drive Sales agile business intelligence products IGT has developed to drive 1. Quickly lottery profitability and growth. Since Aurora technology enables identify problems extending back-end services across multiple applications, Aurora and opportunities. OnePlace, Aurora Retailer Wizard, Aurora Retailer Manager, Powerful but simple, Aurora Performance Intel, and Aurora OrderStar will all share the Aurora OnePlace displays same set of services and the same information to provide IGT information in a way that makes customers unprecedented integration; for instance, a retailer will it immediately actionable. For example, with a quick glance, see the same alerts in Retailer Wizard as field sales reps see in sales reps or sales managers will know how a retailer’s sales are OnePlace and inside reps see in OrderStar for that location. Of trending within each game category, enabling them to react course, OnePlace easily integrates with other IGT and third-party appropriately and instantly. applications as well, allowing all OnePlace users to benefit from IGT’s vast resources, including its training organization, teams 2. Shift sales reps from defense to offense. of analysts, and insights from its lottery operator and sales force Sales reps who use OnePlace walk into each sales visit with a management experience in jurisdictions around the world. mission, knowing exactly what they want to accomplish. This allows the rep to use the limited time allotted for conversations Lotteries buy sales force automation solutions for results, and with store managers and owners efficiently, to the benefit of IGT’s Aurora OnePlace mobile app and website deliver the results both rep and retailer. lotteries need to grow sales at retail and to operate more efficiently and effectively. 3. Increase new game penetration. • Visualized, up-to-the-minute reporting puts insights and Aurora OnePlace proactively alerts reps and sales managers compelling data into the hands of sales reps, enabling them to when retailers have not activated a pack of a new game in the coach retailers. first weeks after launch. With OnePlace, sales reps can see all alerts in their territory and/or all alerts for a specific retail • Actionable alerts notify reps immediately of potential location, so that they can call and/or visit retailers to get those revenue-draining situations and opportunities for growth. new hot sellers put out for sale. • Routing tools provide optimized time management. 4. Sell in best-selling games. • Prospecting module supports active tracking and monitoring Dispenser space is a precious commodity; it’s important that of retail recruitment activities. it’s used wisely. OnePlace lists best-selling games by price With a major new release, Version 8.0, scheduled for September point so sales reps can quickly ensure that the top performers 2016, including brand-new iOS and Windows 10 apps, Aurora are carried and on display at each retail location. In addition, OnePlace now has even more essential tools and features to drive OnePlace will alert the sales rep of stale inventory that has best practices and provide invaluable information on: been sitting in the retailer’s safe for too long and should be returned. • Sales. • Winners. 5. Remove slow-selling games that the retailer believes sell • Instant ticket inventory. • Merchandising elements, well in his or her store. including new POS • Sales goals. Often, when sales of a once-best-selling game begin to ordering module. • Retailer goals – new. decline as customers move to newer games, retailers fail to • Instant games. notice that the game has lost momentum. OnePlace lets reps • Retailer profiles – new. • Incentive tracking – pinpoint old inventory and show the retailer which specific • Territory routes. coming soon. games are not selling well in his or her store and should be • Service calls. • More. replaced with better-selling games. • Jackpots.

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 23 10. Increase field time and maximize History productivity. Prospecting Because OnePlace proactively provides Jackpots information on sales, earnings, credits, Sales Insights adjustments, settlements, pack statuses, and more, it can dramatically reduce the hours Retailer Info reps spend in the office or on the phone with

Product Info headquarters, allowing reps to spend more quality time with retailers and freeing up office staff. Sales Routes An Integrated Solution Inventory Adam Perlow, formerly CEO of Hudson Alley Software, has joined IGT as Vice President, Sales Task Force Automation Solutions, and the transition has Management been seamless, with no interruption to the service Sales Hudson Alley customers have come to expect. Presentations Aurora OnePlace will continue on its established Alerts path of evolution inspired by new technology, new Scheduling ideas, and feedback from IGT’s and OnePlace’s Winner lottery partners. Awareness Perfect Store In the future, OnePlace customers will benefit Everything reps need, all in OnePlace. from even more enhancements based on the goals 6. Optimize each retailer’s price point mix. and desires of lotteries and IGT’s experience and Effectiveness of a display varies by location, depending upon insights. Among the exciting new features coming to OnePlace the preferences of customers. OnePlace’s Space-to-Sales are sales rep and retailer incentive management modules; instant Screen graphically presents analysis of each retailer’s specific ticket ordering; real-time, terminal-free pack returns; and other instant game assortment and makes recommendations for pack functions. New training programs (both classroom and in- adjusting the price point mix or adding facings of higher- the-field coaching) will increase the effectiveness of OnePlace use selling, higher-price-point games, taking the guesswork out of to drive sales. These will include training on and implementation achieving a more profitable display. 7. Use winner awareness to drive sales. “Our goal was for our Sales Reps to maximize their It’s no secret that customers like to play in “lucky stores.” time in the field, achieve real results during a sales visit, OnePlace provides abundant winner awareness information, increase lottery ticket sales and improve the service both by territory and by location, to help reps help retailers that the NCEL provides to its retailers. OnePlace has spread the news. positioned us to be true sales representatives in NC!” 8. Spark friendly competition by focusing on areas – Terri Avery, Deputy Executive Director of Sales, of opportunity. North Carolina Education Lottery OnePlace can compare an individual retailer’s sales by product line within its territory, region, state, zip code, and business type. This powerful dynamic provides actionable data to show of the PERFECT Sales Process, a systematic, repeatable, where the retailer can improve and gives the retailer incentive and measurable way to sell that turns the oft-perceived “art of to outperform the competition. selling” into more of a “selling science” and ensures that customer interactions are standardized across the sales organization. And to 9. Track what is happening – and not happening – at retail. help optimize lottery sales processes, IGT will offer a consulting OnePlace pioneered the use of checkboxes to document service that includes evaluation of current practices and a plan to each retailer visit. This simple step not only provides both enhance them. quantitative and qualitative information about each visit, it offers the added benefit of providing powerful reporting For more information on Aurora, visit IGT at NASPL 2016 or capabilities to track initiatives, such as selling in of special follow the action on IGT’s Facebook, Twitter, and LinkedIn feeds. dispensers or increasing facings at retail. It even allows reps to take photographs and add them to their visit history, which managers can view instantly.

24 // PUBLIC GAMING INTERNATIONAL // September/October 2016 PUBLIC GAMING INTERVIEWS

Alice GARLAND Executive Director, North Carolina Education Lottery (NCEL)

Responsible Gaming and Sales Maximization go Hand-in-Hand PGRI Introduction: For the 10th year can be pursued with equal vigor and dedi- strong record of success with sales, but I in a row, the N.C. Education Lottery cation. Is there a trade-off between RG and am just as pleased that each year as we sales maximization? have grown our sales, we’ve also built a set new records in sales and earn- Alice Garland: No. Showing concern stronger responsible gaming program. ings in fiscal year 2016, raising more for players is not only the right thing to than $600 million for education pro- do, but it is the right business practice Promotion of a responsible and healthy grams in North Carolina. Sales in- too, because it sends a positive message approach to recreational gaming would creased by 20% over FY 2015, shat- to our customers and the public that we seem to be key to building a business that tering the $2 billion mark to reach serve. Lotteries don’t need sales to prob- is sustainable. In the short-term, though, $2.38 billion. Net funds increased by 16.5% to deliver $607.8 million to its beneficiary, public Education. We can meet that competition by knowing that As enviable as these accomplish- in the end, today’s consumers, especially that ments are, there is another achieve- much sought after millennial demographic, ment that is just as impressive. Alice want to do business with businesses that show Garland was awarded the Don Hulen they care. They expect and demand Award from the National Council on Problem Gambling for her leadership great customer service. And responsible gaming in expanding Responsible Gaming is at the heart of good customer service. (RG) efforts across the United States. Now we need to create an award for combining dedication to the principles of RG and the business goal of lem gamblers to be successful. Today’s the aggressive (and less responsible) ap- maximizing sales and net funding for consumers have multiple choices for proach towards customer acquisition and maximizing GGR applied by commercial Lottery’s beneficiaries—we have our how to spend their entertainment dollars. They are not only choosing prod- operators generates higher profits. How first winner! ucts that deliver great value, but they are can we ensure that our good intentions do Paul Jason: People often talk about a also choosing to spend their dollars with not put us at a competitive disadvantage “balance” between RG and sales maximi- companies that care. I’m pleased that over against our competitors in the games- zation. Your results seem to show that both the N.C. Education Lottery has such a of-chance industry?

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 25 LOTTERY CHIEF EARNS NATIONAL A. Garland: Sustainable is the key word here. Lotteries and their public HONOR FOR RESPONSIBLE service mission are here for the long term. Our games need to appeal to a GAMING ADVOCACY broad and diverse audience. Our success depends on a lot of people play- —Alice Garland Accepts Award ing a little rather than a few people playing a lot. The history of the lottery from the National Council industry in the U.S. shows us that. Yes. There’s lot of competition today and on Problem Gambling more is coming. We can meet the competition by moving more quickly to embrace the technologies that provide a better lottery experience. We can The Don Hulen Award for Advocacy was con- expand our base of players with innovative games—some for everybody and ferred by the National Council on Problem Gam- some for important niches. Building your base of customers is actually one bling. Executive director of the North Carolina of the most important pieces of growing a lottery responsibly. We can meet Education Lottery Alice Garland is the first lottery that competition by knowing that in the end, today’s consumers, especially or gaming industry professional to earn the honor, that much sought after millennial demographic, want to do business with which was presented to her at the 30th National businesses that show they care. They expect and demand great customer Conference on Problem Gambling in Tarrytown, service. And responsible gaming is at the heart of good customer service. NY. The conference provides information on prevention, treatment and responsible gaming. I realize that the purpose of RG is to protect the consumer—that its purpose isn’t Director Garland pioneered a program to share to burnish our image and be leveraged as a PR tool. But still, why couldn’t and responsible gaming training resources developed shouldn’t it be leveraged into our brand-messaging as a value that Government- in North Carolina with other U.S. lotteries. The Lottery delivers much more effectively, and with much more genuine dedication program was embraced and advanced by NASPL, and commitment, than other sectors in the games-of-chance industry like casino the U.S. lottery industry’s professional associa- and Daily Fantasy Sports operators; and to explicitly differentiate Lottery from tion. “Alice’s leadership in responsible gaming those other sectors as regards to RG performance? resonates across the country,” said Keith Whyte, A. Garland: I agree. Our brand is responsible play. That’s one of the executive director of the National Council on main things that makes state lotteries unique and different from other Problem Gambling. “She has helped set the stan- gaming enterprises. We’re accountable. We’re transparent with our custom- dard for the lottery industry.” ers and the public about how we operate and where the money goes. Our Her vision led to a broader discussion about the engagement with our customers is different. And our profits go to good active role lotteries must play in responsible gaming causes. When people think of lotteries, they should see fun, fair and respon- and new partnerships with advocacy groups. From sible play. That’s our brand. those collaborations, NASPL launched a program Government-lottery applies a social consciousness to its mission in ways that to implement best practices in all member jurisdic- other purveyors of games-of-chance do not. What can we as an industry do to tions and added responsible gaming components to gain recognition and appreciation for that fact from stakeholders like the media, its national seminars. “We can balance our mission the legislators who shape regulatory policy, and the general public? to raise money for good causes with our responsibil- A. Garland: Making responsible play part of our brand helps everyone ity to look after the interests of players,” Director see how lottery is different. Isn’t that what a successful brand does? We all Garland said. “Everyone who works at a lottery— just need to do a better job across all our platforms and channels ensuring whether they work in sales, security, advertising or that our responsible play message gets seen and heard. We need to turn any other department—has an important role to up the volume. And it can’t just be part of a holiday campaign or a flag play in sustaining that effort.” we fly each March during National Problem Gambling Awareness Month. While the lottery has always encouraged respon- We need to make it part of a conversation that goes on every day, all year. sible play, developing a robust responsible gaming Check out NASPL’s new home page. Responsible gambling has a promi- program became a top priority when Director Gar- nent, can’t-miss-it spot on the page. Here in North Carolina, all of our civic land rose to the lottery’s top leadership post in 2010. presentations include a section on responsible play. If the public sees that we Under her direction, the lottery has obtained Level acknowledge the part we play in problem gambling and that we take steps 3 certification under the World Lottery Association’s to mitigate any harm that comes from lottery games, we will eventually get Responsible Gaming Framework, dedicated a new the recognition we deserve. position to support the program, and has required all employees and retailers to undergo training. All lotteries endeavor to employ RG measures to protect the consumer and The N.C. Education Lottery began in 2006 and players. What are some action-items that might be missing in the RG programs now raises more than half a million dollars a year as they exist for lotteries that have not secured the Level 3 RG accreditation for education. For more information, visit nclottery. from the WLA? com and click on the “For Education” tab. ■ Continued on page 65

26 // PUBLIC GAMING INTERNATIONAL // September/October 2016 THE BEST SOLUTIONS ARE BUILT ON YOUR IDEAS PUBLIC GAMING INTERVIEWS Vernon KIRK Executive Director, Delaware Lottery

Lessons from the U.S. Lottery which Sells Casino-Style Games Online

PGRI Introduction: Now in its 41st year of Paul Jason: Describe your relation- of the product and in the end, all operation, the Delaware State Lottery of- ship with stakeholders over the past four stakeholders had ownership. years as regards to the implementation fers the largest variety of game-of-chance What do you do to nurture and manage of online gaming in Delaware. Have through a wider variety of distribution chan- positive relationships with all the differ- the general media, land-based casinos, nels and media than any lottery in the U.S. ent interest groups? legislators, and the lottery all been in V. Kirk: There is constant com- Video Lottery games were introduce in agreement with how casino-style inter- munication with all of the groups 1995. Sports-betting was launched in net gaming should be implemented and involved. We have regularly sched- 2009, and casino gaming was launched at managed in Delaware? uled meetings and phone confer- three racetrack casinos in 2010. A couple Vernon Kirk: The Delaware ences to assess what is working well, years later, Sports Lottery was expanded Gaming and Competiveness Act of what may not be working the way 2012 which, among other things, to select Sports Lottery Retail locations we thought it would and what can authorized iGaming, put forth some throughout the state. we do to improve and make the cus- requirements of operations (i.e. On November 7, 2013, the Delaware Lottery tomer experience better. must be in the State of Delaware launched its online gaming system offering to play), but gave the Lottery wide Further to the previous question: I casino-style games such as poker, blackjack latitude for implementation and op- would think some stakeholders press for a and more, making them available for play on eration. Delaware’s three land-based focus on a slow, steady, responsible gam- the websites of Delaware’s three casinos: casinos are in partnership with the ing approach towards growing the online Delaware Park, Dover Downs, and Har- State as the Lottery has administra- business. And others press for higher rev- rington Raceway & Casino. The roll-out has tive and regulatory oversight of their enues. And aren’t there are countless oth- been one of steady development. By design, gaming activity and the State shares er issues to resolve into a singular strategy no high impact promotion or PR to drive in the profit distribution. iGaming for the Lottery to pursue. How do you rapid growth. With traction building, and per- in Delaware is required to be offered clarify objectives and execution to satisfy stakeholder agendas that sometimes con- haps reaching a tipping point, the first half only through the websites of the casinos, but the platform is provided flict with each other? of 2016 was almost double the net revenues by the Lottery through its vendors, V. Kirk: From the very beginning, over the first half of 2015. Now is a good time Scientific Games and 888 Holdings. Delaware emphasized providing a to ask Director Kirk to reflect on the impacts The State, the vendors, and the casi- safe, secure and stable platform for and insights gained from these first few years nos all worked hand-in-hand during its iGaming. I know Nevada and NJ of online gaming. the long, complicated development were similarly focused. It was critical

28 // PUBLIC GAMING INTERNATIONAL // September/October 2016 September/October 2016 // PUBLIC GAMING INTERNATIONAL // 29 for these first launches to be successful, not Is there anything that promotes Lottery to ca- eLottery (traditional products online). We Guy Bartlett, Business Intelligence Analyst only for the individual states, but for the sino and i-gaming players? had thought we may be able to do them industry as a whole. There were more than V. Kirk: We have not found much of a in parallel, but that proved way too ambi- a few iGaming opponents who said you market for cross-over between our tradi- tious, so we made the business decision to couldn’t do reliable geolocation, couldn’t tional game Lottery players to the casinos do iGaming first. We launched iGaming do proper player identification, couldn’t do and we are currently not well positioned to in late October 2013. Then, in February safe payment processing, etc. Any slip-up encompass the same to iGaming. We have 2014, the Governors of Delaware and Ne- had the potential to set-back iGaming who tried various types of casino promotions vada signed the Multi-State Internet Gam- knows how long. But Delaware, along with such as selling NASCAR instant tickets in ing Agreement, the first of its kind in the the other jurisdictions, have had no seri- conjunction with races at Dover Downs, nation. This agreement allowed for the two ous or significant operational or integrity but with modest success. We have had states to share poker liquidity where players issues since their respective launches. No success cross promoting our Sports Lot- from both states could sit down at a virtual cheating scandals, and no underage play- tery with casino gaming with such things poker table and play against one another. ers or players from outside state boundar- as buy a Sports Lottery ticket of a certain We added mobile for iGaming in May and The power to ies. To your point, I have been on several value and receive a match-play coupon for then were tasked with establishing lim- panels with Nevada and NJ and we always table games (i.e. blackjack, roulette, craps, ited video lottery in fraternal organizations get asked about revenue and we all reply etc.). Our Vegas style iGaming is more dif- throughout the state. As soon as we catch transform your in the same manner. The question should ficult to coordinate with our traditional our breath, we will look toward eLottery! be does it work, not are you disappointed products, but when we get to the stage How has development of online gaming im- revenues in how much revenue you are generating. where we will be selling our traditional pacted traditional lottery revenues? Delaware has now turned its attention to products online, I’m confident we will be player acquisition with more targeted mar- able to find ways to promote to both types V. Kirk: We have seen no impact on our keting. Having established a strong and of players as they will both be familiar traditional lottery revenue. FY13-15 were reliable operational platform, we are now with the genre. For example, some online all record years in traditional sales for us able to focus even more on the revenue- loyalty programs offer game play and that (2015: $149.7 million; 2014: $148.3; building component. I think the results are could serve as an introduction and transi- 2013: $144.1). Then we shattered the re- really beginning to show, with a 93% year- tion to our iGaming platform. cord in FY16 with $175.0 million. All of over-year increase for the first six months of Delaware’s products were up, but the pri- 2016 versus the same period last year. What have you learned about player behavior mary reasons for the increase were the re- that has surprised you, or that you did not surgence of Powerball (up 45%) and the Does your experience indicate that there is know five years ago? continued success of our instant games (up much cross-over between players who play V. Kirk: We have a large contingent of 21%, in part fueled by our first $25 price lottery at retail stores, those who buy online, young players online. That is not surprising point game). those who play casino-style games online, and in and of itself, but a large number of them What do you do to maintain growth in the tra- those who play in land-based casinos? are young women, and that has been a bit ditional lottery sector in the face of increased V. Kirk: We have no direct evidence that surprising for me. They are very loyal and consumer options for recreational gaming? players migrate between traditional lottery enthusiastic players, especially on certain customers and iGaming, or even land based virtual video lottery games. V. Kirk: Like many if not most, our traditional lottery growth has come from in- casino customers and iGaming. Questions Kambi provide a fully managed Sportsbook solution. Why not sell traditional lottery products online? stant scratch-off games. We have focused relating to consumer play-styles and behav- Our innovative global sports betting platform gives clients on value in all price points and introduced ior will be part of a player’s survey that’s V. Kirk: We definitely will, but our the complete package — everything from odds pricing our highest ($25 per ticket) just a few being planned now. Agency is very small and we have had a to exceptional customer intelligence and risk management. lot on our plate. Going back to the Dela- months ago and it became the first instant In addition, Kambi’s Sportsbook effortlessly empowers Do your promotional strategies facilitate and ware Gaming and Competitiveness Act of game the Lottery ever re-ordered. operators by providing them with a scalable and secure encourage consumers to go to different chan- 2012, we were authorized to expand our It appears to be the case that the DE legisla- foundation that delivers a leading player experience, while nels and try different game-styles? Sports Lottery from the 3 casinos to in- ture will not legalize Daily Fantasy Sports? at the same time offering them the flexibility to mould the V. Kirk: Yes, we have tried to promote clude retailer locations. We did that first so Do you think that might change? How do you service to fit their unique strategy and brand. exactly that. For example, the casinos have that we could launch in time for the 2012 think the Fantasy Sports phenomenon will poker tournaments that start on-line and professional football season. We were also impact the broader games of chance space, finish with live tables at the casino. Also, authorized to start Keno, which was num- and lottery in particular—not just in DE but coupons and other giveaways are awarded ber two on our agenda, and we successfully across the country? online and redeemed at the brick and mor- launched in January 2013. We then turned tar facility, and visa/versa. our attention to iGaming and what I call Continued on page 91 kambi.com 30 // PUBLIC GAMING INTERNATIONAL // September/October 2016 Guy Bartlett, Business Intelligence Analyst

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PUBLIC GAMING INTERVIEWS HEDINGER Executive Director, New Jersey Lottery

The Private-Public Partnership in Action

PGRI Introduction: It has been three years since the state teries in the nation have achieved the Level III Certification. of New Jersey entered into a 15-year contract with North- The Lottery continues to work with its partner, Northstar New star New Jersey, a joint venture consisting of GTECH (now Jersey Lottery, to make advances toward attaining the high- IGT) and Scientific Games. The goal is to enlist the resourc- est responsible gaming recognition offered in the industry by es and capabilities of private enterprise to drive responsible achieving the WLA Level IV Certificate of Accreditation. growth and optimize operations in the New Jersey State Carole Hedinger served as deputy director of the New Jer- Lottery. In Fiscal Year 2016, the Lottery grossed $3.2 billion sey Lottery between 1994 and 2003 before being appointed in sales, contributing $980 million to the State in support of acting director in 2003. She left that position in 2004 to as- its beneficiaries. sume the role of Chief Clerk at the Ocean County Surrogate The New Jersey Lottery also implements industry best prac- Court where she served until June of 2010. That is when tices as defined by the World Lottery Association (WLA) in Carole was again appointed to lead the New Jersey Lottery its Responsible Gaming Framework (RGF). In September where she continues to serve as Executive Director. The last 2012, the Lottery received its Level I Responsible Gaming three years have been a period of major changes for the Framework Certificate of Accreditation. In 2015, the Lottery New Jersey Lottery as they spearhead the implementation achieved the WLA Level II and Level III Responsible Gaming of an entirely new model for optimizing performance at a Framework Certificates of Accreditation. Only five other Lot- state government lottery: the private-public partnership.

Paul Jason: How does your, background, ing to be more on preserving margins than as a strategy to increase short term sales. academic training, and experience as a CPA maximizing sales. To our minds, that not To be sure, it may even increase short- inform your approach to the way you think only optimizes short-term net funding, term net. But, to my mind, the degree of business strategy and objectives? it is also a vital key to optimizing long- to which it may increase short-term net Carole Hedinger: I think that my term sustainability and responsible gam- is greatly off-set by the impact it has on background in public accounting is an ex- ing. That may seem obvious, but there is the profit model going forward. Typically, cellent basis for managing a lottery organi- a lot of pressure on everyone to increase players quickly realize when you increase zation for optimal financial performance, sales by enhancing the value proposition the prize-payout percentage which cre- for both short-term profit maximization to the players by increasing payout per- ates a demand for higher and higher prize and for long-term sustainability. For in- centages and price points. A case could payouts. That creates a slippery slope. By stance, the focus of an accountant is go- probably be made for the efficacy of that increasing prize-payouts, we are train-

32 // PUBLIC GAMING INTERNATIONAL // September/October 2016

You go down that path of training the players to more conservative, risk-averse approach than expect higher prize-payout percentages and then you seem to apply. you are under even more pressure to continue to C. Hedinger: I think we should all be risk-averse! Risk is something we want to increase that prize-payout percentage. do everything possible to minimize. I think most lottery directors are bemused when we read current biz-lit that admonishes us ing them to look for value in that specific and especially for larger businesses like a to be willing to make mistakes because that feature. Like Sears trained its customers to state lottery. I appreciate and respect that. is the only way to innovate and grow, etc. wait for sales promotions to buy its prod- But in the end, our mission is to maximize I can only speak for myself, but we put a ucts. You go down that path of training the revenues for our good causes, prioritize re- very high priority on avoiding mistakes and players to expect higher prize-payout per- sponsible gaming for the protection of the make no apologies for that! centages and then you are under even more consumer, and to operate responsibly from a That said, it can also be a mistake to not pressure to continue to increase that prize- financial management perspective. None of assume some calculated measure of risk payout percentage. And your costs increase those objectives is about maximizing sales. to make the necessary changes to keep up because you need the infrastructure to sup- It’s about maximizing business efficiencies, with changes in the market-place. The risk- port the higher sales required to maintain management discipline, and net proceeds assessment model applied by state govern- a net that is based on decreasing margins. for the beneficiaries of lottery funding. ment lotteries is going to be more conser- Why do that? I would rather generate $980 vative than those applied by start-up tech In FY2015, you even over-shot the mandate million net on $3 billion in sales than companies. In fact, state Lotteries will be of 30% net to return to the state by 2 points. $1 billion net on $5 billion in sales. The more conservative than almost all sectors of I would observe, though, that sales of the New higher margin model is a more efficient use private enterprise. And that is as it should Jersey Lottery have also increased every year of resources, a more responsible model for be. We are the shepherds of a multi-billion since 2008, surpassing the $3 billion mile- player protection against over-spending, dollar brand that is owned by the people of stone in FY2015. and it is a more sustainable model going this state. Our first priority is to preserve the C. Hedinger: A business with a high forward for future generations. During the value of that brand for future generations. margin like Lottery depends on an increase recent recession, instant games with high It is not to maximize short-term profits for in sales. So we do need to keep our focus price points and high prize payouts were the benefit of private shareholders who may on the top line as well. We do that by meet- the first to decline in sales leaving lotteries have a bigger appetite for risk than a state ing the needs of the consumer, producing dependent on them for revenue in a quan- government has. And consider the aspect in great games, promoting them effectively, dary. Prize payouts and price points are just which the value of that brand is almost all and doing all the things necessary to drive one part of an overall strategy for growing tied to intangible assets like trust, integrity, sales growth like good customer service and our business. and reputation. The value of those assets is supporting our retailers. in the billions of dollars. And it is ephem- Responsible Gaming is also a top prior- Your experience as a CPA seems to have in- eral, very vulnerable to dramatic devalu- ity for us. To that end, we want to ful- stilled a good instinct for the way real-world ation with even small miss-steps. Are we fill our financial obligations to the state entrepreneurs assess pricing and business- risk-averse when it comes to managing the without compromising our commitment model strategies. value of those assets? You bet we are. to provide a form of recreational gaming C. Hedinger: I think so. I spent a large However, we have never been averse that is entertaining and fun. Insofar as the part of my career working with all sizes and to taking calculated risks. New Jersey has prize-payouts keep climbing, there is a shapes of businesses, from small businesses done a lot of “firsts:” first to introduce a point at which Lottery begins to resemble right up to large publicly traded companies, computerized game—Pick-it, first to go the play-style of slot machines. What is and this is the way they think about how to online using terminals allowing players to the difference between Instant games that build a sustainable enterprise. These same select their own numbers—an event that pay out over 80% and slot machines that fundamental market-place dynamics apply revolutionized the industry, first to use pay out 85%? We do not want to encour- to the Lottery just as they do to commer- age a gambling mentality when it comes LOLA—Lottery On-Line Ticket Account- cial private-enterprise businesses. to the state Lottery. ing System, first to offer a second-chance Of course, it takes a variety of functional drawing with the MDI-licensed Elvis™ in- disciplines to make a business success- In past conversations, and in my observations stant game, first to offer “Cyber Slingo®” a ful. Marketing, operations, sales, logistics, of your comments on panel discussions, I have scratch game with an internet play compo- product development, and other areas are always been impressed by your approach to- nent, first to Livestream drawings and first indispensable components to all business, wards innovation. I would have expected a to Livestream a live lottery event.

