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

INSIGHTSJuly/August 2018

FOCUS ON: Technology- Driven Solutions Nearly 70% of the world’s General Session Breakout Session Representatives from the World Association (WLA) This breakout session will dig a little deeper on the choices sports wagering operations and Global Lottery Monitoring System (GLMS) will make the each regulator needs to consider when setting up are run through lotteries case for lottery oversight of this exciting new game and bet type operation. and share best practices. Experts will be on hand to deliberate over questions, such as: We bet you can’t pass up this session. This panel discussion will also delve deeper into how the early • Which tax rate is mutually beneficial to the state and On May 14, 2018, the U.S. Supreme Court overturned the adopters in the U.S. have begun to set up their operations. the operators? Professional and Amateur Sports Protection Act of 1992, also From licensing venues and sports book operators, to utilizing • How do the technical platforms work? known as PASPA or the Bradley Act. a single providers, the options are vast. Thought leaders from • Which bet types should be accepted? This has left the door open for states to adopt laws and rules various states will share the pros and cons of their respective to allow sports wagering. states’ models. • Integrity fee or no integrity fee?

REGISTER TODAY! FOR MORE LIKE US ON FACEBOOK! INFORMATION, www.facebook.com/NASPL18 GO TO NASPL18.COM NASPL18.COM SEPTEMBER 25-28, 2018 2 INSIGHTS JULY/AUGUSTMarch/April 2018 2018

NASPL_2018_spreads_September.indd 2 8/15/2018 8:38:20 AM NASPL_2018_spreads_September.indd 3 8/15/2018 8:38:20 AM Nearly 70% of the world’s General Session Breakout Session Representatives from the World Lottery Association (WLA) This breakout session will dig a little deeper on the choices sports wagering operations and Global Lottery Monitoring System (GLMS) will make the each regulator needs to consider when setting up sports betting are run through lotteries case for lottery oversight of this exciting new game and bet type operation. and share best practices. Experts will be on hand to deliberate over questions, such as: We bet you can’t pass up this session. This panel discussion will also delve deeper into how the early • Which tax rate is mutually beneficial to the state and On May 14, 2018, the U.S. Supreme Court overturned the adopters in the U.S. have begun to set up their operations. the operators? Professional and Amateur Sports Protection Act of 1992, also From licensing venues and sports book operators, to utilizing • How do the technical platforms work? known as PASPA or the Bradley Act. a single providers, the options are vast. Thought leaders from • Which bet types should be accepted? This has left the door open for states to adopt laws and rules various states will share the pros and cons of their respective to allow sports wagering. states’ models. • Integrity fee or no integrity fee?

REGISTER TODAY! FOR MORE LIKE US ON FACEBOOK! INFORMATION, www.facebook.com/NASPL18 GO TO NASPL18.COM NASPL18.COM SEPTEMBER 25-28, 2018 JULY/AUGUSTMarch/April 2018 INSIGHTS 3

NASPL_2018_spreads_September.indd 2 8/15/2018 8:38:20 AM NASPL_2018_spreads_September.indd 3 8/15/2018 8:38:20 AM FROM THE NASPL

PRESIDENT NASPL Staff David B. Gale Executive Director IN THE IMMORTAL FINAL WORDS OF SOCRATES: Thomas Tulloch Director of Administration Andrew White VP of Operations “I DRANK WHAT?” Tamika Ligon Director of Program Planning

The Buddhist thought behind mistakes – or a “mistake” – is vastly different than our John Koenig Graphic Designer commonly held American belief. As Americans, we believe correct or not correct in each Natalie Ross Norris Accounting task, each moment is almost a binary state: good/bad, success/failure. A Buddhist would believe that the moment is what matters, and to do your best in that moment and to grow Patricia McQueen Editor in each succeeding moment. I often tell my boys, it’s only a mistake if you don’t learn from Jake Coy Vendor Relations it (their mother might disagree, especially as relates to the raised toilet seat, which mistake appears to occur in an endless loop in my house). Paul Corey I.T. / Software Development I’ll give you an example: the NH Lottery head of sales and product had designed a $1 ticket and sent it to our print vendor for production. During one of her all-too-few days off, Lori Rugle Responsible the proof came back, and due to mix-up she didn’t see it until it was about to go to print. Mackenzie Whitacre Communications Coordinator In a panic, she was about to cancel printing the game, because the color was a bit puke orange and not at all what was intended. I suggested that she let the game print, that the universe often affords us gifts in the way of mistakes. It was one of the top tickets we sold NASPL Executive Committee that year (and yes, I am fully aware of the irony involved in using Buddhism and lottery tickets). I should note that this is the same person that had an idea for a bacon-scented Charlie McIntyre President scratch ticket, which I nearly nixed. It got a ludicrous amount of publicity, even featured on Dennis Berg First Vice-President Good Morning America, so I was affirmed in the belief. When I was hired to be the NH Director, I made a solemn vow to avoid being a color Bishop Woosley Second Vice-President picker. By that I mean a boss that gets so into the minutiae that he picks colors for scratch tickets or makes the staff send photos from an ad set to pick out clothes. Never done either Angela Wong Treasurer and really tried to avoid micromanaging the people I work with, who know more about Sarah Taylor Secretary their jobs than I ever could. Hire the talent, nurture it and allow the universe to unfold as it should. You’ll be surprised by the results. You can overthink this stuff pretty badly and Rose Hudson Immediate Past President mess it up. At a conference in Chicago a number of years ago I suggested that it should be Kevin Gass Pres. Interprovincial Lotteries almost like a martial arts film, say, Crouching Tiger, Hidden Latex. And then I followed it with a joke I won’t repeat here… but let your imagination run with it… Gordon Medenica Region I Director I often think of some of the best advice I received in this business. I had just started Tom Delacenserie Region II Director as the General Counsel at the Mass Lottery. I was 32, basically the youngest person in the place, and knew essentially nothing, but certainly wasn’t going to show that to the Robert Doty Region III Director folks there. Over 400 employees at the Mass Lottery, and I had to exude the confidence I thought a senior manager should. Paul Mandeville, the head of IT at Mass. suggested the Hugo Lopez Region IV Director best advice I probably have ever gotten – if I could avoid making major decisions, do so, for as long as possible. Not to procrastinate, but to allow myself the time to understand the business and how all the pieces fit into the overall structure of what was, and still is, a ridiculously profitable lottery. One of my favorite cartoons from my younger days was Bloom County, and one of my INSIGHTS favorite strips from that was one where the remarkably precocious youth scientist Oliver Wendell Jones allows himself a rare moment of sanity and realism when he stands on a Circulation: mound and reluctantly shouts: “The universe is a little too damned orderly to be a big Insights ISSN 1528-123X, accident!!!” So every so often, I dust that off and remind myself to allow the universe to July/August 2018, unfold as it should and not get too hung up on the random odd details that seem to grind Volume No. Eighteen, Issue Four. us down. If you work in the business, you know what I mean. Published bi-monthly by NASPL Have a happy summer everyone, until next time, I remain (North American Association of State and Provincial Lotteries)

7470 Auburn Road, LL1 Concord, OH 44077

Charles McIntyre © 2018 All rights reserved. Executive Director, / NASPL President NASPL Email: [email protected] Web Sites: www.naspl.org / www.nasplmatrix.org P. 440.361.7962 4 INSIGHTS JULY/AUGUST 2018 F. 440.867.2327 © 2018 Califon Productions, Inc. “Wheel of Fortune” is a registered trademark of Califon Productions, Inc. All Rights Reserved. © 2018 IGT Global Solutions Corporation. The trademarks used herein are owned by IGT or its affiliates, may not be used without permission, and where indicated with a ®, are registered in the U.S. IGT is committed to socially responsible gaming. Our business solutions empower customers to choose parameters and practices that become the foundation of their Responsible Gaming programs. 78 INSIGHTS JULY/AUGUST 2018 CONTENTS JULY/AUGUST ISSUE

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IN THIS ISSUE OF INSIGHTS...

8 42 Around the Industry Big Bang Success in Oklahoma Industry news and updates. The ’s ambitious strategy to relaunch its instant product 18 paid off in FY18, with an 82 percent Making a Difference: increase in instant sales and a 19 percent Mary Cassani, Financial Manager, and increase in profits to education. Jeff Cavender, Director of Marketing and By Patricia McQueen Sales,

24 FOCUS ON:

Risky Business Technology-Driven Solutions By Stephen Wade, Principal, Lottery By Patricia McQueen Management Consulting, LLC 42 48 30 The Lottery Ecosystem Research Corner Technology in all its glory drives the Using Research to Bring solutions lotteries seek in order to 18 Fast Play to Life operate efficiently and to stay relevant. By Chris Rogers, Deputy Director: Products and Marketing; Karla Henriksen, Draw 56 Games Product Manager; and John Turner In-Lane Inroads Gilliland, Public Information Officer, Arizona Several in-lane solutions are in play, or Lottery soon will be, around North America.

34 68 Lottery’s Research on Instant Delivery Responsible Gambling America’s leading lottery product line Third in a series of articles exploring the presents a number of operational components of NASPL’s new Responsible challenges, but lotteries and their Gambling Guidelines. vendors continue looking for ways By Lori Rugle technology can help mitigate those challenges. 38 Probability and the Odds 72 of Repeating Digital Marketing Tools By Helena Pereira, Lotteries have various options to build Marketing Director, Szrek2Solutions awareness of lottery products among consumers at retail and beyond using the latest in digital marketing.

6 INSIGHTS JULY/AUGUST 2018 SEPTEMBER/OCTOBERJULY/AUGUSTMarch/April 20172018 INSIGHTS 7 Around the Industry

Arizona Lottery Teams Up with Alice Cooper

n early August, the Arizona Concert, Alice Cooper Lottery introduced the memorabilia and more. first-ever, exclusive Alice “We are excited to join ICooper Scratchers ticket. The this legendary musical artist game was revealed on July 25 with this exclusive ticket,” at a special media-only launch said Executive event at Alice Cooper’s Solid Director Gregg Edgar. “The Rock Teen Center in Phoenix. Arizona Lottery is dedicated to Solid Rock was co-founded supporting vital programs that by Cooper to help foster kids serve people across the state and other youths develop and we are proud of the work their musical, dance and Alice is doing with the Solid artistic talents that they would Rock Teen Center to provide not otherwise be able to do. incredible resources, positivity Cooper and music students at and excellence for Arizona the Teen Center took part in youth.” an intimate jam session at the There is indeed event. tremendous synergy in the “We were first contacted missions of both the Arizona by Solid Rock’s Randy Spencer, Lottery and Solid Rock. The who was interested in working latter supports aspiring young with us on promotional artists in need – Cooper is events,” said Arizona Lottery donating a portion of the Deputy Director for Products lottery ticket licensing fees to and Marketing Chris Rogers. further benefit his Solid Rock “We realized there was an Teen Center. And one of the opportunity to do something Lottery’s beneficiaries is CASA creative with Alice’s likeness (Court Appointed Special and we collaboratively Advocates), which trains decided to do a scratcher volunteers to speak on behalf ticket.” Four months later, the of abused and neglected licensing deal was done. children in court proceedings. “You know you’ve made it From a production in this world when you’re an standpoint, Arizona Lottery answer on Jeopardy or Wheel officials said Alice Cooper’s of Fortune, a likeness of your people made the difference head is on a PEZ dispenser, or in making the deal. “They if your face is plastered all over were really easy to work an Arizona Lottery ticket,” said with and represent a great Cooper, who is excited about organization,” explained the ticket. Instant Ticket Product The $5 rock n’ roll themed Manager Ivy Gilio, adding that ticket includes top prizes of it took about seven months $50,000 and top-of-the-line from start to finish. Scientific second chance prizes, such Games assisted in the The ticket was launched to be in full swing ahead of as VIP tickets and pre-show development of the ticket and Halloween. “We’ve had a huge demand for sample/void party access to Alice Cooper’s the artwork, and is facilitating tickets and these tickets may become collectors’ items Annual Christmas Pudding the second chance drawing. with people buying them but not scratching them.”

8 INSIGHTS JULY/AUGUST 2018 JULY/AUGUSTMarch/April 2018 INSIGHTS 9 Around the Industry

Massachusetts Initiates “National Lottery Day”

By Christian Teja, Communications Director,

17 17

nspired by the popularity of the wide range of “holidays” that have been established through

Ithe power of social media, the 17 17 Massachusetts State Lottery celebrated Tuesday, July 17, as the first ever 17 National Lottery Day. “The purpose of National Lottery 17 Day is to celebrate the collective contributions lotteries make to the communities they serve, while offering players and retailers a day of special #N y promotions,” said Executive Director ati yDa Michael Sweeney. onalLotter “As we found ourselves incorporating our products into posts about other social media holidays on a regular basis, we asked, ‘Why not have our own day for lotteries?’” said Juan Di Prado, who joined the Lottery last summer as its first full-time Social Media Director. “We all have great promotions for multiple products For instant tickets, an extra incentive stories to tell and passionate fans who that were driven almost exclusively was added to a month-long “Christmas enjoy special offers.” by social media, and all promotions in July” promo in which non-winning A core work group that showed measurable success. 2017 holiday instant tickets could be included Sweeney, Di Prado and On National Lottery Day, all Mass entered into a drawing for 20 $500 Communications Director Christian Cash tickets purchased were entered prizes. All tickets entered on National Teja began framing out the National into a drawing for ten $500 prizes, Lottery Day were also entered into Lottery Day concept. Once the decision resulting in a 26.2 percent sales a separate drawing for 17 $100 was made to move forward, the increase in the cash lotto game over prizes. After averaging 4,506 tickets Lottery chose a July date because it the equivalent day last year. Monitor entered daily over the first 16 days of was identified as a time of year that game promotions for the day included the month-long promotion, a total could benefit from a new promotion. the addition of a 2X multiplier to of 15,070 tickets were entered on The next steps included the Bonus and a drawing in which National Lottery Day. development of a logo and working 17 non-winning tickets On social media, Facebook, Twitter with product managers to construct were selected to win a $1,000 prize. and Instagram followers were given a slate of promotions that could be Combined monitor game sales for the the opportunity to enter to win a $500 executed with relatively short lead day were up 11.4 percent over the prize (one prize awarded on each time. The result was a series of player previous year. of the three platforms) by posting

10 INSIGHTS JULY/AUGUST 2018 InsightsNASPL Ad_2018.pdf 1 6/21/18 1:40 PM

MIX TOGETHER AND CHILL

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NASPL 2018

The Cleveland Public Auditorium Across from the Huntington Convention Center

September 26, 2018 10:00pm – 1:00am

SEPTEMBER/OCTOBERJULY/AUGUSTMarch/April 20172018 INSIGHTS 11 INSIGHTS March/April 2017 11 Around the Industry

a photo of themselves with their favorite lottery ticket, accompanied by the message, “I help support the 351 cities “We are hopeful that and towns in Massachusetts.” These ‘call to entry’ posts other lotteries will join combined to reach over 264,000 people, generate over 1,200 reactions and garner 429 submissions. us next year and make it Retailers were able to earn entries into a pair of drawings for cash prizes, one by reaching designated sales increments truly a national event.” for monitor games and one by selling Season Tickets. And to keep it all in good fun, a post encouraging responsibly play was made across the Lottery’s social media - Michael Sweeney platforms. “This was an unqualified success for us and the potential is there for it to become much bigger,” said Sweeney. “We are hopeful that other lotteries will join us next year and make it truly a national event. We want to explore turning this Association of State and Provincial Lotteries (NASPL). into a National Lottery wWeek and consider issuing a limited “We applaud what the Massachusetts Lottery has done,” edition National Lottery Week instant ticket for participating said NASPL Executive Director David Gale. “It shows that states.” a National Lottery Day or even Week has the potential to His wish may very well be realized. Massachusetts’ attract players with special promotions and social media development of its own National Lottery Day was created activities. We also think there is great potential to use the independently of an initiative currently gaining traction concept to showcase the good causes that all lotteries among lotteries through the work of the North American support.”

