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Q&A With Gerry Aubin | Making a Difference
INSIGHTS
THE OFFICIAL PUBLICATION OF THE NORTH AMERICAN ASSOCIATION OF STATE & PROVINCIAL LOTTERIES
MAY/JUNE 2020
Focus On:
Research and Data Analytics
These activities are more important than
ever as the industry navigates uncharted
waters in 2020 and beyond.
FROM THE NASPL
PRESIDENT
Executive Director
DAVID B. GALE
Director Of Administration
THOMAS TULLOCH
Vp Of Operations
ANDREW WHITE
postings under Insights Direct. Not a Director Of Program Planning
TAMIKA LIGON
Matrix user? Just give a shout to Jake
at jcoy@nasplhq.org. Graphic Designer
JOHN KOENIG
Additionally, the June Directors’
Meeting is still scheduled (to be Accounting
NATALIE ROSS NORRIS
held remotely, of course). A virtual
It may be hard to believe, but the Dialogue with our Associate Members Editor
PATRICIA MCQUEEN
summertime months have arrived. is being planned for the fall. Round
And for all of us, this summer is going six of the NASPL/NCPG Responsible Vendor Relations
JAKE COY
to look a little different. Gambling Verification Program is
As we are all well aware, the coro- in full swing. The Powers and Ott I.T. / Software Development
PAUL COREY
navirus pandemic has created real Brown Awards, recognizing individual
issues for industries around the globe. employee excellence, will still be pre- Communications Coordinator
MACKENZIE WHITACRE
We’ve seen a lot of changes in the sented – as will the annual awards for
recent months. But I’m happy to say advertising and best new games.
It may not be business as usual. But EXECUTIVE COMMITTEE
that one thing that hasn’t changed is
NASPL’s commitment to keeping our we’re still taking care of business. President
BISHOP WOOSLEY
membership informed, educated and So, like many others, the lottery
connected. industry is facing new challenges. But First Vice President
ANGELA WONG
That’s why NASPL is working with we’ll continue to learn, adapt, and roll
our committees, vendors and con- with the punches in a safe, responsi- Second Vice President
SARAH TAYLOR
tributors to provide a new series of ble manner. Because our purpose still
presentations and webinars through remains: We exist to generate revenue Treasurer
GRETCHEN CORBIN
the digital platform Insights Direct. for essential good causes, like K-12
Each installment will focus on an im- education, college scholarships, envi- Secretary
CINDY POLZIN
portant and timely topic, specifically ronmental conservation, senior citizen
significant to one or more of the major programs, tourism, tax relief, local Immediate Past President
CHARLIE MCINTYRE
lottery disciplines – accounting, audit, aid for cities and towns, economic
information technology, legal, product development and many others. And as Pres. Interprovincial Lotteries
KEVIN GASS
managers, public relations, research, those of us in the industry know, we
sales and marketing, and security. do so much more than that. We have a Region I Director
GORDON MEDENICA
We kicked off the new series with profound economic impact, by creat-
a presentation on Cashless at Retail ing jobs and helping bolster our retail Region II Director
BETH BRESNAHAN
(following an industry chat between and vendor partners. We support local
yours truly and NASPL Executive initiatives. And, sometimes, we even Region III Director
BRIAN ROCKEY
Director David Gale). Upcoming topics help change our players’ lives.
include Business Succession Planning In short, as we say in Arkansas, Region IV Director
BARRY PACK
& Crisis Management; Driving we create winning people, winning
Business Failure or Fortune in the futures and winning moments. Let’s
Post-COVID-19 Economy; Practical keep that rolling. CIRCULATION:
Ethics; and more. Some of these we- Insights ISSN 1528-123X,
May/June 2020,
binars offer CPE credit. And more are Volume No. Twenty, Issue Three.
being added every week. Published bi-monthly by NASPL
(North American Association of State
Keep an eye on your inbox for up- and Provincial Lotteries)
dates. If you aren’t already receiving 7470 Auburn Road, LL1
emails from NASPL, just reach out to Concord, OH 44077
Mackenzie at mwhitacre@nasplhq.org BISHOP WOOSLEY © 2020 All rights reserved.
to be added to the distribution list. Director, Arkansas Scholarship Lottery NASPL Email:
And check the NASPL Matrix for new NASPL President info@nasplhq.org
Websites:
www.naspl.org / www.nasplmatrix.org
p 440.361.7962
2 | NASPL INSIGHTS May/June 2020 f 440.867.2327
May/June 2020 NASPL INSIGHTS | 3
INSIDE INSIGHTS | MAY/JUNE 2020
12
6 Up Front
Industry news and updates.