34 // PUBLIC GAMING INTERNATIONAL // September/October 2016 The Next Generation of Lottery Draw Games

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Explore Our Groundbreaking Ipsos Research Contact Brad Cummings at (502) 644-1454 or [email protected]. I am averse to risk but that doesn’t mean I am the basic structure. I’m eager to see what averse to progress. There is a risk posed recommendations we receive regarding the structure of our organizations. by failing to act to modernize our business practices. A prudent assessment of costs and The New Jersey Lottery contracted with benefits often leads to the conclusion that it is Northstar New Jersey almost three years ago. What are some of the outcomes of this change? indeed much riskier to stick with obsolete C. Hedinger: I am extremely proud practices than it is to invest in change and of having been part of the implementa- innovation. I believe that is the case when it tion of this unique public-private partner- comes to creating the IT infrastructure that ship. The implementation has gone very smoothly. The purpose of the contract was enables us to communicate seamlessly between to bring in the human, technological, and ourselves and with our retail channel partners. economic resources of a world-class commercial partner. And that is exactly what we have done. The NJ Lottery has retained total authority and control over every aspect of the operation, only now it is with But for instance, at PGRI’s last conference posed by a challenging business environ- the benefit of a partnership that augments in NYC, you articulated a compelling ar- ment. We respect the fact that the future our operation in ways that we could never gument for state lotteries to work together is uncertain, and that inputs to help us have otherwise done. to overcome obstacles to the implementa- discern the correct actions are not always State lotteries all operate with budgets tion of forward-looking IT like Application quantifiable. We still insist on the impor- that are not well synchronized with the Programming Interface. tance of cost-benefit ratios and the need to business model. Budgets are not based on assign values to factors that are not wholly C. Hedinger: I am averse to risk but that optimizing ROI of expenditures and the doesn’t mean I am averse to progress. There quantifiable. In the end, you have to rely potential of a market-driven business. is a risk posed by failing to act to modern- on your experience, judgment, and the We now have a partner who is capable of ize our business practices. A prudent assess- facts you have to make a decision applying that kind of analyses to investment of costs and benefits often leads to the ing in the business. They can invest in U.S. lotteries are served by three organiza- conclusion that it is indeed much riskier to growth opportunities. They can reassess tions, NASPL, MUSL, and Mega Millions. stick with obsolete practices than it is to in- the ROI and increase or decrease invest- There is an effort to explore the potential to vest in change and innovation. I believe that ment as needed. They have more flexibil- re-structure the organizations to improve pro- is the case when it comes to creating the IT ity to make changes as needed, to invest ductivity, efficiencies, and outcomes. Do you infrastructure that enables us to communi- in new technology, new merchandising have an opinion on whether or how the struc- cate seamlessly between ourselves and with and retailer support programs, to test ture should be changed? our retail channel partners. new games or promotions, to increase C. Hedinger: I am not sure that the the sales force and implement sales force Your assessment of the advisability of any structure is either broken or needs chang- automation tools, to make personnel investment, including innovation where the ing. NASPL serves the function of a trade changes, to enter into third-party rela- outcomes are uncertain, is calculated by a association, being a clearinghouse for in- tionships and other initiatives that prom- relatively straightforward assessment of fi- formation, publishing a trade magazine, ise to improve performance and results. nancial costs and benefits. But how do we and coordinating educational seminars Northstar has the flexibility and the re- do that when there is no way to ascertain the and trade shows. I do not think a trade sources to maximize the potential of the costs and benefits? association should dilute its focus by per- business. And we retain control to ensure C. Hedinger: The accounting profes- forming tasks that a commercial enterprise that everything is performed to the high- sion certainly tries to integrate all the facts, is better equipped to perform. Likewise, est standards in every respect. including those which may not have a con- MUSL and Mega Millions develop and Now, together we can build three to crete financial metric to attach to it. We manage games and they should stick with five year business plans and know that just try to mitigate the influence of fear of their core competencies. I’m sure there is the resources will be allocated to support loss and hope of gain that are not based always room for improvement, but I’m those plans. The outcome is year-over-year in fact. Accountants are among the most not sure that the basic structure needs to growth. Most importantly, the entire en- trusted advisors to businesses because we be changed. I’m not even sure what we terprise is being positioned for long-term really do wrestle with all the pressures think we would accomplish by changing sustainable growth. We exceeded $3 billion

36 // PUBLIC GAMING INTERNATIONAL // September/October 2016 in sales in fiscal 2015 and exceeded last year a clerk-assisted mode. They would only things that could be accomplished by sales a month early in FY 2016. sell Lottery in their stores if we installed the state Lottery without entering into self-service vending machines. The NJ a private-public partnership. But there What is an example of something that has been Lottery could not allocate the funds for are three things about that. First, state accomplished that would not have been done those machines along with the develop- budgeting and management procedures without your partnership with Northstar? ment of the back-office reporting that are just not conducive to operating in a C. Hedinger: Anything that requires they required. Northstar installed the ma- market-driven business environment. As capital investment is a problem for state chines, developed an accounting system far as I can tell, that is true for all state lotteries. The ROI on investment may be to meet their needs, and Wawa is now our lotteries, not just New Jersey. Second, a very positive, but if it is not in our budget largest retail account. I don’t think the private enterprise like Northstar is better it’s difficult to fund. Northstar is not con- New Jersey Lottery would ever have got- at doing many of these things, like ne- strained in that way. For instance, Wawa ten into Wawa without Northstar. gotiating a multi-state deal with Wawa. is a large multi-state corporate account Automating the sales force involved Third, the private-public partnership effectively outsources the risk of inwith more than 240 stores in New Jersey an investment that the Lottery was not alone. But they would not sell Lottery in able to do. Theoretically, there are many Continued on page 96

The purpose of the contract was to bring in the human, technological, and economic resources of a world-class commercial partner. And that is exactly what we have done. The NJ Lottery has retained total authority and control over every aspect of the operation, only now it is with the benefit of a partnership that augments our operation in ways that we could never have otherwise done.

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Experience it at NASPL 2016 Bring this innovative, 3D augmented reality technology to your players today, exclusively through IGT Global Solutions and powered by Paymaxs.

This material contains information that is proprietary to Paymaxs USA, LLC. © 2016 IGT Global Solutions Corporation. When third party brand attributions are identified separately throughout the material: Except where ownership is otherwise identified, the trademarks used herein are owned by IGT or its affiliates, may not be used without permission, and where indicated with a ®, are registered in the U.S. IGT is committed to socially responsible gaming. Our business solutions empower customers to choose parameters and practices that become the foundation of their Responsible Gaming programs. Changing the Game at NASPL 2016

IGT invites you to meet its IGT’s team of Insight Shapers will demonstrate how the suite team of Game Changers of business intelligence tools creates actionable insights that who are reshaping the empowers quicker, more effective decision-making. Jim Humphrey lottery industry at the will demonstrate how Aurora™ Performance Intel uses state-of- NASPL’s 2016 Business the-art analytics to turn mountains of data into “aha” moments. Development and Product Kasia Cahill and Adam Perlow will show how Aurora Retailer Innovations Conference. Wizard and Aurora OnePlace provide Lottery Representatives This year the technology and their retailers with the real-time data they need to efficiently will come alive as we manage and successfully grow their businesses. Jennifer Seymour showcase the inspirations and insights of the imaginative minds that are ushering in the next generation of lottery products. A new sensory experience will amaze visitors as Tom Napolitano and members of IGT’s Game Studio introduce Astro Cash. Players will be a part of the virtual reality action as they immerse themselves in outer space and blast three-dimensional alien spaceships and meteors. IGT’s Content Creators will also showcase Medieval Money and Monkey Drop, two of our most exciting games. All of the Instant Win games in the IGT portfolio are available on mobile and desktop and configurable to an array IGT’s NASPL 2015 Booth in Dallas. of price points. In addition, they can be used as part of a second will present Aurora’s diverse suite of back-office applications that chance program to win entries instead of cash allow lotteries to transform, manage, and grow their businesses. prizes. Also on display will be Ringit, the platform eGaming Review named Francesco Parola and our Product Development Team, the “Best Product Innovation” and visionaries behind FutureGame, IGT’s eight-step game called “The Best Thing Since development and testing framework, will introduce four new Beer” by Next Impulse Sports. games. To thoroughly understand player needs and emotions, Ringit’s real-time gameplay the FutureGame process began with a series of insights and lets players win cash for their trend diagnostics and ended with a complex methodology sports knowledge. Fans predict of consumer and retailer research. From brainstorming to what will happen next, in real testing, the FutureGame team refined the process to bring time, as they watch live broadcasts. only the best game concepts to lottery customers. Come and Ringit is currently embedded in IGT/ see the games that have earned the FutureGame seal of approval Lottomatica’s mobile platform in Italy and i s and hear about the next series of games currently in development. offered as a stand-alone iOS/Android app in the U.S. for the IGT will once again showcase a number of futuristic experiences NFL season. that elevate player interaction. We welcome your feedback on the Lottery games will enter a new dimension as Amy Morin next generation of lottery products. demonstrates our newest captivating instant experiences. Using augmented reality, Paymaxs’ Gold Castle transforms from a typical Are you game? Visit IGT’s Game Changers in Atlanta and explore scratch game sold at a traditional retailer into a 3D interactive how we’re reshaping the lottery business. Be sure to follow the experience that bursts out of a player’s phone or tablet. A complete action on IGT’s Facebook, Twitter, and LinkedIn feeds and use line of augmented reality games featuring basketball, soccer, and #IGTgamechangers to become part of the conversation. holiday games is ready to be experienced. In addition to featuring top performers such as Wheel of Fortune® and Caesars®, IGT will also unveil new properties that are sure to attract younger players.

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 39 Tracey COHEN Interim Executive Director PUBLIC GAMING INTERVIEWS DC Lottery and Charitable Games Control Board

The Unique Governance Model of the Lottery in the Nation’s Capital

PGRI Introduction: Tracey Cohen is solid background as an account executive What we do have is the distinction of forging her own indelible mark on the with an advertising and public relations being the lottery for the nation’s capital, firm and then, director of marketing and where the District’s population of over industry. She is one of only a handful public relations for the Restaurant Asso- 670,000 swells to more than one million of women at the helm of a state lot- ciation of Maryland. The ten years I spent people thanks to commuters teeming tery in the US. Thrust into leadership at the Maryland Lottery were exciting into the city. We’ve been laser-focused in the wake of the sudden and un- and rewarding. The introduction of new on capturing that audience. Our flagship expected passing of her predeces- games, development of successful promo- store located within the iconic Union sor, Buddy Roogow, Tracey is now a tional strategies, aggressive product line Station train station was our busiest lo- management, and the brokering of stra- cation during the historic billion-dollar force of her own. With over 20 years tegic partnerships with professional sports Powerball jackpot. Union Station sees in sales and marketing experience, teams were all programmatic elements over 90,000 visitors daily. We’ve taken she is charting new waters for the that highlighted my tenure there. advantage of this prime opportunity to DC Lottery, the lone city-run lottery host exclusive on-site promotions, and in the nation and recently ranked by So how was the transition from a state lottery staged productions showcasing new with state resources to the unique situation an independent consultant as one product launches. The Official DC Lot- that makes up the DC Lottery? of the top ten lotteries in the coun- tery Store at Union Station continues T. Cohen: In 2010, I came to the DC to outperform annual projections with try. Among her many accolades is a Lottery as the Chief Operating Officer. steady year over year gains in sales. This 2016 PGRI’s Lottery Industry Lifetime That position offered me a real ‘lay of the ‘winning destination’ is overall, our fifth Achievement Award. Let’s meet Trac- land’ perspective to assess the many work- highest performing retailer. ey Cohen, in her own words. ing parts that ensure a successful lottery. Another effort to harness the buying Since assuming the interim executive di- power of the influx of commuters and Paul Jason: Tracey, tell us how you rector’s post in 2015, I am proud of the travelers into the city has been our mobile came to the lottery industry. progress we’ve made and excited about the retail vehicle, the Lucky Lottery Mobile Tracey Cohen: Buddy would say that future ahead. (LLM). Bringing ‘fun on the run’ to busi- he changed my life when I started working We are unique as the only municipality- ness corridors during the day, neighbor- for him at the Maryland Lottery. And, he operated lottery—which means our report hood festivals, and special events all over was right—to an extent. I approached the systems are a little different from state-run the District, the LLM is a mobile lottery opportunity well equipped with a master’s agencies, our resources are not on a state- sales truck that brings the excitement of degree in public and international affairs funded level, nor do our territories span the lottery right to the people. from the University of Pittsburgh and a across counties. We’re also leveraging partnerships with

40 // PUBLIC GAMING INTERNATIONAL // September/October 2016 A VSC and Intralot, Inc. Company

DC09 is the proud gaming technology provider to the D. C. Lottery and Charitable Games Control Board

Congratulations!

2016 Major Peter J. O’Connell Lottery Industry Lifetime Achievement Award Recipient Tracey Cohen, Interim Executive Director , D.C .Lottery

“It is with much pride and good wishes that our entire company send you congratulations for the wonderful honor of receiving a Lifetime Achievement Award! The impact you have had on the lottery industry is priceless and your legacy will always be remembered. You and your D. C. Lottery team are one of the best in the country, and DC09 is proud to be your partner!”

Emmanuel S. Bailey President and CEO attractions like the Verizon Center, the pre- Jeff DeWitt. It’s a sizeable title for a man fer. Instant ticket sales plummeted by $27 mier sports and entertainment venue in the with the responsibility of the city’s finan- Million, or 45% from their high in FY12, city. The DC Lottery has launched basket- cial health and prosperity in his hands. He resulting in over $3 Million in lost transfer ball and hockey-themed tickets that have manages every revenue-generating entity of as of FY15. But, you make the best of what been hot sellers, as well as Money Machine the District’s government from tax collec- you have. You get innovative. You dig in. We nights that have served as gateway games to tion to lottery transfer. He oversees all fi- became a more efficient organization reduc- those unfamiliar with the lottery and fun nancial functions of the city. He is very en- ing operating expenses, streamlining busi- introductions to the DC Lottery for those gaged, astute, and understands the nuances ness operations, and cross-training staff. We used to playing in their home states. Add of dual accountability—to the District as became very aggressive in introducing new to that our partnership with the Washing- well as Congress, as he in turn reports to games and promotions to our other fran- ton Nationals, our professional baseball the District’s congressional oversight com- chise games—particularly the DC Fast Play home team and the introduction of the $2 mittee. Like all government lotteries, we family of games. We replaced instant ticket Racing Presidents scratcher that has been are dedicated to serving the best interests of facings with DC Fast Play selections. Dur- a homerun with players and with four our stakeholders. ing this period, we also introduced new Tap- N-Play games and the multi-state Lucky for Life. Players transitioned nicely to the new offerings. When our full line of scratchers It’s no secret the challenges the agency faced was reintroduced in 2015, we took huge ef- during the instant ticket shortage that began in forts to thank our players for playing and mid-2013 when our entire product line staying with the DC Lottery with player reward promotions of never-before propor- of scratcher tickets ran the risk of near depletion tions and payouts of more than $1,000,000 for almost two years. That absence of product was in total prizes. And, again players have re- a significant hit in sales with resounding impact sponded overwhelmingly. Our Second to our bottom line and transfer. Instant ticket sales Chance contests have seen marked increases in participation, setting new benchmarks plummeted by $27 Million, or 45% from their for entries and prize payouts. high in FY12, resulting in over $3 Million in lost Since reinstatement, instant ticket sales transfer as of FY15. But, you make the best have been robust. FY16 sales are tracking of what you have. You get innovative. You dig in. more than 60% positive over last year’s sales—a direct result of the return of in- We became a more efficient organization reducing stant tickets to our game portfolio. operating expenses, streamlining business The federal shutdown of October 2013 operations, and cross-training staff. We became had a seismic impact throughout the country. We temporarily suspended winning very aggressive in introducing new games and ticket redemption. But, again—lemons to promotions to our other franchise games. lemonade. Days before the shutdown, we awarded a $1 Million scratcher winner; two months later, we had a $2 Million Powerball winner. The lottery must go on. scenes, become a collector’s item among Sounds like quite a turnaround from some of The recent Best Practices study—that baseball enthusiasts. the previously reported challenges faced by the named us among the top ten lotteries in Unlike several other lottery entities, the DC Lottery. How did you do it? the nation—confirmed that we were doing DC Lottery does not have a cause-specific T. Cohen: We are a ‘small but mighty’ some things right. We’re ranked 7th out of designation. Proceeds from the sale of DC agency that likes to say we’re experts at turn- 45 lotteries in the most important area of fi- Lottery games are channeled directly to the ing lemons to lemonade. It’s no secret the nancial measure-operating income per cap- District’s General Fund which supports es- challenges the agency faced during the in- ita. The study involved evaluations of more sential city services like public safety, edu- stant ticket shortage that began in mid-2013 than 50 organizational processes, practices, cation, and infrastructure. when our entire product line of scratcher and systems. The DC Lottery received high In terms of reports, we are accountable tickets ran the risk of near depletion for marks. Specifically, ten processes and sys- to both our city government and the fed- almost two years. That absence of product tems were noted as best practices while 31 eral government. My boss is Chief Finan- was a significant hit in sales with resound- others were highlighted as exemplary. cial Officer of the District of Columbia ing impact to our bottom line and trans- We learn a lot about ourselves during pe-

42 // PUBLIC GAMING INTERNATIONAL // September/October 2016 The recent Best Practices study—that named us are both elements of our instant ticket among the top ten lotteries in the nation— product line. Both have seen incremental increases in sales and profit since before the confirmed that we were doing some things right. disruption. We continue to promote the DC Fast Play lineup, adding new games to retain player interest and exciting promo- riods of adversity. While we are challenged market and further our efforts to seize the tions to extend the player’s experience. We to do and be our best—I think we’re still availability of daytime customers. The ex- see this category of games as a growth prod- doing a good job. perience has given us a stronger, broader, uct and are investing accordingly. more robust foundation for future growth. We operate in a very competitive mar- I’m wondering if the “necessity is the mother We now have integrated into our culture an ket. The District of Columbia is positioned of invention” situation might have prompt- appetite for innovation and creative think- between two Goliath-like state lotteries. In ed you to discover additional solutions that ing that may not be here if we hadn’t had to addition to the existing casinos in nearby you might not otherwise have found and deal with the challenges presented. Baltimore and our immediate suburbs, that ends up making you an even stronger MGM Casino is building a mammoth marketing organization. How about products like Fast Play—did it sized gaming structure just outside our bor- T. Cohen: We were anxious to do any- continue to be a meaningful contributor to der. Prior to 2010, our neighboring states thing and everything we can to increase sales after you got back to offering the full did not sell Powerball. When they did, the our bottom line and ultimately our trans- portfolio of Instants? cross-sell negatively impacted DC Lottery fer. We’re always strategizing to increase T. Cohen: At the height of the instant revenue as commuters who lived in those our player base. In addition to the Lucky ticket shortage, DC Fast Play accounted states and worked in DC were now able to Lottery Mobile, Union Station, and stra- for 10% of our total sales. Now, with a purchase in their state of origin. But, again tegic partnerships—we are hitting hard on full complement of games, DC Fast Play our ‘small but mighty’ lottery is sharpen- retailer promotions to drive day-time sales. holds steady at 4%—a figure we celebrate

These activities propel our presence in the as scratcher tickets and DC Fast Play games Continued on page 70 Following is an edited synopsis HOW REGULATORY of the panel discussion held at PGRI SMART-Tech on April 7 CHANGES ARE in New York. You can view a video CONVERGING WITH of the complete presentation at www.PGRItalks.com. TECHNOLOGY, Edited by Paul Jason, PGRI. THE INTERNET, AND CHANGING CONSUMER BEHAVIOR TO UP-END THE GAMES-OF-CHANCE AND LOTTERY MARKET-PLACE

PANEL DISCUSSION Gordon Medenica: Our discussion today is not just about the current state of regulatory issues. Our real purpose is to look at how new game concepts are challenging the Moderator: conventional legal definitions of gambling, how new distributional models are disrupting Gordon Medenica the barriers that control the way consumers access new and different games, and what this Director of the Maryland Lottery all means to state government lotteries. & Gaming Control Agency We are all wondering what the impact of Daily Fantasy Sports (DFS) will be. Is this an Panelists: audience that comes from the unregulated markets and so does not affect Lottery? Even Mark Hichar though that may be the case, won’t it open the door to further regulatory change that Partner, Hinkley, Allen Law Firm, could impact Lottery? And how might it alter the play-style of twenty-somethings who Chair of Gaming Law Practice will eventually become thirty-somethings who have traditionally been the ground floor for our customer base? James Maida Let’s start by asking Mark to give us an overview of the legal and regulatory environment Co-Founder, Chief Executive and perhaps his thoughts about how the role of DFS fits into the larger picture of sports Officer & President, Gaming betting in general, and also its potential impact on Lottery. Laboratories International (GLI) Mark Hichar: I think it would be helpful to start with some statistics and put things Lynne Roiter into proper context and perspective in order to understand the impact that DFS has had Corporate Secretary and Vice in the U.S. market. During the first three or four months of the NFL (National Football President of Legal Group, League) season, fans could not escape the relentless advertising of DFS. The televised LotoQuébec and General games were inundated with DFS commercials. Beer used to dominate TV advertising and Secretary of the World Lottery it was completely overshadowed by DFS. I commute sometimes into the Boston South Association (WLA) Station where the entire train station was draped with advertisements for DFS. That might Philippe Vlaemminck cause one to think that DFS is a huge industry within the United States, commensurate Managing Partner, Pharumlegal with the huge advertising budget it seems to have. Looks can be deceiving. In 2015 total Group, Legal Counsel wagers on U.S. lotteries was $74 billion. By contrast total entry fees for DFS, based on to Lotteries on Matters the turnover of the two companies which dominate the DFS market (FanDuel and Draft of European Union Kings) totaled $3 billion. So … $74 billion for total U.S. Lottery sales; $3 billion for Daily Regulatory Laws Fantasy Sports sales. Illegal sports betting has been estimated by the American Gaming Association to be approximately $148 billion in 2015, twice the sales of U. S. Lottery and some 50 times the annual sales for DFS. The Fantasy Sports Trade Association estimates that in 2015 there were 56.8 million Fantasy Sports players, of which less than 5% played DFS. The rest were participating in what’s known as traditional fantasy sports. That is a season long variety which doesn’t advertise, is not so much gambling as DFS, and is pretty much still a hobbyist’s game. The debate over the issues and how to regulate the indus-

Continued on page 48

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© 2016 IGT. Except where ownership is otherwise identified, the trademarks used herein are owned by IGT or its affiliates, may not be used without permission, and where indicated with a ®, are registered in the U.S. Patent and Trademark Office. IGT is committed to socially responsible gaming. Our business solutions empower customers to choose parameters and practices that become the foundation of their Responsible Gaming programs. Changing the Game in 2016 and Beyond

As another NASPL conference approaches, and we look to the end of a historic year, PGRI spoke to Marco Tasso, Senior Vice President of Product Marketing, and Paul Riley, Vice President of Innovation, at IGT about the major milestones of 2016 and the future of the lottery industry.