12 INSIGHTS JULY/AUGUST 2018 JULY/AUGUSTMarch/April 2018 INSIGHTS 13 Around the Industry

Camelot Illinois Releases Fiscal Year 2019 Illinois Lottery Business Plan

n July 10, Illinois Lottery private manager Camelot Illinois released the company’s Obusiness plan for Fiscal Year 2019, which began on July 1, 2018 and ends on June 30, 2019. A requirement of the 10-year private management agreement between the State of Illinois and Camelot, the annual plan outlines Camelot’s business objectives for the year as well as its strategy for managing and growing the Illinois Lottery. The plan is the framework for an ambitious program as the new private goals and planned activities for mobile app. In the second half of the manager for the Lottery begins its marketing and branding, games, retail year, Camelot plans to implement the first full year of operations. Under and iLottery, communications and roll out of a $15 million investment the plan, Camelot Illinois will work in corporate social responsibility. in point of sale equipment that will partnership with the Illinois Lottery to “Our first year is a foundation year transform the presentation of the establish new games and improved to establish operational fundamentals Lottery in more than 7,600 retail stores experiences for lottery players, as well and build trust in the Illinois Lottery across Illinois. as growth in revenue to the state. through responsible, transparent Also planned for Fiscal Year 2019 In Fiscal Year 2019, Camelot is and accountable management,” said are the launch of , a draw- projected to deliver lottery sales of Camelot Illinois General Manager based game that will offer winners $3.03 billion, an increase of 3.5 percent Colin Hadden. “Our long-term goal regular payments for life rather than over the previous year, slightly more is to create an innovative, modern a single jackpot, enhanced training than expectations outlined in the lottery that will attract new players and and support for retailers and initiatives private management agreement. This maximize financial returns to the state to expand awareness of iLottery to sales increase is anticipated through in a socially responsible way.” acquire new customers. 3.2 percent growth in instant ticket Camelot projects Illinois Lottery The full Camelot Illinois business sales to $1.94 billion, and 4.2 percent expenses to be $2.3 billion in Fiscal plan is available on the Lottery’s growth in draw-based game sales Year 2019, including $1.96 billion in website at www.illinoislottery.com. to $1.09 billion. Overall, the plan prizes and claims, $114.1 million to is projected to result in a financial fund the costs of sales and services, contribution to the state of $735 marketing and advertising and million, up an estimated 5.7 percent vendor fees, as well as $26.6 million in over the prior year. By the end of management fees. Camelot’s contract term in 2027, the Key highlights anticipated in Fiscal company projects the net annual Year 2019 include the transition to income to the state to exceed $1 a new back-office central gaming billion. system, new computer terminals in all To achieve this growth, the annual retail locations, new vending machines business plan focuses on strategies, and the launch of a new website and

14 INSIGHTS JULY/AUGUST 2018 ILLUMINATING YOUR JOURNEY

iLottery Solutions. Powerful Results. For more information: [email protected]

JULY/AUGUSTMarch/April 2018 INSIGHTS 15 Around the Industry

Lori Rugle Honored at NCPG Awards

ASPL’s own Lori Rugle was one NCPG honors communications Problem Gambling (Public Awareness - of the recipients of the National efforts in the areas of problem and Corporate), and Russell Herder (Website Council on Problem Gambling’s responsible gambling, and this year’s - Corporate). N2018 awards, presented during the winners include the New York Council Two individuals were honored NCPG’s annual conference in Cleveland, on Problem Gambling on behalf of the for their lifetime efforts in the field. held July 18-21. The NCPG honors New York Responsible Play Partnership. Maureen Greeley, Executive Director individuals and organizations for their The Partnership, which includes the New of the Evergreen Council on Problem work on problem gambling issues. York State Gaming Commission and its Gambling, was given the Monsignor Rugle received the Joanna Franklin Lottery division, won for the Holiday Joseph Dunne Lifetime Award for Annual Award for Direct Service for her Responsible Gaming Campaign. Advocacy. Early in her career, Greeley work in Maryland. She is an Associate McGill University International was on the staff of Washington’s Lottery. Professor in Psychiatry at the University Centre for Youth Gambling Problems The Lifetime Research Award went to Dr. of Maryland School of Medicine, and and High-Risk Behaviors, which is one of Richard Rosenthal, the founder of the before becoming NASPL’s responsible the sponsors of the Holiday campaign, California Council on Problem Gambling, gambling specialist last fall, she served won the NCPG award for Corporate who is currently a Clinical Professor of as Program Director for the Maryland Newsletter. Psychiatry and Co-Director of the UCLA Center of Excellence on Problem Other communications awards went Gambling Studies Program. Gambling. “I am so grateful for this to MGM Resorts International (Corporate The remaining award winners award,” exclaimed Rugle. “Joanna Social Responsibility), the California include national council affiliates Franklin was my dearest friend and her Office of Problem Gambling (Multi- and individuals working with those example of service has been a guiding Cultural Communications - Corporate), affiliates, researchers and other problem star in my life and work.” the Maryland Center of Excellence on gambling programs.

16 INSIGHTS JULY/AUGUST 2018

2-Jackpots-PrintAd-2018-8.25x10.75-V1.0.indd 1 2018-05-30 2:56 PM JULY/AUGUST 2018 INSIGHTS 17

2-Jackpots-PrintAd-2018-8.25x10.75-V1.0.indd 1 2018-05-30 2:56 PM Jeff Cavender Director of Marketing and Sales, Vermont Lottery

Mary Cassani Financial Manager, &Vermont Lottery

18 INSIGHTS JULY/AUGUST 2018 Making A Difference

Mary Cassani, Financial Manager, Vermont Lottery Jeff Cavender, Director of Marketing and Sales, Vermont Lottery

t a small lottery, staff managed to increase sales and revenues finances and related issues, while members are used to to education in the process – and they are Cavender would explain how the sharing responsibilities understandably proud of those results. marketing budget kept the Lottery true to and pitching in whenever “Both Mary and Jeff were a its mission of raising money for education. necessary. That experience tremendous help to me as I moved And without an Executive Director, proved invaluable when an unusual into my role as Executive Director,” they kept each other in check as well. With Aseries of circumstances left the Vermont said Rachek. “I continue to rely on their every crazy new marketing or promotional Lottery without an Executive Director for experience and historic knowledge of idea, Cavender would look to Cassani and more than a year, from October 2016 to the industry as the Vermont Lottery she’d grill him on what the end goal was. November 2017. moves forward and builds on our success. “She’d always ask what I was trying to do First, a new governor was elected They were put in a difficult situation, to for our customer. If I thought something and the search for a new Executive assume additional responsibilities and would work, she’d figure out how to fund Director – begun when Greg Smith pressures without a formal appointment it.” resigned – was put on hold. That new or promotion, but really thrived in their All that extra work for the legislative governor then issued an executive order new roles. The staff responded well to task force resulted in a new bill to create to merge the state’s lottery and liquor their leadership. Vermont and the Lottery the merger – a bill that failed to pass in operations. Finally, three of the five lottery is lucky to have them!” the regular session this spring. Due to a commissioners left their positions (one Keeping the Lottery’s staff budget impasse, however, a two-week joining the governor’s cabinet) – the energized was perhaps the most special session was called in June. During commission served in an advisory capacity important achievement. “We made sure such special sessions, Cassani explained, and kept an eye on lottery operations. communication was wide open, so that new bills cannot be introduced but bills By late spring 2017, new commissioners everybody on staff knew what we knew,” that had been discussed during regular had been seated and educated in basic said Cavender. “We kept the team focused session could be brought up again. “So “Lottery 101,” and the search for an and kept morale up, and I’m proud that the liquor and lottery merger resurfaced Executive Director began anew. Top FBI we didn’t lose anyone along the way.” in the special session and it passed,” she agent Danny Rachek was named to the Added Cassani, “Everyone was calm said. “If they had passed the budget in position in August, but didn’t actually start because we were calm. It helped that our the regular session, there would be no the job until last November. Meanwhile, personalities all meshed – there was no merger.” the executive order to merge lottery conflict, no one was competing with each As a result, effective July 1, the and liquor was rejected by the Vermont other. We were blessed.” Vermont Lottery Commission was House, and a legislative task force was That meant that the organization disbanded, replaced by the Department created to study the merger. continued to run as smoothly as it always of Liquor and Lottery with an oversight All this time, the Vermont Lottery had had, delivering results that included board yet to be seated. Exactly what to keep on rolling, conducting business increased sales and revenues. After all, that will mean in terms of ongoing as usual with the added responsibilities of with a staff of just 20 full-time employees, lottery operations has yet to be testifying before the task force – political everyone is cross-trained. “We do determined; there will eventually be some responsibilities in particular are often everything together,” explained Cavender, combination of responsibilities as liquor in the hands of an Executive Director. from ticket art to developing promotions and lottery come together. Stepping up to the plate in the absence and customer events. “I don’t ask anybody Cassani and Cavender are clearly of such leadership were three Lottery on the team to do something that I no strangers to uncertainty, and staffers – Financial Manager Mary Cassani, wouldn’t be willing to do myself, and I try together with Rachek (now with the Director of Marketing and Sales Jeff to infuse an element of fun in everything more cumbersome title of Deputy Cavender and Director of Security Mike we do.” He even has F-U-N spelled out in Commissioner of the Lottery Division of Ferrant (who has since left the Lottery). building blocks on his desk! the Department of Liquor and Lottery) They worked tirelessly to keep the They would play on each other’s they will see to it that the Lottery lottery going while spending numerous strengths as they handled the added continues to provide needed revenue to hours at the State House. Despite the responsibilities of dealing with the education in Vermont. After what they’ve challenging circumstances, they kept legislature and the task forced assigned been through, they wouldn’t have it any morale up throughout the small office and to the merger. Cassani would address other way.

JULY/AUGUST 2018 INSIGHTS 19 Mary Cassani

Hailing from Saratoga Springs, N.Y., Why did you decide to come back to Running the Lottery’s administration Cassani comes from a big family – she’s the Lottery? and financial services is critical, but the second-youngest of 10 children. She I feel I have a penchant for taking not really fun and glamorous. What met her husband Michael at Adirondack positions where things are kind of messy, gives you the most enjoyment from Community College and they’ve been or at least not up to my standards – I your job? together for 32 years. He is originally like to “fix” things. It was kind of like that As mentioned I do like making sure from Vermont, and after college they when I came to the Lottery, both for the our beneficiary gets every dollar they moved to his home state. A few months first time and again on my return. I felt I are due. But I also enjoy celebrating after settling there, she found a job at could make improvements. What I really with our winners. We have a small the Vermont Lottery as an accountant. like about the job is knowing things office so I always get to hear when After more than four years at the job, she are recorded accurately and the right winners are excited when they are at decided to take a little time off to be a amount of money is sent to the Vermont the claim window. It’s all about the stay-at-home mom to two sons. Education Fund. There’s no room for people – there’s nothing like it. And of She would return to the Lottery doing drafts and fixing them later – it’s course, I do interact directly with big 11 years later when recruited for the all about doing things right the first time. winners, especially with our Tri-State position of Financial Manager while Megabucks jackpot winners where working at the Vermont Chamber of The Tri-State Lotto Commission there is an annuity option and I can Commerce. Lottery must have gotten was the first multi-state lottery help them through it. It is particularly into her blood – she’s now into the organization in the U.S. Is there gratifying when a big winner had been fifteenth year of her second stint at the any special challenge on the down on their luck and the win lifts them Vermont Lottery. administrative side of such an up. I remember one woman with three Cassani and her husband are both organization? children whose husband had passed big baseball fans, and are trying to visit Over the years, our member states away from cancer a few months before as many major league baseball stadiums have sort of all moved in different her win. All she wanted to do was take as possible – they are up to 10 so far. directions, each doing our own thing. her kids to Disney World – a place she While she doesn’t have a favorite team, So the difficulty is in keeping Tri-State and her late husband had always wanted she enjoys watching the Boston Red Sox together so we stay on track doing to take them but never got a chance. It defeat the New York Yankees. projects that still fit within the scope of was a dream come true that she could They also love to travel, with recent our original compact. That has been the make that trip. Stories like that are just so adventures to Italy, Mexico and Hawaii. big challenge, and we do constantly look meaningful. With her sisters, Cassani is heading to to do new things together. the U.K this fall, visiting England, Wales, Ireland and Scotland.

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JULY/AUGUST 2018 INSIGHTS 21 Jeff Cavender Born and raised in northeast I thought, “why not?” Somebody has in what we’ve been able to accomplish Ohio, Cavender is a self-described to do it; it might as well be me. Then- here in Vermont – record overall sales “long suffering Cleveland sports fan director Greg Smith was himself new to and instant ticket sales increases of 25 (is there any other kind?)” He’s been the lottery industry, and he hired me. percent. a Vermont resident since 1989 and And we propelled the Vermont Lottery is a relative newcomer to the lottery forward. You were in an industry that was industry. He joined the Vermont Lottery severely disrupted with technological as Director of Marketing and Sales in Did you apply anything from your change. Does that give you any insight 2013. His background is in the music previous career in music and video on what threatens to change the and video industry, having worked for to the marketing and promotion of lottery industry? Blockbuster Video and various music lottery products? I certainly saw the change from vinyl, and video wholesalers and distributors They are very similar in terms of each 8-track and cassettes to CDs and from in sales and marketing management having a release schedule. It’s always movies exclusively in theaters to video roles. Most recently, he served as head about getting the right product in the tapes to DVDs. It also went from movie of the distribution arm for Rounder hands of consumers and getting it there rentals in stores to delivery by mail to Records (headquartered in Cambridge, in a timely manner. But in music and video streaming. It was always about Mass.), overseeing sales and marketing video distribution, there were more building a better format for delivery responsibilities for the label’s video and defined roles and teams of people doing and to make it easier for the customer. children’s music initiatives. just one thing, whether it be marketing, It does give me pause as far as what Music continues to dominate his sales, publicity, media or customer might be coming around the corner in personal life, as he shares his love of appreciation. Their whole mission was to the lottery industry. But with lottery, it’s music with his wife Karen and two adult make customers feel good, something not so much about improving the format daughters. They were scheduled to see you don’t often see today. With our small as it is about adding choices of what to Pearl Jam at Chicago’s Wrigley Field in staff at the Lottery, we don’t really have play. I think people will always like that mid-August. people who specialize in doing only one physical feel of scratching a ticket or thing – we take everyone’s ideas to see getting that piece of paper for a lotto What made you want to join the what would be best for our customer jackpot. But our choices are expanding – Vermont Lottery? base. But either way we try to get behind pulltabs, different kinds of draw games, I had been trying to purchase my the product and make sure we hit all the and perhaps now even sports betting. own business (local movie theaters), but points and maximize everything we can The barriers are dropping; we just have the deal just wasn’t going through. So from a sales and distribution standpoint. to strike the right balance between I started casually looking to see what I do think that my non-traditional music responsibility and profitability in order to else was out there and I saw the lottery and video background, and not having produce results that our legislators can ad. I had never thought about lottery any idea or preconception about the support. tickets needing marketing, and I had lottery business and the marketing and never worked in the public sector. But selling of lottery products, has helped

22 INSIGHTS JULY/AUGUST 2018 JULY/AUGUST 2018 INSIGHTS 23 Risky Business Stephen Wade, Principal, Lottery Management Consulting, LLC.