30
36
12 Making a Difference:
Business as UNusual
This special edition
Focus On:
acknowledges the hard work
by every employee during the
pandemic. Research and Data Analytics
20 Research Corner: 44 Supporting the Games 76 Using AI to Deliver
After Record U.S. Lottery By Patricia McQueen a Better Player
Revenues in 2019, What’s Experience
By Srini Nedunuri, Vice President
Next? 48 Research Agendas IGT PlayDigital™ Platform
By Barry E. Goodstadt, Telecom, Utility A roundup of lotteries’
& Regulatory Consulting, LLC; Sarah
research programs.
Fulton, SFA Research & Strategy;
Alex Chew, The Harris Poll 80 The Correlation Between
Data and Performance
64 Research Advice From Across Multiple
30 Q&A With Gerry Aubin a Pro Jurisdictions
By Simon Jaworski, By Mark Mitchell, Senior Manager
President, Leger USA BI & Analytics, INTRALOT USA
36 Remembering the Past -
Winners, That Is! 68 Growth Through Tailored 84 The BIG Impact of Small
It’s rarely easy, but it is possible Communications Data
to follow up on big winners to By Monika McMahon, Director Pollard Banknote
provide good examples about of Digital, Camelot Illinois
winning it big in “the lottery.”
By Patricia McQueen
72 Data and Insights
in Times of Crisis
Scientific Games
4 | NASPL INSIGHTS May/June 2020
We Are One
Moving Forward, Together
As people and institutions we may be individuals, but as an industry we are one.
Scientific Games is doing everything possible to help our lottery partners
safely navigate these uncertain times and protect vital funding to
the good causes they support.
Together we will arrive stronger and smarter
than ever before.
Reimagine Next
© 2020 Scientific Games Corporation. All Rights Reserved.
Remembering Jim Hosker
Jim Hosker, a Korean War veteran and former police officer,
helped establish the Massachusetts State Lottery, first as the
Commonwealth’s Deputy Treasurer and then serving as Executive
Director from 1983 to 1990. He followed that with a two-year stint as
President of the Kentucky Lottery Corp. before joining GTECH Texas
(now IGT Texas) in 1992. He also served a term as NASPL President in
1990-91. Hosker passed away on May 19, just shy of his 89th birthday,
and left fond memories of those who knew him.
The following is a personal tribute He was arguably the foremost
to Jim Hosker from Ray Bates, who expert on scratch card games, and
served nearly 20 years as the Director “Jim Hosker, a Korean War his lottery was a pioneer for lotto
of the Irish National Lottery and who veteran, was a pioneer in through the online retail network.
continues in the lottery industry as a And while internet/online gaming
state lotteries. As Deputy
consultant. was at the edge of his experience, he
Treasurer, Jim played an could often surprise a meeting with
instrumental role in the an incisive comment on internet
Jim Hosker was my mentor and launch of the Massachusetts selling observed through his prism of
good friend. State Lottery and the “traditional” selling experience.
When I joined the lottery family development of the Daily He moved with ease and success
in 1987, like many others in that po- through Massachusetts, Kentucky
Numbers game and the
sition I knew little or nothing about and finally to GTECH to head up
lotteries. So I searched around for first-in-the-nation Instant their facilities management oper-
a world expert and discovered one Game. As Executive Director, ation for the Texas Lottery, and
James J. Hosker, Executive Director he led the continued growth latterly to work as a consultant.
of the Massachusetts State Lottery. of the Mass Lottery, further
I made contact and asked could I establishing its position as an
come and visit. I got an immedi-
Clearly he was
industry leader. As a former no pushover, but
ate yes and spent one amazing and
seminal week in Boston learning all local official, he understood underneath he was
there was to know about the lot- the importance of returning gentle and caring,
tery business from Jim and his first local aid to cities and towns
and with a great
lieutenant Tom O’Heir. We three in Massachusetts. Jim later
were bonded by a mutual love of
sense of humour.
went on to run the Kentucky
Ireland and an even greater love of
State Lottery and GTECH
Macanudo cigars. Jim had a gruff exterior which
Since that time, Jim has been a Texas. It was an honor to some might have found intimidating.
constant in my business and person- work with Jim in the early Clearly he was no pushover, but un-
al life. years of my career at the derneath he was gentle and caring,
He was my “go to” person when- State Treasury.” and with a great sense of humour.