What is IGT doing to remain in process begins with a series of insights and the forefront of lottery services and trend diagnostics and ends with a complex technology? methodology of consumer and retailer research. In addition, and to ensure we are M. Tasso: Knowledge of the player and constantly on the forefront of interactive retailer is at the heart of how we approach games, we have pooled the resources of innovation at IGT. We will continue to invest 120 software engineers, artists, and game in research and development to ensure that designers from around the world to create the our lottery partners receive the most cutting- IGT Game Studio. By combining the staff’s edge systems and terminals as well as the unique approach to art and science along with most relevant game concepts. By combining the cultural nuances of our five worldwide our investment in innovation with our player studio locations, we release at least seven new intelligence and our operational expertise, we game concepts per quarter. help our lottery partners achieve sustainable As much as the U.S. lottery industry and responsible growth. talks about the importance of interac- How does IGT stay in touch with the tive and omni-channel approaches, needs of players? progress appears to be slow due to Marco Tasso, Senior Vice President of Product Marketing legislation and other concerns. What Last year at NASPL, IGT unveiled M. Tasso: Our Player Insights Team advancement has been made in the Aurora, your new business plat- constantly collaborates with our customers last year? form. What has been its reception in to conduct studies to understand the wants, needs, and expectations of retailers the industry? What progress have you P. Riley: Slow and steady are perhaps the and players around the world. In the last 12 operative words for the U.S. with respect made in its development and rollout? months, we’ve conducted more than 260 to interactive wagering. Illinois, Michigan, studies in the Americas and 62 internationally. and Georgia are still leading the industry The reception to Aurora TM has been P. Riley: That’s more than 224,000 people that IGT with their respective deployments and are overwhelmingly positive, due in no small has talked with in the last year. We are also being joined by Kentucky and Virginia. We part to two major items. The first is our laser continuing our World Player Study, which have seen continued growth in the number focus on end-user usability. Our completely captures the attitudes and opinions of lottery of mobile apps that IGT is providing as well revamped User Interface (AuroraTM Navigator) players in 10 countries. It’s this comprehensive as the functionality that is deployed. We that sits on top of our feature-rich back- data set that feeds the actionable insights that currently support seven lottery apps on both office suite of applications, makes the jobs of drives growth for our customers. iOS and Android, all of which have a suite of lottery personnel much more efficient and player convenience features, and some that effective. The expanded access to business How has that affected the develop- also allow wagering where permissible. These intelligence in a graphic, visualized approach ment of new games? apps also support omni-channel interaction, also makes folks’ jobs easier. The second is such as scanning for a winning ticket and then our Service Oriented Architecture. Lotteries directing the consumer to the nearest retailer M. Tasso: As game portfolios and the are increasingly interested in a solution that for redemption, or creating digital playslips playerbase continue to age, lotteries need to supports omni-channel engagement with that are more user friendly as well as fast and have a partner that is vested in the ongoing players, and the ability for lotteries to easily mix easy for retailers to use. and match components from various vendors development of game concepts. IGT has – and with Aurora, we can deliver on those created FutureGame, an eight-step game What developments are you most key needs. We are in the process of rolling our development and testing framework to excited about? initial Aurora deployments out in the U.S. and satisfy our customers’ need for a constant have been having discussions with our global stream of new games. To thoroughly leverage P. Riley: We are very excited about the customer base about Aurora. player needs and emotions, the FutureGame potential to leverage interactive platforms

46 // PUBLIC GAMING INTERNATIONAL // September/October 2016 P. Riley: Powerball was of course huge in so commitment to corporate social responsibility manyP. Riley: ways. Powerball Operationally, was of thecourse team huge and in the so andcommitment achieving to WLA corporate Level social4 Certification. responsibility systemsmany ways. delivered. Operationally, More than the 234,000 team and rolls the of and achieving WLA Level 4 Certification. papersystems were delivered. used; that’s More enough than 234,000 to go around rolls of What are you most excited about for What are you most excited about for thepaper world were 1.5 used; times. that’s More enough than to 15.5 go around million the year ahead? playslipsthe world were 1.5 times. produced, More and than our 15.5 185,000 million the year ahead? terminalsplayslips functionedwere produced, at 99.9% and uptime. our 185,000 From M. Tasso: Our business intelligence tools, anterminals awareness functioned perspective, at 99.9% the uptime. media Fromhype whichM. Tasso: are already Our business the best intelligence in the industry, tools, surroundingan awareness the perspective, record jackpot the was media priceless. hype keepwhich getting are already stronger. the bestOur BIin the tools industry, create Thesurrounding key question the record is how jackpot do we was parlay priceless. that actionablekeep getting insights stronger. that Our empower BI tools quicker, create interestThe key into question engaging is how new do players we parlayon a repeat that moreactionable effective insights decision-making. that empower quicker, For basis.interest Monumental into engaging events new players like this on provide a repeat example,more effective the Retail Marketing decision-making. Insight (RMI) For opportunitiesbasis. Monumental to engage events more like this consumers provide platformexample, isthe now Retail capturing Marketing data Insightfrom 21 (RMI) U.S. andopportunities expand the to player engage base, more particularly consumers with lotteriesplatform to is providenow capturing visual comparisons data from 21 across U.S. somethingand expand like the the player mobile base, apps particularly which we withjust retaillotteries chains to provide and visual jurisdictions. comparisons Aurora acrossTM TM discussed.something The like thejackpot mobile was apps also whicha great we value just Performanceretail chains Intel and is jurisdictions. using state-of-the-art Aurora todiscussed. retailers. TheRetailers jackpot had was to alsoacknowledge a great value the analyticsPerformance to turn Intel mountains is using of state-of-the-art data into real- history-makingto retailers. Retailers lift in traffichad to and acknowledge ancillary sales the timeanalytics strategies to turn andmountains tactics. of Plus, data withinto real- the Paul Riley, Vice President of Innovation thathistory-making the jackpot liftdrove. in traffic and ancillary sales acquisitiontime strategies of Hudson and tactics.Alley, we Plus, have with paired the Paul Riley, Vice President of Innovation and games to deliver a compelling player that the jackpot drove. 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The way initiative for retailers is about to communicate setting up a some meaningful data. How do you stay current on what standard way for retailers to communicate How do you stay current on what with lottery transaction processing vendors What were the biggest milestones players and retailers respond to? inwith a uniform lottery transaction manner that processing more aligns vendors with What were the biggest milestones and developments of the past year? players and retailers respond to? thein away uniform in which manner they sell that many more of alignstheir other with and developments of the past year? M. Tasso: Our Lottery Management Services goods.the way Ifin wewhich penetrate they sell moremany retailersof their other and Our Lottery Management Services M. Tasso: One of the best examples of our groupM. Tasso: continues to be the incubator for profit- tradestylesgoods. 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September/October 2016 // PUBLIC GAMING INTERNATIONAL // 47 Panel Discussion … continued from page 44 try is not very clear on the distinctions between the different fan- Gordon Medenica: One of the broader issues for the topic tasy game categories. Legislators, attorneys general, regulators, and today is this intersection of regulation, technology, internet, and law enforcement seems to be treating DFS and traditional fantasy emerging consumer trends. As we know, what happens at inter- sports with equal vigor, or at least with inadequate understanding sections is collisions. Regardless of where DFS ends up, this is an of the differences and actual market impacts. example of industry disruption—new game styles and distribution Further, it has been reported that DraftKings lost an estimated methods that fall outside of current regulatory frameworks. How $280 million and FanDuel $137 million in 2015. In light of every- will these disruptions impact Lottery and what can Lottery do thing that’s happened since the insider betting scandal broke in Oc- about it? Philippe? tober of last year, it’s now estimated that the best case for the Daily Philippe Vlaemminck: First, I think it is important for us to Fantasy Sports market by 2020 will be approximately $14 billion nurture this dialogue between U.S. and Europe. We have much to and the worst case could be where it is today which is between $3 learn from each other and I expect there will be quite relevant ways and $4 billion. in which we can collaborate on initiatives to support the stability of It is not my intent to minimize the impact and relevance of DFS. the government-gaming industry in the future. It just needs to be understood and assessed in proper context and European lottery operators have been dealing with major disrup- perspective. The volume being played in DFS is not nearly as large tive forces for many years now. In fact, the internet has wreaked as the advertising of DFS might lead one to believe. havoc on European markets in ways that the U.S. has largely avoid- The regulatory environment is being shaped as we speak. At least ed. Europeans have tended to feel that we are the only ones with ten states have come out with opinions on the legality of Fantasy these problems and so are encouraged to see that you finally have Sports, and only two of those have found that the play of fantasy your own problems! sports is lawful. Legislation is pending in another thirty two states. You are correct, Gordon, in pointing out that DFS is not the same phenomenon in Europe as in the U.S., probably because sports-betting is already a highly developed and growing market. It might seem that the step from DFS The European consumer does not get excited about DFS because to a market-place being disrupted by an they can engage in whatever variety of sports-betting they choose, and have been able to do so for many years. The specific game of invasion of highly sophisticated and DFS is not a problem or an issue for us. The thing that is a problem well-funded operators based outside and an issue for all of us is the inability of legislators and regulatory of the U.S. and selling all varieties of agencies to keep up with changes in the games, new technologies, products, many of which replicate consumer trends, the internet, and other forces that are disrupting the market-place. As Gordon points out, the intersection of these the lottery-playing experience, is a factors is creating a collision. The aftermath of the collision is a lack big leap and not likely to happen anytime of clarity as to how existing laws apply. And that creates a fertile soon in the U.S. It’s not a big leap. ground for further disruption. To make matters worse, the army That is exactly what happened in Europe of lobbyists employed by the commercial sector is more likely than government gaming operators to influence the way legislation and and, I would submit, can happen regulations get updated. That’s why the trend in Europe is towards anywhere including the U.S. opening up the markets to borderless competition between mul-

—Jean-Luc Moner-Banet tiple operators. The monopoly model is under severe attack. You think that will not happen here. And maybe your monopoly model will remain intact. What will happen in the U.S. as it is happening everywhere is that the market-place is being reinvented by new [Ed. Note: Since the date of this panel in April, 2016, legislation le- games, new technologies, and new distribution models. DFS is a galizing DFS has been enacted in Colorado, Indiana, Mississippi, very small example of the potential for a new game to have disrup- Missouri, Tennessee and Virginia. In addition, the legislature in New tive impact. It opens the way for a Pandora’s Box of ongoing change York passed a bill legalizing DFS, and that bill awaits action by New that is likely to have far more dramatic impact on all games-of- York Governor Cuomo. DFS had already been made lawful in Kansas, chance operators including government-lottery. We may be having and it is regulated in Massachusetts, although not legalized by statute.] more issues than you are with the disruptive impact of the internet. And the market for DFS has shrunk considerably since October 2015. Right now, you may be having more problems with the disrup- Even so, Fantasy Sports still holds a level of excitement that has piqued tive impacts of DFS or other entrants into the games-of-chance the interest of lotteries, regulators, and other government agencies. space. But the fundamental dynamics of disruptive forces are quite

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incomm.com Panel Discussion similar. I would propose that we need to work together to develop solutions and strategies for the global community of government- It is conservatively estimated that illegal gaming operators to defend the interests of their stakeholders. sports-betting exceeds $100 billion a Jean-Luc Moner-Banet talked about these broader issues yester- year, that 97 percent of the $4.1 billion day. It might seem that the step from DFS to a market-place being disrupted by an invasion of highly sophisticated and well-funded bet on last year’s Super bowl was illegal, operators based outside of the U.S. and selling all varieties of prod- and that millions of otherwise law- ucts, many of which replicate the lottery-playing experience, is a abiding citizens are betting on sports in big leap and not likely to happen anytime soon in the U.S. It’s not the U.S. in spite of the illegality. At what a big leap. That is exactly what happened in Europe and, I would point does it become impractical to submit, can happen anywhere including the U.S. It does not take long for a small crack in the dam to cause the whole dam to crash continue to outlaw it? under the weight of powerful forces. We owe it to our stakeholders —James Maida to make sure our businesses are prepared.

Gordon Medenica: Let’s get the Canadian perspective from it doesn’t matter if people play the DFS instead of lottery in their Lynne … twenties because they have always started in with lottery in their thirties anyway. It may not have mattered so much in years past Lynne Roiter: First, I would suggest that a new game concept when twenty-somethings were not exposed to so many gaming op- that goes from zero to $4 billion in sales in the time that Fantasy tions. Insofar as recreational gaming options like Fantasy Sports are Sports has done should not be regarded as insignificant. Granted, attracting a younger audience, those consumers develop habits and that may be just 6% of U.S. lottery sales, but it is still huge, it behavioral patterns that may be difficult for Lottery to connect with. shows a potential for continued growth, it attracts the young adult Are we hoping that twenty-somethings who play Fantasy Sports are demographic, and it reflects a shift in consumer play styles and going to migrate over to Lottery when they move into their thirties? preferences. I think Fantasy Sports represents a potential for major New games may not affect us so much in the short term, but we impact on the games-of-chance industry. should also think about the long-term potential impacts. Gordon Medenica: Maybe a silver lining is that DFS is played Commercial operators are always over the internet. If legislators are considering the legalization of pushing the edge of the envelope. DFS, maybe they will be more receptive to the prospect of enabling U.S. lotteries to sell online. DFS could be the thin edge of the Where there is a gray area, they can move wedge that causes legislators to allow lotteries to offer games on the forward and adjust course based on the internet. James … reaction of the market-place and the legal James Maida: Commercial operators are always pushing the system. If their actions are challenged by edge of the envelope. Where there is a gray area, they can move the courts, like DFS has been, it’s easier forward and adjust course based on the reaction of the market-place to ask for forgiveness than permission. and the legal system. If their actions are challenged by the courts, like DFS has been, it’s easier to ask for forgiveness than permission. And that method has served them well. And that method has served them well. By the time legislators get —James Maida around to addressing the issues, they are dealing with a fait ac- compli which is much more difficult to unwind. Of course, lottery directors can’t apply those methods without unwanted controversy. Second, like Europe, sports-betting is very popular in Canada. But it is important to recognize how these changes unfold; and to But so is Fantasy Sports betting. That may be partly because Canada think about how lotteries might defend against it. At this point, for is heavily influenced by whatever is popular in the States. But I have instance, after decades of pushing by commercial operators to open another theory. The University of Montreal looked at how people up the markets, European lawmakers must make policy decisions based not just on what is best public and regulatory policy, but develop habits and behavioral patterns. They found that if smoking what is the reality of the market-place. If the reality is that the un- and drinking is not habitual prior to an early age, like late teens, it derground market is so big that it is no longer practical to pretend is highly unlikely that the person will develop a problem later in life. That could be relevant to the Lottery industry if we think that Continued on page 67

50 // PUBLIC GAMING INTERNATIONAL // September/October 2016

INTERVIEW Sam Wakasugi VP, Global CSP Services Scientific Games

From his executive office on the second floor of Scientific lotteries in the industry, including many start-ups. Today, Games’ global lottery headquarters just north of Atlanta, Sam Sam leads Scientific Games’Cooperative Services Program— Wakasugi seems like a guy you’ve known all your life. He’s or “CSP”—as many call the company’s highly successful polished and uber professional, yet so approachable you get approach to instant game management. Integrating game the impression that you can ask him just about anything. planning, analytics, marketing, inside sales, packaging, Sam’s answers are thoughtful and his stories slowly unwind, warehousing and retail distribution, CSP is used by more than spanning across a lottery career that began in the early 1980s 20 lotteries, including nine of the Top 15 lotteries in the world and touching nearly every aspect of the business. based on instant game per capita sales.

He has traveled and lived around the globe serving some of the biggest

52 //XX PUBLIC // PUBLIC GAMING GAMING INTERNATIONAL INTERNATIONAL // September/October // September/October 2016 2016 Sam learned the lottery business from the ground up. At 21, I learned at an early age that you have to establish that he got caught up in the excitement of Washington’s Lottery relationship so your customers trust you.” start-up—one of the coolest happenings in the state of Washington at the time. He applied for a sales rep job, and remembers being slightly surprised when the Lottery hired “Customer service has always him. The next thing he knew, he was moving to Walla Walla been important to me. Half of the to sell scratch games, and spending up to eight hours a day success is the relationship, and the other half is just the desire to help driving his car from one end of his large territory to the other. your customers...” Sam explains that back then, everything was done manually. In a pre-UPS era, logistics meant picking up the scratch tickets at the Lottery’s regional office and delivering them in person -Sam Wakasugi VP, Global CSP Services to 100+ retailers every week. He would hand-write an invoice, Scientific Games the retailer would give him a check, and at the end of each day he would go to the bank and deposit the funds.

Quickly promoted to the Lottery’s regional manager, then director of sales for the entire state, Sam moved to Olympia, where he found himself learning how to motivate a team of 35 more senior, and much more seasoned sales professionals Intuitive people skills continued to serve him well. Sam’s who had been hired from the private sector for the Lottery’s simple approach to customer service, coupled with extensive start-up. lottery experience, propelled him to director roles with the Arizona Lottery, and eventually to Scientific Games where he “This experience in my 20s prepared me for what lay ahead began Scientific Games launch of theCSP operations for the because the state government did a really great job training Florida Lottery in 1997. employees who wanted to be managers. A good deal of my operational skills today are a direct result of what I learned Sam is definitely someone who can sit at the table and back then. I was traveling to six very different regions all do business with a lottery because he’s also been on the around the state, directing a sales staff and helping train government side of the table. It was through CSP for the retailers. I never expected this to happen,” he shares as he Florida Lottery where his knowledge of the instant product explains how it all unfolded. deepened.

Also, key to Sam’s success has been his dedication to “I had been a sales rep, a regional manager, a sales and customers: understanding their needs, providing a service marketing director and a state director, but I still remember and earning their trust—lessons learned early on. In high standing there in a pile of dirt in Orlando thinking how are school, he worked at his father’s farm implement store every we going to do this in 90 days?” he says. “We built a fully day during the summer, watching farmers come and go operational CSP facility in 77 days.” while his father built his business standing next to the coffee machine as customers came into the store. Business always With the SciTrak™ supply chain solution deployed at Scientific took place at the coffee machine. Games’ new CSP facility, the Lottery embarked upon a great instant game partnership. The SciTrak system securely “His customers would come in the store to buy tractors and manages game inventory with more accuracy and efficiency fencing, and my father sold them everything they needed— than other supply chain solutions, and it allows lotteries to not what he wanted to sell them. They always came with be much more responsive to retail sales volume and player a need,” Sam says. “This is why customer service has always demand. In Florida, automated sorting was added in 2009 been important to me. Half of the success is the relationship, with OrderSorter™ and predictive ordering technology was and the other half is just the desire to help your customers. added with OrderCast™ in 2011.

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 53 September/October 2016 // PUBLIC GAMING INTERNATIONAL // XX “Our next generation system, SciTrak Retail 15 Ultra™, has made incredible Distribution Determinants advancements with the addition OF Demand of predictive ordering,” says OrderSorter $ automated packaging + Sam. “In just the last five years, distribution system]

g n i instant game sales in Florida r a h S

a t have grown 79 percent. a

D The OrderCast technology POWERED SciTrak Ultra BY Insights is proving to have a great instant game management system] impact on instant game sales MAP

in the jurisdictions where it’s n ■ ■

i marketing analysis planning]

r a

h [CooperativeCSP Services Program]

deployed.” a t

a D Game Design + The partnership drove results. The OrderCast Programming Florida Lottery’s strategic sales and predictive ordering system] marketing plan and Scientific Games’ Advanced Tell-Sell 15 Determinants of Demand™ also made Manufacturing a major impact on sales. In 2013, Scientific Technology Games worked with the Lottery to create a six- week game introduction cycle that would offer players Data Sharing bigger games and better prize structures. Today, the Lottery has 13,000 retailers throughout the Sunshine State with approximately 36 new games introduced each year and up to 70 games generally in market – 56 percent of instant sales are The Florida Lottery is perennially one of the highest performing at the $10 price point and above. lotteries in the industry, with more than $3.9 billion in instant

SciTrak Ultra™ is now deployed at Scientific Games’ CSP operation for the Florida Lottery, where instant game sales have grown 79 percent in the last five years. Sam Wakasugi helped the company build the CSP facility in Orlando in 1997.

54 // PUBLIC GAMING INTERNATIONAL // September/October 2016 XX // PUBLIC GAMING INTERNATIONAL // September/October 2016 game sales FY2015 it currently ranks in the Top 10 lotteries practices in the area of quality, integrity and security, will sell worldwide for instant game per capita sales. Scientific Games well anywhere in the world.” provides 95 percent of its instant games, which represented 67 percent of the Lottery’s revenues last year. In FY2015, the Now back in the U.S., Sam leads the global CSP business for Lottery returned a whopping $1.5 billion to its beneficiaries – Scientific Games. Despite his experience working with instant breaking a record for the sixth year in a row for both sales and products around the world, he says he still learns something funding for beneficiaries. new every time he visits a customer or a retailer. He is still impressed by the sheer magnitude of instant game sales. Following the CSP success in Florida, Jim Kennedy, now Group Chief Executive of Lottery for Scientific Games, assigned “Lottery instant games are an $80.4 billion consumer product Wakasugi to service customers on the west coast of the U.S., that outperforms most consumer product categories on the and work on the instant games business for state lotteries planet. It’s bigger than the global music and movie industries in California, Oregon, Washington, Idaho, Colorado, Indiana, combined,” he says. “Last year, our domestic CSP partners alone Illinois, Texas and Arizona. created a combined $1 billion in growth in the category.”

Sam eventually became Vice President of North American Sales, guiding relationships and strategies for the company’s instant game customers. He also worked on the UK National Lottery’s instant games, as well as several other projects in Europe, Taiwan and Mexico.

And then, Kennedy asked him for a personal favor. Would “Lottery instant games are Sam be willing to go to Beijing for 30 days to help launch an $80.4 billion consumer product instant games for the China Sports Lottery in time for the that outperforms most consumer 2008 Olympics? Wakasugi packed his suitcase for the trip. The product categories on the planet. launch was a success at an enormous scale. In nine months, It’s bigger than the global music the China Sports Lottery’s instant game sales went from $700 and movie industries combined.” million RMB to $10 billion RMB. By 2011—with the company’s -Sam Wakasugi CSP best practices deployed in 31 provinces throughout the VP, Global CSP Services world’s largest country—sales doubled to $20 billion RMB and Scientific Games the Lottery skyrocketed to the largest instant game lottery in the world. Sam didn’t leave China for seven years. Scientific Games continues to refine itsCSP program and drive record growth in instant game retail sales globally. The “For a guy who entered this business North Carolina Education Lottery is the company’s newest when the only lottery in the U.S. CSP customer, recently awarding the company a new eight- west of the Mississippi was Arizona, year contract. it has been an incredibly exciting experience,” he says. “Those Olympic- One of Scientific Games’ most successfulCSP customers is themed games in China will never the Pennsylvania Lottery—ranked in the world’s Top 10 for be forgotten, but what’s even more instant per capita sales with more than $2.6 billion in instant memorable is that the Golden Millions game sales FY2015. The Lottery has achieved over $1 billion game we launched in 2009—a game in profits in each of the last three fiscal years.CSP launched in almost identical to its U.S. predecessor—is still the best-selling 1997, and the Lottery focused on fully developing its instant instant game in China today. It comes down to the simple fact game portfolio and growing its retail network to more than that a good game design, backed by Scientific Games’ best 9,000 retailers.

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 55 September/October 2016 // PUBLIC GAMING INTERNATIONAL // XX In 2007, the Pennsylvania Lottery challenged the company to build a solution for future growth up to $2 billion and beyond. Scientific Games deployed its OrderCast predictive analytics tool and fully integrated it into the existing SciTrak “CSP simplifies [instant Ultra system. The Pennsylvania inside sales team now had the games] for lotteries. It is a very game mix insights to help grow profits – not just sales – for scientific approach, from the data the Lottery and its retailers. Since the addition of OrderCast, analytics platform we use to the automated sorting and predicitive the Lottery’s instant game sales have grown nearly $1 billion ordering technology. “ in just eight years. -Sam Wakasugi Pennsylvania Lottery: VP, Global CSP Services A History of Instant Product Growth Scientific Games $3 B $2.59 B $2.5 B

$2.0 B $1.70 B successful and effective category management program in $1.5 B the industry. $1 B

$500 M $458.1 M Research continues to play a leading role in the CSP program 2015 2007 1998 $0 NEW CONTRACT INITIAL CONTRACT Sam now leads. He works closely with data scientists and AWARD AWARD consumer researchers in the company’s Insights group. “We like that our customers view us as more than an instant game supplier. Scientific Games is a company that adds “The more we understand consumer motivations, the better value to their business and helps them meet their goals and the chance we have to keep existing players and add new objectives—that helps them get to their magic number,” says players to the mix. There is a large segment of consumers out Sam. “We are aligned with our customers and understand there who don’t play lottery games yet—but they play other what their challenges are, and we continue to innovate games,” he says. “We haven’t even scratched the surface with solutions for them.” consumers.”

He shares a bit more about his philosophy on customer As we wrap our conversation, the talk turns to digital media relationships but in the end, he is very candid about what (interactive games). But Sam lives and breathes instant games. differentiates the company. “Other suppliers want to sell instant games. Scientific Games sells long-term solutions.” “Digital media is an exciting and growing part of our business—it is a promotional platform that makes all games Sam also knows that the instant game is a complex product. better. But if you watch players like I do, scratch tickets offer “CSP simplifies it for lotteries. It is a very scientific approach, a very special experience. You hold that game in your hand, from the data analytics platform we use to the automated scratch it, and hopefully put that winner in your pocket. They sorting and predictive ordering technology. If lotteries want may be augmented by digital media, but I don’t believe to grow their net profits, CSP is the way to do it.” instant games will ever be completely replaced.”