isk is a word of warning. players will remain the same. and , because these It can arouse anxiety and Near the other end of the risk games have the potential to produce fear of loss. This emotional spectrum, we have the small draw ‘bonus’ years; we count on less volatile freight tends to make us games that produce much the same assets to make the downside risk of Rback off from anything called risky. sales and profit year after year. Most the big games tolerable. Risk also has a sense that conveys jurisdictions have a few of these. Unfortunately for lottery managers, an upside. I feel that the way risk is Some lottery jurisdictions earn most it is not only their own risk tolerance used in formal financial theory, tracing of their yield here. but also that of their beneficiaries back to the 1950s, recognizes a Somewhere toward the low-risk that matters. The beneficiaries are profound truth: risk enables both the end are the instant games. Here, risk generally risk-averse, and at the same fear of losing and the thrill of winning. arises because a particular game may time hungry. They want whatever Risk is defined statistically in financial fail to reach its sales goal, while still we can produce now, and there may theory. This definition has nothing to paying its top prizes. Alternatively, it not be any sort of ‘buffer’ to absorb say about emotions. Rather, it says may sell through while the big prizes one year’s bonus in order to protect something like, “the less predictable go unclaimed. The risk associated with against another year’s shortfall. the yield from your investment, the any single instant game is generally In the absence of an actual buffer, riskier it is.” Sometimes a risky asset not all that important, because there and with pressure to increase the disappoints; sometimes it yields more are so many instant games in the yield to beneficiaries, what tactics than we had any reason to expect. market in most places. are potentially available to protect In the lottery business, we manage The instant portfolio illustrates a beneficiaries from risk? One approach assets (games) that have different key insight from economic theory: might be to focus more attention degrees of risk. At one end we have the important thing is the risk of the on developing games that are not the extremely risky multi-state games, portfolio, not the risk of any particular inherently risky - draw games offering and Mega Millions. Risky asset. To the degree that the lottery’s smaller top prizes, for instance. is not pejorative here, it is merely yield comes from small draw games Another might be to work for better honestly descriptive. Yields can vary and instants, it is less risky. But along profitability of the instant games. a lot from one year to the next. We with lower risk comes lower potential However, since the appeal of really never experience the long-term yield for big gains. big prizes has been demonstrated of these games, because every few Economic theory talks about the many times, it is worth asking years we change their rules. The long- risk tolerance of the investor - that is, whether there is any way to make term yield is in fact a difficult concept, the ability to accept variations in yield offering really big top prizes less risky. because even if the games do not over time. Lottery managers tend to Remembering the insight that it is change, there is no assurance the welcome the upside risk of Powerball the risk of the portfolio that matters, I

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We partner with lotteries to help them achieve sustainable and responsible growth. enquiries@cJULY/AUGUSTaMarch/Aprilmelo t2018gl o INSIGHTSbal.c o 25m suggest that we consider the effects of diversifying our holdings. Lotteries saw some benefit when, in 2010, they agreed that both Powerball and Mega Millions, rather than one game or the other, could be sold in each U.S. jurisdiction. Sales from both games together have been less variable year-to-year (and Fast also larger) than from one alone. Fast Statistical theory teaches that having the same volume of sales running through a greater number of games lowers year-to-year variability. As a rule, this works roughly according CheapCheap to the square root of the number of games: having four games would give half the variability of having only one. Each additional game added has a smaller beneficial effect. DeliciousDelicious Another approach to diversifica- tion has been shown by an unlikely teacher: the ‘synthetic’ lottery, of which is the best-known (Choose Any Two) example. Lottoland diversifies its (Choose Any Two) risk portfolio by going right outside the lottery realm and working with commercial insurers. Lottoland is a name that carries negative emotional freight in the lottery world, where it is known, first of all, for appropriating the best- known games of state-sponsored lotteries for its own profit. But if the Lottoland incursion teaches state lotteries something new about risk management, it may be doing us a BigBig PPrrizizee favor. The basic lesson from synthetic lotteries is that having a huge playing population and correspondingly large cash flow is not the only way PrPredictedictablablee YielYieldd to provide for paying multi-million- dollar prizes in a lottery game. We can address the possibility of paying a big prize at a financial loss in the Small/Medium same way we address the possibility Small/Medium of a house burning down: we pay a premium to an insurer in exchange for a guarantee to cover the cost of PPoopulationpulation the adverse event. It is the insurer’s business to assemble a diversified portfolio of risks, and to charge an appropriate premium for each little part. (Choose(Choose AnyAny TTwo)wo) Why would an insurer want to take on the risk of a big lottery game? Perhaps mostly because the risks

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JULY/AUGUST 2018 INSIGHTS 27 in our honest games of chance can monopoly to run it. But that would be by paying premiums, in exchange for be perfectly understood in principle, a digression. I just want to emphasize protection from the downside – then simply from the way the games are what it may be worth now.” you don’t have to worry about the size defined. There is no perfect math “You need something like that sign of the playing population. You escape governing the risk of fire, and yet over there,” said M. He nodded to a the Tyranny of Scale.” insurers work from empirical evidence placard on a side wall. The placard “But doesn’t that add a cost of to address the likelihood of your was placed over framed awards and operation?” particular building burning. Lottery notices won by this eatery, a popular “Sure. And wouldn’t the benefit business may also appeal to an leader in the Seattle “slow food” be worth something? You would insurer, because no one insurer needs movement. probably have to do a competitive to be asked to take the whole risk “Well, that’s the slow-food attitude procurement for the insurance. Might of a game – rather, each may have a for sure,” I acknowledged. “But get enough competition going to get certain appetite for this kind of thing actually, this place delivers pretty well a good price.” as a part of its diversified portfolio. on all three points, doesn’t it?” “Do you mind if I use your Tyranny Why would a lottery want to “Yes, I’m happy with it too,” he of Scale in the article?” consider paying another party to help said. “But my point is that the sign “Don’t you think that’s a little it address the possibility of being shows the constraints they work florid?” “caught short” when paying a big within. And they have managed to “Yeah, but I can put that on you, prize? Because this frees the lottery make tradeoffs within that box that so no harm done. And I’ll keep that from the Tyranny of Scale. produce something we like.” While I napkin too, if you don’t mind.” I must admit I am indebted to considered how slow would be too So it was that M. provided me with my friend M., the lottery-enthusiast slow, M. pulled out a pen and wrote the ending of this article, for which economist, for that expression on his napkin: I am again indebted. To make the Tyranny of Scale. It happened like “Here’s the box lotteries have been implication completely clear: With this: We were sitting in a bistro in in. If you want predictability, you have insurance-backed prizing, the size of Seattle, catching up on what we each to keep the prize relatively small. the player population can become had been working on. I was telling But ‘small’ does not mean the same irrelevant. This is especially important him about this very article that I was amount of money when you have when considering a new game which, writing, and how I was hoping to wind one million players as when you have although it may grow in popularity, it up. 10 million, or 100 million. So, with a is initially unknown. The player “You see, the problem is I may have bigger population, you may feel safe population must grow from a small started out sort of pedantic, with the offering very long top prize odds on a start. With the conventional approach definition of risk and all, and people big prize. If you risk a big prize, even that M. sketched on the napkin, the don’t have a lot of patience with that with a small population, you may lose early development of a new game sort of thing. I want to get to why you money some years. The yield becomes can easily produce a financial loss. If don’t have to be a big monopoly in unpredictable over any reasonable the lottery is not provisioned to cover order to pay big prizes, if you go the amount of time. And a start-up is the loss, the random occurrence of insurance route. It’s really profound in just a crap shoot. That’s what I would an early top prize award may lead a way. I’m tempted to get all historical call the Tyranny of Scale. But, if you to the accidental death of the game. and talk about how, back in the day, choose to make your yield predictable Why not pay a little for relief from that it looked like the only way to make a by going to the insurance model – risk? This is the value proposition of big game work was to set up a state that is, you give up some of the upside insurance in the lottery industry.

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JULY/AUGUSTMarch/April 2018 INSIGHTS 29 Using Research to Bring Fast Play to Life By Chris Rogers, Deputy Director: Products and Marketing; Karla Henriksen, Draw Games Product Manager; and John Turner Gilliland, Public Information Officer, Arizona Lottery

hat’s the difference in-store promotional campaigns, game between a modestly sales surpassed $8 million by the end of successful and a fiscal year 2018. wildly successful Before we look at the ways in which drawW game? The Arizona Lottery is both qualitative and quantitative discovering it is research, technology research helped the Arizona Lottery and gut instinct. Since the sale of our redevelop this game into a strong first game, the “Scratch It Rich” ticket money-maker, let’s talk about the game in 1981, the Arizona Lottery’s game itself - how to play and how to sell it to research methodology has become players. more extensive and sophisticated, Fast Play builds on two play styles currently focusing on both qualitative that focus groups told us would appeal (focus group) and quantitative (survey) most to them: ease of play and - research. This focus on both research themed games that players already tracks when launching products understand how to play, like slot ensures that the data we get from focus machines. To that end, we launched groups informs the surveys used to give several games, including the popular the focus groups that they would try our games their best possible chance of “Cherry Twist” Progressive game, where these new games almost immediately success. It’s that ever-evolving process players match three -styled and many would add them to their that has helped to transform the newly- symbols in a row to win the progressive play portfolio, increasing their average launched Fast Play line. jackpot or, like in a casino, a single ticket. Players were intrigued by the Fast Play was first introduced to “cherry” can win as well. The more new gameplay, excited by multiple wins Arizona Lottery players in 2007 and whimsical “Piggy Bank Bucks” game on a single ticket and the prospect of a it ran for four years. During that time builds on the players’ stated desire large (unavailable the line brought in $7.5 million. In for an easy-to-play game by simply in Scratchers games), and confident 2017, the Arizona Lottery conducted matching one of two numbers from a that the ease of play would help them. detailed focus-group research into what field of five. All six Fast Play games play Retailers were pleased as well, telling players found to be the most appealing the same way: no scratching and no us in the focus groups that the new and exciting elements of Fast Play. numbers to pick. The lottery terminal vending machines we tested from We then surveyed people in our key guides the retailer or player through the (coming to market player demographics to discover what purchase process from start to finish. later this year) were easy to use, with we could improve. Using the research both Fast Play and traditional draw conducted in partnership with BLJ Focus Group Insights games available for purchase. Marketing and WestGroup Research The new Fast Play game mix is Retailers said their biggest concerns to help guide us, we implemented the a direct result of research targeting were that lines could form as Fast new Fast Play line in February 2018 players who like to win instantly Play players continually purchased with easy-to-understand play styles. without taking the extra time to play multiple tickets for consecutive draws Supported by aggressive marketing and a Scratchers game. Players told us in and that the new vending machines

30 INSIGHTS JULY/AUGUST 2018 Cherry Twist Progressive

Participants really liked the Progressive Jackpot aspect of the game. It made the game more exciting and di erentiated it from the regular Scratch games.

“The progressive feature is very appealing.” (Frequent Scratchers Players) “It’s easy to play plus it has the progressive feature.” (Supermarket Retailers)

Participants liked the 8 games on the ticket. It provided them with lots to do while playing the ticket.

“It has the most chances to win on one ticket.” (Occasional/Infrequent Scratchers Players) “It has 8 chances to win.” (Frequent Jackpot players)

The name and look of the ticket reminded participants of slot machines. It made the game look more exciting to play.

“The ticket is more like a .” (Frequent Scratchers Players)

Some of the symbols were harder to read than the others. For example, the auto win symbol (e.g. cherries) was not easily distinguishable.

“I nd it really hard to see some of the symbols.” (Frequent Jackpot Players) “I didn’t know that was a cherry symbol. I wasn’t sure what it was.” (Occasional/Infrequent Scratchers Players)

Possible improvements: Participants did not provide any suggestions to improve the concept

might be a bit bulky for smaller targeting hundreds of Arizonans in with less intimidating game play convenience stores. Those players our key demographics to determine from the outset; however, non-card who had concerns worried that if those insights were reflected in players found blackjack (which ranked new players might take too long the opinions of the larger player higher in the research than some to play, causing lines to back up, population. The survey confirmed other games) difficult to understand. and that unscrupulous clerks might what the focus groups said about This led to our decision to initially withhold winning tickets and only sell players’ readiness to try a new kind exclude blackjack from our Fast Play losers to players. As we have yet to of game that was easy to play and game portfolio. The research also deploy the new vending machines, offered good perceived value-for- showed that “Cold Cash Crossword” we don’t know if concerns about money, with bonus plays and multiple had a much higher positive rating lines of customers impeding other wins on a single ticket. This effort led in focus groups than “Cherry Twist” players and retailers’ patrons will be directly to the implementation of Progressive or “Piggy Bank Bucks,” realized. Retailers’ concerns about four new initial Fast Play games, now but it also had higher negatives from the size of the new machines may numbering six, ranging from $1 to players in the focus groups, so we limit their deployment to larger stores $5, that are easy to play and remind went with games that were less likely and supermarkets. As for security, players of the excitement, ease and to drive away players. the Arizona Lottery has several potential immediate reward of a The research also confirmed procedures in place to protect against casino game. the lessons we learned through the hacking or unfair retail practices that Secondary quantitative research original iteration of Fast Play. Back might hurt players. We also continue gathered from Nielsen Prime Lingo in 2007, the year Fast Play was first to work with Scientific Games to showed that the crossover between launched in Arizona, players had to mitigate the potential problems that casino players and Arizona Lottery go through a complicated process were revealed in the focus groups and players is significant. Focus group of scanning game-specific cards in the survey. research revealed that slot-themed mounted on the vending machines The Arizona Lottery used the focus games are more appealing to lottery in order to play the correct games. group research to develop a survey players, who also frequent , This was confusing for players. The

JULY/AUGUST 2018 INSIGHTS 31 Overall Ranking of Fast Play Games

Respondents were also asked Blackjack 43% 28% 29% to rank all games tested in order of preference, and the Cold Cash Crossword 38% 16% 46% chart at the left shows rankings segmented by 1st/2nd, 3rd/4th, Piggy Bank Bucks 37% 30% 33% and 5th/6th combined.

Goldfish 30% 38% 32% Overall, Blackjack is the highest-ranked game, with Cherry Twist 26% 46% 28% 43 choosing it as their first or second preference. Lucky Gems 26% 41% 33% Although Cold Cash Crossword 0% 20% 40% 60% 80% 100% also received a high proportion of 1st/2nd rankings, it was also rated lowest by an even higher 1st or 2nd 3rd or 4th 5th or 6th proportion (46).

Listed above are the various games you have rated; place them in the order of your overall preference (1st through 6th)

new vending machines are exponentially easier best possible chance of success with players. That “human” factor is for players to operate. The focus group research equally important when weighing the research to determine whether on these machines was overwhelmingly positive, you guide it, or you let it guide you. likening them to a casino gaming experience. If there’s anything that this process has taught the Arizona Lottery Finally, when we were researching how best about the relationship between research and games development to reintroduce Fast Play to the Arizona Lottery’s it’s this: Data is important when you make decisions about product mix of games, players and retailers alike told us launches, but it is just one information point. Your gut is also an that the key link in the chain of success would be information point and the “human” factor is important. It pays to rely education - educating retailers about how best to on the knowledge and expertise of your staff and retailers, as well as sell this game and drive business into their own the research data, at all stages of game development. stores, and educating players about how these games are different from Scratchers yet similar in ease of play.

