2018/19 Annual Report 2018/19 o New Zealando New Annual Report t Lo mylotto.co.nz PO Box 8929, Symonds Street Auckland 1150. Level 1, 73 Remuera Road Remuera, Auckland 1050 New Zealand Annual Report 2018/19 3 CONTENTS The business of Lotto New Zealand 4 The Lotto New Zealand Board 4 Chair and Chief Executive’s Report 6 Creating business value 8 Organisational health and capability 10 Winners 12 Kiwis helping Kiwis 14 Responsible gaming 16 Statement of performance 18 Financial statements 22 Directory 48 4 Lotto New Zealand The business of Lotto New Zealand Our purpose To provide safe gaming that allows New Zealanders to play and win while contributing money back to New Zealand communities. The New Zealand Lotteries Lotto New Zealand’s (Lotto NZ) The success of our business is built Commission (known as Lotto primary goal is to generate improved on the integrity of our products, the New Zealand) was established earnings in order to maximise transparency of our systems, and our in 1987 and operates as a Crown the contribution we make to commitment to growing our business Entity under the Gambling Act 2003. New Zealand communities, without adverse social outcomes. We exist to promote, organise and while minimising the risk of Lotto NZ operates a world-class conduct lottery games for the benefit underage and problem gambling responsible gaming programme that of New Zealand communities. associated with our products. is certified to the highest possible level internationally (Level 4) by the World Lottery Association. We employ approximately 138 The Lotto New Zealand Board people, who are mostly based in The Lotto New Zealand Board is appointed by the Auckland, with a small number of Government and is responsible for Lotto New Zealand’s our retail support staff based in other overall policy and direction. regions of the country. Our retail network encompasses 1,549 stores around the country and employs more than 5,000 people, making it the single largest retail network in New Zealand. Launching in 1987, Lotto was our first game and for many years it has remained New Zealand’s flagship lottery game. Since then, our product range has expanded to now include Lotto, Matthew Boyd David Tapsell Powerball, Strike, Bullseye, Keno and Deputy Chair Chair Instant Kiwi—both in-store and online. 100 percent of Lotto NZ’s profits are transferred to the New Zealand Lottery Grants Board, which works to build strong, sustainable communities by distributing this funding to a wide range of activities across New Zealand. Each year, more than 3,000 organisations and Monique Cairns Keiran Horne Kim Gordon projects around the country receive essential lottery funding. The Lottery Grants Board is also a major funder of Sport New Zealand, Creative New Zealand and the New Zealand Film Commission. In the 32 years that New Zealanders have been playing Lotto NZ’s games, Logan Sears Roanne Parker Mark Todd over $4.6 billion in lottery funding has supported New Zealand communities via the Lottery Grants Board. Annual Report 2018/19 5 Autonomous Crown Entity Scrutiny of performance Lotto NZ’s activities are authorised and controlled Accountability through the Gambling Act 2003. This gives Lotto NZ four statutory functions: Answerable to Service provision • To promote, organise and conduct lotteries. • To make rules regulating the conduct of those lotteries. Accountable = owed to the person who assesses performance and has • To advise the Minister of Internal Affairs on matters the authority to decide on rewards relating to lotteries. and sanctions. • To maximise profits subject to ensuring problem Answerable = owed to persons/agencies and underage gambling is minimised. insofar as they exercise a statutory or delegated authority to make a legitimate and lawful request for information. Public (voters) Parliament (including Select Committees) Department of Internal Affairs Auditor-General Minister State Services Commission Lotto NZ Crown Entity Treasury • Board • Chief Executive • Our people Profits transferred to the NZ Lottery Grants Board 3,000 community groups Public (service users) around New Zealand 6 Lotto New Zealand Chair and Chief Executive’s report In a year characterised by an unprecedented number of Powerball wins, we are pleased to report that for the year ended 30 June 2019 Lotto New Zealand transferred $261.3 million to the NZ Lottery Grants Board for the benefit of New Zealand communities. This year’s performance was built Highlights We continue to invest in our retail on solid business foundations in environment, and further connecting Lotto NZ continued to invest in our responsible gaming; people and our in-store and online environments games throughout the year, to create culture; technology; risk and security remains a key focus for the business. more compelling game propositions management; and health and safety. for our players. We launched a range Targeted retail growth has seen The overall sales result for the year of enhancements to Keno to create