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COVID-19 AND THE LOTTERY INDUSTRY FROM LOTTERIES TO VENDORS, PANDEMIC PROVIDES CHALLENGES, OPPORTUNITIES By Jim Acton Lottery Industry Consultant INTRODUCTION As the lottery representatives who attended the PGRI n What will be the revenue expectations for the new Lottery Expo in Miami parted ways in early March, no one fi scal year and beyond? could have imagined it would their last in-person meeting The passage of time will provide context to all these for many, many months. By mid-March, many of us had issues. While many lotteries saw little revenue impact retreated to the safety of our homes; handshakes and (and many, in fact, have enjoyed sales boosts as the hugs were replaced with Zoom meetings. lottery provided the only available source of entertain- With the nationwide spread of COVID-19 and the ongoing ment), others were hit hard and the pain will continue. stay-at-home/safe-at-home orders given by many Gov- Some lotteries had to make the diffi cult decision to lay ernors, life was turned upside down across the country. off employees. The fortunate amongst us were only dealing with barking As the lottery industry slowly returns to normalcy, it's dogs during video conferences. So many others have helpful to look back over the past few months, review been either battling the COVID-19 virus themselves or what has taken place in the industry, and discuss worrying about friends and loved ones. where the events surrounding the COVID-19 pandemic For those in the lottery industry, the concerns were multi- have left us. layered and the impacts were both small and large: In this special section, we will take a look at how the n How would employees deal with working from sudden shift in lottery sales due to pandemic-related home, many for the fi rst time in their careers? stay-at-home orders has renewed the push for iLottery n Do daily drawings continue with staff operating ball in many states. We will examine how some of the lot- machines? tery industry's most important retail locations, deemed as "essential businesses," are working to streamline n Is it safe to allow lottery retailers to continue to sell and speed-up lottery purchases. And we’ll look at lottery products? how lotteries have used social media and other online n How will the vendor-lottery relationship change communications tools to stay in touch with critical with few or no in-person visits? constituencies. 18 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2020 Is iLottery the Key for States Needing to Fill Budget Shortfalls? n 2014, the Michigan Lottery became states laid o workers, including from the ranks of the envy of the lottery industry when it lottery employees, including 60 at the Oregon Lot- launched its iLottery e-instant platform. tery alone (13% of the lotteries workforce) Lotteries watched, inquired and strategized In a radio interview in April, NY Governor said about how they could add a similar platform that the state might have to cut education funding in their states. Since then, other states have to address the state's budget shortfalls. come on board, oering either eScratch tick- ets or single day draw game sales - Georgia, "I said kiddingly to a legislator, 'is is the easiest Kentucky, Pennsylvania, New Hampshire, Illinois, budget we've done. ere's no option. e num- INorth Carolina and North Dakota. On July 1, ber is zero," Cuomo said. “We have no money." Virginia launched eScratch and single ticket/same- When we look at iLottery during these dicult day draw game sales. times, we might just be seeing the future of the But what happens now? Will states continue to lottery put on hyper-speed. slow-walk iLottery, even as they fast-track the process of licensing sports-betting operators? Will GEORGIA, KENTUCKY iLOTTERY lotteries be handcued as they look to modernize SALES SOAR; RHODE ISLAND their operations, broaden their customer base and LAUNCHES FULL iLOTTERY increase revenues? Or now, after months of vary- For both the Georgia Lottery Corporation and ing degrees of “stay-at-home” orders to help stop Kentucky Lottery, the stay-at-home orders associ- the spread of coronavirus, have we arrived at the ated with the COVID-19 outbreak has been a fur- tipping point where states realize that retail habits ther opportunity to leverage their digital oerings. were already changing such that lotteries must Both lotteries enjoyed an excellent year for digital oer alternative purchase options that no longer sales in 2019 but by mid-May 2020, respectively require an in-person retail experience? were performing year-to-date +62% and +57% As state budget chiefs and lottery directors have in digital sales vs. the prior scal year. is growth nervously monitored there week-over-week sales, had accelerated through the end of 2019, when there is one critical point – iLottery sales, where both lotteries invested more on digital advertising available, never faltered. In