Keep the Human Element While research is very important in game development, it is not all-important – we must also account for the “human” factor. The Arizona Lottery recognizes that the numbers can only tell us so much about how well any given new game Chris Rogers, Deputy Karla Henriksen, John Turner Gilliland, will do in the marketplace. It takes a close working Director: Products Draw Games Product Public Information relationship with retailers and our own sales force and Marketing, Manager, Arizona Officer, Arizona at every phase of development to give games the Arizona Lottery Lottery Lottery

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JULY/AUGUST 2018 INSIGHTS 33 ’s Research on Responsible Gambling/Problem Gambling (RGPG) Awareness Messaging

Third in a series of articles exploring the components of NASPL’s new Responsible Gambling Guidelines. By Lori Rugle, Responsible Gambling, NASPL

o far in this series on Only one of those addressed the healthy behaviors. We will work core sections of NASPL’s content of messages, while the other collaboratively to ensure that Responsible Gambling two simply evaluated outcome of all stakeholders have a shared SGuidelines we have looked at retailer messaging without considering the understanding of and a commitment and employee training. This article will messages themselves. This certainly to effective responsible gambling focus on the area of RG research on reinforced my impression that most practices.” public awareness messaging. organizations – including lotteries Promote Help and Hope. “The As the second item in NASPL’s RG and problem gambling advocacy Lottery is committed to ensuring Research and Evaluation Guidelines and treatment agencies – were players and their families know how suggests (see box on opposite page), generally “flying in the dark (without to access help for gambling issues, a good place to start with research instruments)” when it came to and that they understand treatment is to learn what evidence-based developing effective RGPG awareness is free, confidential and effective. We practices and standards currently messages. will continuously seek new channels exist in the field. I therefore did a That is why I was so pleased and methods of communicating that review of the scientific literature that the Oregon Lottery’s Stacy help works.” on effectiveness of problem and Shaw, Director of Corporate Social These two categories emphasize responsible gambling public Responsibility, and Laura Sofro, the need to address the continuum of awareness messaging and confirmed Research & Analytics Manager, were adults from those who play the lottery my impression that very little has willing to take the time to share their and gamble non-problematically to been published on this topic. While research on RGPG message testing. those who have serious gambling I am aware of anecdotal information Before describing this particular problems and may need professional from conference presentations and research project, it is important to help. personal conversations of how some note that the Oregon Lottery has lotteries have used focus groups and/ built RGPG into their Corporate Social Oregon Lottery RGPG Message or stakeholder feedback to develop Responsibility Charter under the Testing Research RGPG advertising, there has been little following two specific categories: systematic evaluation of the content Keep Lottery Entertainment, Before specifically describing of RGPG awareness campaigns. Entertaining. “The Lottery is the methods and findings of this Additionally, what information committed to supporting customers research project, I think it is important has been gleaned has not been in positive play behaviors … We will to highlight several aspects of the widely disseminated. Indeed, in my continue to evolve and enhance process involved in developing, preliminary review of the scientific our efforts to promote education, implementing and interpreting the literature, I found a grand total of awareness and understanding of results of this research that depict three studies in the past 15 years that healthy gambling choices, and core RG strategies. One thing that even began to address this topic. to provide tools that encourage immediately struck me about the

34 INSIGHTS JULY/AUGUST 2018 Key RG Research and Evaluation Guidelines Summary:

Lotteries are encouraged to:

Oregon Lottery’s evaluation of stakeholders in the treatment and • Develop a clear process their RGPG messaging was that recovery communities. for regular evaluation of this project brought together their An array of ads was presented lottery responsible gambling research, corporate responsibility in each session. Individuals who strategies and practice. and marketing divisions to work on exhibited moderate gambling this joint RGPG project. This clearly (gambled at least monthly, but • Consult with stakeholders demonstrates a commitment not weekly) were shown only the and experts to be informed to integrate RG considerations RG-focused ads. Those who were of evidence‐based best throughout the organization. classified as frequent gamblers Additionally, the inclusion of (gambled at least weekly), were responsible gambling practices RGPG stakeholder groups at the shown both the RG- and PG- and identify applications for beginning of the project was key focused ads. Those who were the lottery. to obtaining critical insights. It has classified as problem gamblers been my experience that often (based on recruitment from • Work with stakeholders stakeholders are involved in only treatment programs) were shown (including researchers) to share the final stages of research or only the PG ads. Several key insights lottery data (marketing, player marketing projects, which limits were derived from these focus demographics etc.) to inform the impact of feedback they can groups. RG and public awareness provide. Finally, RG expert input was included to assist in evaluating Recall and Impact of Advertising activities and initiatives. and interpreting feedback from all One positive finding was that stakeholder groups. All of these participants had been familiar with • Be informed and incorporate components combined to make the ads and were able to recall research on evidence-based this a model for RGPG research. much of the advertising that had RG practices into emerging Using an independent market previously been aired in the media. technologies/equipment and research firm, six focus groups Those individuals self-identified games. were conducted. Sofro reported as in recovery from a gambling that the Lottery was specifically disorder were especially aware • Include impacts of advertising interested in how individuals who of the advertising, but thought it messaging on at-risk or gambled non-problematically should be more “hard-hitting.” That as well as those who gambled is, they felt it should convey the vulnerable groups (individuals problematically would perceive devastating impact that a gambling at risk, experiencing or in RGPG advertising. Therefore, disorder can have. Participants recovery from gambling participants in the focus groups suggested feelings of isolation, problems). were recruited from either the being out of control, hopelessness, Lottery’s traditional player panels and loss of family, friends, job • Invest in and support (moderate and frequent players) or and financial stability should be research designed to inform from treatment programs. Those highlighted. RG programs and problem participants who were recruited The problem gambling group gambling resource awareness. from treatment programs had believed that people who have not completed treatment for gambling experienced gambling disorder This should include: disorder and/or were deemed by do not view it like other addiction - Impact and prevalence independent, qualified problem and mental health disorders. They surveys. gambling treatment provider felt people “don’t understand the - Awareness tracking. staff to be stable in their recovery. depth and darkness associated with - Effectiveness of awareness It is important to recognize that it.” However, it is also important messaging. obtaining participants in recovery to convey a sense of hope that was made possible as a result of the others can relate to and to decrease trusting relationship the Oregon shame. Furthermore, this group Lottery had built over time with key cited YouTube as a source they had

JULY/AUGUST 2018 INSIGHTS 35 ...within the smaller, focused sample of Oregonians participating in the RG focus groups, most participants expressed surprise that free treatment was available for gambling disorder.

used when considering treatment. also felt that it would be helpful to Considerations for Future They felt it could be an impactful provide more information about what Advertising vehicle for visually communicating the to expect once they reached out for depths of gambling disorder and how help (e.g., what happens next; a range What works: to get help. of resources/support – not one size fits • Keep it simple: use short, all; etc.). engaging and direct stories. Impact on Family/Friends • Convey the negative impact and This group also emphasized that the Demonstrating Practical emotional toll on family, friends message of how problem gambling RG Measures Works Well and the workplace, along with the affects family and friends has a strong Frequent and moderate gambling loss of valuable time. impact. This theme was consistently group participants confirmed that • Connect with the emotional a “hot button message.” While the highlighting the specific RG messaging desperation of addiction. Oregon Lottery already had messaging (set a limit on time, set a budget, • Take a more hopeful approach. on this theme, it was recognized etc.) across ads had resulted in a very • Use straightforward analogies. that there was more opportunity for high, widespread recall. Participants • Provide tangible strategies for emphasizing the loss of precious time recognized this as an effective tactic responsible gambling. with children and family. Targeting because it provides specific RG • Show widely relatable situations family and friends was seen as an strategies that most people can easily and convey “Oregon-ness.” effective approach because this relate to. • Capture initial attention through community is often influential in sound, visuals, relatability and/or helping a person with a gambling Be Careful When Showing pace. problem to seek treatment. Gambling Activity When gambling activity was a focal Things to watch out for: Treatment: Free, Confidential, point of the ad’s visuals, individuals • Involved stories or analogies that What to Expect who were frequent and recovering ask for too much concentration or The Lottery’s quantitatively robust, problem gamblers reported focusing time from the viewer. annual tracking survey conducted on the gambling activity rather than • A tone that is too light hearted. with a Census-proportioned sample on the RGPG message. They felt that of adult Oregonians found that 65 while briefly showing gambling in the • Humor that overshadows the percent are aware of free problem background or abstractly can provide message. gambling treatment services. However, important context that strengthens the • Action and voice-over that within the smaller, focused sample RGPG message, it is important to avoid compete for the viewer’s of Oregonians participating in the lengthy visuals of gambling activity. attention. RG focus groups, most participants expressed surprise that free treatment Media Considerations This RGPG research project not was available for gambling disorder. The Oregon Lottery’s current media only exemplifies critical elements Some didn’t even believe that it channels for RGPG advertising should of NASPL’s RG and Advertising was true. This certainly revealed also be considered. This includes TV, Guidelines, but also presents very an opportunity to find new ways bus, radio, outdoor, print and digital practical information for continuous to convey this critical message to advertising (including YouTube), plus improvement measures regarding segments most closely impacted by advertising on ATMs in bars and stores RGPG awareness messaging. Many this resource. where lottery tickets are sold. thanks again to Stacy Shaw and Laura Participants felt that the issue of Sofro and to everyone at the Oregon confidentiality was a bonus and helped Lottery for their dedication to putting address feelings of shame associated responsible gambling at the heart of with having a gambling disorder. They their organization.

36 INSIGHTS JULY/AUGUST 2018 United we can stamp out Fake Lotteries www.jumbointeractive.com [email protected]

JULY/AUGUST 2018 INSIGHTS 37 By Helena Pereira, Marketing Director, Szrek2Solutions

38 INSIGHTS JULY/AUGUST 2018 ooner or later you may need to explain the outcomes from your draws and deal with customer and stakeholder disbelief. Showing the proof of integrity is crucial for digital draws. Given enough opportunities, the seemingly Probabilities of Recurring Numbers impossible becomes plausible. The law of large numbers guarantees stable long-term results (e.g. the average of one billion tosses of a coin will be close to 500 Q1 Probability of 1-9-1-0 1/10,000 million heads), but it also allows for unlikely short-term occurring on a given occurrences (e.g. a string of 100 consecutive heads). day There are so many lotteries around the world drawing numbers each day that at some point we will come up Q2 Probability of the same 1/10,000 with a draw in which the random numbers will repeat number occurring on themselves on a proximate or consecutive day. Consider subsequent days also how our attention works and how our media functions: When something unusual happens, much Q3 Probability of 1-9-1-0 1/10,000 x more attention is brought to it. We do not write about repeating itself on 1/10,000=1/100,000,000 lottery draws having usual outcomes! subsequent draws Consider, then, situations when the same identical string of numbers replayed itself for a lottery draw. On September 6, 2009, the Bulgarian lottery’s winning Q4 Probability of ANY Using Wolfram’s numbers were 4, 15, 23, 24, 35 and 42. On September NUMBER occurring Calculation*, the end 10, the Bulgarian lottery randomly selected the same twice in subsequent result is .2534 winning numbers 4, 15, 23, 24, 35 and 42, although the draws over 8 years numbers appeared in a different order. “This is happening for the first time in the 52-year history of the lottery. We * For calculations of probabilities over time (Q4 in the chart), we are absolutely stunned to see such a freak coincidence, use Wolfram’s calculation of the probability of exceedance at but it did happen,” a spokeswoman was quoted as saying www.worframalpha.com. Three fields need to be filled, and these in a September 18 Reuters article that year. This “freak can be interpreted as follows: (i) Number of times exceeded is the coincidence” is actually the Improbability Principle at number of times the outcome occurs; (ii) Observed time period work. Lottery games are taking place regularly all over is the number of possible occurrences; and (iii) The prediction the world, hence creating numerous opportunities for time period is the number of draws or time period over which a numbers to repeat. Frequent lottery draws over time probability is estimated. To calculate the probability of the same allow for repetition of outcomes. numbers occurring on subsequent draws over the lottery’s eight- In Israel’s Mifal HaPayis state lottery, the numbers year lifetime, we estimate: i) “1” occurrence of a certain 4-digit drawn on October 16, 2010—13, 14, 26, 32, 33, and 36— combination entails ii) “10,000” different possible combinations were exactly the same as those drawn a few weeks earlier, (1/10 * 1/10 * 1/10 * 1/10), which iii) can be estimated over a on September 21. The North Carolina Cash 5 lottery draw period 2922 days (eight years). produced the same winning numbers on July 9 and 11, 2007. In 1986, when our founder, Walter Szrek, worked at GTECH (now IGT) there was a similar situation that what was the chance that any same number combination – not occurred at the : The same draw the specific combination – repeated itself in a short time period. outcomes for a 4-digit game repeated themselves (1- Leonard Stefanski made the same point in his analysis of the 9-1-0). The software director at GTECH asked what the North Carolina Cash 5 coincidence in the The American Statistician probability was of the same 4-digit number coming up (May 2008). His analysis would be of interest to readers with more twice in a row; one university statistician responded that mathematical inclination. it was a 1 in 100 million chance, because the probability For a given day, the probability of having a specific combination of this specific 4-digit number occurring twice was is 1 in 10,000. The probability of any 4-digit combination occurring 1/10,000 x 1/10,000. Walter reasoned differently, asking on subsequent draws is also 1 in 10,000 (the probability of the first

JULY/AUGUST 2018 INSIGHTS 39 draw combination occurring again). But what is the probability that this same number combination repeats on subsequent draws at least once during the lifetime of the lottery? In this case, the probability of the same number combination repeating itself was estimated at over 25 percent for the lifetime of the game (which was eight must be possible and must occur with question the legitimacy of the draw years old at the time). the same probability. and demand proof of integrity. The theoretical chances of The need to have fair outcomes Likewise, we should demand proof of repeated draw outcomes discussed has led to the practice of certifying integrity for every draw, even when above assume the ideal world, where electronic draw machines – testing the numbers do not repeat and “seem the draw devices used to generate random number generating systems random.” random numbers do not interfere and the data they generate to make with randomness and all possible Besides testing and certification, a sure that the outcomes display random reliable verification method needs to outcomes are equally probable. properties. However, certification Now, it is possible that mechanical be used to guarantee the integrity of only guarantees that electronic draw the electronic draw. More specifically, machines can have some differentially machines generate random numbers to prove the integrity of an electronic weighted balls and so all outcomes when they are functioning properly draw, a lottery needs to be able to are not equally probable. An infamous and when there is no interference, guarantee (i) that there were no example involved the Pennsylvania say from an intruder. Pre-and post- hardware or software errors and (ii) lottery scam in which insiders testing were introduced to check that managed to substitute some of the the hardware works properly during that there was no interference with the balls for heavier balls. Today, most the draw. However, it is possible that draw. To satisfy these requirements, lotteries adopt procedures in which both the pre-and post-testing produce the draw system must first fulfill some they verify the weight of mechanical results that “look random” without important design criteria, such as “only balls prior to and after a draw. In the actually being random. One example use a valid RNG seed and do not allow rest of the article we focus on repeat is that the results could come from a for the generation of outcomes from a numbers generated from electronic limited range of generated numbers, corrupted seed or defective hardware.” draw machines which are generally which could be a result of a system Furthermore, the lottery must also less transparent than mechanical draw configuration error (e.g. exclude 0s or be able to detect any intrusion to or machines. not allow for repeat digits). It is also manipulation of the draw system. possible that non-random results are Szrek’s Trusted Draw is one Electronic draws using RNGs caused by draw system hardware or example of a system that guarantees software errors or occur because of proof of integrity and provides full The industry has seen cases an undetected draw system seeding transparency into the draw. If the same in which the draw numbers were device reset. numbers were authentically drawn repeated because of hardware or Since we cannot tell if the draw twice, these types of systems can software problems, including Arizona, outcomes are random by observing prove their validity independently, and Delaware and Kansas. Hence, the them, we must always be aware that there is no doubt of the correctness coincidence of repeat lottery outcomes there could be a problem that is not of each individual outcome. On the needs to be viewed with more care visible. We should always verify each other hand, if the outcomes were when it comes to electronic drawing draw to make sure the results were invalid due to a hardware problem, machines. randomly generated, legitimate and software problem or insider fraud, The problems in electronic did not experience any draw system draw machines are not confined to problems or fraud. the system will immediately detect repeating lottery outcomes. Even if the As we look at repeat numbers that the anomaly. Lotteries using these numbers are not repeated, hardware occurred by chance, and other sets of types of independent systems will or software problems could result draw outcomes that were a result of a not experience draw problems due to in the draw results becoming non- problem or manipulation, we realize hardware/software glitches and will random, such that not all draw results that proof of integrity is the most not have any undetected fraud. They are possible or have the same chance important baseline the lottery industry will be able to show all stakeholders to occur. This is important because for can offer to the public. When we see that their RNG draws are correct and a game to be fair all draw outcomes repeat numbers in draw results, we valid.

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JULY/AUGUST 2018 INSIGHTS 41 1201 N. 4th Street, Watertown, WI 53098 | (920) 567-0333 | [email protected] | www.CMGlobal.com OKLAHOMA LOTTERY Big Bang Success in Oklahoma The Oklahoma Lottery’s ambitious strategy to relaunch its instant product paid off in FY18, with an 82 percent increase in instant sales and a 19 percent increase in profits to education.