Perhaps that’s why instant game per capita sales for all U.S. We trust that he knows what he’s talking about. lotteries using CSP services outpaced the industry by 40 percent in 2015. The program’s operating scale accounts for All ® notices signifiy marks registered in the United States. © 2016 Scientific Games Corporation. All Rights Reserved. approximately one-third of total U.S. retail sales. Based on real results achieved for customers, it is currently the most

56 // PUBLIC GAMING INTERNATIONAL // September/October 2016 XX // PUBLIC GAMING INTERNATIONAL // September/October 2016 Cherie applies multiple technologies to deliver the industry’s highest instants performance.

Engineering every aspect of instant product management is an expertise Cherie Peyton of Scienti c Games brings to her customers. “We apply customized solutions to manage lotteries’ instant game portfolios, from data insights to game planning, manufacturing, logistics and retail distribution,” she explains. “We are achieving the highest instant game performance in the industry with our Cooperative Services Program.”

Let us show you how our patented data systems and automation technologies grow sales performance. THE WORLD’S BEST LOTTERY EXPERIENCES

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PUBLIC GAMING INTERVIEWS NIKOLAKOPOULOS Group Chief Operating Officer, INTRALOT Group

Applying Best-Practices from Other Industries to Government-Gaming

PGRI Introduction: Prior to the appointment to his current position in January industries. We even have the luxury of of 2015, Nikos Nikolakopoulos was INTRALOT Group President Latin America, time to observe what works best and to Western Europe & Africa and Managing Director of INTRALOT Latin America. avoid the mistakes they make because of the pressure they are under to be first to In 2007, he joined INTRALOT as the Group Strategy Director and based on his market with breakthrough innovation. extensive international experience, he has been instrumental in shaping INTRA- Still, we do need to act with more urgency LOT’s strategy in the contemporary gaming environment, pursuing new oppor- to assimilate the methods and ideas that tunities for the company worldwide. Before joining INTRALOT, he held a series are proven successful in other sectors. of senior positions in multinational IT companies, including INTRACOM Group, Microsoft, Singular Logic and BULL S.A. What are Telecoms doing that we should be doing? Paul Jason: You spent the first part of the future. But they prided themselves on N. Nikolakopoulos: Telecoms are us- your career in Telecoms, Software and Tech- being “fast-followers” and they focused ing data mining, business intelligence, and nology. What can leaders in the Lottery in- on technology more than the consumer consumer segmentation to enhance the dustry learn from the best practices as applied experience. The products Apple sells are contribution of CRM and big data analyt- in those industries? all about high technology, but their focus ics in order to identify trends in their cus- Nikos Nikolakopoulos: These are all was always on how technology can deliver tomer base. These activities not only guide industries where technology is a mission- a better consumer experience. As a result, their R & D and product development, critical enabler. But the business is all Apple also zoomed past Microsoft in sales, they also guide pricing, promotions, and about the consumer. Even technology-fo- net profits, and market capitalization. all the consumer-facing marketing strate- cused businesses must start with the con- Likewise, INTRALOT sells technology gies. Lottery and its commercial partners sumer. When you think about, what is the products and services focusing on enhanc- are applying these tools in our industry difference between Microsoft and Apple ing the experience of the end user, the too. We just need to accelerate the rate at that enabled Apple to zoom past Microsoft player. The goal of Lottery is to deliver which we invest and execute. when it comes to innovation? Steve Jobs the most fun and engaging player-experi- Even more than most industries, Tele- said “You have to start with the consum- ence. This industry, Lottery and even the coms are driven by competition. They er experience and work back toward the broader games-of-chance industry, does know they will fail if they do not inno- technology, not the other way around.” not move nearly as fast as Telecoms and vate and improve at a faster rate than Microsoft was far better capitalized with consumer electronics. So we are in a great their competitors. That fear of failure is a far more resources going towards R & D position to learn from those industries, to powerful driver! Thankfully, Lottery does and should have been the ones to invent copy the best practices as applied in those not operate under that level of pressure.

58 // PUBLIC GAMING INTERNATIONAL // September/October 2016 At least not in the short-term. In the long- istered data base can be integrated into the customers, from best-practices outside term, though, we should recognize that all analytical process to great effect. We don’t our industry and our competitors, from the different sectors of the games-of-chance want to wait until everything is perfect, or insight gleaned from data analytics and industry are converging so that the con- even until it is better. We need to increase market analyses. We now have a specific sumer has instant access to all games. our investment in data analytics now. Ev- development roadmap that is guided by eryone is operating with incomplete in- rapidly changing consumer tastes and Too, the Fast-Moving-Consumer-Goods formation. Tremendous insights can be market-place dynamics. (FMCG) industry is driving change and gained with the information we have access The third thing is to evolve an opera- modernization in the retail sector. to right now. tional system that leverages strategic part- N. Nikolakopoulos: And land-based nerships. We have for many years devel- retail is where our consumer lives. Digi- You have been COO for almost two years oped a flexible system of partnering with tization of the retail shopping experience now. INTRALOT has progressed greatly over clients. We feel we have a decisive com- is technology-enabled. But here too we that time. What would you say are some of the petitive advantage when it comes to cre- must start with a focus on the consumer key changes that you did to clarify and focus ative collaborations with operators from all experience. The leaders in the FMCG INTRALOT’s operational strategy? around the world. The specific needs vary space are learning much about shopper N. Nikolakopoulos: There are three enormously. Together we assess those needs behavior, how technology can be used to basic elements. The first thing we did was and core competencies and create a part- enhance the consumer shopping experi- consolidate our skill-sets and resources nership that meets those needs and lever- ence, how to integrate Mobile into the to establish a clear focus on the specific ages our respective competencies into the retail shopping experience, how to build segments of Lottery and sports-betting. most productive partnership. The success a relationship with our customers that We chose to focus on developing the of our equity partnerships in Turkey, in Ar- reinforces the connection through all the many stages of the customer journey. The biggest FMCG brands may be leading the way, but we can adopt best practices as we So we are in a great position to learn from those observe them being applied. industries, to copy the best practices as applied in those industries. We even have the luxury of The Telecom industry would have a built-in connection to the customer by way of the tele- time to observe what works best and to avoid the phone number and billing address. How can mistakes they make because of the pressure they Lottery apply data analytics without having a are under to be first to market with breakthrough registered player base? innovation. Still, we do need to act with more N. Nikolakopoulos: Of course, building the registered player data-base is a top urgency to assimilate the methods and ideas that priority for Lottery operators. In spite of are proven successful in other sectors. that, vast majority of players are unregis- tered and therefore anonymous. But there is still much that can be accomplished by application of big-data analytical tools. technologies and expertise in content, gentina, in Bulgaria, in Peru, in Italy and We can capture and organize sales data technology, the Interactive channel, and many others is based on the flexibility and by product and store and time of day and retail optimization. We are not dividing experience at operating within a diverse set much more. This data could help Lottery our attention between the government- of circumstances. In Morocco, too, we have understand consumer behavior, identify gaming sector and the casino business. established truly fruitful, mutually benefi- trends, perhaps correlate buying patterns We do not sell slots or table games or cial and commercially successful collabora- to external events. Intelligence and insight operate casinos. We focus clearly on the tions with great partners who have great gathered through this kind of big-data ana- needs of our customer which is Lottery knowledge of their market and players. lytics could certainly inform and sharpen and the sports-betting operator. Our success as a partner is also based on the focus of all our efforts in marketing, The second thing is to sharpen our fo- our laser focus on the business of our cus- promotion and product design. cus on product innovation. Over the last tomer, which is Lottery and sports-betting. Increasing the registered player data-base three years we have dedicated ourselves For instance, in Peru we collaborate with is key to the kind of personalized CRM to building a product development pro- the Nexus Group which is one of the biggest that is the end goal. But even a small reg- cess that incorporates feedback from our private equity groups in Latin America. It

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 59 is a fabulous arrangement because the Nex- products, and we are confident that the keep in mind that markets where sports- us Group is highly investing in the retail market can be expanded. betting is presently prohibited, like channel partners of Lottery, like pharma- Brazil and Argentina and the U.S. and You are not only assembling a best-of-breed cies and supermarkets. In Italy we partner many others, are actively exploring mod- portfolio of assets, you are doing it in ways with GameNet, one of the biggest gaming els to regulate and tax sports-betting. So that accelerate speed to market and flexibility machines operators in Italy which tightens imagine the opportunity for the opera- to change with the times. the synergies with the sports-betting mar- tors, and for INTRALOT, when sports- N. Nikolakopoulos: Exactly. The fact ket there. INTRALOT acquired a majority betting becomes regulated in these mar- is that nobody can be the best at every stake in EuroBet in Bulgaria, KINO and kets. The upside potential for everyone single thing. Business challenges, opportu- scratch operator, complementing our bet- is huge. The sports-betting market is al- ting portfolio as 49% shareholder of Euro- nities, and environments vary so much all ready huge in these unregulated markets. football since 2002. Everyone benefits by around the world. Our approach enables A lack of regulation is dangerous for the these kinds of partnerships. us to deliver the uniquely best solution for players, has no apparatus to promote responsible gaming or collect taxes or minimize money laundering. Everyone The biggest FMCG brands may be leading understands this, so it is just a matter of time before sports-betting is brought out the way, but we can adopt best practices as we of the gray underground economy and is observe them being applied. properly regulated and taxed.

Is there anything that traditional lottery can do to evolve itself and its products to meet the needs of the modern, younger player? Our strategy is to capitalize on INTRA- each unique set of circumstances. Creative LOT’s technology and products by extend- collaborations and partnerships enable us N. Nikolakopoulos: That is the mil- ing them quickly into new market sectors to assemble the very best solutions for the lion dollar question, isn’t it? A part of through partnerships. And it’s working. benefit of our clients. the answer is to help retailers connect with their customers and enhance the Instead of developing everything internally, And the synergy between sports-betting and player experience. INTRALOT is de- lottery is apparent in almost all markets apart you focus on your core competencies to ensure ploying advanced digital strategies to en- from the U.S. INTRALOT’s strategy to lever- that they are always best-of-breed and then able our customers, the lottery operator, age that synergy makes a lot of sense. augment that with partnerships to bring in to work hand-in-glove with their retail- the complete portfolio of best-of-breed. N. Nikolakopoulos: We think so. We ers to accomplish that. Digital includes think the player profiles and the distribu- N. Nikolakopoulos: Yes, but it’s not in-store technologies and also the build- tion channels and consumer touch-points all about technology and products. The out of the omni-channel model to pro- operational synergies are equally impor- for Lottery are completely different from vide connectivity on all channels—land- tant. For example in Peru we are not go- casinos. The overlaps, especially as re- based, Mobile and digital everywhere. ing to utilize any other technology or gards operations, logistics, and distribu- We need to focus on those things that product partner. It is all INTRALOT. tion, between sports-betting and Lottery we can change, and not be side-tracked Our partnership is with someone that are something we want to leverage for the by things we can’t change. Providing a knows the consumer extremely well in benefit of the operators. The majority of seamless, universal player experience is a very local and in some ways challeng- the countries where we are present employ ing market. And it is not about gaining this winning combination of offering with something we can do and should work market share since INTRALOT already thousands of PoS selling both lottery and harder to make it happen now. has more than 90 percent of the market. sports betting products. We also need to develop game content We are investing in growing the market I believe that INTRALOT has by far that is not so reliant on big jackpots. The in Peru. We are partnering with some- the biggest land-based sports-betting op- jackpot games have been very good for one that has thousands of consumer eration. We are in more than 18 coun- Lottery, and the players will play them for touch points and knows the Peruvian tries. And we focus on helping lottery many years to come. But it is imperative consumer better than anyone else. Com- operators extract significant economic that we develop a more varied portfolio of bine that with our operational expertise benefit from the distributional synergies products that appeal to a broader base of in the industry, our technology, and our between sports-betting and Lottery. And consumer play-styles. ■

60 // PUBLIC GAMING INTERNATIONAL // September/October 2016 best of all, lottery is a vehicle for social good, funding great causes such as education, senior benefits and environmental concerns. In The Lottery all of these measures, lottery meets or exceeds the value of DFS to players, retailers and society as a whole. Now imagine living in a lottery world where the engagement Answer to the of a live, authentic sporting event determines the results of a daily draw. Especially as we look for new ways to engage players of all generations, a game that fits this description would clearly make a Appeal of Daily significant impact on lottery revenues across the U.S. But I hear you saying, “Sports gaming is for people who like games of skill. We need to concentrate on more traditional lottery Fantasy Sports concepts.” It’s easy to see how one could have such an opinion. With rare exception, games based on the results of a sporting event have only been offered as a game of skill. By Brad Cummings And why is that? Is it because of the reams of research testing the Founder & Chief Executive Officer, appeal of sports gaming by games of chance players? Or is it more EquiLottery likely the fallacies of unchecked conventional wisdom? I would www.EquiLottery.com suggest it is the latter. Lottery players love live sporting events as much as any other major demographic. They may prefer the simplicity that games of You’d have to be purposely oblivious at this point to have not no- chance provide, but that in no way diminishes their desire to be ticed the rise of Daily Fantasy Sports (DFS). Advertising campaigns a part of the action. And when you consider the many popular have exceeded a quarter of a billion dollars from the two leaders in the scratch off tickets offering sports experience prize packages, it’s ex- industry since 2015. News stations often highlight the major invest- citing to think about how this yet-to-be-realized product segment ments made by pro sports leagues, team owners and media companies could improve the lots of lotteries in the future. in these businesses. Attorneys General across the U.S. have weighed This evolution in lottery gaming begins with EquiLottery, a draw- in on its legality and many state legislatures have passed enabling style game based on the excitement of live horse racing. Heralded as legislation when necessary to keep this industry growing. The Next Generation of Lottery Draw Games, EquiLot- There are thousands of columns you can read tery allows players to immerse themselves in the ac- about any of these themes and Google will gladly tion at the racetrack through mobile phones and tablets, delivering the kind of authentic help you down that rabbit hole. We’ll let oth- play style consumers crave. On that note, ers continue to pontificate on those angles. In- the ability to deliver the actual live action stead, publications like PGRI should lead the through a lottery-provided mobile app ac- way on evaluating the appeal of this relatively tually gives us a leg up on our more famous new gaming option and how the lottery contemporaries. DFS players still have to rely can best emulate its success. on traditional means of broadcast to actually At its core, DFS is about immersing watch the sports their games are based upon. players in a live sports experience where the Research conducted in conjunction with our outcome of an unpredictable event determines partner Ipsos shows how this integration of lottery their future winnings. It’s simple and easy to play, and live sports can appeal to all player segments and making an entire day of football or baseball not just watch- demographics as core players, infrequent players and non- able, but immensely engaging. The lynch pin is a highly interac- players all indicated an exceptional desire to play EquiLottery. And tive mobile app that appeals to millennials and helps players to nimbly with no difference in demographic appeal, our game earned the same navigate the game experience. high rating from 20something Millennials as it did with 50some- What pieces of this narrative can we as a lottery industry build thing Baby Boomers. upon? Which are not possible due to the legal and political restrictions EquiLottery won’t be the last word on live sports lottery integra- we encounter as an industry? And are there opportunities for lottery tion, especially as sports gaming becomes more liberalized across to actually bring something to the table that DFS can’t or won’t? the country. But with the historical legal advantages of horse rac- When lottery is at its best, it’s a simple form of gaming explaining and a format that already feels like a draw game, it will almost able to consumers in less than one minute. It’s an enhancement certainly be the first. to the retailer who makes our branding and distribution models Build now for the future. Capitalize on the DFS wave. Let’s play possible. Lottery can be boosted by mobile app integration. And EquiLottery. ■

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 61 Improving Retail Performance A Recent Sales Force Automation Panel Discussion at the NASPL Professional Develop- ment Seminar shared some interesting insights and ideas

he NASPL 2016 Professional Devel- action. With SFA applications and real time opment Seminar held in Pittsburgh information, lotteries can know the retail- in early August featured a Panel ers business, prepare better and zero-in on TDiscussion about the practical benefits of critical information. Most importantly, Sales Force Automation/Customer Re- sales reps can show retailers what the lationship Management. With a focus financial benefits will be by implement- on maximizing Retailer performance ing the recommended actions. the panel participants were comprised “Focusing on areas of sales growth op- of Lottery Management and Sales Pro- portunities, and proving it right then fessionals, and a lottery retailer. The fast and there with specific and graphical data paced discussion included insights into is a great way to build positive action, said how a wide range of lotteries are increasing Ashley. In addition to upgrading of our SFA retail performance including the Pennsylvania, platform, we are reinforcing our DISC Personality Oregon, Missouri, Kansas, Michigan, and a local Assessment sales training, so our reps utilize the power Pennsylvania retailer. In additions several lotteries con- of SFA with better communication and a better understanding tributed their ideas about how to maximize the value of SFA and of how retailers think.” retail performance, including Iowa, Kentucky and Florida. Here are a few of the highlights; Fast activations of new games mean results. Have no fear; move the blockers. Bryan Torok, a Zone Sales Manager for the Michigan Lottery When instant tickets sit too long and take up valuable merchan- shared the details of their successful focus on increasing the rate dising space, they are blocking new and other top selling games. of new game activations. Since implementing their new SFA plat- Terry Presta, Director of the Kansas Lottery shared his “activist” form, the Michigan Lottery zeroed in on ensuring all new games approach to increasing instant ticket sales. Terry explained that his are activated as quickly as possible (not more than 3 days). management team instructs their sales reps to look at those games that have been in an “Activated Status” for 3 weeks and that have “The combination of our “NO ACT” Intelligent Alert and our less than 25% validations and “move them out” because they are real time visibility into the status of all our instant products lets blocking the higher selling games! us contact retailers very quickly to ensure we maximize the impact of all new games,” said Bryan. “This has helped us improve re- “Often reps may be hesitant to move products, but the essence of tail performance and increase revenues. In addition, our retailers retail success is merchandising the best-selling products, said Terry. know that we care and know the details for their business.” “I want our reps to “Have no Fear! Return the Blockers, the slow movers and move in the best sellers. By using our “8 ball” Intel- Pop-up Parties to maximize ligent Alert in our SFA platform, reps can show their retailers the social format games like video lottery. top eight selling instant games and the sales potential by merchan- The Oregon Lottery was a pioneer in many areas of lottery dising our top games.” games including video lottery, with one of the nation’s most suc- After the formal panel discussion session a number of lotteries cessful programs. Helping retailers improve the social environment approached Terry to better understand the details of his approach. in which Video Lottery games are enjoyed is a win-win for the retailer and the Lottery explained Farshad Allahdadi, Chief Sales and What’s in it for me? Retail Services Officer for the Oregon Lottery. Planning, attending Lottery sales manager know the importance of focusing on the and following up on these parties at the selected locations offers perspective of the retailer. Ashley Carel, Sales Operations Man- the opportunity for the retailer and the Lottery to work toward ager for the Missouri Lottery shared the importance of engag- a common goal and lets the Lottery participate in being a part of ing retailers on their level, the way they think and communicat- growing their overall business. The Lottery can gain a first hand ing with information that they will understand and use to take glimpse at their clientele in a large format and the events often

62 // PUBLIC GAMING INTERNATIONAL // September/October 2016 brings to light the challenges or opportunities about every detail of our business I can man- our retailers might have with how we are age my store more effectively, from going up working together. to a 32 display vs. 10, to more information “By being there and seeing the gam- about new games. They let us know more ing environment in action we can about each game and how to sell it better.” NO Manny also shared his interest in getting help optimize play areas, machine and monitor placement, said Farshad. The more comparative information such as good will that this generates improves how his location compares to others and our communication and business rela- additional marketing and demographic tionship, increases player excitement and ACT information so he can focus his game fac- loyalty and offers an incentive for under- ings for his customers. performing retailers.” The Power of the First Purchase. Using the SFA platform as your Victoria Holman, Western Regional Project Man- Training Channel. ager for the Pennsylvania Lottery shared some interesting The Florida Lottery shared one of its innovations; the use of insights into new research data that will help the Lottery sup- their SFA platform as a way to improve sales rep product knowl- port retailers with enhanced sales strategies. Based on some recent edge and sales skills associated with the launch of new instant research provided by Scientific Games, the Lottery will be able to ticket games. The Lottery’s Marketing Department creates new focus its promotions and sales efforts to more effectively support videos for every major promotional launch—roughly every 4 to players who are most likely to buy additional games after or in 6 weeks, and then makes it available on the Lottery’s mobile sales combination with their first purchase; offering the right games to tool prior to game launch. The sales reps are able to review talking the right players. points at their own pace and practice so they give the best presen- “This new research is exciting because it will help us target our sales tation possible to the retailer. and marketing efforts all the way to the retailer, who we can guide “A sales presentation can only be considered effective if the end re- with more precise player buying preferences,” said Victoria. “Being sult is one that convinces the prospect to buy, and without product able to translate and apply these new strategic insights into actionable knowledge, including adequately being able to describe the prod- sales strategies with the help of our SFA Employee and Retailer Portals uct’s features and benefits you don’t have a very good presentation is the best part.” and your odds of success decrease dramatically,” said Tom Dela- censerie, Secretary of the Florida Lottery. “While we can’t draw Conclusion a straight line between this and a dollar increase, we just had our The Panel enjoyed the opportunity to share their ideas and best highest sales year ever breaking the $6B mark for the first time so practices, and the Panel thanks NASPL PDS for the forum. As im- I believe there is a correlation.” portantly, the Panel discussion engendered a new level of professional relationship and friendships, all focused on maximizing retail Looking through the eyes of the retailer. performance. The best solutions are built upon creative collabora- Manny Singh is a Pennsylvania Lottery retailer who views the tion, and the Panel was a great example of that in action. Copies of Lottery as a true partner. Manny joined the panel discussion to the Panel’s presentation slides and the exhibits are available upon share some of his thoughts and ideas. From the start Manny be- request from [email protected]. ■ lieve retailers should be proud of the Lottery and the good causes it serves; in Pennsylvania it is Seniors and many play because they www.Lapis.com enjoy it, and to support the cause. Lottery sales representatives that keep his staff up to date with the latest information is essential to their success, and makes it a real partnership. Since 2012, when the Lottery upgraded to its current SFA platform, Manny highly values the real time communications that makes it easier to solve issues and track missing packs right away. This cuts down on the staff churn and resolves problems immediately. “I am proud of the fact that I have had my staff for over 4 years, and they know many of our most active players. I have a dedicated Lottery clerk for 8 hours a day and we will take written slips and key in every single number. We may even call some customers to let them know their number hit,” said Manny. “With the Lottery reps so knowledgeable

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 63 CLICKQUISITION: How lotteries are only a few clicks away from broadening their player bases. neopollard.com

t doesn’t matter whether you are selling enhanced shopping experience with effort- jeans, vehicles or lottery tickets, the great less purchasing. challenge in today’s retail environment is Lotteries operate in an industry with a Ithe same: to design and deliver a “friction- solid and reliable bricks-and-mortar retail less” experience in a world that is increas- tradition that is increasingly looking to ingly dominated by the convenience of on- digital experiences to maintain relevance, line transactions. grow player bases, and compete with other How much of retail is now conducted forms of entertainment. But in a world online? In PWC’s 2016 Total Retail re- where people will be able to purchase just port—a survey of the retail buying prefer- about anything, anywhere and with little ences of more than 23,000 shoppers in 25 more than a wave of their smartphones, countries—it was discovered that 54 per how will they compete? cent of all respondents buy products on- NeoPollard Interactive exploits the lead- line weekly or monthly. And 34 per cent ing edge of retail technology to ensure that of those surveyed believe that their mobile lotteries can augment the proven sales per- phone will become their main purchasing formance of draw-based games via bricks- tool in the future. and-mortar retail networks with mod- These figures aren’t surprising, and it ern online tools to capture and convert certainly emphasizes the significant influ- new players. ence that the Internet has on retail market- Many lotteries have already established place trends. Unfortunately, surveys alone a solid web presence with traditional cus- cannot tell us how to take full advan- tomers, many of whom are very comfort- tage of that trend. able going online to check winning num- The pursuit of a truly frictionless transaction that can be com- bers for draw-based games or monitor jackpot amounts. That pleted with the fewest barriers, clicks, and keystrokes is fueled familiarity presents an enormous opportunity to take those cus- by improvements in payment methods, technology, and modi- tomers and introduce them to new games and features that can fied consumer behaviors. This has prompted some of the biggest dramatically expand a lottery’s player base. companies in the world to try their hands at re-inventing retail However, there are other advantages. Products such as interac- transactions: Apple Pay; Walmart Pay; Google Wallet; Amazon tive draw-based games offer players—particularly consumers that Dash. All these solutions are geared towards the same goal: an may not fully understand how the games work—a simple, error-

64 // PUBLIC GAMING INTERNATIONAL // September/October 2016 proof entry into the lottery experience. numbers and complete the entire gaming Although the majority of the most loyal experience prior to purchase, interactive lottery players are comfortable with the draw-based games can be used as a power- traditional retail experience, modern play- ful educational tool to help encourage new ers are looking for something that parallels players to purchase tickets at traditional e-commerce transactions that are becoming bricks-and-mortar retail outlets. an everyday experience for today’s consumer. Most importantly, interactive draw- For lotteries, the solution can be based games satisfy consumer demand for found in NeoPollard’s Interactive draw- a condensed purchase flow. Ticket pur- based games. These digital versions of the chases, including number selection, can be most popular draw-based games are man- completed in as little as three clicks online. aged through NeoPollard Interactive’s in- This streamlined purchase flow delivers an teractive Central Gaming System—a fully e-commerce experience to lottery consum- independent online platform that can be ers that is consistent with the experience launched in any jurisdiction regardless of that digitally-enabled consumers have the current retail system in use—and are grown to expect in engagements with to- available as part of the company’s iLot- day’s biggest online retailers. tery 360° Solution™. The results in jurisdictions that have In jurisdictions using NeoPollard Inter- forged ahead with interactive draw-based active’s iLottery 360° Solution™, the op- games are compelling. NeoPollard Interac- portunity to select numbers and purchase tive has found that more than 60 per cent draw-based games in a digital environment of players that register online to play in- introduces these products to a whole new teractive draw-based games crossover to segment of players that are already geared to conduct most of play e-Instant games. That conversion is a critical leap forward their everyday purchases via smartphones, tablets or desktop in the drive to expand the lottery player base. computers. This “clickquisition” strategy has garnered between Today’s consumers have a world of goods and services at their 6,500 and 7,000 new players per month for one or NeoPollard fingertips. This is true across nearly all consumer industries, Interactive’s clients since the launch of its interactive draw-based including lottery. Ultimately, by offering digital versions of the games portfolio. most popular traditional games, such as interactive draw-base Once online, players are exposed to dynamic cross-selling op- games and e-Instants, lotteries can effectively leverage both dig- tions that boost sales both online and through traditional retail ital and retail strategies to acquire and engage a broader player locations. As an added bonus, because players can select their base across the entire lottery ecosystem. ■