fact, they skyrocketed and focused on player acquisition. in most metrics, including new customer sign-ups Both Georgia and Kentucky lotteries excel with and overall sales. draw-based-game digital oerings, particularly Will it take ongoing sales challenges, prot goal Keno, for which the digital channel represents stresses, and continuing revenue gaps across state 23% of total sales in Georgia and 15% of total budgets to nally push more states to expand lot- sales in Kentucky. Oering the same Keno game at tery oerings? If you consider where many states retail and digitally, rather than having a Keno-style nd themselves as the country steps forward and e-Instant game at a signicantly higher payout, back with economic re-opening, this certainly allows those lotteries to benet from the higher looks like the nal straw: prot margin with a prize payout of 65%, and to promote more cross-selling opportunities between - New York state is forecasting a $15 billion rev- core players. Given all that has happened since the enue decline across the state start of the COVID-19 pandemic, with many peo- - West Virginia has been losing $9 million/week ple not leaving their homes, the long-term strategic from its closed casinos alone planning of both lotteries and their well-timed choice to focus more on the digital channel at the - New Jersey, Pennsylvania and Ohio announced beginning of 2020 resulted in positive momentum limited spending and hiring freezes and a strong rst half of 2020. - Virtually unheard of in the past, a number of PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2020 19 iLottery ust prior to the COVID-19 outbreak, apps in the U.S. and most recently installed ity in just ve months,” he said. “is is the IGT implemented plans to upgrade its latest advancements in player functionality leading lottery app solution in the market the Georgia Lottery’s digital platform for the Missouri Lottery. Alongside wagering and the rst to comply with Apple Guideline and increase the marketing support features, players can use the app to create play 4.7. We worked closely with the RI Lottery Jthe company provides to the lottery. e slips for retail purchases, store their favorites team to develop and launch an iLottery solu- results of that work played out March-May, numbers and identify themselves as player’s tion that provides a modern playing experi- as digital sales accelerated signicantly. In the club members. e app is fully compliant ence for RI Lottery players. It gives players early weeks of May, sales are at +155% in tra- with new Apple requirements regarding user the choice and convenience to now play ditional draw-based games, +115% in digital experience and native content for HTML5 Keno and e-instant games from their mobile Keno and +330% in e-Instant compared to games. Players have welcomed the new app, devices, consistent with how they engage the same time period in 2019. and it is number one among US iLottery mo- with other forms of entertainment and media as well as purchase goods and services today.” Built on the PlayCommand platform that also supports sports betting in the state, the IGT PlayDigital solution integrates the retail and digital lottery experiences together with a host of tools from purchase to play, and it can all be done in a few touches on the mobile app. Drago added, “Rhode Island players now have the added convenience of playing the lottery from their homes and personal de- vices. In collaboration with the Lottery, our expert marketing team has created promo- tions and loyalty campaigns to attract and retain players that will ensure a successful player engagement strategy to drive revenues for the RI Lottery.” All three Lotteries are powered by the IGT PlayCommand platform and sophisticated IGT’s iLottery mobile offerings for the GA Lottery, player account management system, which KY Lottery and RI Lottery enables lotteries to control all administrative functions such as payments, player account- “It’s exciting to see our team’s eorts making bile applications based on app store reviews. ing, marketing campaign management, a dierence in Georgia. From the new games Marty Gibbs, interim President and CEO of CRM and responsible gaming controls that have been developed for the market to the the Kentucky Lottery, said, “We are delighted for players. e team of digital marketing engaging promotions and loyalty campaigns to have launched our new mobile app. We experts help the lotteries improve results by our expert marketing team has rolled out, it’s expect the expanded functionality and ap- using the powerful reporting tools available rewarding that it has resulted in a positive out- pearance to help us continue to bring value, to analyze data that is turned into actionable come for our customer,” said Enrico Drago, convenience and the best entertainment to insights that drive the day to day digital busi- SVP, IGT PlayDigital.

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