By Patricia McQueen

ast summer, the Oklahoma $221 million. Importantly, revenues to Compared to the previous year, FY18 Lottery made an the Lottery’s beneficiary increased by sales of $1 games were up 40 percent; unprecedented move: Finally $10 million to $63 million, or about 19 $2 games were up 65 percent; $3 given legislative relief from percent. games were up 43 percent and $5 La crippling profit mandate, officials Those big numbers came while games were up 20 percent. decided to swap out the Lottery’s players were rewarded with 67 percent Good jackpots in the national lotto entire instant product line at once – average instant payouts in FY18, games also helped, and all draw games replacing all games with new ones compared to a paltry 57.6 percent the benefited from the “more winners” reflecting higher levels of payout. previous year. campaign. A year later, the Lottery – and the One key to the profit improvement state’s Education Trust Fund – are was a strategic effort to balance price smiling at the results. Instant ticket points, enhancing $1 and $2 price Prizes and Games sales were up 82 percent and draw points enough to offset the higher game sales were up 11 percent, for a payouts on the $3, $5 and $10 games While the entirely new instant total sales increase of 46 percent, to ($10 being a new price point in FY18). product line introduced in July 2017

42 INSIGHTS JULY/AUGUST 2018 had increased average payouts in order to go that route, no matter the across the board, the initial strategy brand. One seen to have potential is also focused on adjusting the prize “But after 10 Golden Nugget, from Alchemy3. The structures to deliver on the promise of years of bad Lottery will launch a family of Golden more winners. That meant a focus on Nugget games later this year. “We’re low-tier prizes. products, it’s just excited about that one and will be Another key change was to remove going to take doing some promotions” along with free tickets from the prize structures. the game release. “All of our price points had free tickets time. It shows we While sales were a slam dunk in before, and we knew players hated are moving in the FY18, there is more work to be done to them because our payouts were so win back consumers for the long term. low,” said Marketing Manager Brandie right direction.” Baseline research conducted before Reisman. For the most part, players the instant game relaunch wasn’t saw a free ticket as just another chance pretty – 84 percent of respondents to lose. were dissatisfied with their winning them back down again. “We worked so For FY19, prize payouts at each experience. “That’s a really high hard to get all these players back.” price point have been bumped up number,” lamented Reisman. “It Sales have been so strong that another one percent. That additional is going to take us a long time to prize money has primarily been added they’ve had the luxury of taking a few overcome that.” And sure enough, a to mid-tier chatter prizes – perhaps risks – to learn what works and what year later, new research showed only $50 prizes on a $2 ticket. This strategy doesn’t. For example, the release of a minor improvement. “But after 10 continues to build on the idea of “more Oklahoma’s first-ever $5 Crossword years of bad products, it’s just going to take time. It shows we are moving in winners” – now it’s even better wins game. “We had to make sure our sales the right direction.” and bigger wins. staff explained to retailers that this “We will continue to make product game probably isn’t for our typical $5 adjustments and increase where players – that it needs to be promoted All Out Advertising needed, and will monitor them to our extended play players” who are closely,” said Reisman. The last thing used to the $3 price point. Continuing to get the word out the Lottery wants to do is increase the As for licensed products, there with an ongoing advertising blitz will payouts too fast, only to have to drop needs to be a strong value proposition certainly help. After years without

JULY/AUGUST 2018 INSIGHTS 43 any television advertising at all, the quickly display winners as they would recent hire was an in-house developer Oklahoma Lottery made a big splash claim prizes. “We bought some to work on these projects – building back into the medium with the new backdrops and some props, just to the customer database, adding campaign. One big focus was on sports make a fun experience for our players.” modern features like ticket checking to – specifically during every live local Winner photos would be transmitted a very basic existing app and adding broadcast (on Fox Sports Oklahoma) to digital billboards – “John won the loyalty club. With all that going of the Thunder games. $10,000 ” – so no matter where on, and more in the pipeline, “it will The Lottery has had a sponsorship residents were, they would see or hear be more fiscally responsible for us to arrangement with the NBA team for winner awareness campaigns on all handle that from a staff perspective the past decade, so it was a no-brainer advertising platforms and social media. rather than contract out projects to to add TV ads to the mix. All of that combined to drive sales of vendors,” said Reisman. “Sports is one of the few things left all lottery products. All this activity has done wonders that people still watch live and can’t for Lottery staff. “It’s really exciting fast forward through the commercials,” for us. Rollo [Executive Director Rollo explained Reisman. That combined Keeping the Redburn] jokes about us now being with the strong brand and existing Momentum a ‘real lottery’ but he’s right. We were relationship with the team made it a a lottery in name, we had tickets, perfect place to advertise. The Lottery And Reisman is looking forward but our products weren’t even close even received additional spots, such to continuing the growth. Two key to industry averages on payouts.” as in a pre-game show or during laws passed this year will help the She added that with tremendous rebroadcasts, because of the long-term Lottery build on its current momentum competition from a tribal gaming partnership. “They really gave us a lot when they take effect November 1. industry in the state, it was tough to of added value with that buy, and that One allows debit cards to be used for compete for entertainment dollars helped us get the message out there lottery purchases instead of just cash. with such low payouts. “And now we as well.” “This is going to be a convenience we are competitive, even higher than Although the Lottery has always will be able to offer our players, which industry averages in some cases. We’re maintained a radio presence, some I think is going to be game-changing okay with that!” of the messaging changed with the for us.” The downside, if there is one, is new emphasis on winners. Rather The other law allows players to that everyone is very busy! “It has than longer spots on products or enter second-chance drawings via been a lot of work, but in a good way. I promotions, numerous shorter spots online means. The Lottery had been think everyone sees the opportunity.” were utilized for winner awareness – doing that years ago, until an Attorney And that includes opportunities for things like “John won $10,000 playing General opinion that such activity professional advancement and growth Powerball with the Oklahoma Lottery” constituted . Since within the agency. “We were running or “The Oklahoma Lottery has paid out then, all entries had to be sent in by lean for a really long time, and now we $xx this week.” Short spots that really mail. “Although I don’t see that as a big have plan going forward with a lot of call attention to winning – not limited initiative that will increase sales, it is at projects to support.” to just instant games – to go along least a step for us to engage with our with the new tagline ‘More prizes. current players.” More Winners. A Better Lottery.’ To that end, the Lottery is building “We really wanted to deliver on a player database platform to be ready that promise,” said Reisman. when online second-chance entries Additional winner awareness begin, and also anticipates launching campaigns came through digital a loyalty program at some point in media. For the first time, the Lottery the next year or two. To build a digital OKLAHOMA LOTTERY used digital billboards that could presence essentially from scratch, a

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JULY/AUGUST 2018 INSIGHTS 45 FOCUS ON: Technology- Driven Solutions

Technology can drive companies to work faster, smarter and more efficiently. While a common consensus is that lotteries lag other consumer industries in this regard, numerous recent initiatives are trying to move the industry forward. Key among them are in-lane sales, cashless acceptance, business analytics for better customer understanding, instant ticket management and digital marketing at retail. These topics and more are explored in the following pages.

46 INSIGHTS JULY/AUGUST 2018 Technology- Driven Solutions

JULY/AUGUST 2018 INSIGHTS 47 FOCUS ON: Technology-Driven Solutions

The Lottery Ecosystem Technology in all its glory drives the solutions lotteries seek in order to operate efficiently and to stay relevant to today’s consumers. By Patricia McQueen

echnology is the great enabler. data. We all need analytical skills in into the digital space,” said Terry It allows consumer industries our organizations to deal with all that Presta, Executive Director of the to move faster and smarter, to data. Marketing and IT teams have to , who has been leading understand their customers like collaborate like never before.” the NASPL Retailer Modernization never before through advanced Collaboration is the keyword of committee. He likens it to a railroad Tdata mining, and to meet those the day, and the lottery industry is infrastructure – “If we can hook up customers everywhere they exist. trying hard and has made significant enough stores nationwide, then all It’s what the lottery industry is advances despite its very nature – sorts of things can travel over this banking on to reach new or infrequent individual lotteries subject to the railroad.” It could eventually eliminate players at the point of purchase. It’s rules and regulations of individual the retailer’s need for a dedicated what will drive the development of jurisdictions. NASPL has been leading lottery terminal. “That dual system new products and player experiences. the charge in two major technology is a nightmare for retailers,” he said, It’s what will enable them to build initiatives the help address a big adding that the gasoline convenience relationships with consumers across industry problem – attracting large store industry was able to make a multiple channels. chain retailers that cross jurisdictional similar transition away from dual The question is, however, just how boundaries. Retailers that can’t systems years ago and never looked much the lottery industry needs to understand why, in order to sell lottery, back. do in order to catch up to what other they have to add a second system Successful companies are those industries – and their consumers – to their stores and why there is no that take the long term view, noted already experience and expect. consistency from lottery to lottery. Presta, and that’s exactly why the “Channels are proliferating and the The first NASPL initiative is the API effort is so important. “It took a power is in the hands of the consumer, XML Technical Standard, which seeks and all companies are struggling with to provide some of that consistency, lot of effort and capital to build the how to deal with that,” said Kathy including consolidated accounting transcontinental railroad, and 150 Stromberg, the Oregon Lottery’s reports. That continues to be a work in years later, we’ve still got product Corporate Affairs Officer. “It’s not progress. running over that railroad. It’s all about about us promoting our brands as The second is the NASPL Lottery taking the long term view to maximize much as them engaging us on their Standard API, the first version of which your success.” terms.” She pointed out that most was released a year ago. While the Just by getting into the retailers’ consumer companies were trying the API project is widely talked about EPOS, the API will give retailers more make this transition 10-15 years ago, in relation to enabling lotteries to control over the lottery category. so lotteries are that far behind when sell products in multi-lane retail “If they get more control, the best it comes to the customer experience. environments (see article beginning on retailers will sit around all day and “The customer journey is no longer page 56), it is much more than that. figure out how to sell more of our siloed – it has to be integrated, and “It’s really about getting into the product, instead of us trying to tell that has a big impact on technology retailer’s EPOS (electronic point of them to sell more product.” and how we structure and think about sale) system and then from there

48 INSIGHTS JULY/AUGUST 2018 Technology-Driven the oversight to make sure all of that project can be developed quickly comes together in a way that’s a highly in isolation and optimized to meet Innovation available solution with security and customer needs before being formally integrity.” launched and integrated into the While attracting more retailers The integration layer is what allows Lottery’s primary systems, often a more is critical to the lottery industry, AL to work with numerous vendors, to costly and time-consuming endeavor. equally important is attracting make sure all the pieces of the puzzle “Ten years ago, you would have consumers dazzled by a myriad of slick come together to deliver what the had to build a whole project end to experiences with other industries. customer needs. “From a technology end and then maybe find out a player “When we look at technology, perspective, the integration layer is the didn’t like it,” said Root. “Now we can we are not just looking at what is key to success.” make a lower investment and find happening with the lottery providers She emphasized that “the lottery out what players like and don’t like.” – we also are looking at what else is vendors continue to effectively Landry is proud of the Innovation Lab’s going on generally in all markets,” provide the complex systems that success. “We have a whole roster of said Kristin Root, Vice President, deliver lottery products with absolute initiatives we want to launch and we Information Technology, for the integrity, but we are augmenting the can’t wait to get them to market.” Atlantic Lottery (AL). What is the actual interaction with the players, Loto-Quebec is another customer experience at Starbucks, because the bar has been raised in organization that has established a at Walmart, at Amazon? Those terms of their experiences elsewhere.” corporate culture of innovation. Its experiences impact what people Along with its goal to find the Innovation and Business Intelligence expect from their entertainment best available technology is AL’s hub includes members from each options, including lotteries. “Right focus on innovations that also aim to of the lottery’s different sectors, and meet consumer expectations. AL has now the bar is being set by all the focuses on strategic surveillance, created its own Innovation Outpost, a experiences that our players are looking for new opportunities. “It has exposed to, and we are finding that the lottery providers aren’t always offering all of those experiences in their solutions.” “We want them to come along on this journey with To find the optional solutions, AL plays the role of the integrator us – to partner with us as we ask them to go faster, – putting all the bits and pieces to think differently, to offer more creative and together. By combining components from traditional lottery vendors relevant solutions.” with those from others – especially – Kristin Root companies specializing in web, mobile and retail technologies – AL gets the flexibility it needs to choose what is important. “It allows us to get at the team of six employees – outside hires allowed us to develop a common best technology to deliver experiences – housed inside a startup accelerator vision for strategy and innovation, that are relevant, and gives us the facility with other startups. “Their job making for coherent initiatives that flexibility and capabilities that we need is to build what we call minimum converge among sectors and foster to meet the experiences that players viable products,” explained Jean-Marc efficiency,” said Isabelle Jean, President are asking for,” said Root. Landry, Vice-President, Innovation and of Lottery Operations and Vice Before AL chooses any technology, Renewal. President of Public Affairs. there is one important first step. “We Projects are developed using the The new structure helps to better try to figure out what the problem is ‘build fast, build cheap’ (or ‘fail fast, fail understand market trends and we have to solve with the player in the cheap’) concept, using design thinking changes in customer behavior; to first place, then we look at whatever to move a project along with customer identify opportunities to collaborate solutions are available to us.” With interaction at every stage. Iteration with others; to increase efficiency a really big project, there might be after iteration, customers provide and convergence; to realize the 20 to 30 different vendors involved. feedback that allows the team to best most attractive opportunities; and to “We want them to come along on this meet their needs. “We have an agile identify and adopt best practices while journey with us – to partner with us front-end development team in our IT establishing innovation as a core value as we ask them to go faster, to think group, so we can really run sprints and throughout the organization. differently, to offer more creative and make changes quickly,” said Landry. relevant solutions. And we provide The beauty of this process is that a

JULY/AUGUST 2018 INSIGHTS 49 FOCUS ON: Technology-Driven Solutions

Data Driven Results employees so it becomes actionable,” “We can analyze that data for cross- said Edgar. jurisdictional insights.” For example, These innovation models rely Another lottery operator hoping with similar products, why would a heavily on data – perhaps one of the to build big things from big data is chain store in one jurisdiction have most valuable tools that the latest Camelot Illinois, which took over significantly different performance technologies provide. Taking that the private management contract than one in another jurisdiction? raw data from the gaming system of the Illinois Lottery in January. Its Finding those differences – and and running it through sophisticated new INTRALOT gaming system will exploring why they exist – may lead to business analytics software means be installed later this year. “The thing insights that would benefit all lotteries lotteries can understand their I’m most looking forward to is the big and their retailers. customers like never before. data platform,” said General Manager The Arizona Lottery hopes Colin Hadden. “Using the latest data innovation will help it meet its goal mining techniques and tools to market Cashless Taking Hold of reaching $1 billion in sales and effectively, to analyze how effective While not strictly a technology $250 million in returns to the state our programs are, and in some cases solution – although adding the option by the end of FY2020. A new gaming drive some one-to-one marketing to vending machines in particular system from Scientific Games will messages, building customer help, a new draw game called Triple engagement.” does require a technology upgrade Twist will launch at end of this year, “Content is king, but data is the – cashless transactions have the and the Lottery developed its own empress,” said IGT’s Paul Riley, Vice potential to transform the lottery in-lane solution called QuickCard™ that President of Innovation and Lottery industry. It’s about time, considering Executive Director Gregg Edgar hopes Transformation. “Data is what drives that fewer and fewer consumers will provide a solid revenue source. our business.” And that means carry cash, which has been the (For more on QuickCard, see the article providing data to retailers as well as to historical medium of choice for lottery beginning on page 56.) Sports betting lotteries’ product, retail and marketing purchases. Most lotteries are now able could be in the mix if the state can teams. IGT has been aggregating to accept at least debit cards for lottery come to an agreement with the tribal retail lottery data from more than two purchases; Oklahoma is the newest casinos. dozen lotteries across the country lottery to add that option, with a new Because of the nature of the lottery – not all of them IGT customers – in law taking effect in November allowing industry – lotteries don’t compete its Retail Market Insights program. the use of debit cards for the first time. with each other – information is freely shared and Edgar has been taking advantage of that. “We have been very aggressive in our outreach to other states, trying to learn from them, including how they approach the development of new products,” he said. “There are some fascinating opportunities out there.” Above it all, data will be key. Looking for a fast way to implement a full-featured business analytics program even before a new back office system was installed, the Lottery chose Qlik to help it make data-driven product solutions. “I really feel that it has transformed the way we look at our products,” said Edgar. The web-based system can drill down to ticket-by-ticket results in realtime and is accessible by every employee. Lotteries know they have the data, The added a cashless payment option to its vending machines last winter, but the key is “taking that data and retrofitting more than 7,200 machines statewide. putting it in the hands of the front-line

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FOCUS ON: Technology-Driven Solutions