Alice Garland Interview … continued from page 26

A. Garland: Lotteries can follow the to improve our program. One key area National Council on Problem Gambling WLA’s Responsible Gaming Framework of improvement was in training all our and our local partner, the N.C. Prob- or the new Responsible Gambling Veri- employees and then all our retailers to lem Gambling Program. I don’t know of fication Program sponsored jointly by understand what problem gambling is, any better place to start, however, than NASPL and the National Council on know how to recognize it, and know with making sure your employees get the Problem Gambling. What North Caroli- how to offer resources that can help. Our training they need to offer the right re- na found out as it worked to obtain Level work also led us to a new tool for retailers sources to someone who has a gambling 3 certification is that it already had many to easily, and in a discrete manner, pro- problem. You’ll probably find, as we did, important responsible gaming practices vide the toll-free number for North Car- that your employees—including many in place. I suspect many U.S. lotteries olina’s Problem Gambling helpline with of our sales reps—face these situations would discover that too. But we also saw one push of a terminal button. And we already and are glad to get the training the gaps, the places where we needed strengthened our partnerships with the they need to provide help. ■

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 65 Demanding Innovation: In sales spaces that have become a lot of noise, develop your product to cut through the clutter.

s a customer, it is noisy out there. So many things to see, to that typically are not innovating either; probably not a coincidence. look at, and to notice before selecting what you need…or Marketing and sales are the driving forces behind what does sell, but Awant. Same holds true whether you are looking for yourself not the only people that should bring ideas to the table. Those are the or making a decision for business. Employees are faced every day with people giving status updates of the industry, identifying needs and that challenge—how do I get the end-user customer to look at my even existing problems. But the drive to innovate exists within every product? The solution is simple; develop a product to cut through department. Set up a team of people to drive ideas of what needs to the clutter. exist to solve problems, drive more sales and see something in the Ok, maybe not too simple. But there are ways to set yourself and marketplace. Then let your research and development teams develop your team up to achieve just that. Below are four general rules to fol- those ideas and come up with the actual solutions. low in developing your next innovative product to make sure it is Look at Kickstarter for example to grab some inspiration. It is full selected in the marketplace. of unique product ideas and those idealists don’t even know how they will go about achieving the end product, but they know there is a so- Rule 1: lution somewhere. This is the start of collaboration, the start of ideas Foster a culture of ideas, diversity, and creativity. and innovation at its finest. It starts here. Internally. If you own another employee’s experience, how are you fostering their ideas through diversity and creativity? Rule 3: Good or bad. If there is one thing you should be paying attention to Use a third party you trust. with the millennial generation is that they have ideas and want to be Look to your contact list as to whom you can trust to grow and heard, so how are you making that possible. They are the next deci- develop your idea. It could be a vendor within the industry to move it sion makers so set it up right for them now. from idea to product. It could be a trusted advisor to give an outsider’s Look around you and how decisions are made and business is get- perspective to solidify the need. Depending on your idea or problem, ting done. If there is only one department responsible for the innova- the solution may also be not just the product but how it is displayed, tion and launch of a new product then it is time to branch out and encased or shown off to grab attention. Use your outside experts to push the limits. Walk down the hall and ask the first person you see polish the idea for you. that has never been asked what problems they see in the industry with your product(s) or the way it is presented. Why do they play the lot- Rule 4: tery, why don’t they. At some point, an answer is heard generating an Don’t forget the fun, think like a customer, and sell it! idea. It could be a new way to get the word out, a new way to market You are one, so it shouldn’t be hard. Remove yourself from the in- an existing product, a tweak, or a new product all together that will ternal working and relate it back to how you choose your groceries, solve a problem you currently are not properly identifying. your new shirt or even a new landscaper. How do they catch your eye, how did you hear about them and what made them special. It may Rule 2: sound odd; your shirt choice and a lottery product, but it is relatable. Have a team dedicated to innovation. Remove the actual product and think experience and what made you This is not the role of marketing. That is the first big mistake some want it, what made you pay attention in the first place. Develop your corporate structures still believe. Those are also the same businesses plan and sell it! ■

What are you looking for in a next big thing? Feel free to comment or ask questions to Kayt at [email protected] or connect with her on LinkedIn. Kayt Gabrielson is currently a Product Manager for Schafer Systems, Inc. with an extensive background in sales and marketing covering diverse industries such as lottery, wireless and apparel. She currently serves as a member of the Board of Directors for the American Marketing Association Iowa Chapter.

66 // PUBLIC GAMING INTERNATIONAL // September/October 2016 Panel Discussion … continued from page 50

Mark Hichar: Absolutely. The regulation of gambling has histor- A London-based internet operator ically been left to the states, with most federal laws specific to gam- called theLotter.com sold an Oregon bling intended to assist the states in the enforcement of their laws. MegaBucks lotto ticket to a player in A key area in which the federal government has acted independent of the states is in regard to sports-betting, which is prohibited in Iraq. Companies like Lottoland and all but the four states where it was grandfathered in to the extent Tipp 24 sell Powerball, Megamillions, conducted prior to the time the 1992 federal sports betting law Euromillions, Eurojackpot, and many was enacted. Now we have a $149 billion illegal and unregulated of the jurisdictional games online and sport-betting market that benefits nobody except the criminals who are making money from it. Hopefully these counter-productive im- into markets where they are not licensed pacts of federal intrusion into gambling will inform the decision- to sell. making process of federal lawmakers such that states are allowed to retain control over gambling policy, along with the authority to —Gordon Medenica clarify the definition of what exactly constitutes “gambling.” that laws against it are working, lawmakers are likely to regulate Gordon Medenica: James … are today’s rogue operators to- and tax it. Some people might say that sports-betting in the U.S. morrow’s mainstream companies? And are there ways that Lottery has passed that threshold. It is conservatively estimated that illegal can leverage the impacts of change and disruption to the benefit of sports-betting exceeds $100 billion a year, that 97 percent of the its stakeholders? $4.1 billion bet on last year’s Super bowl was illegal, and that mil- James Maida: These gray area private operators would prefer lions of otherwise law-abiding citizens are betting on sports in the to navigate a process that leads to them becoming mainstream. For U.S. in spite of the illegality. At what point does it become imprac- example, enterprises like FanDuel and Draft Kings cannot go pub- tical to continue to outlaw it? lic, or at least not optimize their IPO, if they’re operating in a legal Private operators building markets where the boundaries of the gray zone. That’s at least one of the reasons why they are attempt- law are not crystal clear is the end-game of the “ask for forgiveness ing to operate transparently, remove ambiguity in the laws, and instead of permission” method. push for credibility in other ways. There is the problem, though, Mark Hichar: The legal boundaries that depend on a precise that your tenure as illegal operator can come back to haunt you. legal definition of gambling are an example of that. Most may think Companies which operated illegally in the past are being required that DFS fits state legal definitions of gambling. But, from a legal to account for their past behavior when applying for a license to point of view, the relevance of chance versus skill and the ways to operate legally now. I would observe, though, that they seem to be measure those are not precisely defined. We are talking not just successful at doing that. It’s a classic example of a particularly edgy about legality versus illegality. We are also talking about ‘gambling’ “ask for forgiveness instead of permission” strategy. versus not gambling. Tax rates are higher and regulatory require- Philippe Vlaemminck: That’s why European operators work ments more demanding for gambling than for other goods and aggressively on both fronts. They work tirelessly to make sure law- services. So, DFS advocates want it to be classified as not gambling makers at both the member-state level and the EU Commission because then it falls under a different tax and regulatory framework. level recognize, and hopefully appreciate, the role that lotteries Another problem is that nobody has a crystal ball to foresee the serve in channeling economic benefit to good causes and providing implications that current decisions will have on a future that will the gold standard of consumer protection and Responsible Gam- be much different than today. When legislators built a carve-out for ing. But they also vigorously compete in the market-place, applying Fantasy Sports into the UIGEA back in 2006, nobody could have technology and innovation in game development and distribution foreseen that it could grow to the size that it became ten years later. and every aspect of business and marketing operations. Of course, neither the UIGEA nor other federal legislation pro- I would emphatically concur with James’ description of the “ask hibits states from exercising their prerogative to enact laws that for forgiveness instead of permission” approach employed by illegal make DFS or Traditional Fantasy Sports or i-poker or other online operators. And that approach has served them well in pushing law- games illegal. makers to evolve regulatory and taxation frameworks in ways that Gordon Medenica: Doesn’t the diversity of states’ positions as are not favorable to government lotteries. Lawmakers may decide, regards the best regulatory policy for games-of-chance validate the for instance, to allow Lottery to operate in all game-of-chance cat- position that the only way to respect the will and the interests of egories. That would seem to be good, right? But the quid pro quo the people is to let them decide on a state-by-state basis, and not is typically to also implement and regulate and tax model that al- impose a federal decree like RAWA? lows private commercial operators to apply for a license to operate

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 67 Panel Discussion i-games. In the minds of politicians, that is a logical compromise functional in a legal sense. In my role of advising the U.S. House that allows government-lotteries to compete on a level playing field. and Senate committees who are trying to sort these issues out, I Unfortunately, the commercial companies applying for licenses had tell them that the current status of outlawing all gambling at the been operating illegally for years. So, they had the customer data- federal level and allowing states to decide which forms of gambling bases and the operational know-how to carve out a big competitive to allow, permitting states to define precisely what they will allow advantage. Further, as you can imagine, government operators are and what they won’t, is the best. This is not about passing the buck constrained to comply with a standard of advertising and market- to states to wrestle down a thorny issue. It is about the fact that it ing restrictions that is much higher than those applied to the com- is more legally do-able to define what you will allow rather than mercial operators. Technically, the laws may apply equally to both. define what you will not. Of course, the federal government does But in the spirit of “ask for forgiveness instead of permission” yet not want be in the position of legislating the broadest definition again, commercial operators can go to the edge and beyond, know- of what is permissible. That would mean requiring Utah to apply ing that they can litigate when they cross the line, or eventually the regulatory model of Nevada. That is why the best solution is to relent and comply if they are forced to do so. Government opera- empower the states to control the whole process. tors are not so free to do that. There is a partial solution to that Gordon Medenica: Thankfully, there is no discussion in the last issue. Lawmakers could require that the new licensee closes its United States about altering the monopoly status of state lotteries. customer data-base and start from scratch. But, as Philippe points out, that was also the case for European lot- This also brings up an area where we can collaborate as a com- teries some years ago. When we ask for the right to expand the port- munity of government-lotteries. Presently, i-gaming operators are folio of games and distribution channels, that can invite a wider dis- operating legally where they can get a license, and illegally where cussion about the entire regulatory model. In Europe, the outcome they can’t. As a community of government-gaming operators, we of that discussion has not been favorable to government lotteries. could advocate with one voice for the requirement to operate legal- It’s quite an old case now but it still serves as a good example. ly everywhere as a condition for getting licensed in each individual German lottery operators were basically given the option of keep- jurisdiction. We are promoting that concept within the European ing their monopoly and give up the right to advertise, or give up Union now and it will become an even more effective deterrent to your monopoly and retain the right to advertise. They chose to illegal operators once it is applied throughout the world, especially keep their monopoly, and now their ability to promote the prod- in the U.S. and Canada. It is a perfectly reasonable condition to ex- ucts is severely restricted. pect that a business applying for license to operate legally in one ju- That is correct. The result is not surpris- risdiction not operate as a criminal enterprise in other jurisdictions. Philippe Vlaemminck: ing. Revenues went down and the attitude of the political leaders This would create a very compelling incentive for all operators to is that it is fine for government-gaming sales to decline. Sports- respect the laws of the land wherever they operate. betting in particular shifted almost completely from the authorized Lynne Roiter: We may all think that is a reasonable position, government operators over to gray market operators who are not Philippe, but shapers of public policy do not seem to agree. As was licensed to offer sports-betting. pointed out, i-gaming operators who disregarded the laws of many Lynne Roiter: The Canadian model is much like what James jurisdictions do seem to be able to re-group, execute work-arounds, described. Everything, all forms of gambling are illegal until and and find ways to legitimize their operation as soon as it becomes unless specific forms of gambling are legalized and regulated at the expedient for them to do so. provincial level, with very specific conditions under which they are Gordon Medenica: Isn’t that the history of technology and reg- conducted. Regulatory decisions are certainly not controlled by the ulation—technological innovation that drives market-place change lottery. We are accountable to our political and legislative constitu- is always ahead of regulation. And to some extent, Lottery is always ents and so we communicate with them our positions on how best playing catch-up. I think our issue as an industry is much bigger to minimize illegal gambling and social costs and problem gam- than just getting on the internet because quite frankly, as we saw bling. It does appear that our political stakeholders have a clearer from some of the presentations this morning and yesterday, the vision for how to best serve the interests of society when it comes to revenue potential of new games is nice but it’s not necessarily as the regulation of gambling than politicians in Europe and the U.S. good as a $1.6 billion Powerball jackpot. Is there a way for Lottery But making sure that legislators and our political stakeholders have to keep pace with these regulatory and market-place changes? the information to make intelligent decisions is key for all of us. James Maida: It is very difficult to define gambling, to legislate Gordon Medenica: Absolutely. Lottery still has a tremendous the meaning of skill versus chance, to define specific levels of skill brand loyalty and strength. But that too needs to be protected. versus chance, and to measure those factors. And that’s not the only Last December a London-based internet operator called theLotter. issue that makes the job of creating a clear definition of gambling com sold an Oregon MegaBucks lotto ticket to a player in Iraq.

68 // PUBLIC GAMING INTERNATIONAL // September/October 2016 Companies like Lottoland and Tipp 24 sell Powerball, Megamil- appear to be internet gambling which is illegal in the U.S. except lions, Euromillions, Eurojackpot, and many of the jurisdictional where it is specifically authorized and regulated by the state. This games online and into markets where they are not licensed to sell. operator, though, is claiming that the player is not gambling on- They buy insurance to cover the liability of getting hit with smaller line. Instead, the claim goes, the player is giving authorization for a jackpot prize-payouts. Then, when the jackpot exceeds a threshold proxy who is physically located within the tribal land to play. Tech- where it can’t be insured, they just use agents to buy the ticket from nically, the wagers are being placed legally within the tribal jurisdic- the operator, effectively outsourcing the risk back to the operator tion. But they are being placed at the direction of a person who is when the liability is too big. TheLotter.com had an agent in Oregon physically outside of the jurisdiction. The question is whether the buy the lottery ticket in Oregon, so the person they sold it to actu- internet operator who is enabling this kind of derivative wagering is ally received the legitimate lottery ticket. You might wonder how acting legally or not. It is being litigated as we speak. they make money that way unless they upcharge the player. For one Mark Hichar: While Indian reservations are sovereign states, and thing, some of them do upcharge which is against the rules of many thus the federal government has a role to play in matters related to lotteries. The thing is, though, they make their profit on the sales gambling on them, states are usually in the best position to regulate that they self-fund by insuring against a jackpot win in the smaller conduct occurring on state lands and off tribal lands. As James said, amounts. Or, in the unlikely event that they sold the winning num- states today prohibit all gambling and then, in all but two states, bers for a super large jackpot and failed to buy the actual ticket, one carve out those exceptions that they deem most appropriate for its would wonder if they would not just declare bankruptcy instead of local culture and public policy objectives, and the states regulate honoring the $1.6 billion jackpot, or even the $100 million jackpot. and tax those gambling exceptions in the way they deem best. This James Maida: If you have seen the movie The Big Short, you has proven to be the best regulatory framework, as each state can will recall the story of the financial crisis of 2007. The problem was tailor its gambling policies to its own citizenry and its own policy that the vast network of derivatives created a lack of accountabil- objectives. For the federal government to get involved in the regula- ity and transparency which eventually caused the whole system to tion of internet gaming would impose a one-size-fits-all structure break down. These operators that you refer to are, in effect, selling that would likely not suit most states. Even if states could opt out, a derivative product. They are legally licensed in one jurisdiction to a structure in which internet gaming was only allowed pursuant to operate betting. Betting can be on anything, like who will win the a federal regulatory infrastructure would be unlikely to satisfy the presidential election, would the UK vote to leave the EU or, in the states or be consistent with their goals. case of Lottery, what will the outcome of the Powerball draw be. Imagine a commercial land-based casino in which a proxy was It is like a side-bet, a derivative investment, on the outcome of an operating as James described. Would individuals outside the casino event, like a lotto draw. delivering instructions over the internet to this proxy be complying with the law or not? Regardless whether there was technical Gordon Medenica: How is it that these companies can violate the compliance, the main question would be whether the state wanted trademarks of Powerball and EuroMillions and our other products? to allow this type of proxy wagering. And the state would be in the Lynne Roiter: Trademarks and other forms of intellectual prop- best position to address this. One thing is a sure bet: the rate of erty can be defended in your own country. But it is time-consum- innovation of ingenious entrepreneurial internet gaming operators ing and costly to register trademarks in every jurisdiction all over will outpace the ability of the U.S. Congress to react. That is why the world. That has not been done because we did not imagine that these issues must be adjudicated at the state level. States should people in other countries would want to buy our products when retain the right to decide what is and is not gambling, what forms lottery products are already provided by their own jurisdictional of gambling should be legalized and regulated, and under precisely operator. We did not anticipate that a person living in Iraq would which terms and conditions that should be done. pay a premium price to buy an Oregon lottery product from an Massachusetts has a pending bill that would allow them to ex- internet operator based in London. I still don’t quite get that. But plore games of skill. This has the potential to redefine the precise the Tipp24’s and Lottolands are making a lot of money by violating definitions of what constitutes a lottery. Nevada, for instance, has our trademarks and selling illegally into jurisdictions where they are passed a law that redefines the parameters of slot machines by al- not licensed to operate. lowing them to integrate a skill-based component to the game. I am not predicting what might happen with lottery, just pointing out James Maida: Another example of applying a derivative model that legislators do have the authority to redefine the parameters of to gambling: Indian tribes in the U.S. operate gambling within the gaming and regulatory laws and that applies to lottery as well as all boundaries of their sovereign reservation. The land is considered a other forms of gaming. sovereign jurisdiction with the right to operate games-of-chance. An enterprising company now has a website that enables players to Lynne Roiter: The Canadian definition from the criminal code log in and play from locations not on the reservation. This would is exactly that. This code was written in 1969 before the internet

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 69 Panel Discussion and before all of these other mitigating factors and debates about Multi-player formats create a more dynamic environment, a wider what constitutes gambling, or lottery. It states that a “lottery” is variety of factors that can influence the outcome, and therefore a any game of chance, regardless of the amount of chance or skill is better chance for a player base with varying skill levels to compete involved. If there is even a small element of chance involved in the with a hope of winning. Perhaps ironically, it is the increased ele- game, it is a “lottery.” This definition eliminates debate by putting ment of chance that is key to enabling a broader audience of players the decisions of how to regulate and tax squarely in the hands of to engage in skill-based gaming. legislators instead of the courts. This is a model that works very well We know Millennials have been raised on Peer-to-Peer player for us in Canada. You should try it sometime! games and they love that format. It provides the social gaming com- Gordon Medenica: James—how do you think the introduction ponent that makes the games more fun to play. of skill-based casino games will impact the broader world of gaming? Gordon Medenica: Lots for us to think about. Clearly, Lottery James Maida: It is moving into the Peer-to-Peer multi-player will need to understand how the whole environment of gaming is format. If it is just two players, then the outcome will always be, changing, how regulatory frameworks are changing to accommodate or almost always be, that the higher-skill player wins. That kind of these new game formats and channels of distribution, and what we predictability is not a good platform for engaging a mass audience. need to do to continue to engage our audience of lottery players. ■

Tracey Cohen Interview … continued from page 43 ing our understanding of the activity and Go-Go. Strategically, we like to embrace lo- second only to New York. Sure, many behavior of commuters to help minimize cal culture and interests whenever possible. hands make light work, right. So, we’re the impact of these threats. looking into possible partnerships with I think we all make our own party. You are a big fan of licensed properties, at- our neighbors across the District lines for taching a pop culture brand to the Instant We work hard to make it fun for every- a new multi-state game for our region. ticket. It’s worth the small percentage you pay one because that is what this business is And I hope something interesting results for the license? all about. More fun for the players adds from those discussions. I definitely think up to increased sales and revenue. In the T. Cohen: Definitely and always with- it would be mutually beneficial for us to midst of an election cycle that has elec- in reason. There are different schools of collaborate on a game and/or a promotion. trified the nation, we are capitalizing on thought. Some people think that the cost of the license can replace the cost of extra Games like Fantasy Sports and Pokémon Go that excitement with our $5 You Decide promotion—that the licensed brand at- are capturing the imagination of the consum- ticket. Now, in its second print run, this tracts consumer attention so you do not er. Is there anything we can learn about con- ticket is a hot seller and easily among the need to promote it as much. I’m of the sumer game-playing preferences by studying top five all-time scratch ticket performers school that thinks if you’re going to pay for what makes popular games appealing? at the $5 price point. We’re playing up on a brand license then it makes sense to in- T. Cohen: Always. Our marketing direc- the ‘2016’ concept big time. The Second vest in promoting it aggressively as well. I tor relentlessly scouts player trends and the Chance contest has a coffer of $201,600 believe that the benefit of availing licensed latest innovations in leisure and entertain- in cash prizes. The fate of that cash pay- brands is that it helps create demand not ment. He’s determined to bring whatever out is in the hands of the players as they only for that specific product but also en- is exciting the zeitgeist to the DC Lottery. decide whether one winner takes all or if ergizes sales across the entire product port- I won’t give all our secrets away, but yes the prize money is shared among a selec- folio. We have a formula that works for us. there’s pretty interesting technology out tion of winners. At this time, it’s a winner Why fix it? there and we want to be among the first— take all game. And, here’s the November if not the first—to introduce those innova- surprise—the second chance contest win- You share a media market with Virginia and tions to the industry. ner will be announced the day after the Maryland. Have you explored the possibility of The DC Lottery is in its 35th year of presidential election. collaboration on a new tri-jurisdictional game, bringing the fun and excitement of lottery And, nobody knows DC like the DC or perhaps a promotion for the games that you games to players in the District of Colum- Lottery. Another top performer in this year’s all sell, like Powerball and Mega Millions? bia. We’ve been tested for sure. A world- scratcher portfolio is the $5 Chuck Brown T. Cohen: The Washington Metropoli- class lottery, we’ve come through the other ticket, named for DC legend and music tan Area is one of the most expensive mar- side a stronger agency with the vigor and pioneer Chuck Brown, the Godfather of keting areas in the nation. I believe we’re vision to take on the next 35 and more! ■

70 // PUBLIC GAMING INTERNATIONAL // September/October 2016 Scenes from European Lottery Conference INDUSTRY DAYS Marrakech, Morocco, May 30 to June 1

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 71 Scenes from European Lottery Conference INDUSTRY DAYS Marrakech, Morocco, May 30 to June 1

72 // PUBLIC GAMING INTERNATIONAL // September/October 2016 Lottery Industry Hall of Fame photos Ioannis Katakis, Stavros Michael, Thierry Pujol, and Philippe Vlaemminck

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 73 Scenes from PGRI SMART-Tech New York City, April 6 to 8, 2016 Modernizing the Lottery Player Experience at Retail

74 // PUBLIC GAMING INTERNATIONAL // September/October 2016 September/October 2016 // PUBLIC GAMING INTERNATIONAL // 75 Scenes from PGRI SMART-Tech New York City, April 6 to 8, 2016 Modernizing the Lottery Player Experience at Retail

76 // PUBLIC GAMING INTERNATIONAL // September/October 2016 September/October 2016 // PUBLIC GAMING INTERNATIONAL // 77 Pulse of the Industry

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the Executive Team, we paid atten- The Executive Team of the new gam- WORLD NEWS tion not only to formal competence ing company will have 10 members in but also to competence in public addition to CEO Olli Sarekoski: affairs, says Mr Olli Sarekoski, CEO • Executive Vice President Velipe- of the new gaming company as of 1 kka Nummikoski, responsible January 2017. for communications, beneficiary • The new Finnish gaming company and public relations, and sponsor- will start its operations on 1 January ship. CV: M.Soc.Sc.: CEO of RAY 2017, as the gaming operations of 2012–2016, State Secretary, Prime Fintoto, RAY, and Veikkaus merge. Minister’s Office 2011–2012, State • The new company will offer fun Secretary, Ministry of Finance and benefits by providing entertain- 2007–2011, Vice President, Com- ing Finnish games: it will generate munications, Elisa 2003–2007, Vice over one billion euros a year to the President, Communications Ra- common good for everyone living diolinja 2000–2003. in Finland. • Senior Vice President, Business • For the present and until the end of Operations Nora Vähävirta, respon- 2016, the current Executive Teams sible for products, marketing, and Olli Sarekoski, CEO, Veikkaus of Fintoto, RAY, and Veikkaus will brand and product development. be responsible for running the pres- CV: M.Sc. (Computer Science): executive team of the ent gaming operators, operating Vice President, Business Operations new finnish gaming under the temporary name FRV Evo Group, Veikkaus 2014–2016, Vice company appointed Oy. As of 1 January 2017, the new President, Retailer Sales, 2008– Responsibility and reliability are the gaming company will be called Veik- 2013, CRM Manager, Veikkaus cornerstones of the Finnish gaming kaus. The company has a total of 1.9 2006–2008, Senior Consultant, system. The new gaming company million Finnish loyal customers, and Accenture Oy 1994–2006.—Senior will need to earn its position among employs nearly 2,000 people. Vice President, ICT Finns from the very beginning, • FRV Evo Oy’s board has currently • Senior Vice President, ICT Timo meeting the competition on the four members: chairman Olli-Pekka Kiiskinen, responsible for gaming digital market in a responsible way. Kallasvuo, Outi Henriksson, Han- and other systems, and the product Whilst appointing the members of na Sievinen, and Pekka Hurtola. development process. CV: M.Sc.