Lotto NZ continuing to increase was $1.18 billion, down 5.7% on the broader appeal for the game and its presence in supermarkets previous year. This result was driven improve player engagement and and fuel sites around the country. by the Powerball jackpot being participation. This began with the This has included working with won more often than we would introduction of new Dip options and Caltex to further expand Lotto NZ statistically expect. In an average prize giveaway promotions in the products into a range of Caltex year, Powerball can be expected to first half of the year. It was followed stores nationwide. be won 13 times. However in 2018/19, in February by the introduction of a Our communications, at both brand Powerball First Division was struck new add-on feature, Keno Multiplier, and product levels, continue to work 18 times—the highest number of which gives players the chance hard to engage New Zealanders. wins in a single year. to multiply their winnings by up to Lotto NZ has expanded on the 10 times. Since launching, these Despite the high number of times emotive storytelling approach used new features have proven to be a Powerball First Division was struck, for our brands through the launch of success amoung players, with sales the Lotto Family of games continued the ‘Kiwis helping Kiwis’ platform. This exceeding expectations. to perform strongly throughout shares emotionally engaging stories the year, exceeding our targets We also increased the Strike Must of lottery funding in action and at comparable jackpot levels, Be Won level to $1 million in May. drives a clear connection between indicating a strong underlying While this change is not expected to playing our games and providing performance. increase the frequency of Strike Must essential support to New Zealand Be Won draws, we anticipate seeing communities. We also launched With 100% of Lotto NZ profits returned the benefit of this change through a new iteration of our ‘Imagine’ to New Zealand communities, improved sales in 2019/20. campaign, along with new creative the total transferred to the NZ for Instant Kiwi that celebrates the Lottery Grants Board for community This year marked a significant unique ways New Zealanders play initiatives in 2018/19 was $261.3 million. milestone for Instant Kiwi, with the and win with Instant Kiwi. brand celebrating its 30th birthday. This year’s contribution will provide Lotto NZ transitioned the branding Lotto NZ is committed to providing essential funding to more than 3,000 of our online instant win games into a world-leading responsible good causes around the country. the Instant Kiwi brand, creating a gaming environment, underpinning Lottery funding also provides vital clearer brand proposition that reflects everything we do as a business. We support to New Zealand’s sports current customer understanding are incredibly proud to have once people, artists and filmmakers and expectations of the category. again achieved Level 4 Responsible through Sport New Zealand, This was followed by the launch of Gaming certification by the World Creative New Zealand and the a special range of commemorative Instant Kiwi tickets in celebration Lottery Association. This is the New Zealand Film Commission. of the brand’s 30th birthday, highest possible responsible gaming highlighting some iconic Instant Kiwi certification globally, providing moments over the years. independent confirmation that our Annual Report 2018/19 7 programme is amongst the best in Looking ahead Solid business foundations in the world. More information about responsible gaming, technology, Lotto NZ will continue to place our responsible gaming programme people and culture, risk and security strategic focus on driving demand, is provided on page 16. management, and health and safety, digital-first, and increasing as well as the operational availability Lotto NZ’s security management also diversification over the coming period. and performance of our systems, demonstrates best practice, and we We need to ensure that we continue will continue to support all future are one of only 65 lotteries worldwide to drive demand for our games in programmes of work. to have obtained the World Lottery order to deliver positive results in Association’s Security Control Thank you the short term. This will be achieved Standard. We have also obtained by getting more people to play our We would like to acknowledge other key security certifications, games more often, through offering everyone who contributed towards including the International compelling games New Zealanders the 2018/19 year. The results achieved Organization for Standardization’s feel good about playing. We will this year would not have been Information Security Management continue to use storytelling to engage possible without the input and System Standard (ISO 27001:2013). with customers on an emotional support from our people and our We continue to focus on the level, inspiring them to play and retail network partners.