In some of the early adoptions has had a retailer incentive program in from the appropriate vendors,” said of cashless transactions, Riley noted place for several years that encourages Director of IT Paul Mandeville. After that there is evidence of an increased retailers to go cashless. To participate, all, he explained, the retail agents number of transactions and larger retailers must first meet the sales and are the Lottery’s customers. “If one transactions. “We are seeing what we other goals specified in the Lottery’s agent wants a certain type of terminal, anticipated – adoption by consumers quarterly incentive program. If they we want to be able to provide that” of cashless, and the right-size meet those goals, they are eligible no matter which company makes it. transactions that make it economical for a one percent bonus commission Agents might want a smaller footprint for the lotteries to offer it” in the first on sales; if they meet those goals and terminal, for example. Others might place. accept noncash payments as well, want a larger screen to make it In the largest single project to they receive an additional one percent easier to use. A wide screen terminal date, the Ohio Lottery added cashless bonus, for a total of two percent. display may work better in certain payment options to its vending At this writing, roughly 47 percent environments than a more traditional machines last winter, retrofitting of the ’s 10,600 aspect ratio. Within reason, the Lottery more than 7,200 machines statewide retailers accept noncash payments. wants to accommodate those needs, in a very short period of time. They An interesting statistic is that during and it might mean shopping around. include traditional ITVMs in grocery its current fiscal year (ending 9/30/18), But Mandeville has found the stores and similar retail environments; year-to-date sales among retailers process to be quite difficult – it’s not different types of interactive touch accepting noncash payments are up like simply having different devices and play machines primarily in the bar, 8.2 percent; compared to an increase and loading a device driver for each tavern, and veteran and fraternal hall in sales of just 1.3 percent for cash- one. Each company has developed its environments; and machines primarily only retailers. “Our view is that those products to work with its own systems deployed in bars and taverns for keno figures reflect what’s going on in the and there is no standardization across and other games. world in general, in that there are vendors. He credited the companies The machines accept debit more and more people who prefer to on working with the Lottery and and credit cards, plus Apple Pay use cashless,” said Director of Public with each other to make it work. “It’s and Google Pay. After 35 weeks Relations Jeff Holyfield. That said, complicated, but it is something still of operation, cashless methods of because Michigan’s cashless incentive worth doing. The world is changing payment were proving most popular program is combined with a sales and the customer should be able to on traditional vending machines that incentive program, it’s likely also true choose. I think it puts us in a better dispense instant tickets. The Lottery that those retailers going cashless are business, financial and technology originally planned to install all the stronger performers in the fist place. position.” devices first, then activate them as a One thing that surprised group once they were all installed. As A Different Model Mandeville to some degree is how they went along, they learned it was the vendors’ terminals are hardware best to install and activate the devices The Massachusetts Lottery knows specific. “If the world is going to on the same day. all about strong performance – its internet wagering, why aren’t the The only difficulties involved some retailers sell more instant tickets terminal applications a little bit more reporting challenges due to the timing per capita than any other lottery. software-centric than hardware- issues with the payment processor, It has done so with seriously aging centric?” Once everything is up and and the adoption of MCC code 7800 technology, something that is running in Massachusetts (the new IGT by financial institutions – a small currently being addressed. You see, central system should be ready next percentage of purchase have been Massachusetts is in the midst of a year; about 75 percent of the terminals declined or improperly treated as cash massive technology replacement have been replaced to date), he hopes advances. “We still need to resolve all project, one it hopes will set itself up to find ways to reduce that reliance issues to execute the best program well for the future. Currently the only on agent hardware. “Why not run for our players,” said Ohio Lottery American lottery that still owns and the system on a tablet, on a browser, Director Dennis Berg. “The hardest part operates its gaming system, one of the within a cash register or other point of is behind us, and now we can focus goals for the project is to segregate the sale device?” on future strategies to improve our gaming system itself from the terminal And speaking of online wagering, customers’ cashless experience.” hardware at retail. he anticipates that will come to Recognizing the importance of “We want to be a little more flexible Massachusetts eventually. “The accepting noncash payments for and nimble, and have the ability internet will change everything and lottery tickets, the Michigan Lottery to pick and choose what we want we want all options available to us. The

52 INSIGHTS JULY/AUGUST 2018 Montenegro NASPL 2018 July August_Print.pdf 1 6/26/18 4:19 PM

JULY/AUGUST 2018 INSIGHTS 53 FOCUS ON: Technology-Driven Solutions

will deliver value and ultimately profit back to the citizens of Oregon if it is “Imagine what society was like just 11 years done well.” A big problem as he sees it is ago, before the iPhone launched in 2007.” that it is typically not easy to get the traditional lottery system vendors to – David Oh work with each other directly – as the Massachusetts Lottery discovered, their ecosystems are designed to work best with their own products new technology hopefully allows us organizations are challenged to adapt.” and only their own products. “What to do whatever we want to do in the Now, things move fast – successful we are looking at is to potentially future – things that we haven’t even companies integrate everyday life with have a neutral integration layer that thought of yet.” the digital world, and there’s instant can talk to any number of vendors access to everything. “The challenge independently,” explained Allahdadi. that companies face every day has “I couldn’t really care less about Seeking Technological nothing to do with the technology, technology,” said Allahdadi. “It is but how they as organizations adapt Clarity what the technology delivers that is their own way of operations to be important. Our philosophy is to put able to take advantage of these new The Oregon Lottery is in the midst the customer first, and right after that of a strategic planning process that technologies.” is being digital-minded.” And digital seeks to explore the possible paths it That is what the Oregon Lottery is isn’t just online and mobile content can take with respect to technology trying to do. “[It] is trying to implement and player interaction, it’s everything initiatives, from conducting business a private sector methodology inside from digital POS material to vending as usual with a single lottery vendor of a public sector organization,” machines with digital displays. to exploring other alternatives with explained Oh. “It’s about how to get a “It’s a way of enhancing the player varying levels of insourcing. The customer-first mentality, how to bring experience.” Lottery engaged Gartner Consulting in marketing, analytics, technology and He’d like to keep players engaged to help it through the process, to gain digital expertise to really understand by having player accounts that a broad perspective of the technology what the customer journey needs to connect through any channel – using that’s available. “We wanted to learn be.” a kiosk in a retail location, or Bluetooth what the similarities are between Oregon has looked intensively at to access an account within a store, the lottery business model and other the Atlantic Lottery, primarily because or using an account while playing consumer products and entertainment of similarities with the product mix. a VLT, or sending VLT winnings to business models,” said Oregon Lottery That, plus their online, mobile and buy Powerball tickets. “Those are the Chief Gaming Operations Officer sports betting experience, means they kind of whiz-bang things that are Farshad Allahdadi. “Especially business are in a space where Oregon hopes to interesting to me. Whiz-bang things models that are based on mobile and go. always have to serve that strategic mobile transactions.” “What we have learned is that purpose of player convenience and the “Technology is so pervasive in there is some core development and experience that it delivers.” society now,” said David Oh, a strategy core architectural work that lotteries The biggest benefit to lotteries if consultant working with Gartner have to retain; we can’t outsource Oregon is successful in challenging and the Oregon Lottery, who had everything,” said Allahdadi. He doesn’t the current paradigm is speed to previously guided the Alberta Gaming know where the exact mix will end market. “If a company can build & Liquor Commission to its own digital up, but he knows the Lottery should that integration layer for a lottery, it technology transformation. “Imagine own the systems architecture and the can essentially become a common what society was like just 11 years ago, data, and should own and manage platform that can be leveraged by before the iPhone launched in 2007. the technology integration. “These other lotteries as well,” said Oh. “That The digital world wasn’t available to are the core pieces of this evolution core platform allows the creation us as easily as it is today. In the past, that you just can’t farm out and still of a complete digital presence, as organizations innovated linearly, retain the optimal management of every piece of technology from there innovating by building on what they the lottery. They are skillsets that we forward plugs right into that platform.” had. Today, we are living in a world need to develop over time. We have to All of that brings speed to market, where change is exponential and position this as an investment, that it which in turn leads to new choices

54 INSIGHTS JULY/AUGUST 2018 Integrating Sports

t’s no surprise that Arizona, Massachusetts and Oregon – and almost every other U.S. lottery – are all thinking about sports betting. After all, lotteries are well positioned of games and experiences. “As the to add sports betting to their product lines, something that suddenly became lottery has more organizational possible when the U.S. Supreme Court declared the Professional and Amateur Sports capacity to do things, it will start to I Protection Act unconstitutional in early May. get into the world of more creative “It already feels like a year ago,” said Charles Cohen, IGT PlayDigital Vice President, and more interesting product Sports Betting. “There are states talking about legislation today that we never even categories that don’t even exist imagined would be thinking about it. It’s pretty clear already [from the limited today,” said Oh. experience in New Jersey] that there is real demand for this amongst the public, and there’s no reason to think that lotteries can’t, or shouldn’t, or couldn’t, capture some of All About the Customer that action.” Lottery systems that are capable of handling millions of transactions in a matter of What all these experiences minutes should have no problem with sports betting, admittedly a complex product of boil down to is that technology is its own. But unlike a lottery system, where there might be two or three dozen “events” the great enabler. Investment in a week (lottery draws), in the sports world there could be hundreds or thousands of technology provides the biggest possible bets at any given time. Each of those have to be offered with 100 percent potential in the “integration of our accuracy, in real time. Just like traditional lottery products. traditional lottery retail world with One challenge is more from a financial perspective – accounting rules to handle the online world,” said Walt Eisele, situations where there may be parlay bets on events that could take place a few weeks, Chief Technology Officer, Lottery, or even months, after the initial bet was made. Revenue recognition and other issues for Scientific Games. “Being able to “are the sort of multi-faceted details that sports betting platforms are designed to responsibly bring lottery products solve,” said Cohen. “You will need the right accounting rules.” and experiences into interactive Exactly how sports betting will progress across the country remains to be seen. channels is key, and tying those Nick Papadoglou, INTRALOT’s Vice President and Chief Commercial Officer, thinks that worlds together is really where self-service machines will do very well with the product. After all, the U.S. has a strong technology plays a key role.” tradition of sports bars and pubs, unlike many European countries where there may That goes back to the consistent be betting parlors or a strong online presence. For potential players who want to stay experience across channels, whether anonymous, who don’t want to register for online or mobile play, self-service machines it be products, sales, second-chance offer a convenient way to make a few bets. “As we have seen in other countries, drawings, etc. not everyone wants to [register].” Self service will help open the market, and will be He encourages lotteries to invest successful “because of the nature of this country and its culture.” in that interactive world, even if it Because there are all those possible bets, lotteries need to make sure they starts with something as simple as understand what players they want to attract and what value propositions to offer a second-chance entry mechanism. those players, advises Walt Eisele, Chief Technology Officer, Lottery, for Scientific “It allows lotteries to interact with Games. And whether a lottery decides to offer sports strictly through online and/ players in a very relevant way; it’s or mobile, at specific venues, across the entire retail network, or a combination of good for player engagement; and the three, there are “some really cool experiences lotteries can provide players with it starts to build that database of right now that can be integrated with their existing systems technology.” They can information” that is so valuable to encourage sports bettors to try traditional lottery products for the first time. “Sports every consumer product category. will help lotteries grow to the next level from the perspective of touching a new type And through it all, lotteries of player - I guarantee there will be new players enjoying new types of products and need to “start from the customer contributing to worthy causes.” experience,” said Nick Papadoglou, For those lotteries that may not be ready for full sports wagering, or whose INTRALOTS’s Vice President and jurisdictions aren’t quite there yet, there are other products such as Inspired Chief Commercial Officer. “You need Entertainment’s virtual sports packages or EquiLottery’s unique products. The latter to think about what the consumer take live sporting events – initially horse racing, with a pilot of Win Place Show wants to do and how that consumer scheduled with the next spring – and turns them into a game of wants to do it.” While he’s a big chance. Selections are made by RNGs and the “draw” is the live sporting event. “There advocate of the NASPL Lottery are still games of chance players who don’t want to learn all the statistics, the point Standard API for in-lane sales and spreads, etc.,” said Founder and Chief Executive Officer Brad Cummings. The NASPL beyond, there also needs to be Lottery Standard API, if it gains traction, would help more easily integrate these types multiple solutions to satisfy not only of new products into a lottery system. And he’s marveling at the possibilities of turning the consumers, but the retailers on major sporting venues into lottery retailers – how many people attending a NASCAR which the industry depends. “There event at the Kentucky Speedway, for example, might pick up a ticket at the event to is no one size fits all solution.” take their chances? “I think maybe we’ve stumbled onto something here.”

JULY/AUGUST 2018 INSIGHTS 55 FOCUS ON: Technology-Driven Solutions

In-Lane Inroads Several in-lane solutions are in play, or soon will be, around North America, solutions that could potentially capture a whole new group of impulse lottery players. By Patricia McQueen

merican lotteries are starting driven the highly successful gift card they think the consumer will like the to make progress with in-lane industry; initial programs are being best, and there’s nothing wrong with product offerings on several fed through the Blackhawk and/or trying different solutions.” Afronts. A great deal of work InComm networks. The British Columbia Lottery has gone into developing the NASPL These efforts should not be seen Corp. pioneered in-lane sales in Lottery Standard API, which enables as competing, noted Kansas Lottery North America when it launched lottery integration into a retailer’s Executive Director Terry Presta, who Lotto Express in 2012. The program point of sale system. Other solutions has spearheaded the NASPL API effort. provides light and moderate players a are utilizing the technology that has “Lotteries should determine which one convenient purchase option as they go

56 INSIGHTS JULY/AUGUST 2018 PGRI Lottery EXPO NYC PGRI LOTTERY EXPO 2018 • Conference Info & Details: www.PublicGaming.org OCTOBER 22-24 • News website: www.PublicGaming.com Manhattan, New York City • View vide-recorded presentations: www.PGRItalks.com Park Lane Hotel on Central Park South • e-mail: [email protected] Lotteries Reshape the Games-of-Chance Industry • Monday October 22, 5:00pm: Opening Night Reception • Tuesday October 23: Conference Sessions followed by Reception • Wednesday October 24: Conference Sessions conclude at 1:00pm, followed by Lunch and Reception

Why do we do what we do – as an industry and also as individuals who are The theme of dedicated to supporting the mission of Lottery. That basic brand-defining question the conference is: will serve as a catalyst for exploring ways to shape the image of Lottery not just with our players and close circle of supportive stakeholders, but with legislators, What’s general media, general public, and the broadest possible audience. YourWhy? Sports-betting: How will it affect the broader games-of-chance industry, how will it impact Lottery in particular, and what should we do about it. More to come as we confirm the speakers and clarify the program. We hope to see you there!