ever I had a difficult situation to deal He loved being around young people,
with...and there were a few over James MacDonald, Deputy family and co-workers, and was
my 20 years as Director of the Irish Treasurer, Commonwealth of always ready to give someone a start
National Lottery. He knew the detail, Massachusetts on the ladder.
but could also always give me the He had no hint of hubris. He just
broader perspective. was Jim. He could talk to anyone
6 | NASPL INSIGHTS May/June 2020
May/June 2020 NASPL INSIGHTS | 7
from the highest to the lowliest. He was
a sponge for information; he wanted to “Jim’s background and natural abilities made him a really
know everything about everything. “Now effective communicator on behalf of the industry. What
tell me this...” was one of his favourite
I remember most fondly though, is despite his talents in
openers.
connecting and communicating, occasionally that thick
He had stories to tell...of his time in
the Korean War, his time in the Boston Boston accent made it more difficult. When I was president
police force, his political life and finally his of NASPL, I was waiting with Jim in the lobby of our Phoenix
lottery life. hotel for our keynote speaker to arrive. Our keynote that
I am so pleased I had the opportunity year was Zell Miller, architect of HOPE scholarships as
to visit him and his beguiling wife Jean
Governor of Georgia and contributor to the lottery’s suc-
in their retirement home in Mansfield in
cess. When Zell arrived, I introduced the two of them. What
Massachusetts in 2018. He was in rude
good health at the time for a man in his became immediately clear was that neither of them could
80s and he was displaying the same resil- understand a word the other was saying, and I became
ience just recently when I called him for a the translator between the thickest Boston accent and the
catch-up chat. thickest Southern accent. I will miss Jim, his leadership, his
He simply adored his wife, Jean, and his
guidance and his presence, and I send my warmest regards
children and grandchildren, who will all
to his family during this time.”
greatly miss him.
My wife and my children enjoyed and Rebecca Hargrove,
loved Jim too, and feel the loss. President and Chief Executive Officer,
We have all lost a great man...but I have Tennessee Education Lottery
lost a real pal.
Stay informed
with Insights Direct
Check out past episodes on the NASPL Matrix
and see what is coming up on NASPL Insights Direct!
Click here to view
Not a Matrix user yet? Just reach out to Jake Coy at jcoy@nasplhq.org
8 | NASPL INSIGHTS May/June 2020
“But which way do I go from here?”
““at depends a great deal on where you want to get to”
If you want to sell where people are shopping,
step through the purple door.
Abacus makes selling lottery in-lane easy, by enabling customers
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integrating into the retailers’ ePOS estate. Choose the right
door - your players depend on it.
w : www.lotteryeverywhere.com
Solutions for innovators e : info@abacus-bv.com
JANUARY/FEBRUARY 2020 NASPL INSIGHTS | 9
Going Mobile in the Midwest
Ohio Lottery players have a convenient and secure new option for cashing
their winning tickets.
By Mackenzie Whitacre
T
he Ohio Lottery is now of-
fering a new mobile cashing
feature, available through
the Ohio Lottery mobile app. This
innovative tool – a first for the North
American lottery industry – allows
players to cash eligible winning
tickets valued between $50 and
$5,000 in a fast and secure way. The
winning funds are deposited directly
into players’ bank accounts, provid-
ing a convenient, no-contact option
for receiving prize money.
The mobile cashing launch was
already on track for April. However,
with the current social distancing
measures in place, the rollout of this
contactless feature was particu-
larly important. “This program was
initially established to offer cashing And so far, it’s been smooth opposed to prize collection at retail
of $600 to $5,000,” said Ohio Lottery sailing. There have been no ma- for these amounts – which do not
Communications Director Danielle jor technical or other issues since have to be reported to the IRS –
Frizzi-Babb, “but we opened up the launch. For even further security, players collecting prizes through
range of winning ticket amounts to the Lottery pushed out a mobile app the mobile cashing app do not re-
$50 to $5,000 to minimize the risks update a week after launch, adding main anonymous. However, it seems
associated with COVID-19 by min- dual verification of bank account and that winners across the board are
imizing foot traffic within essential routing numbers, to reduce potential welcoming the new option.
locations.” processing errors. “More than half of the transac-
Ohio Lottery Director Pat Mobile cashing has also been tions that have been processed are
McDonald agrees. “The release of generally well-received, by both low tier prizes,” noted Frizzi-Babb.
the mobile cashing feature is timely retailers and players. “Overall, we have had a very
as our main cashing locations, Ohio “Our retailers have embraced positive response from the custom-
Lottery regional offices and Ohio’s the new cashing option because ers,” she said. “We knew players
racinos, are closed due to the pan- it, in some ways, helps with player would embrace the technology but
demic,” he said, shortly after the throughput in their stores,” said Ohio have been pleasantly surprised at
April 20 launch. “The app has proven Lottery Project Manager Maureen their willingness to express their
popular with customers.” Hall. “But they have shared some acceptance.”