78 // PUBLIC GAMING INTERNATIONAL // September/October 2016 (Tech.): Senior Vice President, sources Sirpa Ontronen, responsible report from the world Business Operations, RAY 2013– for human resources and lottery association (wla) 2016, Distribution Director, RAY HR development. on global performance 2010–2013, Vice President, Busi- • Senior Vice President, Strategy and of lotteries ness Operations, Digita Oy 2007– Planning Heidi Ioannidou, respon- www.world-lotteries.org 2010, Entrepreneur 2005–2006, sible for strategy, operational plan- Lotteries worldwide experienced Vice President, MTV Interactive ning and steering, and indicators. a generally positive start to 2016. iTV Business Operations Unit First-quarter on first-quarter sales 2003–2005. china suspends online were up sharply in North America, • Senior Vice President, Customer lottery sales thanks mostly to the record-breaking Relations and Digital Sales Ari As a result, 500.com did not gener- Powerball draw of January 2016, and Aarnihuhta, responsible for cus- were also up moderately in Europe. ate net revenue from sports lottery, tomer relations management, digital However, these results were offset by a its core business, during the second channels and services, business and contraction in sales in the Asia Pacific quarter of 2016. The temporary customer intelligence (CI), and region. Overall, first-quarter on first- suspension of online lottery prod- customer service. CV: Economics quarter sales grew by 3.1% globally. ucts sales followed the issuance of Student, Sanoma WSOY Executive a Self-Inspection and Self-Remedy The North American market enjoyed Program: Vice President, CRM, of Unauthorized Online Lottery the most auspicious start to 2016, Veikkaus 2015–2016, Vice President Sales notice by the Chinese General with participating North American Business Operations Group, Veik- Administration of Sports, Ministry lotteries reporting an aggregate first- kaus 2013–2014, Director, Veik- of Finance, and Ministry of Civil quarter on first-quarter increase in kaus 2008–2013, Head of CRM, Affairs. China’s regulated lottery in- sales of 15.7%. The African market Veikkaus 2003–2007, Commercial dustry started in the late 1980s and also performed robustly in Q1 2016. Director, Lottex Oy 2003. Participating African lotteries reported has became one of the world’s largest an aggregate increase in sales of 13% • Senior Vice President, Sales Pertti lottery markets by sales volume. for Q1 2016, as against Q1 2015, Koskenniemi, responsible for Growth came to a halt last year when with the main contribution coming partnership and sales network, the government banned online lot- from the strong showing of the South and the Casino. CV: Diploma in tery sales as it investigates the state- African National Lottery and Mo- Business and Marketing: CEO of run industry amid a broader crack- rocco’s La Marocaine des Jeux. Collec- Suomen Hippos ry (The Finnish down on government corruption. Trotting and Breeding Association) tively, participating European lotteries 2015–2016, CEO of Fintoto Oy registered an aggregate increase in uk approves virtual sales of 4.9% for Q1 2016, versus the 2014–2016, Tote Director, Fintoto currency for Oy 2001–2014. online gambling corresponding quarter of 2015. Norsk • Senior Vice President, Finance Mai- Tipping reported an increase in sales The United Kingdom Gambling ja Hjelt, responsible for finance, of 9% for the first three months of Commission has elected to allow Business Intelligence (BI), real 2016, as against the first three months licensed online gambling companies estates, and service and logistics. of the year prior, while Francaise to begin accepting virtual currencies des Jeux sales increases 8.2%, anmd • Senior Vice President, Legal (like Bitcoin) as a payment me- Europe’s largest lottery, Italy’s Lot- Affairs Mari Mustakoski, respon- dium as of October 31, 2016. This tomatica, recorded a rise in sales of sible for legal and contract affairs, new policy allows operators a wide 6.6%. Participating Latin American and procurement. latitude in deciding which digital lotteries reported an aggregate increase • Senior Vice President, CSR Pekka currencies can be accepted all while in sales of 3.5%. In the Asia Pacific Ilmivalta, responsible for corporate staying within regulations. The UK region, positive results from Australia’s social responsibility and security, Gambling Commission is the first Lotterywest and Hong Kong’s HKJC risk management, Board of Direc- significant regulatory force to grant were not enough to compensate for a tors and Supervisory Board, compli- approval for digital currencies. Oth- contraction in sales at the mainland ance, and internal audit. ers around the world are expected Chinese lotteries, with the result that • Senior Vice President, Human Re- follow suit in the near future. participating Asia Pacific lotteries saw

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 79 aggregate first-quarter on first-quarter increasing its enforcement of laws that polish gambling market sales contract by 3.5%. The mainland govern how gambling, competitions, on cusp of major Chinese lotteries in particular had a and lottery-style contests should be regulatory change slow start to the year, with sales only operated in the United Kingdom. The The Polish government has adopted beginning to pick up in the last month rising popularity of e-sports betting— a draft amendment to the Polish of the quarter. In consequence, China especially the practice of using “skins” Gambling Act. The Draft Amend- Sports Lottery recorded a Q1-on-Q1 or virtual currency—has occurred ment was submitted to the European decrease in sales of 7%, while the with little regulation to date. There are Commission, and until October 31, Chinese Welfare lottery recorded a several reasons for this: 2016, awaits comments and consulta- Q1-on-Q1 decrease in sales of 1.9%. • E-sports sites are easy to start up tions. The government has said that it In contrast, the sale of lottery products expects that the amendment will mini- • They are frequently shut down after rose by 24.7% at Hong Kong’s HKJC mize the grey market in gambling; a short time in operation over the January–March 2016 period, assure better protection of players as against the corresponding quarter of • They are difficult to monitor against negative consequences of gam- 2015, and by 15.4% at Australia’s Lot- and police bling, especially via online websites; terywest over the same three-month • Many are operated from outside and ensure higher revenues generated on three-month period. the UK and attempt to circumvent by the legal gambling sector. UK laws by stating that UK players This draft legislation would impose a israel to ban slots and should not participate new, very radical, and tough gaming horse race betting There also is the legal question regard- framework in Poland, significantly Israel’s notoriously strict gambling ing whether “skins” or virtual cur- strengthening the position of the laws are about to get even tougher, rencies can be regulated in the same gaming state monopolist by equip- with the sudden prohibition of betting fashion as traditional betting. The UK ping it with more competences and on horseracing and slot machines. Commission’s position is that they fall additional channels of games distribu- Finance Minister Moshe Kahlon and under the same legislative restrictions. tion. Also, it introduces severe instru- Justice Ministry Director General Emi Recently, the website CS: GO Lotto ments to combat illegal gaming, with the intention of driving players to Palmor announced that the country made news when it was revealed that the legal market which will be mostly would be putting an end to both two YouTube stars were associated operated by the state monopolist. The forms of gambling as well as any plans with it. The site was positioned as Draft Amendment, if enacted, will to legalize casinos. a get-rich-quick scheme to its pre- extend the catalog of gambling games dominantly young audience, which which can be offered online. The Draft sparked debates about the morality regulated online poker Amendment would require all online delayed in portugal until of targeting young people with at least november operators (including existing licensed gambling messages. online betting operators) to enable the The UK Commission has contacted Customs Office to have remote access scientific games expands more than 100 unlicensed online to the data stored in the operator’s into romania gambling websites, informing them archive system, including adequate Scientific Games Corp. is among the that they should cease offering tools and software ensuring protection first online casino content providers services to British customers. Upon of the data. The Polish government has to have been licensed by Romania’s that notification, most discontin- decided to engage more intensely in gambling regulator. ued their operations involving UK combatting illegal online gaming. customers, the commission said. Finally, with the stated aim of prevent- e-sports sites draw the Others continue to be the subject of ing money laundering and financing attention of uk gambling on-going enforcement action. The of terrorism, the new regulation re- commission commission is seeking a consensus stricts online payments methods avail- In the wake of a recent controversy on how it should proceed against the able to online players. It is e3xpected surrounding an e-sports gambling site non-compliant sites before a final that the new control instruments will associated with two YouTube stars, declaration of intent is published result in additional procedures and the UK Gambling Commission is this autumn. mechanisms enabling its enforcement.

80 // PUBLIC GAMING INTERNATIONAL // September/October 2016 novomatic expands kkcg & emma established called ‘in-game’ items which comput- business in albania a joint lottery company er gamers can win, trade, sell or use. After the Casinos Austria plan to sazka group It said those “digital commodities,” or withdraw from the lottery business in Emma KKCG Group and Capital “skins,” can sometimes be “converted Albania, Novomatic will take over the established a joint lottery company into money or money’s worth” and that local subsidiary of Casinos Austria. Sazka Group that have put their assets they therefore serve as “a form of vir- Novomatic currently has three in a lottery. Karel Komarek’s KKCG tual currency” which can be gambled companies in Albania. will have in the joint venture Sazka with. The Commission has previously Group share of 75 percent, EMMA confirmed that offering facilities novomatic achieves George Šmejc 25 percent. Manage- whereby virtual currencies can be record turnover in first ment Control will perform equally. used for gambling qualifies as a regu- six months of the year Sazka own shares in the largest Greek lated activity for which a gambling and sees headcount rise gaming company OPAP, the Italian licence is required. by 12.1 percent company LOTTOITALIA or Austrian NOVOMATIC, Europe’s leading companies Casinos Austria and Öster- lottery strength lifts gaming technology group, recorded a reichische Lotterien. tatts lotteries revenue turnover of EUR 1,094.9 million in “Together with our partners we aim to “All-in-all, our business renewal the first six months of this fiscal year. create the largest European company in program is delivering, it positions us This represents an increase of 10.8 the lottery and gaming industry. Our well for future growth, and has at percent over the first six months of the common strategy is to further promote its core a focus on maximising value previous year. The largest gains were the growth of companies that today Saz- from our unique portfolio of gam- seen in the proceeds from gaming ka Group owns, and continue to expand bling assets,” chief executive Robbie machines, which increased by 11.8 to other parts of the world, even outside Cooke said. “It is really satisfying to see percent, and the number of sites Europe. We are looking for opportunities the digital initiatives we implemented operated by the Group rose to over for further acquisitions,” over the last few years now driving 1,600 as of June 30. The number of said Komarek. strong sales outcomes,” he said. He people employed has also risen to a also stepped up his attack on for- historical high, reaching an average gambling regulator looks eign bookmakers, arguing that some of 22,373, which corresponds to an to clamp down on are circumventing the tax and duty increase of 12.1 percent. unlicensed e-sports system for their own financial ben- Harald Neumann, NOVOMATIC betting and gambling efit. Reform of regulatory, taxation, Chairman of the Board, said: “We The British gambling regulator has and enforcement policies are being pursued our growth strategy during the warned online platforms that facilitate discussed and debated at the Federal first half of the year and have under- bets on e-sports or which allow gamers Government level. Tatts competitor, taken a number of important expan- to gamble virtual items they have ob- Tabcorp, CEO David Attenborough sions. With our acquisition of the British tained when gaming that they might has also criticized the current taxation gaming operator Talarius, we have require a gambling licence to continue system and corporate bookmakers further increased our market share in the with their operations. Website opera- and calls for reform. “The fiscal posi- important UK gaming market, and we tors are enabling individuals to bet tion of these jurisdictions is damaged by are now the largest operator of gaming against each other for money or prizes. operators who are circumventing the tax arcades in the UK. Our intention to Operating as an intermediary for wa- and duty system for their own financial acquire a stake in the Australian listed gers between individuals may require benefit, and in some cases deceiving gaming technology company Ainsworth a license. The Gambling Commission customers as to the true nature of their would give a massive boost to our market said “the lines between some social gam- product offering,” Attenborough said. position in Australasia, as well as in ing products and gambling are blurring” Tatts and Tabcorp have had merger North and South America.” and highlighted concerns about unli- talks in the past and some think those censed betting and gaming activities as discussions may resume. ■ bitcoin plunges, rebounds the popularity of e-sports grows. after hackers steal The Gambling Commission also $65 million addressed the rise in the trade of so-

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 81 draft minutes of its June 28 meeting iowa lottery NORTH at the commission’s headquarters in FY 2016: Unique Year Becomes Re- Rocky Hill. According to minutes of cord Breaker For Iowa’s Lottery. Fiscal AMERICA the meeting, Noble said “These results year 2016 has gone into the books as FY 2016 lead to big expectations for FY17.” the best year in the Iowa Lottery’s history, with some unique circumstances arkansas lottery georgia lottery producing records across the board, in- Scholarship to benefit from record Georgia Lottery transfers $1.097B to cluding record sales, proceeds to state causes, prizes to players and retailer sales. Total sales for fiscal 2016 were education. This is the first time the commissions. The Iowa Lottery gener- $455.6 million, a gain of 11.5 per- Georgia Lottery has transferred over ated a record $88 million in proceeds cent over fiscal 2015. Net proceeds $1 billion in a single fiscal year. Profits to state causes, an 18% increase over available for scholarships were $85.4 transferred surpass last year’s record the previous year. Annual sales were a million for the twelve months ending transfer by more than $117 million. record $366.9 million, up 13% over June 30, $6 million more than Lottery Georgia Lottery players won $2.75 FY 2015. officials had projected for the fiscal billion in prizes in FY16, and retailers year and an increase of about $13 mil- earned over $270.7 million in com- lion over the prior year’s proceeds. missions. kansas lottery “We appreciate the commitment from Kansas Lottery Sets New Re- bclc our dedicated lottery and COAM retail- cords—$163.9 Million Transferred to the State in Fiscal Year 2016. Tradi- BCLC contributes $1.3 billion to ers, players, vendor partners and employ- tional lottery sales in Fiscal Year 2016 British Columbia. British Columbia’s ees. We are grateful to our board of direc- were $286.7 million, an 8.47 percent BCLC celebrated its 30th anniversary tors for their leadership and guidance,” said Debbie D. Alford, president and increase over FY 2015 record sales. As by delivering a record net income of a result of strong sales, the Kansas Lot- $1.3 billion to government. BCLC CEO of the Georgia Lottery. “ We’re proud to have reached the extraordinary tery transferred $78.2 million to the achieved growth in all lines of busi- State in FY16, which also set a record. milestone of raising over $1 billion for ness—lottery, casino and eGaming— Transfers to the State from state- HOPE and Pre-K.” which resulted in a record net income owned and -operated casino gaming in that is $59 million ahead of the last Fiscal Year 2016 were $85.7 million. fiscal year. BCLC’s diverse portfolio of idaho lottery products, combined with responsive- Idaho Lottery Returns Record kentucky lottery ness to changing consumer demands Dividend of $49,500,000 to People Kentucky Lottery has another record- and evolving market conditions, were of Idaho. The Idaho Lottery ended breaking year for sales. The Kentucky pivotal in this success. its Fiscal Year on June 30, record- Lottery reported that ticket sales for ing $236.1 million in annual sales, california lottery the fiscal year ending June 30 totaled awarding $153.8 million in prizes to $997.3 million. The number was dis- California Lottery has another record- players, and retailers earning $13.8 closed by lottery officials at a meeting breaking year. Preliminary numbers million in commissions—all new Ida- in Louisville Friday morning, and the are in, and it looks like the Lottery ho Lottery records. The $49,500,000 total broke the old mark of $899.1 generated nearly $6.3 billion in total in net funds turned over to the state million set in FY 2015. of Idaho represents a 10% increase sales, smashing its all-time record of The new revenue figure translated $5.5 billion which was set just last over last year’s dividend. into record-breaking profits returned year. Nearly $1.5 billion will be trans- to the state treasury—a total of $253 ferred to schools all across the state. indiana lottery million, topping last year’s previ- The Indiana Hoosier Lottery finished ous record of $231.1 million by 9.5 connecticut lottery fiscal year 2016 by sending $281 mil- percent. The funds will be used for While a final report of the Connecticut lion to state tax coffers, a 16 percent scholarship programs. Lottery’s banner year has not yet been increase over fiscal year 2015. Total The board also announced that a search published, details were included in the revenue was $1.2 billion. firm will be hired to help find a new

82 // PUBLIC GAMING INTERNATIONAL // September/October 2016 CEO. Longtime CEO Arch Gleason marked the first time that five casi- the continued growth of the lottery’s recently died soon after retirement. The nos were operating in Maryland for a KENO and EZPLAY® Games and a new CEO will be appointed by Gov. full fiscal year. Gross gaming revenue record Powerball jackpot contributed Matt Bevin, and is subject to confirma- totaled $1.144 billion, beating last to the eleventh consecutive year of tion by the lottery board of directors. year’s figure by $105 million (10.2 %). profit growth. The Lottery generated a Casino revenue contributed $402.5 record $1.06 billion in transfers. maryland lottery million to the Maryland Education Trust Fund (ETF). Maryland Lottery Sets All-Time Record pennsylvania lottery for Sales and Profits. Maryland Lot- Pennsylvania Lottery reports record tery and Gaming (ML&G) announced new mexico lottery sales. Over the last year, the Pennsyl- more than a half-dozen record-breaking New Mexico Lottery delivers its high- vania Lottery set new records in terms figures for Fiscal Year 2016. The Lot- est profits ever: $46.3 million in FY of total sales, net revenue, and total tery’s record sales of $1.908 billion best- 2016, approximately $5.2 million amounts paid to winners. For this cur- ed the previous record set in FY2012 by more than last year’s return. Sales were rent fiscal year, the lottery made $4.13 6.3%, and FY 2015 by 8.2%, and pow- approximately $154.3 million, up billion in total sales. Of that, $2.64 ered all-time highs for prizes to players, $17.3 million (12.65%) from last year. billion was paid out to winners, and retailer commissions and profit to the $1.20 billion turned over to the state. State of Maryland. ML&G contributed new york lottery an unprecedented $1.079 billion to the The New York State Lottery sales tennessee lottery State of Maryland – $569.8 million topped $9.7 billion for the financial The Tennessee Education Lottery Cor- from traditional lottery and $510 mil- year that ended March 31. The sales poration closes year by shattering mul- lion from casinos. The total represents increase produced a $3.3 billion bo- tiple records, including an all-time high a 6.7 % increase from the previous nanza in aid to public schools. More for sales and net proceeds for educa- combined record of $1.012 billion set than half of the $7.7 billion in sales tion. This year’s record sales resulted in in FY2015. for traditional lottery games involve a contribution of $394 Million for all “The many milestones that we reached the popular scratch-off tickets. education programs funded by the Lot- clearly reflect the good year we had, not tery, a record increase of $46.3 Million, just for the lottery but for everyone— north carolina lottery or 13.3 percent, over last year’s record more prizes for our players, stronger return. This brings the total raised to commissions for our retailers, and most North Carolina Education Lottery more than $3.8 Billion since inception. importantly, an all-time record contri- set new records in sales and earnings The Lottery reported a record $1.626 bution to the State,” said Maryland in fiscal year 2016, raising more than Billion in total sales for the period from Lottery and Gaming Director Gor- $600 million for education programs July 1, 2015, through June 30, 2016, don Medenica. “We’re optimistic that in North Carolina. That makes it 10 an increase of $151 Million, or 10.2 the coming year, which will bring the years of consecutive sales growth. Lot- percent, over last year’s previous sales opening of the state’s sixth casino, will be tery ticket sales totaled $2.38 billion, record of $1.475 Billion. This brings another record-setter.” up 20 percent from the year before. total sales since inception to more than The lottery raised $607.8 million for Sales of instant tickets (scratch-offs) $15 Billion. education, up 16.5 percent from the set an all-time record, totaling $611.3 Strong instant game sales started the year before. million, an increase of $65.2 million year off on a record pace, culminating (12.0 %) over FY2015. FY2016 also with a record $1.304 Billion—6.88 saw the Maryland Lottery add to its ohio lottery percent over last year’s record of $1.22 lineup of draw games for the first time Ohio Lottery Celebrates Historic $1 Billion. Drawing-style game sales set a since 2012 with the Cash4Life game, Billion Profit Transfer. Ohio Lottery record of $322.8 Million, 7.6 percent which went on sale in January 2016. traditional sales combined with video higher than the prior record of $300 Maryland became the sixth state to lottery net win reached a record $3.9 Million. The Lottery set monthly join the multi-state game. The growth billion in Fiscal Year 2016, up $263.1 total sales records in 11 of the 12 of the state’s casino gaming industry million from Fiscal Year 2015. Seven months of FY16, and set quarterly continued during FY2016, which fully functional racinos combined with records for all four quarters. ■

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 83 massachusetts online california lottery NORTH lottery failed to make cut leverages data to grow in late-session flurry The California Lottery has found a AMERICAN Lottery Executive Director Michael winning ticket: data analytics. By NEWS Sweeney had been pushing this session converting data into business intel- for an OK from the Legislature necessary ligence, the California Lottery is doing scientific games announces to move forward with an exploration more than simply identifying when and kevin m. sheehan of online opportunities for the Lottery. where potential players might be. It is as new ceo, president, Treasurer Deborah Goldberg has touted using data to move the entire enterprise and member of the board the idea of a Lottery-run fantasy sports toward its goal of becoming the largest of directors—gavin isaacs game, which she said would attract a lottery in the United States. CA State to become vice chairman younger audience that favors playing of the board. lottery revenues have increased from on mobile devices, particularly 25-to- $5 billion in 2014–15 to $6.3 billion (See interview with Kevin Sheehan on 45-year-old males “who are not Lottery in 2015–16, and are expected to reach players (and) who are extremely excited by page 20) $8 billion by 2018–19. By combining sports-related fantasies.” Goldberg, whose “I am so pleased to welcome Kevin to Scien- historical data with business goals and office oversees the Massachusetts Lottery, tific Games and that Gavin will continue operations, lottery officials are able to expressed disappointment Tuesday that with the company in his new role. With the address a number of issues that they the online language failed to prevail company fully integrated, it is the right time previously relied on people to track. before a six-member House-Senate to expand our leadership team so we can Data analytics is removing many of the conference committee that conducted take full advantage of the new and growing human assumptions that once figured its deliberations privately. Having been opportunities open to a company with our into which retailers were selected to sell denied the legislative authority to move global scale and broad expertise. Kevin’s in- lottery tickets and scratchers, as well as products online, the head of the Mas- tellect and experience will be an invaluable sachusetts Lottery said the agency will predicting when those products would asset as we move forward as one company,” continue to make its case to lawmakers run out. Empty shelves can equate to said Ronald O. Perelman, Chairman of and seek approval to offer its products on millions in lost revenues. the Board of Scientific Games. the internet. The organization has discontinued the “Today we are one company with three use of manually produced inventory re- strong businesses—gaming, lottery and in- jcm global brings flex- ports; instead, a data-based predictive so- teractive. Our integration is behind us and ible, direct promotional lution aligned with the product ordering our business strategies are delivering solid couponing to las vegas system could help automatically allocate results. With our momentum building, The new Topgolf Las Vegas at MGM product to consumer meet demand. I’m moving from an operational leadership Grand is a four-level entertainment position to a more strategic role, Vice Chair- venue with interactive golf games that it is with great sadness man of the Board of Directors. On behalf of is unlike anything Las Vegas visitors we report the passing of my colleagues and the Board, we welcome have ever experienced. Now JCM dan bower. he co-founded our new CEO and President, Kevin Shee- Global is adding a new layer of interac- scientific games with dr. han. This is the right time to grow our lead- tivity to the facility with its intelligent john koza in 1973 ership team and have someone of Kevin’s couponing solution, PromoNet®. JCM talent, experience, and financial acumen has installed PromoNet on 20 bar top national indian gaming take us to the next phase of growth and games at Topgolf, giving the facility the commission (nigc) an- innovation,” said Gavin Isaacs, Scientific flexibility to enhance guest experiences nounces largest tribal Games Board Vice Chairman. by identifying valuable players, and to revenue gain in 10 years deliver promotions and reward players. Revenues generated by the Indian alabama lottery bill gaming industry in 2015 totaled fails in senate budget impasse delays $29.9 billion dollars. After six years The Senate and House fail to agree on final passage of online of modest, but stable growth, the 5% which games should be allowed, so the gaming/poker legislation increase in GGR from 2014 is the entire bill is dead for the season. in pennsylvania largest increase in 10 years.