Visit PublicGaming.org for updates and conference info PUBLIC PGRI GAMINGGAMING JULY/AUGUST 2018 INSIGHTS 57 FOCUS ON: Technology-Driven Solutions

through the grocery checkout lanes of and the seamless experience Fusion platform from Abacus Solutions their favorite stores. There are currently for players continues to drive International Group; it will integrate 11 participating grocery chains, overall lottery sales growth at the the Lottery’s new Scientific Games offering a total of nearly 2,100 lanes at participating retailers. gaming system with the retailer’s some 260 individual stores. Ontario Lottery and Gaming new Electronic Point of Sales system Players can choose from Canada’s (OLG) is currently implementing Lotto (EPOS). The trial is anticipated to begin two national games, Lotto 6/49 Express as the multi-lane solution sometime next year, after the retailer and Lotto Max, with or without for Loblaws banners; another in-lane upgrades its EPOS. the add-on Extra. In each checkout product for OLG is Quick Ticket, the While there are other in-lane aisle, consumers simply tear off a preferred solution, which is a pre- solutions either in market now or in purchase slip/voucher for the game printed ticket that is activated by the the works, the API solution has certain of their choice and a quick pick ticket Blackhawk Network and retailers’ POS advantages. “If you go with the API, gets added to their purchases. The system. More on Quick Ticket later. you can print the lottery ticket on plain consumer may also simply request a receipt paper,” said Presta, indicating ticket from the cashier. In either case, that’s the only in-lane solution where the tickets are printed on a secure API Just the Beginning that is possible. intelligent printer using special lottery- But in-lane is just the tip of the specific paper that doesn’t fade. The Presta, a former retailer, has been iceberg when it comes to utilizing printer is the only extra hardware spearheading the NASPL API effort, the API. “I try to stress that people required; Lotto Express integrates with which culminated in the first version shouldn’t get fixated on this as just the retailer’s software, so the tickets released last summer. Since then, the an in-lane solution. It’s really about are sold through the regular retail API working group has been trying to getting into the retailers’ EPOS” and register. retail chains for beta testing. In June, eventually eliminating the dedicated Digital jackpot signage was added the Kansas Lottery announced it will lottery terminal. “And if we ever want to the checkout lanes beginning in launch an in-lane trial in supermarkets to get into the big box retailers who 2015, enhancing consumer awareness, using the API together with the Abacus are way past the lanes, like Amazon

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“The software knows what to do when a lottery ticket gets scanned.” – Brendan McCarthy

up a Lottery Card of their choice in the checkout lanes of these retailers; available are Powerball and Mega Millions quick pick options in $10 and $20 denominations. An 89 cent service fee that covers financial network costs is added to the purchase. Requiring virtually no new IT integration, since it uses the stores’ existing Blackhawk interface, and others, we need to be in the digital space with them with an API the Lottery Card is activated by the purchaser by no matter what the distribution method. That’s why the API effort sending a text message with the card’s code. The is so important. I think it has the most potential success in the long quick pick numbers for the next drawing are then term.” sent automatically to the player’s phone; everything Brendan McCarthy, Head of Sales, North America, for Abacus, is done electronically. Low-tier prizes are paid thinks the biggest potential for in-lane sales will come from automatically through PayPal. “reaching non-involved customers during a big lottery jackpot, Linq3 is working with these retailers in the where it’s an incidental purchase. It could become very big, because development of comprehensive integrated there are a lot of people who are never presented with lottery.” He marketing plans designed to apply the best practices noted that an API-enabled transaction requires no service charge of retail marketing to lottery products. “Lotteries and no player registration to complete the play. “That’s the way we have never really benefitted from that in the past,” think it should be as an industry.” noted Chief Marketing Officer Mark Smith. The five The other main goal is to attract retailers that lottery isn’t serving key areas are product placement; product signage; today. Presta noted that Dollar General has been talking about possibly getting involved through an API effort also involving the gift card process. “For Kansas that’s a big deal, and we are talking with them as well. They have 256 stores in Kansas, and we have a hard time adding new stores.” Across the country, Dollar General has more than 14,000 locations in 44 states. “That’s a big one not selling lottery right now.” McCarthy believes the industry just needs to keep reaching out to different retailers. “The API does require a little bit of work by the retailers,” and that can make it difficult, but it will be worth the effort. Abacus has focused on completing integrations with the EPOS systems themselves – Toshiba and NCR dominate the EPOS landscape in America. “We are already in the latest Toshiba system, so lottery is already built into the EPOS; it just has to be optioned and configured. The software knows what to do when a lottery ticket gets scanned.” He added that Abacus is still working out details with NCR.

Lottery Card Goes Live

While the API is still a work in progress, some of the alternative solutions are up and running. The gift card concept from Linq3 using the Blackhawk Network launched two pilot programs in July, one in Georgia and the other in Ohio. Participating retailers include Target – lottery’s first inroad there – and grocers such as Kroger, Publix and others. Players pick

60 INSIGHTS JULY/AUGUST 2018 JULY/AUGUST 2018 INSIGHTS 61 FOCUS ON: Technology-Driven Solutions

in-store marketing (including signage in other areas of the store); promotion (staff incentives, fuel point programs, coupons, etc.); and digital marketing. The latter, which includes database marketing and social media, “is a huge asset to lottery,” said Smith. The Kentucky Lottery should be the third to offer the Lottery Card with an expected October launch, and President and Chief Executive Officer Tom Delacenserie is excited to be working with Kroger and to benefit from the chain’s “world-class marketing package” for the product. In fact, it was Kroger that initiated the conversation with Delacenserie; for them it made sense to add Kentucky stores to the program since the company’s headquarters is in neighboring Cincinnati. Kroger currently sells Kentucky Lottery products at its customer service counters and through vending machines. “I’ve been a fan of in-lane sales for a long time,” said Delacenserie, who is looking forward to the Lottery Card launch. He’s also a big supporter of the work NASPL has done on the API standard and hopes that will fall into place before long as well. “My whole goal is to get in-lane, and I don’t think you can give the consumer too many choices. At the end of the day, the consumer will decide what is preferable.” He added that lottery is one category that will actually bring consumers into a bricks- and-mortar store. “The more we can offer to retailers and the more attractive lottery is to purchase, the more people we can actually bring into the store and it’s a win-win for everybody.” Although Smith thinks the Lottery Card as currently implemented is the sweet spot because it involves the ubiquitous mobile devices in everyone’s pocket, the company is developing an alternate version that doesn’t require the mobile element. “It will be sold the the end result of an RFI for in-lane ten boards with quick pick numbers same way, through the gift card rack, but it will services that the Lottery issued already populated on the card. The meet legislative requirements in jurisdictions last December. “We wanted to consumer takes the card off the where the mobile element isn’t allowed.” get a better understanding of in-lane display and it is scanned at the vendors’ capabilities,” said the register, activating the numbers Executive Director Gregg Edgar, for the next drawing and turning Arizona’s Own Creation adding that the responses provided it into a bearer instrument. Initially the Lottery with a lot of information. Powerball and Mega Millions An in-lane solution without a mobile “What we learned is that we QuickCards will be offered, but phone requirement – which was deemed needed the simplest solution Arizona’s own lotto game, The Pick, to be a violation of Arizona law – was the possible, so we developed the could be added at a later date. driving force behind the Arizona Lottery’s QuickCard,” said Edgar. It will be The Lottery is working closely development of QuickCard™, for which it a standalone card resembling a with MUSL’s security and integrity has applied for a U.S. patent. The product is scratch ticket – latex covers five or committee to ensure that the

62 INSIGHTS JULY/AUGUST 2018 HOW DO YOU BUILD TRUE LOYALTY AND ENGAGEMENT FOR YOUR LOTTERY?

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card maintains MUSL’s high security player, simple for the retailer and easy The grocery industry cites statistics standards. The card has the same for the Lottery.” He thinks the concept that only five percent of grocery trappings as a regular Powerball or can be applied to instant tickets as shoppers ever go to the customer Mega Millions ticket, but blends the well. service counter, so only five percent added security of a scratcher ticket and There are $10 cards (five plays) and of their customers have seen our the gift card network that is utilized. $20 cards (10 plays), each good only product. It seems straightforward that “Our efforts are focused on for the next drawing. The Lottery will if we can get to where 100 percent of developing an extremely secure absorb the network fees, thinking that shoppers see our product, we will get a product that will ease the purchase sales volume will make it worthwhile. significant sales lift.” process for players at grocery.” The Lottery has a commitment with In baseball parlance, said Edgar, The goal is for the cards to Fry’s, an Arizona supermarket chain “We’re not focused on home runs, but use whatever networks exist at a (a division of Kroger), and Albertsons. rather on solid singles and doubles. participating retailer, whether it be Similar to Georgia and Ohio, Edgar We expect in-lane sales to be a solid Blackhawk, InComm, Abacus or in the hopes to launch with Target through double.” future the NASPL Lottery Standard Blackhawk’s connection. And because API. Edgar thinks that ultimately the the Lottery just started adding vending Ontario’s Quick Ticket API will be adopted by lotteries and machines at Walmart Supercenters, he retailers across the country, but “we also would love to offer QuickCard in Yet another product has been cannot wait for the establishment of addition to vending there, but much rolled out in Ontario. In addition to that in-lane groundwork. The reality more work is to be done to secure that offering BCLC’s Lotto Express in-lane is that the Blackhawks and InComms relationship. system at Loblaws, as noted earlier, of the world are decades ahead of us Edgar is pushing to launch OLG also launched Quick Ticket at in getting their APIs developed, so we QuickCard this fall, preferably in several key account banners, its own need to buy that capability now.” time for the “fall reset” – when stores version of a card using the secure Edgar is actually glad that Arizona gear up for the holiday season in late Blackhawk Network. OLG had a had to find an alternative to the September/early October, though defined balance gift card product at existing in-lane offerings. “It forced security will be the first priority and many of its key accounts, and “our us to look at it and simplify the the launch may be delayed until late new business development team whole process. All the solutions we winter. saw the opportunity to leverage the were offered with our RFI were too “I think the potential for QuickCard relationship that Blackhawk already complicated for us. We needed a paper is huge,” said Edgar. “Lottery is an has with those stores with this new ticket. QuickCard is very simple for the impulse buy for a number of folks. product,” said Adam Caughill, Director,

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Business Development, for OLG’s [in the lanes] prompts people I think there are a lot of ways to do that. At the end Lottery Sales & Marketing group. to start thinking about it and to of the day we are selling a draw ticket; you can spice Quick Ticket, which started act on it, before they get to the it up with a little bit of marketing or provide extra rolling out in Metro and Food moment of truth” as they pass a messaging to the customer at checkout. All those Basic grocery stores in June 2017, kiosk or service counter. things could really help propel this into something is essentially a pre-printed ticket Quick Ticket is on a positive meaningful.” that is displayed underneath trajectory, and OLG is certainly “Anything we can do to be more conformant or jackpot signage in each checkout pleased about that. “Every time make our products simpler for retailers is huge,” said lane. The customer takes a ticket we see positive results we are Paul Riley, IGT’s Vice President of Innovation and and presents it to the cashier very happy,” said Anderson. Lottery Transformation. “We have a complex product along with other purchases. “Because this type of expansion offering, and it’s a whole separate infrastructure – it “Scanning the ticket activates it, is a necessity for our business to lives outside of everything that they do. Initiatives and the numbers associated with grow and reach new players.” like the NASPL standard API and selling in-lane are that activation are printed on transformative, however it takes place.” the customer’s grocery receipt.” He added that the Linq3/Blackhawk solution The actual ticket, however, is Fun and simple that has just recently been deployed in Target stores still the live lottery ticket which is a significant step forward for the industry. “It’s became activated once scanned. Industry vendors would important because it ties into this general trend, and The customer’s lottery numbers agree, and have worked long and it’s already integrated into their point of sale.” can also be retrieved using hard on the API project, and are “We need to keep it simple for the consumer,” the terminal, the app or the still waiting for the industry to added Nick Papadoglou, INTRALOT’s Vice President customer facing website noted embrace the technology. They on the ticket. The two product see the potential. and Chief Commercial Officer. Any solution should be offers currently available are “In-lane sales can attract explored through the consumer’s eyes, and should single-draw Lotto 6/49 and Lotto new players who don’t want to keep things fairly close to what they are used to, Max, each with the Encore add- go stand in line at the customer or there won’t be any adoption. Older generations on, at a price of C$4 and C$6, service counter to buy lottery are likely more comfortable having paper tickets, respectively. products,” said Walt Eisele, Chief while younger consumers are probably happy with Interestingly, the jackpot Technology Officer, Lottery, for an electronic ticket of some sort. Papadoglou noted signage in each lane for the two Scientific Games. Many people three methods of in-lane sales are currently offered in national games has triggered want things to be “quick and Ireland, including using a small footprint POS device sales increases for OLG’s other frictionless, and unless there’s that sits next to the store’s register. When coupled products at the customer service a perceived value to them, they with a jackpot sign, the customer knows to simply counters and kiosks in the stores. generally won’t do it.” But if they ask for a lottery ticket; instant tickets can be sold this “There’s an insight there,” said think something looks like fun, way as well. “At the end of the day, you have to have Dante Anderson, OLG’s Director, they might do it. “There needs multiple solutions” so the retailer can choose what Lottery Marketing. “The signage to be a cool factor as well, and works best in their stores.

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JULY/AUGUST 2018 INSIGHTS 67 Please contact NASPL Headquarters if you have any questions at [email protected] or call 440.361.7962 SEPTEMBER/OCTOBERNovember/DecemberMarch/April 20172018 INSIGHTS 1 FOCUS ON: Technology-Driven Solutions

Instant Delivery America’s leading lottery product line presents a number of operational challenges, but lotteries and their vendors continue looking for ways technology can help mitigate those challenges. By Patricia McQueen

nstant tickets are instant only from the players’ perspective; after all, they just want the prize, and they Iwant it now. For lotteries and retailers, the instant product line is labor intensive and not easy to sell in many types of venues. Inventory has to be managed and tickets actually need to be in the dispensers so players can see them. Efforts to sell lottery products in-lane (see story on page 56) have primarily focused on draw games, yet instant games in the United Stakes accounted for 64 percent of traditional lottery sales last year. Advancements in vending machines – including sleek new Wouldn’t it be nice for a consumer sales to a whole new level. For the models and cashless capabilities – can to just pick up a couple of instant first time in the lottery industry, certainly help instant ticket sales, and games when going through the there is unit-level technology that they offer other products as well. They grocery or big box store checkout provides inventory control, security, can introduce lottery into new trade lane? Certainly. “But the reality is that merchandising and simplified styles, like the shorter models recently there are concerns around security accounting functions for retailers, designed for the Walmarts of the and integrity of the instant product,” while adding customer-friendly world. But there must be more. said Walt Eisele, Scientific Games’ Chief features that, depending on the There’s no doubt that a critical Technology Officer, Lottery. “Retailers options selected by a lottery, can need in the lottery industry is to grow can’t allow customers to have access to speed the consumer purchase and the player base in order to sustain a ticket without purchasing it, even if even offer the ability for a player to the growth lotteries have enjoyed it’s not active.” “advance order” the specific games for decades, much of it driven by desired before even getting to the the instant ticket product line. “The retail store. player base is flat, and you can’t keep Innovation with SCiQ For lotteries, the system provides a growing sales from the same player wealth of data never before available. base,” noted Doug Pollard, Co-Chief Enter Scientific Games’ impressive “When I was with the Executive Officer of Pollard Banknote. new retail technology called SCiQ™, five years ago, there was always the “You have to find new ways to reach introduced at the NASPL conference question of how to figure out sales,” new people, and technology can help last fall. An intelligent instant game said Randall Lex, Scientific Games’ Vice with that.” ecosystem, SCiQ takes instant game President of Retailer Solutions. After

68 INSIGHTS JULY/AUGUST 2018 all, there are activations, shipments, settlements and validations. Some chains prefer to activate and settle at “SCiQ is a very modular and flexible system the same time. “SCiQ solves all of that.” to adapt to anybody’s environment.” And more. Much, much more. Ticket by ticket, game by game, a – Randell Lex lottery will know everything, in real time. How many games sold in the last five minutes? In the last five seconds? “Retailers have told us they need help – vary in placement; they might be What time of day do stores have a lag solving operational problems” with on, behind, under or next to the in instant product sales? Are there selling lottery. “They are intrigued by counter. “SCiQ is a very modular and promotional opportunities that can be SCiQ.” By addressing those challenges, flexible system to adapt to virtually designed around those lags to bump retailers can focus on selling the any retail environment. These pilots sales? What about the average player product rather than spending time have been very successful and have shopping basket – what percentage of managing operations. One benefit demonstrated the ability to solve transactions are for a single ticket, or of that is the ability to put lottery retailer challenges,” said Lex. multiple tickets, and what combination into more types of retail locations, From the player perspective, SCiQ of tickets are purchased? What can be especially large chains that have never makes it easy for dedicated players to learned from that to encourage those been interested in selling lottery. see what ticket number is next in each multiple ticket purchases? Indeed, chain stores are more likely to game and how many are left in the This is just a sampling of the data benefit from SCiQ than independents, pack – information of great interest that is available through SCiQ. “You which typically don’t have as many to core players and not always easy can now take that data into a business of the operational challenges as their to ascertain in a timely fashion from intelligence system and have more bigger retail counterparts. a traditional ticket dispenser. Should valuable information than any research Pilot tests are currently underway a lottery choose to implement the survey can ever provide,” explained in seven lottery jurisdictions: Arizona, “app” feature, players are even able to Lex. Georgia, Maine, North Carolina, Ohio, build a shopping basket with specific SCiQ also provides lotteries with a South Carolina and , with chains games – ultimately including draw retail solution that enhances retailer such as 7-Eleven, Circle K and Kroger. games – before they even arrive at the engagement like never before. The installations – 23 at this writing store. They simply show the clerk the