Indeed, players were quick to anticipated questions about the And that’s all good news for
take advantage of the new feature, possible impact of cashless on their Ohio students. Last year, the Ohio
with more than 3,500 claims in the cashing bonuses.” Lottery gave more than a billion
first seven days. And as of May 26, In addition to the potential dollars toward education in the
the Ohio Lottery has processed impact for retailers, another factor state – giving support to K-12,
more than 17,000 mobile cashing considered was the response from vocational schools and special
transactions. winners under the $600 mark. As education.
10 | NASPL INSIGHTS May/June 2020When your customers are ready to
Alchemy3 has the solutions
Visit www.alchemy3.com/goout for more details.
May/June 2020 NASPL INSIGHTS | 11MAKING A DIFFERENCE - Special Edition
Business as
UNusual
This space is usually used to profile communications disruptions, struc- “Within days, nearly a
lottery industry employees who have tural problems with lottery buildings, third of our retail base
done their part to make their organi- etc. were no longer selling
zation a success, or who have made a Few, if any, were ready for a
greater impact on the community at global pandemic. One that changed lottery tickets; retail,
large. In this special edition of Making life as we know it, that will likely bars and restaurants
a Difference, we acknowledge the result in permanent changes to the were closed, and
hard work done by every employee way business – any business – is
during the public health crisis that conducted moving forward. And in
many licensees were
is COVID-19, employees who had to the meantime, while other enter- unreachable.”
shift gears, develop new policies and tainment and gaming businesses
procedures and do things in new were shut down, lotteries continued - Gweneth Dean
ways without looking back. Specific to operate in some form or another.
actions taken by individual lotteries After all, never have their revenues
in the early stages of the pandemic been needed more than they are of Lottery, New York State Gaming
are highlighted in the shaded sections now, for good causes and even for Commission. “Within days, nearly a
throughout this article. the retailers that stayed open. third of our retail base were no lon-
And that’s where we begin here, ger selling lottery tickets; retail, bars
L
honoring all the industry employ- and restaurants were closed, and
otteries have a very specific ees who have gone well above and many licensees were unreachable.
mandate, as approved either beyond the call of duty – and not Without any disruption in opera-
by voters or by political lead- just for their own lotteries. In some tions, New York Lottery staff pivoted
ership: they exist for the purpose of jurisdictions, lottery staff were even to address evolving and unexpected
providing revenue for much-needed borrowed by other agencies, helping retailer issues while re-imagining
programs, such as education, the with things such as processing an new business processes. Essential
environment, economic develop- overwhelming number of unem- staff continue to support critical
ment, senior services and more. In ployment claims and with COVID-19 functions on-site, reporting to
doing so, they provide a source of contact tracing. They’ve done it all work daily, enduring long sessions,
entertainment for the public, and of- with a can-do attitude. scheduling challenges, and shifting
fer a chance to win potentially large New York has been the hardest- demands to continue our mission
prizes for the small cost of a ticket. hit state with respect to COVID-19 of supporting public K-12 education
Many lotteries thought they cases and fatalities, and the state is all while trying to ensure our own
had a handle on crisis management also home to the largest American employees’ health and safety. I have
and recovery, with documented lottery. been amazed by the resolve, dedica-
procedures on exactly what to do “When the NYS on PAUSE tion and leadership exhibited by our
in the case of natural disasters went into effect in mid-March, employees, who have clearly shown
such as hurricanes, floods, torna- the Lottery’s retail landscape they will meet the challenges of
does and earthquakes, plus other transformed overnight,” explained tomorrow’s lottery. New Yorkers are
potential disasters like power or Gweneth Dean, Director, Division tough, smart, disciplined, unified and
12 | NASPL INSIGHTS May/June 2020loving. These characteristics couldn’t that allowed even more employees, the whole concept of working re-
be more evident as we work through initially needing to report to the motely. For the past couple of years,
this crisis.” office to complete their duties, to employees have been required to
We know that similar messages work from home. work from home twice each month.
would come from every lottery chief The shift began when it was time to
executive across North America. replace office computers – instead
- Rotating staff between remote of desktop workstations, most staff
Working Remotely and in-office work, so that on received laptops and tablets.