84 // PUBLIC GAMING INTERNATIONAL // September/October 2016 play at the pump are, right at the pump,” said Steven nba nearing $250 million lottery on the rise in Desautels, senior category manager deal with data north carolina for Murphy USA. company sportradar The partnership of Linq3, creator Linq3’s lottery playing platform will The NBA has for years been among the of Play at the Pump technology, soon add Verifone Commander to its most progressive sports leagues in the and the North Carolina Education pump POS/site controller integration, world in its use of technology. They’re Lottery (NCEL) has surpassed with NCR’s RPOS completing the set about to take another major step. Ac- $1 million in lottery sales. For a by year end. This will position NCEL cording to a report from Bloomberg’s program that’s less than two years and Linq3 to access more than 95 Scott Soshnick, the league is close to a old and began with seven participat- percent of the gas retail sector. deal worth $250 million with the Swiss ing retailers, the milestone paints company Sportradar: Sportradar and “Every ticket the lottery sells helps to a bright picture of what’s to come data analytics firm Second Spectrum raise more money for education in for the future of fuel pump lottery. are said to be close to a six-year, $250 North Carolina,” said Alice Gar- While Play at the Pump launched million contract with the NBA. The con- in a trial mode with a select group land, executive director of the N.C. tract is expected to apply yo a variety of of retailers, the solution has grown Education Lottery. “Our partnership services that include selling official league to more than 190 convenience stores with Linq3 adds a way to buy a ticket data to betting houses, data analytics to across the state. And with recent for Powerball, Mega Millions and teams and the development of a stream- partnership announcements with Carolina Cash 5 that didn’t exist being product. The NBA Mavericks owner NCR and Verifone, Linq3 looks to fore. Using Linq3’s new technology to Mark Cuban, Hornets owner Michael further expand the North Carolina make playing the lottery a convenience Jordan and Wizards owner Ted Leonsis Education Lottery’s reach to new at a gas pump will help the lottery are among the investors in Sportradar. players in the years to come. Play continue to improve its performance.” Their involvement with bookmak- at the Pump offers these players a Linq3: More players. More oppor- ers worldwide is consistent with the convenient and efficient way to play. tunity. For more information, please NBA’s support for legalized sports bet- The Play at the Pump lottery trans- visit www.linq3.com. ting, a stance NBA commissioner Adam action occurs in a matter of seconds, Silver has publicly stated his support for including age verification, payment changes to california legalizing sports-betting where it is now and receipt. online poker bill would prohibited by federal law. Sportradar “This is a nice milestone to reach in our keep pokerstars out for already has data contracts with the NFL, partnership with NCEL,” said Daniel five years NHL and Major League Baseball. Cage, president & founder of Linq3. The latest changes to California’s “Think about today’s convenience econo- Internet poker bill call for online igt acquires hudson my. We rely on Uber for cab rides and alley software, a leading AirBnB for lodging. So what does Uber gaming companies who facilitated provider of sales force look like for the lottery? Our technology poker games for Americans between automation (sfa) helps lotteries and retailers answer that 2006 and 2011 to be excluded from and lottery retailer question. Play at the Pump helps them the Golden State market for five engagement applications modernize their distribution, expand years. The amendment would pre- Hudson Alley is known in the lot- their reach and offer new players a vent PokerStars, which has roughly tery industry for having well-estab- convenient way to play.” 70 percent of the worldwide online lished, respected solutions “At Murphy USA, we serve about poker market, from being involved with an excellent reputation for 1.65 million customers per day at our right out of the gate in what is con- customer service and driving re- fueling islands. When you consider sidered the nation’s largest online sults. Hudson Alley products are that 65 percent to 72 percent of these poker market. PokerStars facilitated currently used in 20 U.S. lotteries. customers never come inside the store, games for Americans until 2011, 14 of those U.S. lotteries are also that’s one million customers who never before the federal government IGT draw-based customers. Hud- come into our locations. Play at the indicted its former owners. The son Alley CEO Adam Perlow joins Pump helps us reach these potential company settled without admitting IGT as Vice President of Sales Force players by meeting them where they to any wrongdoing. Automation Solutions, reporting to

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 85 Marco Tasso, SVP of Global Prod- rfp: illinois department hydra industries uct Marketing, Lottery. of the lottery acquisition corp. enters Marco Tasso, SVP of IGT Global private manager into agreement to acquire Product Marketing, Lottery: “The ad- The State of Illinois, acting through inspired gaming group dition of OnePlace gives our customers a its Department of the Lottery (the Upon consummation of the transac- holistic set of tools to drive retail perfor- “State”), is issuing a request for quali- tion, Hydra’s CEO Lorne Weil will mance. Sales force automation comple- fications and proposals (the “RFP”) become Executive Chairman while ments the numerous other solutions, from responsible entities to provide Inspired’s founder and current CEO tools, and services IGT provides to our the State with all equipment, goods Luke Alvarez will continue in his customers to drive retail performance. and services, and to perform for the leadership role as CEO in addition to Now we can provide a more compre- State, as private manager, all func- being named to the Board of Direc- hensive offering to lotteries and their tions necessary to operate the Illinois tors. Lorne Weil commented, “We retail partners.” Adam Perlow, Vice Lottery (the “Lottery”), other than have been searching for a compelling President of IGT Sales Force Automa- those services and functions expressly business that utilizes our skill set to tion Solutions, said, “The transition for retained by the State as set forth in drive growth. We are excited to have the Hudson Alley’s current customers will the RFP. The RFP is governed by opportunity to partner with Luke and the Illinois Lottery Law (20 ILCS be seamless, with no interruption to the his team as we work together to grow 1605/1 et seq.) and the rules drafted service they’ve come to expect.” the digital business through increased by the Chief Procurement Officer for focus and the deployment of new the selection of the successor private ushering in a new era, the technology and content.” Hydra is a kentucky lottery is now manager, which are contained in the selling several products Illinois Administrative Code at 44 Ill. blank check company formed for the via the internet Adm. Code 1.8000, et seq. purpose of effecting a merger or other business combination with a target The State has established an electronic Eligible players who register for an ac- company. Hydra was founded by count at kylottery.com and are within data room (the “Data Room”) in order gaming industry veteran Lorne Weil the boundaries of the state will be able to provide potential respondents to the and raised $80 million on October to purchase tickets for the Powerball, RFP with access to Lottery informa- 29, 2014 in its Initial Public Offering. Mega Millions and Kentucky Cash Ball tion and maintain the highest level of Inspired Gaming Group is a global draw games. There are 11 Instant Play transparency within the process. The games technology company, supply- games also available, ranging in price Data Room was initially populated ing Virtual Sports, Mobile Gaming from 50 cents to $5, with more being with general Lottery information and introduced monthly, with a long-term now, in conjunction with the issu- and server-based gaming systems with goal of offering 30 or more games at ance of the RFP, is being populated associated terminals and digital con- a time. “All businesses are going mobile on a rolling basis with proprietary and tent to regulated betting and gaming to strengthen their brand and survive confidential information available only operators around the world. Inspired in today’s economy,” said Marty Gibbs, to potential RFP respondents. In order currently operates more than 25,000 executive vice president and COO of to be granted access to this proprietary digital gaming terminals and supplies the Kentucky Lottery. “Customers expect and confidential information, inter- its Virtual Sports products in more brands to be accessible online and on their ested parties must execute a notice of than 30,000 venues and on over 200 devices. We’re delivering what folks want.” intent to respond letter and a confiden- websites in 30 countries. Inspired Gibbs says the move online in no tiality agreement in the forms attached employs over 800 employees in the way diminishes the important of the to this notice and send both to Helen UK and elsewhere, developing and lottery’s 3,000 retailers scattered all Kim at [email protected]. operating digital games and networks. around the state. “Our bread and but- RFP due date: 10/26/2016 Additional information can be found ter will always be our bricks and mortar The Lottery anticipates posting addi- at www.inspiredgaminggroup.com retailers,” she said. “We will make cer- tional documents in connection with tain that we are strengthening their sales this RFP on a rolling basis during the szrek2solutions’ trusted through traditional means while selling RFP process. Any questions concern- draw™ and trusted audit™ to players on the web, as this has been ing the Data Room may be submitted systems deployed by the the case in other states as well.” to [email protected]. iowa lottery

86 // PUBLIC GAMING INTERNATIONAL // September/October 2016 new gallup poll says that roactively shielded two private equity biggest financial backer for ‘Keep the about half of americans firms, Apollo Global Management and Money in Nebraska’ and helped the play state lotteries TPG Capital, from junior bondholder group to raise around $1.25 million That is down from the 57% who said claims related to the bankruptcy of for its campaign. Should legislators they played the state lottery in 1996 casino chain Caesars. make amendments to the state gaming and 1999. And that decline is even in laws, the tribe will look to reopen its spite of the fact that the number of ppa, pokerstars opposing Atokad Downs race track which shut- states which grew from 38 states to 44 california web poker bill down in 2012, and develop a casino states. And of those who play, the poll Once supporters of the legislation, the on the property. indicates that 40% of the players are Poker Players Alliance and a coalition Mississippi: Lottery considered “lower-income” and 53% are “upper- formed by PokerStars and its brick- during 2016 session, but only fantasy income.” 11% of the lower-income and-mortar partners in California sports survives say they sometimes gamble more than have respectively issued statements A proposal to establish a lottery in they should. Americans whose annual opposing the latest changes to a Mississippi was defeated during the household income is less than $36,000 bill in Sacramento that would legal- final days of the 2016 legislative ses- per year were substantially less likely ize, regulate and tax online poker sion. The bill allowing the playing of than higher-income Americans to say sites that receive a license from the fantasy sports was approved and is they have purchased a state lottery state. The PPA appears to be throw- now pending Gov. Phil Bryant’s sig- ticket within the past year. Less than ing in with PokerStars in the fight nature. Only six states in the nation half of Americans (47%) with a high- to stop lawmakers from penalizing do not have a lottery. school diploma or less say they have the operators which were in viola- purchased a state lottery ticket. That tion of the law. According to a state- Online Fantasy Sports is lower than the 53% of Americans ment from the PPA, “an examination Contests For Money with some college, as well as those of the proposed amendments reveal that Asked To Cease whose highest education is a college it is actually a lifetime ban.” Litiga- In Delaware degree, who say they have bought a tion that may result from this dispute The Delaware Department of Justice state lottery ticket. These player data could cause further delays to passing formally notified DraftKings, Inc., are very similar to the results of previ- and implementing an online poker FanDuel, Inc., and Yahoo! Inc. that ous Gallup studies conducted in 1999, bill should it become law. California online fantasy sports activities are not 2004, and 2007. In each of those is the flashpoint for many of these on- permitted under Delaware law. DOJ three years, higher-income Americans line gaming issues because it is such a attorneys determined that online fan- were more likely than lower-income big and active online gaming market. tasy contests that involve payment for Americans to say they gambled. playing and monetary rewards consti- Further, playing a state lottery is the ‘keep the money in tute gambling because chance, as op- most popular of 11 common gambling nebraska’ continues push posed to skill, is the dominant factor activities measured in Gallup’s latest for legalizing casino and in the outcome of these contests. An update on gambling behavior, with poker industry online fantasy sports contestant selects barely a quarter of Americans report- Lottery and horse-racing are the fantasy players and teams, but has ing engaging in the second-most- only games-of-chance that is allowed no role in how these players actually popular mode of gambling—visiting a in Nebraska. But there is an on- perform once the real-life games or casino (26%). going campaign by a group called events occur. This is why chance—and ‘Keep the Money in Nebraska’ to not skill—is the dominant factor in casino giant caesars push for new gaming laws that will online fantasy sports contests and why entrainment: bankruptcy allow brick & mortar casinos and these contests are illegal in Delaware. laws being amended to poker rooms to operate in the state. As games of chance, these contests are favor powerful private Nebraska does permit the lottery, lotteries that must be operated under equity firms? horse racing and Keno but does not the control of the State or permitted Last December, Sen. Harry Reid tried allow video gaming machines. through appropriate and specific legis- tacking an amendment onto an omni- The Winnebago Tribe of Nebraska lation, otherwise they are illegal under bus spending bill that would have ret- which owns Ho-Chunk Inc is the Delaware law. ■

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 87 dfs operators win is fantasy sports a level legal fight, but profits playing field? top 1.3% U.S. SPORTS remain elusive of players take over 90% BETTING The two largest operators in daily of the winnings! REGULATION fantasy sports—FanDuel and Draft- According to an article in Tech Insider Kings—may have survived legal (October 2015) fantasy sports, par- court rejects new jersey’s attempts to shut down their opera- ticularly DFS, is projected to be worth bid to legalize sports tions, but an even bigger challenge $14.4 billion by 2020. According to betting remains: becoming profitable. Both the same article, most players will lose, as 70 percent report losing money New Jersey’s most recent attempt to FanDuel and DraftKings lose money, every month, and the top 1.3 percent legalize Las Vegas-style sports betting although neither has disclosed how account for 91 percent of winnings. was rejected by a federal court, a deci- much. CEO Nigel Eccles acknowl- sion that may lead state legislators to edged that FanDuel is under pressure consider multiple options. New Jersey from investors to become profitable. maine legislature to “We are not profitable today but we are lawmakers could: consider regulating moving towards profitability, and we are fantasy sports gambling • Petition the U.S. Supreme Court to sufficiently funded to get to profitability,” Maine will join the growing number consider the case Eccles said. of states that will consider legislation • Pass a different bill that complies He downplayed reports about a possible next year to regulate fantasy sports with existing regulations merger between FanDuel and DraftK- gambling. Maine Attorney General • Legalize sports betting outright with ings, saying that the companies would Janet Mills says the state’s criminal no oversight by the state not realize savings on legal costs and code is ambiguous about whether fan- A legal expert on matters related to multiple state lobbying efforts because tasy sports betting is a game of chance sports betting said that New Jersey they already share such costs. Regulators or a game of skill. could force the hand of the National also could prevent a merger of the two Football League, the National Basket- companies on antitrust grounds. tennessee changes name ball Association, and the U.S. Con- Both companies have reduced their of state agency to include gress to lift the ban on sports betting advertising spend. Last year, they fantasy sports in most states. spent more than $300 million on A Tennessee state agency has a new NBA Commissioner Adam Silver has television advertising, according to name and new rules to handle a offered support for federal oversight iSpot TV. This year, FanDuel has General Assembly-passed law last that would allow states to offer some spent about $1.2 million on TV session that legalized fantasy sports form of sports betting. Many sports commercials, compared with $12.7 betting in Tennessee and regulates leagues and franchises have formed million during the same period in it. The state Division of Charitable partnerships with daily fantasy sports 2015. DraftKings’ ad spending has Solicitations and Gaming is now the sites, where competitors pay an entry decreased significantly, to $3.09 mil- Division of Charitable Solicitations, fee with an opportunity to win thou- lion from $32.2 million. Fantasy Sports and Gaming. The sands of dollars by choosing players The fantasy sports industry’s busi- Fantasy Sports Act of 2016, pushed from a variety of teams. States have ness practices came under scrutiny in by gaming companies DraftKings and differed on whether such contests late 2015 when the New York Times FanDuel, legalized the companies’ ex- constitute sports betting. reported that a DraftKings employee isting gambling operations within the had won $350,000 playing on Fan- state. Sports fantasy sites that allowed new york lawmakers vote Duel. A later investigation found that wagering sought the law here and to legalize daily fantasy the employee had not done anything in other states as a number of states sports games wrong. But the incident caused state began cracking down on what by law officials to investigate the companies’ was illegal gambling. ■ maryland state’s activities. With its recent legal victory comptroller wants to in New York, the DFS industry ap- improve daily fantasy pears poised for growth: an estimated sports regulation 60 million people play fantasy sports.

88 // PUBLIC GAMING INTERNATIONAL // September/October 2016 first truly “gamer” cohort, appears to profiting from underage gambling. INNOVATION be disinterested in traditional ap- Augmented and virtual reality will play proaches to gambling. Recent actions a major role as game developers create IN GAMES have been designed to enable a new a mix of social, skill-based, and betting OF CHANCE gaming approach. For example, the game hybrids. Casinos of the future states of Nevada and New Jersey have may be virtual reality arenas, where pokémon go could revised their gaming laws to permit “cyber athletes” compete while audi- herald a new world of “variable payouts.” This will allow for ence members strap themselves into gambling technology the advent of video-game-slot hy- their VR headsets and place their bets. brids on the casino floor. Historically, When the presence of a Pokémon anybody playing a gambling machine (an augmented reality) can trigger a had to be offered the same chance of what constitutes gambling? human stampede in New York City’s skill games expand the winning. The legalization of variable traditional definition Central Park (a “real” reality), you payouts means that players who have know the world is in the grip of a mastered a certain video-game-style What is gambling? For decades, gam- gaming tsunami. bonus round, for example, can earn a bling has been defined as a game that Within two days of its release, the aug- better chance of winning. requires players to risk something of value for a prize that is awarded based mented reality gaming app Pokémon Coupled with AR and variable payouts on the outcome of an uncertain event. Go had been installed on more than is the rising popularity of e-sports You place your bets, spin the wheel five percent of all Android smart- betting. Sports-like gambling markets (or roll the dice or play the cards) and phones in the U.S. Four days later, it could emerge around Pokémon GO hope to be rewarded. had become the most popular mobile games, although it remains to be seen game of all time in the United States, how much of a “skill” element the Gambling has been defined as Prize with 21 million users, a figure that game actually possesses. + Chance + Consideration and needs surpassed Candy Crush Saga’s high of One of Pokémon Go’s principal attrac- to include all three. This traditional 20 million. tions is the existence of highly coveted definition is changing, however, with Game makers Nintendo and publisher rare creatures. This game feature has the legalization of skill-based gaming The Pokémon Company are mak- sparked speculation that Nintendo in Nevada and New Jersey. Skill- ing $1.6 million per day from the might launch a trading platform, based gaming redefines gambling by US iOS store alone on a game that is where monsters can be bought and eliminating or reducing the amount “free.” The moneymaking is generated sold or traded like baseball cards. It of chance involved in a game. Recent by in-app transactions, which enable is a potentially lucrative, although changes have expanded the scope of the purchase of items that will increase risky proposition as Valve recently gaming laws so that such games may the efficiency of Pokémon playing. discovered. The maker of the game be authorized, approved, and regulated Advancements in mobile internet con- Counter-Strike: Global Offensive (CS: on casino floors. nectivity and mobile processor speeds GO) and owner of the Steam games Nevada and New Jersey are the leading have made games like Pokémon Go platform, Valve introduced “skins”— developers of gaming policy. Accord- more viable in recent months. Aug- designer weapons of varying degrees of ingly, their regulatory models for skill- mented Reality (AR) is the foundation rarity that could be acquired or sold. based games will become templates of Pokémon Go. And while there has Valve intended to create an in-game for other jurisdictions that may wish been industry buzz around virtual real- economy, but an unwanted gambling to authorize such games. However, ity—AR’s more evolved cousin—as industry grew up around the skins. expansion may be impeded by differ- VR goggles were made commercially Third-party sites used skins like a ing state statutes, regulations, and case available for the first time this year, the digital currency with which players law that determine how a state defines expense of VR hardware means it is a could wager on lottery-style games or “gambling,” specifically, the compo- market for the future, perhaps a few esports matches. nent of chance. years away from mass adoption. The introduction of skins made CS: These changes provide casinos an The gambling industry is closely GO one of the most popular games of opportunity for innovation. Game observing the popularity of AR games all time, but because much of CS: GO’s developers are confident that new because the millennial generation, the audience is minors, Valve was sued for head-to-head and multiplayer games

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 89 will attract younger and more dynamic play in a casino as a “gambling ers. Millennials can now gamble via crowds that are indifferent to tradi- game” prevent its play for money social networking sites and play games tional gambling games. Creators from outside a licensed environment? through apps, while providers can cap- other industries, such as video games, Despite these grey areas, the clear ture behavioral tracking data to inform board games, and sports, probably will intent of legislation has been that casi- game design in the future. enter this new market with innovative nos should be allowed to operate skill Mobile gambling, however, is only solutions of their own. games within their establishments. one segment of the overall gaming Traditional legislation authorizing li- Similar activities involving skill games industry, an estimated $36 billion censed gambling allows a state gaming outside a casino may well be beyond behemoth worldwide. It is an indus- board to oversee gambling games, or the jurisdiction of regulators. try enjoying dramatic growth and those involving the elements of prize, Other states that may seek to expand equally dramatic shifts in thinking consideration, and chance. Gaming gaming opportunities beyond tra- about game development and how to authorities, in partnership with law ditional gambling games should be engage players. enforcement agencies, are authorized aware of potential language conflicts Game developers traditionally focused to prevent such games from being with standard enforcement laws and on achieving such metrics as DAU conducted outside a casino or other policies. Although intent may be clear, (daily active users) and MAU (month- licensed gaming establishment. The legal issues may arise because of the ly active users). New thinking centers regulations are clear—games per- wording of future skill-based regula- on “regulars,” those who play a certain mitted in a casino cannot be played tions as they are incorporated into game every day (in many instances, 90 outside of a casino for money, with the existing policies. minutes or more per day). Developers exception of special cases like licensed try to create a gaming environment charity games. smartphones fuel gaming that will continue to engage such Skill-based games, however, can be among millennials frequent users. Frequently, this can be achieved through social gameplay played outside of a casino for money Millennials—the tech-savvy genera- without a gaming license. The new within a game … the player-to-player tion of young adults who are coveted interactions, sharing, and competing. regulations in Nevada and New Jersey by marketers across industries—are us- To emphasize the strategic importance may allow these activities to be consid- ing mobile smartphone technology to of regulars, Kabam, a company that ered “gambling games” if they occur fuel unprecedented interest in gaming. has created six game titles that gener- within a casino and have been ap- In a recent report by the UK Gaming ated $100 million in revenue, is think- proved by gaming authorities. In this Commission, the percentage of 18- to ing about how to develop games that context, whether an activity is consid- 34-year-olds gambling on their smart- may last for as long as a decade. ered “gambling” is not determined by phones has increased from 10% in the characteristics of the game itself, While developers scramble to compete 2008 to 17.5% in 2014. This age co- but by the approval of the game by in the U.S., UK, and Japanese gaming hort is the first truly “on-line” genera- state authorities. markets, China has, somewhat quietly, tion, and their use of mobile phones become the largest mobile gaming This creates ambiguity around tradi- demonstrates their familiarity and market in the world. The Chinese tional gaming enforcement; casinos proficiency with technology—they market represents new complica- now may be permitted to oper- spend 3.2 hours per day on average on tions from technical, regulatory, and ate games for money that are also their smartphones, or nearly a full day marketing perspectives. In fact, Asian permitted to be played for money each week. companies are expected to be very ag- outside a casino. This raises addi- The heavy use of smartphones is great gressive in acquiring western compa- tional questions: news for gambling companies, who nies to help fuel the Chinese market. • If a casino operates a skills-based have moved their services online. So the industry faces a challenging game outside its complex without Advancements in smartphone tech- admixture of dynamics: Millennials’ the approval of authorities, can it ar- nology have enabled the placing of attitudes toward gaming, the rise of gue that the game is not a “gambling bets for sport, playing online poker, the Chinese market, and the growing game” and is therefore beyond the and accessing online casinos, which presence of VR (virtual reality) hard- jurisdiction of the gaming officials? means there is more opportunity for ware. The stage is set for unprecedent- • Does approval of a skill game for gambling providers to engage played innovation and industry growth.