JULY/AUGUST 2018 INSIGHTS 69 FOCUS ON: Technology-Driven Solutions

code on their phone and the machine number has been well received by In-Lane Options dispenses exactly the products the players, and saves both the player and customer ordered. “The transaction is the clerk valuable time. Given the dominance of instant quick and easy, so the advantages to Boardman noted that although tickets in the United States in the consumer include speed of service, SCiQ is configurable based on space particular, it would seem necessary to integrity, trust and confidence,” requirements, its size still does create work on solutions that would allow explained Lex. some challenges. “They will not be their sale in-lane. “I applaud all of the The first field testing of SCiQ suitable for all locations. I think the work that is being done on retailer began in Maine in October 2016, placement of these units will be similar system integrations and on APIs, but and after refining the technology to vending machines, where you and conducting additional tests the evaluate the location and determine if it is mostly geared up to sell lotto following spring, the system was rolled it’s an appropriate fit.” tickets,” said Pollard. “The mistake in out to additional locations beginning He is certainly encouraged by the that is that the instant category has in the fall of 2017. tests at four Big Apple locations, part been the growth engine for North “We jumped at the opportunity to of a local convenience store chain. American lotteries. I think there’s a test Scientific Games’ latest innovation Encouraged enough to expand the lot more value in trying to figure out in instant ticket technology,” said pilot program to as many as fifty how instants are going to evolve. Our Director of Lottery locations in order to build a larger products haven’t evolved much since Operations Mickey Boardman. “The sample size. Cost is the big question, so they were created in the 1970s, so we ability to track instant ticket sales in “we are expanding the pilot program do have to recognize that sometimes real time, provide a higher level of to obtain more data that will allow us to make our product work in new security for retailers, improve inventory to complete a more comprehensive channels, we will have to evolve a little management to minimize out of cost benefit analysis,” he explained. bit.” stocks and provide players additional “We believe this will be most beneficial One step towards change is game information was exciting to the retailers and may look at cost to utilize single-ticket activation, and something that retailers are sharing agreements with retailers who something that has been done desperately looking for.” Something are interested in the product.” successfully in Europe. The player picks as simple as providing the next ticket up a ticket or two in the checkout lane

70 INSIGHTS JULY/AUGUST 2018 and adds them to the grocery purchase. The clerk scans the ticket, which triggers the purchase and therefore the ticket activation. With proper systems integration, it can be a fairly simple one- “ScanActiv is true to the impulse step process, explained Pollard. But it’s a system still fraught with complexity – and requiring additional up-front purchase, it’s simple and retailers work by a retailer – and that may be one reason why single-ticket activation understand the process.” hasn’t taken off in this country. “We are always trying to make this easier for – Doug Pollard retailers, not harder.” A more evolutionary change in the product itself, one that would allow sale in multi-lane environments, is along the lines of the gift card concepts being drawings and other features designed from prepackaged ticket selections introduced for draw games. ScanActiv is to gather player information. on various themes or choose their Pollard’s entry into the mix. The tickets “ScanActiv is true to the impulse own ticket mix. At this writing, 18 themselves can look very much like any purchase, it’s simple and retailers prepackaged selections were available, instant ticket on the market today, with understand the process. It looks like a ranging from the $21 “Simple Pleasures” all the bells and whistles designed to regular ticket. And for players, it can still (eight tickets) to the $90 “Life Changers” attract attention. They could hang in be an anonymous transaction if they (five tickets) and “Multi-Millionaire the checkout lane next to similar cards so choose. To me, it works and is worth Maker” (three tickets); players can also offering plays for Powerball, Mega trying.” buy “The Works” – $99 for 18 tickets. Millions, Lotto 6/49 or Lotto Max. Like Orders value at $40 or more receive free those cards and any other gift card, a shipping. ScanActiv ticket would have no value Pushing the Envelope until purchased and activated at the register. All these concepts look for ways Moving Forward In Pollard’s implementation, once to make instant tickets easier to sell at purchased, the player scratches the retail and even easier for the consumer Clearly the lottery industry is trying latex to reveal an access code, not the to buy. But there’s another option. In a to address the challenges associated world where consumers order virtually usual symbols and numbers on the with selling instant tickets. It’s not everything online for easy home play area of a traditional instant ticket. always easy, and it’s hard work creating The player then submits that code – delivery, Atlantic Lottery has created new technology. “We’ve done years ideally via text, said Pollard, but maybe a home-delivery service for instant of research with retailers and invested through the use of a QR code or other tickets. millions of dollars developing SCiQ means. That sends the reveal, what The Winvelope pilot is a result of to help make lottery products easier you’d normally see after scratching a its design thinking innovation lab (see to sell,” said Eisele of the efforts to regular ticket, to the user’s phone in page 49), which allows the Lottery to minimize the pain retailers have in digital format. If the ticket is a winner, develop and test solutions in a small the player can scan that reveal at any environment conducive to numerous dealing with instant tickets. “Because lottery retailer (or lottery offices, for iterations based on customer feedback. this is an area where technology in the larger values) to claim the prize. The subscription service “is really about lottery industry does need to advance Although space limitations in convergence and the idea of omni- and play a very strong role in making checkout lanes likely limit the number channel – digital isn’t just digital, it’s these things possible.” of different ScanActiv products on sale everything,” said Jean-Marc Landry, He advised that any potential at any given time, there could certainly AL’s Vice President, Innovation and solutions should always focus on the be multiple offers – the different price Renewal. “Winvelope is a really slick player journey. “If we put our heads points, play styles and game themes online system that is age controlled and together as an industry, these are all that have made instant tickets so verified,” he explained, adding that the problems that are all definitely solvable. popular. “This relies on technology for pilot has provided the Lottery with “a We are going to have to figure this out, the reveal, but as much as possible it ton” of information about its customers. because lotteries are under increasing looks like an instant ticket,” said Pollard. The pilot launched in the Spring pressure to return more profits to their It can even incorporate second chance of 2017 and players may choose beneficiaries.”

JULY/AUGUST 2018 INSIGHTS 71 FOCUS ON: Technology-Driven Solutions

Digital Marketing Tools Lotteries have various options to build awareness of lottery products among consumers at retail and beyond using the latest in digital marketing; the technologies also enhance ease of use, a critical factor in reaching casual or even non-players. By Patricia McQueen

ign, sign, everywhere a sign. The 1971 hippie-era song by the Five Man Electrical Band earned gold Sas a protest against the ills of the day. Fortunately, the proliferation of signs in today’s consumer-centric world aim to help more than hinder – at least when done properly – and lotteries may see gold as a result. “Digital signage is especially effective at stimulating impulse purchases, making it particularly suited to lottery products,” explained Maxwell Goldstein, Vice President Sales - Americas, of Carmanah Sighs, the Gaming Division of STRATACACHE. He added that evidence has shown that adding digital signage across a retail footprint typically increases sales of highlighted products by three to seven percent. the desirable space lottery signage increased sales of all lottery products By operating in real time, digital inhabits, lotteries should protect their at the customer service counter in signage messages can change almost turf. “Lotteries have to nurture this those locations where in-lane sales are instantly based on the needs of lottery asset.” offered. marketing programs. As a result, lotteries should not under-appreciate And as more lotteries explore the value of digital signage at retail, in-lane sales options (see article Menu Boards advised Paul Riley, Vice President of beginning on page 56), digital signage Innovation and Lottery Transformation takes on added significance. Ontario A step beyond digital signage is for IGT. “Our industry has had this asset Lottery and Gaming (OLG) has learned the digital menu board, a technology for years, and it’s valuable real estate that placing jackpot advertising increasingly used in retail venues, for lotteries to promote awareness of on digital signage in-lane has not especially quick-service restaurants, their product, winners and jackpots.” only helped increase in-lane lottery but just beginning to find purpose for With more and more retailers turning purchases (currently limited to the lotteries. “There is clearly a place for to digital signage and perhaps eyeing two national games), but it has even them but it depends on the venue,”

72 INSIGHTS JULY/AUGUST 2018 OLG has also learned quite a bit about content. Players don’t like a lot of animation – it interferes with their ability to focus on specific items listed on the board. There is considerable static content in the middle of the boards as implemented to date, showcasing the two big national games, certain Ontario-only games, sports, and selected instant games – popular games, for example, or those new to market. On either side, message boxes change content more often, typically featuring current promotions or jackpot messaging. said Walt Eisele, Scientific Games’ is to reach the more casual players, Chief Technology Officer, Lottery. the ones more intimidated by lottery,” “With the depth and the breadth of explained Anderson. “We want to help the products lotteries offer, [menu them navigate lottery offerings before boards] are a way to not just advertise they reach the register.” lottery, but to explain the games and So perhaps it not surprising that make players comfortable with them.” OLG hit the jackpot, so to speak, And when they are more comfortable with the menu boards in their kiosks with the games, consumers are more at selected key account stores. “We likely to try something new. have seen a significant lift in sales, That was the hope of OLG, which and I think a lot of that stems from has learned a great deal about the traffic flow and enhancing our digital menu boards since it began presence in these locations. It’s really testing the technology in the field encouraging for us to see that it is about a year ago. “They were our working in some applications.” starting point for implementing At mass merchandise stores, digital technology at retail,” said lottery kiosks are located in the front Dante Anderson, OLG’s Director, area of the stores, adjacent to other Lottery Marketing. “We undertook dedicated services and retailers. Two this as a pilot program with the intent 55-inch screens are clearly of improving shopability for the visible in the kiosks as foot customer,” he said, adding that the traffic flows from the general customer is the center of everything checkout lanes to the exits. OLG does. The experience to About 200 of the boards are date would indicate that currently in test sites, including the menu boards don’t independent convenience stores necessarily have to be and key accounts of various trade located above a checkout styles. While sales performance at the register. “There are probably independents has been somewhat key points of intersect mixed, some other pilot installations with the shopper’s path have been positive. where the boards can The early thinking is that at be as effective as at the independent c-stores, sightlines and register,” said Anderson. placements are more difficult, and OLG will continue to build customers in these locations are its knowledge as other key more likely to be experienced lottery account convenience stores players to begin with, and therefore implement the boards as an less influenced by information on the extension of their retailer boards. “Our goal with these boards modernization strategies.

JULY/AUGUST 2018 INSIGHTS 73 FOCUS ON: Technology-Driven Solutions

Digital Play Stations desired, these stations can even play stations to cross-promote OLG’s integrate cashless payments, send online games with its traditional ticket “orders” automatically to the retail products. “Retail is 95 percent Digital signage moves to a whole retailer’s register or lottery terminal for of our lottery revenue right now, and new level when incorporated into payment or simply print those orders we want to capitalize on that traffic a screen with touch technology, on a voucher with a bar code to be by introducing retail players to our as presented in the form of digital scanned at the register/terminal. online-only games, bridging that gap play stations for retail use. Among For OLG, player education – on between retail and digital.” its other initiatives, OLG is exploring topics such as available games, how to In its tests to date, OLG has learned the potential of digital play stations play and even responsible gambling that consumers across ages and for lottery operations as part of a – is one of the most useful features experiences appreciate the ease of bigger plan to totally refresh the retail of these units, but their potential use provided by the stations. “The experience with the goal of eliminating goes well beyond that. “We want to concept has been very well received customer pain points – such as the make the whole buying experience a by all demographics, by lottery players intimidation consumers unfamiliar lot more simple and seamless, even and non-lottery players alike,” said with lottery feel when faced with a for the most average player,” said Anderson. “Given these test results, confusing array of product offerings Anderson. He likened the ability to he’s excited about the potential of and complex selection slips. set up a lottery “order” to the self- introducing the stations to market. “Digital play stations open up service kiosks used by McDonald’s The has been testing virtually limitless player experience and other quick service restaurants. digital play stations in the field on a options,” said Carmanah’s Goldstein. “You can customize your lottery order limited basis since September 2016; 10 “Proximity sensors can trigger quickly and easily,” and it’s highly units are currently deployed statewide interactive experiences, inspiring a desirable to keep it paperless and just at a mix of convenience and grocery younger demographic of players, automatically send the transaction stores. There have been several offering instant gratification, and details to the store register, where the iterations since the initial launch, educating new players on how to play. player can complete the purchase and noted Brand Strategy Coordinator Multi-lingual communication, multiple receive his/her lottery tickets. Andrew Leeper, as the Lottery tests product categories, and complicated There is also considerable upside various content schemes and retail sports betting information all become in the convergence of retail and digital trade styles. Their use has been strictly straightforward and clear.” Where channels, perhaps using the digital informational to date, “with the intent

74 INSIGHTS JULY/AUGUST 2018 to drive awareness and education at range. And because it all works in real Winner Awareness retail.” time, it’s possible to trigger a content The first phase focused on how-to- change on digital signage while the While these most recent digital play education, and also included fun customer is still in the store, tailored to advances are state-of-the-art consumer games like an interactive the known interests of that customer. efforts to make things easier for the Magic 8 Ball that would tell amusing Walkbase is fully compliant with consumer and potentially expand fortunes like the original 1950s toy. The both U.S. and European consumer the player base, or to help lotteries second content phase concentrated privacy legislation, as all data is collected better understand their players, more on scratch ticket data such as anonymously and no action is needed one of the first benefits of digital prizes remaining, along with jackpot by the customer. That said, a lottery marketing tools came from winner information. Results of these tests are could incorporate the system into a awareness messaging. While in-store still being evaluated. mobile app, with the customer choosing advertising displays now often to receive messaging directly on their Drilling Down phone, again tailored to the individual include winner information, the based on insights learned by the impact reaches a whole new level system. That functionality adds a whole through the use of digital billboards. In-store digital signage and other An early adopter of this digital point of products take on even new level to the concept of reaching customers in a direct and meaningful technology was the . greater importance when combined “We have been celebrating our big with the latest in sensor technology. way. “We can measure a lot of things winners by displaying their photos INTRALOT will be doing a lottery test on our digital outdoor advertising using STRATACACHE’s Walkbase system. by using these sensors that measure and our regional office digital Walkbase sensors locate an individual’s foot traffic,” said INTRALOT’s Vice on-premise signs for almost seven Wi-Fi enabled device in real time. When President and Chief Commercial Officer years and our winners have loved a new consumer is identified for the first Nick Papadoglou. While sensors can it,” said Vice President of Sales and time, the sensor assigns a unique ID to be incorporated into digital signage, Marketing Teri Wood. In fact, at a that device that ensures the consumer INTRALOT’s test will place sensors in remains anonymous. Every aspect vending machines. Not only will it help time when many big winners are of the customer’s experience can be determine optimal machine placement, reluctant to receive any publicity, anonymously analyzed, customized and but it can even drill down to indicate many of Iowa’s winners can’t wait to mapped – from moving throughout what screen content attracts customers. see their own image larger than life. the store to what’s being viewed and “Today we measure only the selling rate Photos of winners are sent ultimately what triggers a sale. That [of vending machines], but we want to almost instantly to in-store Lottery behavior is tied to their online ID, and see other things as well,” he said, adding InMotion screens, and can appear every time that customer enters the that all of this data should help lotteries on selected outdoor billboards the store, more data is gathered about that better understand their customers same day. “We have found that the customer’s retail behavior. for increased effectiveness of things quick and timely disbursement of When combined with cameras, like promotions and loyalty programs. these celebratory winner messages the system can even identify basic “Hopefully it will help increase sales for provides extended reach and demographics such as gender and age the lottery.” awareness of our in-store messages.”

JULY/AUGUST 2018 INSIGHTS 75 WHERE ARE YOU GOING? SEPTEMBER 25-28, 2018

2018 CALENDAR 2019 CALENDAR 2020 CALENDAR

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JULY/AUGUST 2018 INSIGHTS 77 SG_24of25_NASPLLI.pdf 1 6/22/18 8:36 AM

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at’s right – of the 25 top performing lotteries in the world for instant game sales*, Scientic Games provides games to 24. at’s not coincidence, that’s cause and eect. When you’re the best at something, as these lotteries are, you look for partners who will not only maintain your success but help you achieve the next level of success. Real performance based on real partnerships – that’s Scientic Games.

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*Based on instant game per capita sales. 78 INSIGHTS JULY/AUGUST 2018 © 2018 Scienti c Games Corporation. All Rights Reserved.