any given day, no more than “The original thought about
Many, if not most, employees in a one-third of staff is on-site. tele-working came from the very real
number of industries suddenly began question of how we can get things
working remotely; lotteries were - Rotating teams in essential done the next time we have a huge
no exception as their offices were on-site services such as draw snow storm,” explained Pennsylvania
shut down or restricted to essen- staff, prize payments staff and Lottery Executive Director Drew
tial personnel only. In the process, accounting, to minimize infec- Svitko. “While it’s been a while since
information technology staff were tion in any one unit. we had one, the time to figure out
the first to take action, to make sure how to get things done during a
everything went smoothly. They - Anyone who can work from three-foot snowfall is NOT during a
provided work-from-home solutions home has been directed to do three-foot snowfall; it’s in July.”
that included all necessary computer so. We are enabling remote Once the equipment was pur-
equipment, connectivity solutions, access programs to increase chased, employees were able to
and setting up virtual meeting envi- the number of people who can work from home the required two
ronments so business could continue work from home. days per month. “This allowed us to
no matter who was where. Indeed, work through any technical chal-
they were key to making it all work, lenges, but also learn, as a business,
whether 30% or 100% of staff began If what was perhaps an eerie how to be productive with a team
working remotely. As the crisis went bit of foresight, the Pennsylvania that wasn’t together. The tele-work
on, new solutions were implemented Lottery might have had a leg up on model also has a side benefit of
May/June 2020 NASPL INSIGHTS | 13BCLC used Facebook Live to conduct virtual
jackpot winner press conferences.
keno), most retailers of traditional drawings are actually conducted was
products were kept open as essential also on the table in some cases.
businesses also supplying food and For example, the Kentucky
other goods. Selling lottery provides Lottery was one that switched to
additional revenue opportunities for RNG draws for its Pick 3, Pick 4 and
those essential businesses, although Cash Ball 225 daily games. Beginning
in a few cases, retailers decided to April 13, all three games, which had
temporarily suspend lottery sales. been drawn using traditional ball
Many lotteries adjusted their machines, began using a random
settlement terms, billing procedures, number generator. In its press
returns and other policies to assist release announcing the change, the
their retail partners in these and emphasis was on maintaining the
other circumstances. safety of the draw staff by minimiz-
ing the time necessary to conduct
the drawings. “Instead of taking an
- There are a few reasons we will
hour for the midday drawing and
still visit the retail location to
being good for employee morale. almost two hours for the evening
ensure we are continuing to
By allowing employees to pick their drawing using the old method of
provide excellent customer
tele-work days, we were able to give balls and machines, we will now be
service and meet our retailer
them some flexibility.” able to complete this vital function
needs during a unique time in
Of course, no one knew then that in a matter of minutes,” said Chip
retail.
tele-work would become the rule Polston, the Lottery’s Senior Vice
instead of the exception, but that President of Communications, Public
- Without in-person visits, sales
desire to solve potential problems Relations and Social Responsibility.
reps have ample technology to
before they start actually impacting He noted that the Lottery had
remain in contact with retail-
the business “was a huge factor in already been using an RNG for other
ers, assess inventory levels,
our preparedness for dealing with games, such as 5 Card Cash. “By
adjust orders, etc.
COVID-19,” said Svitko. using this system, our drawings will
be done in a much quicker manner
- Sales reps are calling their
Retail Management with the same levels of security and
retailer accounts, evaluat-
integrity.”
ing needs, and making any
The heart of every lottery is its
requested deviations from au-
retail network, and the relationships
tomated orders. Any situations - We have reduced time in the
between a lottery’s sales staff and
that may require an in-store office to only the draw window
its retailers are priceless, especially
visit are assessed on a case- and are handling everything
face-to-face relationships. Those
by-case basis. Any in-person else remotely.
all but came to an end in most
appointments would involve
jurisdictions. By the third week in
taking all necessary public - We do have the ability to tran-
March, lottery sales reps had been
health safeguards. sition to RNG drawings to fur-
pulled from the field almost every-
ther limit the number of staff
where. Tele-calling was the new
present during the drawings.
name of the game, and sales reps Drawings
began contacting their retailers on
- Our continuity of operations
a much more frequent basis, either While retailers are essential for
plan includes contingency
by phone, email or other messaging. lottery sales, a lottery’s drawings
procedures for stacked draws
Emergency repairs and other on-site are also essential. In most cases,
should we be unable to con-
problem solving have been on an the actual drawing production is
duct our drawings as sched-
as-needed basis. one of the key lottery functions that
uled. For draws, the drawing
While some types of lottery cannot be done remotely. Lotteries
officials come in after hours
retailers were shut down in many established multiple draw teams,
and are therefore at a lower
jurisdictions as “non-essential” separating them either on different
exposure than regular busi-
(such as bars and restaurants, upon draw nights or setting up draws in
ness hours.
which many lotteries rely to sell different rooms. Changing the way
14 | NASPL INSIGHTS May/June 2020VIRTUAL
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May/June 2020 NASPL INSIGHTS | 15MAKING A DIFFERENCE - Special Edition
The Colorado Lottery's new touch-
free drive-up claims window.