90 // PUBLIC GAMING INTERNATIONAL // September/October 2016 gaming standards associa- Display Interface) v3.0. These directly G2S 3.0 is one of 11 standards GSA tion (gsa) new standards address operators’ business needs, get- recently released, all of which were Since 1998, the Gaming Standards As- ting new content to players. The new designed specifically to further en- sociation (GSA) has created standards standards streamline both develop- hance the global gaming industry and proven to decrease costs, streamline ment and implementation of equip- unleash the creativity of its develop- development, and speed time to mar- ment and systems that drive operator- ers. Each of the standards is available ket. Now GSA is releasing 11 stan- player communication. for free to all GSA members on GSA’s dards designed to further enhance the “The Player User Interface Committee website,www.gamingstandards.com. global gaming industry and unleash has been very clear in expressing opera- the creativity of its developers. tors’ challenges and needs. Among those amazon moves into online “GSA’s members have collaborated is a strong desire for more significant gaming intensely during the last couple of years player-to-system interactions at the Amazon-owned Twitch acquired and agreed to release the next set of gaming device,” said Committee Chair Curse, a gaming content and re- standards which are vastly improved. John Taylor. “Our committee worked source hub visited by more than 30 GSA has been seeking ways to lower very hard to establish these two standards million people each month. Founded the barriers to implementation of our to abridge both development and imple- in 2006, Bay Area-based Curse had standards. This new set of standards mentation surrounding player user inter- raised nearly $60 million to date has now reached a level of maturity in face equipment, and to allow operators for its platform that gives users PC our industry to the benefit of suppliers, to take full advantage of this exciting gaming-related information and operators, and regulators,” said GSA technology to benefit their players.” add-ons like videos, guides, forums, President Peter DeRaedt. The landmark and award-winning communication apps, streaming tools, Among the 11 new mature standards G2S® (Game-to-System) Standard new mod managers, and more. It operates recently released by the GSA were v3.0 makes the gaming industry’s lead- more than 45 sites like LoLnexus and two breakthrough standards that ing standard much easier—easier to Gamepedia. In February, Amazon enable Player-to-System Interactions implement, easier to test, and easier to released Lumberyard, a free, cloud to be streamlined with common PUI operate. Further, new extensions have connected game engine and moved it templates. PUI (Player User Inter- been added to support gaming opera- into a state-of-the-art game studio and face) v1.0 and EMDI (EGM Media tors’ modern business needs. The new streaming facility. ■

Vernon Kirk Interview … continued from page 30

V. Kirk: There is a Delaware Attorney least understood about it? professional gaming operation that meets General advisory letter that states fantasy V. Kirk: Delaware Law states that there the needs of consumer with the highest sports are games of chance, not skill, and as be only two kinds of gambling in Dela- standards of player protection and respon- such, according to Delaware Law, are a lot- ware—Lottery and horseracing. If there is sible gaming. tery, and must be under the administrative prize, consideration and chance, it is a lot- What has the implementation of the Multi- and regulatory control of the Lottery. Fan- tery and must be operated by the Lottery. State Internet Gaming Agreement and the tasy sports companies insist they are a game Anything else, like games of skill, is illegal. multijurisdictional, progressive video lottery of skill, and to concede otherwise would What challenges do you think are under- network taught you about the challenge of cloud their participation in much larger estimated, what solutions are not being ad- forging multi-jurisdictional collaboration? states than Delaware. Delaware residents equately embraced? already have great sports betting options, V. Kirk: Anything can be accomplished possibly causing the fantasy sports opera- V. Kirk: Honestly, the Delaware Lottery with cooperation. We are different jurisdic- tors to focus more on other states. has always had tremendous support from a tions, but working together for a common succession of administrations and has been goal embraces that diversity and allows us The Delaware Lottery model is unique in the given the freedom to manage gaming from to solve problems. A clear focus on the out- U.S. for having the widest variety of games a professional perspective. We appreciate a comes that benefit our respective stakehold- distributed through the widest variety of dis- high level of harmony with our stakeholders gives us all the will to overcome obstacles tributional channels … What do you think is ers who share the objective of building a and create mutually agreeable solutions. ■

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 91 SPOTLIGHT: Leaders of the Government-Gaming Industry

It’s the collaboration between operators and their commercial partners which makes this industry work. It’s that relationship that drives innovation and progress. PGRI endeavors to support and nurture that relationship, confident that

INTERNATIONAL GAME TECHNOLOGY PLC (IGT) www.IGT.com Corporate headquarters: Providence operating headquarters: 66 Seymour Street 10 Memorial Boulevard London, U.K. WH1 5BT Providence, RI 02903 Phone +44 02075353200 Phone (401) 392-1000; Media line (401) 392-7452 Fax (401) 392-1234 Marco Sala, Chief Executive Officer, International Game Technology PLC Michael Chambrello, Chief Executive Officer, North America Lottery Renato Ascoli, Chief Executive Officer, North America Gaming/Interactive (DoubleDown Casino) Walter Bugno, Chief Executive Officer, International Fabio Cairoli, Chief Executive Officer, Italy Contact: Reach our employees by email at [email protected] IGT is the global leader in lottery and gaming. We enable players to experience their favorite games across all channels and regulated segments, from lotteries and gaming machines to interactive and social gaming. Leveraging a wealth of premium content, substantial investment in innovation, in-depth customer intelligence, operational expertise and leading-edge technology, our gaming solutions anticipate the demands of consumers wherever they decide to play. We have a well-established local presence and relationships with governments and regulators in more than 100 countries around the world, and create value by adhering to the highest standards of service, integrity and responsibility. IGT has more than 12,000 employees and $5 billion in revenues. The Company is listed on the New York Stock Exchange under the ticker symbol IGT. Lottery—designs, assembles, installs, operates and maintains draw-based lottery systems, lottery terminals and communica- PLATINUM SPONSORS PLATINUM tions networks for governments and licensed operators worldwide. IGT is the industry’s leading private lottery manager, with the most extensive and proven operator capabilities. The Company operates one of the world’s largest lotteries in Italy, and manages other operator contracts in the United States and Latin America/Caribbean. Additionally, IGT provides printed products and related services, self-service lottery product vending machines, game design/content, marketing services/best practices, field service for retailers, responsible gaming and promotional and interactive lottery capabilities. Gaming—designs, manufactures, and distributes top-performing games, slot machines, central systems, video lottery terminals (VLTs) and associated software to gaming markets around the world. IGT offers a complete range of end-to-end gaming products for diverse gaming segments, including distributed government-sponsored markets, commercial casino markets and Amusement With Prize (AWP) markets. Interactive—offers comprehensive solutions for the interactive market, providing a full suite of award-winning products and services for Internet gaming/social gaming. IGT designs, manufactures and distributes Internet poker, bingo, table games, slots and gaming management systems (GMSs). Additionally, IGT provides player services including marketing, portal, player acquisition, CRM, VIP, player support, payment solutions, fraud and collusion prevention, responsible gaming, game management, migration, and trading services. Betting—offers solutions for the development of real-time operations and computerized systems for the sports betting market. IGT offers trading services, fully managed partnerships or “software only” technical solutions, to create a complete one- stop solution or to integrate new functionality to existing operations. IGT provides secure retail betting solutions, point-of-sale display systems, call center facilities, Internet betting technology, and fixed odds or pool betting options.■

92 // PUBLIC GAMING INTERNATIONAL // September/October 2016 together we can all build successful businesses that meet the needs of our stakeholders 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 conferences, and all industry events and conferences. Their products and services are the result of a tremendous 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 presentations from PGRI conferences.

DIAMOND GAME LINQ3 www.diamondgame.com www.Linq3.com Diamond Game designs, produces, and services Linq3’s secure payments platform transforms existing unmanned games, gaming systems, and tickets for various North POS devices into highly interactive access points for sale of lottery American Lotteries and alternative gaming markets. products. By leveraging existing hardware, securing transactional Diamond Game’s mission is to provide innova- data and communications, lotteries have a unique opportunity to tive solutions to lotteries seeking retailer and revenue think outside the traditional sales terminals. The Linq3 solution growth. To deliver on that mission, the patented LT-3 works in partnership with existing lottery networks, allowing lotteries suite of ITVMs was created with lottery needs at the to efficiently reach a greater market, intersecting and interacting with forefront. The LT-3 allows lotteries to expand their re- players in a new way. In collaboration with state lotteries, their opera- tailer base into less traditional and age-regulated social tors, and the nation’s leading fuel pump and payment kiosk manu- establishments, such as bars, taverns, bingo halls, and facturers, ATM providers, and the payment card industry, Linq3 has social clubs. developed the secure protocol for lottery transactions on fuel pumps, ATM’s, taxis and other innovative unmanned points of sale. Linq3 The LT-3 is a ticket dispenser that dispenses pre- enables lotteries to achieve sales growth at a low cost through new printed instant tickets on each play and displays the sales channels that reaches new players and occasional players. The result on a video monitor in an entertaining manner. Linq3 solution promotes a new level of interactivity for the player The footprint of the machine is significantly smaller and lottery. A dedicated web interface, 24/7 call center support, auto than a standard dispenser, thus allowing one or more redemption of low tier prizes, and detailed state reporting and security to fit easily in even the smallest of venues. Additional compliance and responsible play features are just some of the benefits features include secure ticket validation and fraud to the Linq3 platform. Optimized performance is achieved through prevention, and a sophisticated accounting and sales state of the art processing and data security. It’s secure, it’s scalable, and tracking system. The LT-3 is customizable and can it’s ready to change the distributional landscape for lottery products. be deployed in a variety of configurations based on Linq3 recognizes that security and integrity is of upmost im- unique lottery needs, helping generate significant new portance to lotteries. Linq3 utilizes a state of the art multi-tiered instant ticket revenue. The LT-3 is currently deployed security protocol that ensures transaction data is not compro- in 5 North American lottery jurisdictions. mised. Included in the system is a check and balance that employs Diamond Game was established in 1994 and internal and external (third party) redundancy and verification. as of May 2015, Diamond Game is proud to be Linq3’s technology consists of three fundamental features security, a subsidiary of INNOVA Gaming Group: www. reliability and availability, and performance and scalability. Linq3’s innovagaminggroup.com. data centers are housed in SSAE 16/SOC 1-compliant facilities, INNOVA Gaming Group Inc. (“INNOVA”) devel- which provide a high level of physical security, including onsite ops and grows companies that provide unique games guards, multiple forms of verification for access, and visual moni- and products to the global gaming industry, with toring. All data center equipment is secured within locked cabinets particular focus on state and provincial lotteries. The under recorded video surveillance. Connectivity is provided over INNOVA management team collectively has over 65 multiple carriers to ensure availability if one carrier should have an years of experience in the gaming industry, bringing outage. The primary requirement for processing credit and debit in-depth knowledge of the industry, long-standing re- transactions is PCI compliance. Linq3’s PCI DSS (Payment Card lationships with lottery directors, and a track record Industry Data Security Standard) Tier 1 Status is the highest level of significant acquisitions. INNOVA is a public com- attainable in the Payment Industry. Linq3 combines the key goals pany trading on the TSX under symbol IGG. of the PCI Data Security Standard and its own internal standards to Diamond Game is a proud Associate Member of establishing physical security, network security, and system software the WLA and NASPL. ■ security ensuring end-to-end integrity of lottery transactions. ■

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 93 INTRALOT THANK YOU www.Intralot.com PGRI LOTTERY EXPO SPONSORS INTRALOT is one of the leading gaming companies worldwide with a presence in 57 regulated jurisdictions around the globe. In the U.S., INTRALOT has 13 contracts that include PLATINUM SPONSORS online systems and services, warehousing and distribution of instant tickets and VLT/COAM monitoring. They have also done the last two new lottery start-ups in the U.S. (Arkansas and Wyoming). The company offers market-tested solutions and retail operational expertise. They offer an Omni-channel approach to an integrated portfolio of best-in-class gaming systems and product solutions & services that encompass all gaming verticals (Lottery, Betting, Interactive, VLT). Players can enjoy a seamless and personalized experience through exciting games and premium content across multiple delivery channels, both retail and interactive. INTRALOT contributes decisively to the future developments of the industry. It actively engages the global gaming community being a member of the major lottery and gaming associations such as NASPL (North American Association of State and Provincial Lotteries), WLA (World Lottery Associa- tion), EL (European Lotteries and Toto Association), CIBELAE (the Hispanic Association that covers South America and the Iberian Peninsula), APLA (Asia Pacific Lottery Association), GSA (Gaming Standards Association), and a gold member of AGEM (Association of Gaming Equipment Manufacturers). As member of the UN Global Compact, INTRALOT is a global corporate citizen committed to sustainable development and is an active proponent of the principles of responsible SILVER SPONSORS gaming. The World Lottery Association (WLA) has awarded INTRALOT with the prestigious WLA Responsible Gaming Framework Certification for its global lottery operations. The company maintains the highest security certifications. INTRALOT is the first international vendor in the gaming sector that has been certified according to the World Lot- tery Association (WLA) Security Control Standard in 2012. In addition, the Company has been certified with the ISO 27001 for its Information Security Management System (ISMS) and maintains the ISO 20000-1 certification on In- formation Technology Service Management. OUR MISSION is to supply gaming organizations worldwide with state-of-the-art integrated transaction processing systems, equipment, game content and value added services in a secure and responsible manner. OUR VISION is to retain our leading position in the gaming industry and consistently offer increased value to our customers, shareholders and employees. OUR VALUES include a commitment to customer satisfaction and continuous improvement and growth while achieving excellence across the entire range of our business activities. ■

94 // PUBLIC GAMING INTERNATIONAL // September/October 2016 SILVER SPONSORS

ABACUS SOLUTIONS CARMANAH SIGNS EQUILOTTERY INTERNATIONAL GROUP www.CarmanahSigns.com www.EquiLottery.com www.lotteryeverywhere.com STRATACACHE and its gaming The Next Generation of Lottery Lottery Everywhere division, Carmanah Signs, is the world’s Draw Games Abacus offers lotteries the opportu- leading provider of digital signage net- Are you looking for new draw nity to reach 100% of their potential work software, hardware, and services. game options to increase profits going players in-store with the Abacus In- An active member of the global lottery to the good causes your lottery sup- Lane Solution. Implementation of the community, Carmanah serves 49 lot- ports? Trying to expand your player Abacus In-Lane Solution means that tery customers on four continents. base with exciting new games that potential players are exposed to the reach players on their mobile devices opportunity to play lottery at every STRATACACHE’s customers are and appeal to all ages including the till point as they’re checking out their Fortune 500 retail chains, banks, and usually elusive millennial generation? shopping—unlike the current 5% of quick serve food retailers. Together, Trying to find ways to encourage shoppers playing at a dedicated in-store STRATACACHE and Carmanah “stickiness” and positive word-of- terminal. Abacus manages the integra- have over 1.4 million connected me- mouth marketing? tion of the lottery’s existing or new dia players and 120,000 jackpot signs games into the retailers’ EPoS systems at retailers around the world. If you answered yes to any of these from start to finish, making it easy and Carmanah provides everything from questions, then it’s time to take a look at EquiLottery, a new live action lot- painless to implement. Abacus offers digital signage software and hardware tery game based on the excitement of lotteries the opportunity to sell LOT- (media players, screens, tablets, net- ™ live horse racing. Studies show that TERY EVERYWHERE . working equipment, and jackpot signs) EquiLottery allows you to offer a new ABACUS is unique, employing ex- to services (content creation, schedul- product category to your players that perts from both the lottery world and ing & distribution, network monitor- the payment processing industry as increases profitability without canni- ing, and technical support). well as leading software technologists. balizing existing games. This unique Our solutions have simplicity at their Behind the sleek signage lies Ac- offering also attracts new players while core, with impressive speed to market tiVia for Media, the most robust, reli- creating greater investment from your and high levels of lottery and payment able digital signage software available. core players. And by delivering this industry compliant security. Built to handle the most complex live racing experience through mul- Our solutions, games and technol- digital signage networks at massive tiple online platforms, EquiLottery ogy work in partnership with lottery scale, ActiVia powers the largest retail meets people where they are by turn- organisations, their suppliers and the networks in the world. It enables dising the excitement of a two-minute retailers, enabling all parties to benefit tribution of differentiated content to horse race into a highly relevant daily from increased sales. thousands displays, facilitates interac- mobile video experience. Our fully managed service offering tive experiences, and interacts with Visit our comprehensive website includes: consumer mobile devices—delivering at www.EquiLottery.com to learn • Lottery In-Lane, Self-Checkout, and ROI by engaging the next generation more about how EquiLottery works, Self-Serve of lottery players. take a lap with our mobile app and • E-commerce and Mobile solutions As an associate member of five learn more about our player stud- • Abacus games including Bill Paid global lottery associations, and an ies conducted with market research • Retailer loyalty solutions, follow-on ongoing sponsor and content con- leader Ipsos. For more informa- promotions & 2nd chance draws tributor to numerous lottery industry tion or to set up a free in-person Contact: Simon Butler, CEO events, Carmanah is the only digital consultation, contact Founder and Email: [email protected] signage provider committed to the CEO Brad Cummings at (502)644- Telephone +44 1604 846777 ■ lottery industry at this level. ■ 1454 or [email protected]. ■

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 95 NOVOMATIC LOTTERY SOLUTIONS (NLS) POLLARD BANKNOTE LIMITED www.novomaticls.com www.pollardbanknote.com NOVOMATIC Lottery Solutions (NLS) is a full solution al- For over 30 years, Pollard Banknote has been a full- ternative vendor for international lottery markets. NLS delivers service instant ticket partner that lotteries trust to provide games and services using state-of-the-art technology that allows high quality products and related services. The company for easy integration with any 3rd party systems and games. The serves over 60 clients worldwide, providing value-added NLS system supports all sales channels simultaneously, creating strategic marketing and management services for both tra- a truly omni-channel offering while at the same time increasing ditional instant games and the emerging interactive space. lottery revenues and returns to good causes. With ISO 27001 Pollard Banknote’s success are grounded in its unrivaled certification, WLA Security Control Standard Certification and ability to form strong partnerships with its customers, fo- numerous lottery audits, NLS solutions guarantee the highest cusing on maximizing player engagement, sales and pro- levels of security and reliability. NLS is part of the NOVOMAT- ceeds for good causes. IC Group, one of the biggest global producers and operators of Pollard Banknote is a proven innovator, having introduced gaming technologies, with revenues of about $4bn, more than important, revenue-generating product innovations to the 24,000 employees and activities in 80 countries. NLS was estab- lottery industry. The company continues this trend by con- lished in 2014 after the acquisition of Icelandic lottery provider stantly introducing fresh and innovative print features, as Betware and quickly became a major player in the international well as a number of exciting Space Between™ products and lottery business. services that leverage emerging technologies into viable av- Omni Experience solution for lotteries includes: enues for driving instant ticket revenues at retail, effectively • Full service retail solutions for lotteries bridging brick-and-mortar products with the Internet. • Intrinsic player account management—we put players first Pollard Banknote offers sales-driving licensed brands that and center appeal to existing lottery players and brand-loyal consum- • Open and flexible gaming platform for retail, online and ers. These licensed brands are supported with integrated mobile lottery games marketing programs that maximize success at retail. • Portfolio of all classical Lottery games, with full support for Pollard Banknote and NeoGames, a leading global Internet instant ticket games lottery provider, have partnered to form NeoPollard Interac- • Comprehensive facilities management service tive, a joint venture that offers development, implementa- Contacts: tion, operation and maintenance of iLottery solutions. ■ Sales and customer-related matters: [email protected] Partnership and cooperation opportunities: Frank Cecchini, [email protected] Brendan McCarthy: [email protected] ■

Carole Hedinger Interview … continued from page 37 vestment and future-proofs the Lottery the Lottery and Northstar. If Northstar mon goals. Northstar appreciates our against ill-advised investment. is going to run a promotion, my finance deep involvement because it maximizes people need to know about it because we the likelihood of success. And we appreci- It sounds like you have engineered a very have to account for it, reconcile commis- ate Northstar’s commitment to align not collaborative approach with Northstar sions and record other aspects of every just with the big-picture financial targets, New Jersey. initiative that takes place. For another, but with every aspect of execution to C. Hedinger: We have. We are two I insist on a spirit of mutually support- achieve those goals, with our methods of separate entities, but we operate as one ive collaboration. There is no “us” and operation and our culture, and our need integrated organization. For one thing, “them.” We clarify objectives and then we for accountability on details of imple- every aspect of execution involves both work as a team to accomplish our com- mentation as well as outcomes. ■

96 // PUBLIC GAMING INTERNATIONAL // September/October 2016 PGRI SMART-TECH 2 0 1 7

Park Lane Hotel Central Park South, New York City March 20, 21 and 22, 2017

For conference information and updates, please stay tuned to our news website PublicGaming.com and conference website PublicGaming.org. E-mail Paul Jason at [email protected] PGRI LOTTERY EXPO 2 0 1 6 LOTTERY EXPO 2016 CONFERENCE PROGRAM

Conference Sessions MONDAY, SEPTEMBER 12 Moderator: September 13 & 14; 5:00 to 7:00 pm: Opening Night Reception Gary Grief, Executive Director, Eden Roc Miami Beach Resort, Texas Lottery, President of MUSL Florida TUESDAY, SEPTEMBER 13 Panelists: Visit www.PublicGaming.org 8:00 to 9:00 am: Continental Breakfast Tom Delacenserie, Secretary, for conference updates Promenade B South Receptions from 5:00 pm to Florida Lottery 7:00 pm on Monday and Tuesday. 9:00 am: Conference Sessions Open Andy Davis, Chief Financial and IT Officer, Wednesday Reception Paul Jason, Chief Executive, PGRI Tennessee Education Lottery Corp. Pompeii Ballroom to follow lunch. Austin Huggins, Technical Specialist, Double Platinum Sponsor: Industry Collaboration as the key to Publix SuperMarkets IGT unlocking the power of API/Cashless/ Paul Riley, Vice President Product In-Lane and other Retail Modernization Marketing and Interactive Wagering, IGT Platinum Sponsors: initiatives—Tom Delacenserie, Secretary, Diamond Game, INTRALOT, Linq3 11:00 am: Florida Lottery Coffee Break Silver Sponsors: SPECIAL SESSION: PANEL DISCUSSION: Abacus Solutions International The Promise of API (Application Providing Consumer Options—Making Group, Carmanah Signs, Lottery Available in a Cashless Economy EquiLottery, Novomatic Lottery Programming Interface) Technology Solutions, Pollard Banknote Presentations on the urgency to implement Moderator: /meaning and purpose of APIs will be Terry Presta, Executive Director, Presenters (Times TBA): followed by a special session that includes Kansas Lottery; Bill Breslo, audience Q & A. Chair of the NASPL Retail Subcommittee Vice President, Sales & Marketing, Diamond Game APIs are the key component to building Panelists: the IT platform that supports the rapid Drew Svitko, Executive Director, Simon Butler, Chief Executive Officer, deployment of technological innovation Pennsylvania Lottery Abacus Solutions across the board. How and why will APIs Gardner Gurney, Director, Brad Cummings, increase Lottery sales and net funds to Division of the Lottery, New York State Founder & Chief Executive beneficiaries—what are the costs and Gaming Commission Officer, EquiLottery risks as well as the benefits to implemen- John Spicknall, Director of Package Goods Max Goldstein, tation of APIs? This topic was introduced and Services, RaceTrac Petroleum, Inc. Vice President Sales, at PGRI Smart-Tech in April, has gained Sue Strouse, VP Retail Strategy and Carmanah Signs momentum over the past few months, Scott Hoss, and is now at a point where concrete Business Development, IGT Senior Marketing Manager, action-plans are being shaped. It’s time 12:30 pm to 1:30 pm: Luncheon INTRALOT to take it “to the next level”—to connect Starting a New Lottery in the Modern Brendan McCarthy, the dots and relate objectives like in-lane North American Representative, Era—Jon Clontz, Chief Executive Officer, sales, cashless transactions, standardized Novomatic Lottery Solutions Wyoming Lottery Corporation reports and audits for multi-state retail- Byron Peterson, ers, and more … to the technologies that PANEL DISCUSSION: Director U.S. Sales, Pollard Banknote enable them. The key to unlocking the Stakeholder Relations: How might Lot- tery do a better job of engendering sup- Tom Shaheen, transformative power of APIs is multi- Executive Vice President state collaboration and funding. How do port from the national media and legisla- Business Development, Linq3 we get there? tors at the federal as well as state levels?

98 // PUBLIC GAMING INTERNATIONAL // September/October 2016 Who is advocating with a singular voice chance industry and Lottery WEDNESDAY, SEPTEMBER 14 for those values and interests which are How might popular new games impact 8:00 to 9:00 am: Continental Breakfast shared by all lotteries? Who is monitor- Lottery? And even if the short-term Promenade B South ing gaming legislation and court cases impact on lottery spend is not significant, 9:00 am: SPECIAL SESSION that impacts us all? How do we counter how might it reshape the play-styles of Presentations on Retail Modernization all the publicity of other gaming sectors the twenty-somethings who we expect to to be followed by Interactive Discussion with positive publicity for Lottery? Could become lottery players in their thirties and our industry benefit if we had a national forties? How can we ensure that Lottery Modernizing the Lottery at Retail: government affairs and PR effort? Is it retains its appeal to consumers whose Retail is reinventing itself for the modern time for a national branding campaign? game-playing options have increased and consumer. CPG (Consumer Packaged How can we connect with and forge a changed so dramatically over the past Goods) companies are helping them do more positive relationship with retailer few years? Too, as online gaming in other it, and we can’t expect them to look out stakeholders and associations; any Silver forms increases in popularity and accept- for our interests. Lottery needs to take Bullet to defuse NACS opposition or oth- ability, won’t that cause legislators to look the leadership role in this paradigm shift erwise overcome that obstacle? more favorably on Lottery’s need to make that will end up re-positioning the way Moderator: its products available online? Are there products and services are sold at retail. May Scheve Reardon, Executive Director, game attributes (that comply with Lottery Too, “convenience” has become the Missouri Lottery; President of the random logic) of these new games that modern consumers’ priority. That that North American Association of State can be applied to Lottery? will give rise to a new generation of 21st century convenience stores which should & Provincial Lotteries Moderator: (TBA) represent an opportunity for Lottery. How Panelists: Panelists: (Further Panelists TBA) can Lottery apply digital technology to Gerry Aubin, Executive Director, Larry Loss, Executive Vice President, enhance the player experience, how can Rhode Island Lottery Iowa Lottery Lottery create more co-promotions to help Byron Boothe, Vice President Government Shan Daniels, Chief Brand Manager, retailers achieve their own goals to sell Relations, INTRALOT Florida Lottery more and drive store-traffic, and how can Jon Clontz, Chief Executive Officer, Rick Weil, Chief Executive Officer, Lottery otherwise align with the modern- Wyoming Lottery Corporation Innova Gaming Group/Diamond Game ization of the retail shopping experience? Vernon Kirk, Executive Director, 4:00 pm: Award Ceremonies Moderator: Delaware Lottery Gary Gonder, Chief Branding Officer, Chip Polston, Kentucky Lottery Corporation Lottery Industry Statesman Award Missouri Lottery Terry Rich, Chief Executive Officer, In Memory of Arch Gleason, Formerly Panelists: Iowa Lottery President and CEO of the Kentucky Lottery; President of the World Lottery Association; Michelle Carney, Vice President, Update on MUSL Agenda and President or Chairs of all the offices of Marketing, IGT Initiatives—Bret Toyne, Executive Director, NASPL and MUSL Tracey Cohen, Interim Executive Director, Multi-state Lottery Association D.C. Lottery and Charitable Gaming Major Peter J. O’Connell Lottery Industry Global Gaming Update— Control Board Lifetime Achievement Award Rebecca Hargrove, President & Chief Tom Dolan, District Sales Manager, Tracey Cohen, Interim Executive Director, Executive Officer, Florida Lottery D.C. Lottery and Charitable Gaming Tennessee Education Lottery Corp.; Control Board Gregory Smith, Executive Director, Senior Vice President, World Lottery Vermont Lottery Association (WLA) Carole Hedinger, Executive Director, 12:30 pm: New Jersey Lottery Luncheon and Reception 3:00 pm: Coffee Break Spa Terrace Vernon Kirk, Executive Director, PANEL DISCUSSION: Delaware Lottery The Impact of Daily Fantasy Sports, Pokémon GO, and other pop game 5:00 pm to 7:00 pm: Reception phenoms on the broader games-of- Spa Terrace

September/October 2016 // PUBLIC GAMING INTERNATIONAL // 99 Innovating at retail is Robbie’s passion.

Scienti c Games’ Robbie Asendorf is committed to developing new products that make lottery products easier for retailers to sell and players to purchase. He works to create products that give players more access to games when and where it’s most convenient. Robbie says, “Lottery retailers love our PlayCentral™ HD, WAVE™ and LotteryInMotion™ technologies.”

Let us show your lottery more retail innovations and solutions that o er a great point-of-sale experience. THE WORLD’S BEST LOTTERY EXPERIENCES Visit scientificgames.com/lottery