“Our draw staff have its Board-approved Draw Services by-appointment-only options, some-
been exemplary Agreement. Additional member times only for prize claims above
lotteries have contacted MUSL staff a certain threshold. Many lotteries
throughout this to set up arrangements for future also extended their claim periods to
public health crisis, emergency draw services should the allow players with winning tickets to
and have modified need arise. And to protect the health hold onto them until a later date.
of its essential staff, MUSL limited Some new procedures included
their schedules access to its main office to only au- curbside or drive-up claims options,
and lifestyles to thorized draw officials and auditors. some of them touchless, which al-
ensure that our draw “The ability to perform draw- lowed lottery staff to quickly gather
ings with integrity is the most vital information and return with a check
operations continue service that MUSL can provide its to the player in a matter of minutes.
on a daily basis.” member and licensee lotteries,” A mail-in claims service was
MUSL Executive Director J. Bret promoted by just about every lottery,
- J. Bret Toyne, MUSL Toyne said. “Our draw staff have but it was quickly realized that there
been exemplary throughout this were limitations to that option. If a
public health crisis, and have mod- lottery’s headquarters were closed,
In some cases where conducting ified their schedules and lifestyles for example, no one was able to
drawings simply became impossible to ensure that our draw operations pick up and process those mailed-in
given restricted building access continue on a daily basis.” claims.
or other issues, in stepped the And not surprisingly, many play-
Multi-State Lottery Association, Claims ers are uncomfortable with mailing
whose essential services to member a winning ticket worth thousands,
lotteries include emergency draw Of course, with drawings and or even hundreds of thousands and
services. For a period of several ticket sales continuing, lotteries also more, to collect their winnings. In
weeks through mid-May as the had to find new ways to process response, some lotteries set up a
pandemic progressed, MUSL had winning tickets. In state after state, secure dropbox at their headquar-
performed 140 emergency drawings claims centers were closed to the ters, allowing players to deposit their
of jurisdictional lottery games under public; others had limited hours or valuable tickets directly.
16 | NASPL INSIGHTS May/June 2020May/June 2020 NASPL INSIGHTS | 17
MAKING A DIFFERENCE - Special Edition
The Louisiana Lottery addressed
the problem in another way, at least
for tickets with prizes up to $5,000,
by passing an emergency rule to
allow players to mail in photocopies
of winning tickets to claim their
prize, effective May 1. “Our players
have been extremely patient, holding
on to large winning tickets while
our offices have been closed,” noted
Lottery President Rose Hudson in a
press release announcing the new
rule. “We recognize that players
with tickets winning large prizes
have been hesitant to mail those in
for fear they could be lost. We are
so pleased that this rule change will
allow them to be paid in a timelier The NASPL staff began using Microsoft Teams for its meetings. While social distancing
manner and with peace of mind.” and proper face coverings aren’t necessary for virtual meetings such as these, we thought
Any prizes of more than $5,000, we’d show off our adherence to pandemic guidelines!
or for multi-state games, still need
the original ticket, and players are
required to make an appointment for public informed about beneficiary reviewing contracts and negoti-
those claims. awareness and general information ating agreements with vendors.
Any lottery still processing about lottery operations, including Accounting and finance has to keep
in-person claims, by appointment or how to claim prizes by mail. the bills paid and the invoices going
otherwise, has implemented strict Those working on products, es- out. Security has to accommodate
health policies, such as using gloves pecially instant games, had to closely situations in which employees are
while handling documents, staying follow sales trends and inventories, often remote, retailers are closed or
behind glass partitions and maintain- and work with the sales team to struggling, claim centers are closed
ing social distancing. determine if the regularly-sched- to the public ... the list goes on.
uled game releases should continue, One of the biggest issues that
And the Rest particularly with game launches surfaced for all the necessary
typically supported by advertising. administrative work it takes to run
There hasn’t been a single job at Public relations staff had to tire- a lottery was that while remote
any lottery that hasn’t been impacted lessly address the media, the players work is certainly possible, lotteries
by COVID-19. While those described and other stakeholders with updates typically rely on paper – docu-
above are some of the key aspects on what was happening. They had to ments and reports that are stored
of lottery operations that have been realize that these are stressful times at headquarters and invoices that
impacted the most, other employees for everyone, nothing like anyone come by mail, for example. Being
had to step up and alter the usual had ever seen before, and continue away from the office for an extended
way of doing things. to represent their lottery in a profes- period time and not having access
Marketing and promotions teams sional and courteous manner. to critical documents was never
had to postpone or cancel events For those lotteries that offer on- part of any crisis management plans,
and figure out what to do next. line sales, business has been robust and moving forward lotteries will be
Advertising campaigns were scaled in that channel. Everyone involved in working to revisit all that reliance on
back or pulled entirely, and what that area of the business has to make paper.
did remain in media was generally sure the online platforms hold up to It’s all part of wondering what
shifted to a brand or proceeds focus, sharp increases in volume. the “new normal” will be – but no
with an emphasis on beneficiaries There are still more departments matter how this ends, it’s a safe bet
instead of products. Lotteries kept that must run smoothly to enable that lottery employees will continue
their social media presence, but of- successful lottery operations. The to make a difference and keep the
ten with a shift towards keeping the legal team has to keep things going, revenues coming for good causes.
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May/June 2020 NASPL INSIGHTS | 19RESEARCH Corner
After Record U.S. Lottery
Revenues in 2019, What’s Next?
Barry E. Goodstadt Sarah Fulton Alex Chew
Telecom, Utility & Regulatory SFA Research & Strategy The Harris Poll
Consulting, LLC
A
ccording to the North resulting in diminished foot and car part of the societal response to the
American Association of traffic. To address these conditions, COVID-19 pandemic, sporting events
State and Provincial Lotteries the industry must come to grips have been largely curtailed, leaving
(NASPL), sales and revenue from U.S. with an unprecedented challenge little opportunity to place wagers on
lotteries reached an all-time high in to its growth and sustainability. A sporting outcomes.
fiscal year 2019. The data indicated number of state lotteries have closed Third, the pandemic has trig-
that in 2019, industry sales of $91.3 their redemption offices and are gered an economic downturn which
billion exceeded 2018 results by 6.7% redeeming winning tickets by mail appears similar in scope to the 1930s
It is evident that 2019 was a ban- and extending payoff deadlines. For Depression. In light of this devel-
ner year for the industry, by almost some time, starting Powerball and opment, the gaming industry will
any measure: Mega Millions lottery jackpots, and be faced with a potentially smaller
incremental growth, were guar- group of players with more limited
• Double-digit revenue growth in anteed – this will no longer be the assets. Harris Poll data (May 2020)
seven states. case since jackpot value is driven by indicate that two in ten say they
• Sports betting increased by 142% lottery sales and those sales are now will visit a casino within the first
(on a small base of $18.5 million). lagging. month of the government providing
• Instant games alone added $2.6 As is the case in many other fac- information that the spread of the
billion to total sales. ets of our society in recent months, virus is flattening, nearly half (47%)
a lot of things have changed in the of the public say it will be between
Due to these record results, the gaming space in at least the near 2-11 months, and a quarter (25%) say
industry was initially faced with a and medium term. First, given new a year or longer. Nearly one in ten
question regarding whether signif- social (i.e. physical) distancing rules, (7%) say they will never visit a casino
icant growth can continue into the the industry needs to move rapidly again.
future, and if so, how. However, in to determine how it can serve the Findings from the April and May
light of the coronavirus pandemic gaming public while consumers are Harris Poll COVID-19 tracker also re-
that started in March 2020, the unable to readily visit casinos and/or veal six in ten Americans have been
answer to the industry question has lottery retailers. When they do arrive impacted financially in some way and
unfortunately been clearly answered: at casinos, gaming enthusiasts will more than half (55%) are concerned
Such growth will not likely continue need to keep their distance around that they may lose their job due to
at this time. gaming tables – but casinos were the coronavirus outbreak. Nearly
Instead, because of COVID-19, the never designed to accommodate two in five (41%) think their income
industry is faced with the question of such physical distances between will be lower in 2020, 38% are seek-
how to recover. Casinos in virtually players. ing out additional sources of income,
every state have been closed, and Second, NASPL has noted that and 84% feel that the coronavirus
lottery retailers are finding that their sports betting experienced substan- will cause a global recession.
sales have languished as state “stay tial growth between 2018 and 2019 Cash-strapped Americans
at home” orders are put into effect (primarily due to expansion). But, as will be cautious investors, savvy
20 | NASPL INSIGHTS May/June 2020Figure 1
Current Newly Adopting (Past Two Years) Lottery and Casino Players (as of September 2019)
180
168.0
159.7
160
140
120
Millions of Players
100
84.5 86.5
80 76.8
65.3 70.5
59.1 60.1
60
44.4 38.6
40.9
37.9
40
30.7
20
0
Lottery draw players Scratch-off players Keno players Sports betting players Video lottery players Internet gaming players Table game players
Current Players Recently Adopting Players
deal-seekers and more inventive September 2019, and determined 1. The extent of playing specific
and attentive in managing their that Millennials and Generation Z lotteries and casino games;
household budgets. Financing plans, consumers participate in gaming 2. Whether playing activity was
discounting and compassionate in ways that are different from that recently started (in the past two
brand messaging will separate the of previous generations. These years); and
opportunists from those who build differences suggest that the mix of 3. Generational differences in gam-
long term affinity as consumers gaming options provided by lotteries ing activity.
struggle to get back on their feet. and casinos will need to evolve in
At the same time, there is a lon- the future to a form that is more Key Findings
ger term threat to gaming. Industry customized, innovative and more
speculation and research over the mobile. The second survey effort Findings regarding near term growth.
past few years has raised questions was conducted at the beginning of One of the most important findings
about the gaming participation of March 2020, just prior to the sig- from the survey is that it supports
Gen Zers and Millennials as the role nificant onset of coronavirus in the the fundamental results of the
of Baby Boomers and members of U.S. This survey sought to explore NASPL analysis in terms of the near-
the Silent Generation decline in the the potential of internet-based term growth in lottery and gaming
coming years. (See Suh, E., Alhaery, state-sponsored lottery applica- revenue. That is, traditional lottery
M., Abarbanel, B. and McKenna, tions that would operate on mobile offerings generated an additional
A., “Examining millennials’ online devices (iLottery) and examines how 6.9% greater revenue in FY2019 than
gambling behavior: A Comparison of iLottery could make a major contri- in FY2018.
generational differences.” Journal of bution to recovery of gaming in the Findings regarding an increase
Hospitality and Tourism Technology, post-COVID-19 era. in the number of gaming partici-
2017, 8, 314-376.) pants from the Harris Poll Survey
To assist in addressing these September 2019 Harris Poll are shown in Figure 1 and reveal a
issues, our research team, which Survey of Gaming dramatic increase in the number
includes The Harris Poll, has under- of new players during the past two
taken two significant survey efforts An online nationwide Harris years. Thus, the number of “scratch-
focused on gaming activity by the Poll Survey was conducted among off” players has risen by more than
general public. The first study was 2,032 adults aged 18 and older in 65 million to 168 million users during
conducted by The Harris Poll in September 2019 and focused on: the past two years. Lottery players
May/June 2020 NASPL INSIGHTS | 21increased by 59 million over the past Figure 2
two years to 160 million per year. Generational Distribution of Adults 18+ in Harris Poll (Sample N=2,032,
While “scratch-off” games are lottery Weighted Data)
games, the authors attempted to dif-
ferentiate between traditional lottery 40%
draw games (such as Mega Millions,
35% 33.90%
Powerball, Pick 2, Pick 3, Pick 4, etc.) 32.20%
and “scratch-offs.” Therefore, “lot- 30%
tery players” as defined in the survey 26.50%
include only draw games players. 25%
While NASPL analyses show
only modest growth in lottery-run 20%
gaming table revenue (2.7%), Figure
15%
1 reveals that a substantial portion
of current table game players have 10%
only recently begun to play those
4.90%
games (39 million) in the past two 5%
2.60%
years. This suggests that prior to
0%
the coronavirus pandemic there was Silent Generation Baby Boomers Gen X Gen Y-Millennials Gen Z
significant upside in casino revenues,
but that growth in patronage has
not yet translated into significant
non-gaming population. This is the be an important component of the
revenue growth. Perhaps, the new
next question raised in this research. population to focus on for the future
players are not yet spending as much
of the gaming industry.
as more experienced players.
What proportion of the population is
NASPL findings suggest that rev-
not engaged in gaming? To esti- Generational differences in gaming
enue from lottery-operated sports
mate the size of the non-gaming activity. In order to examine genera-
betting is relatively small at this
population based on survey results, tional differences in gaming activity,
point in time ($45 million in FY2019).
the survey analysis calculated the one needs to define different gener-
The findings from the Harris Poll
number of people who indicated that ations in terms of their birth years.
indicate that over 70 million individ-
they have not played any lottery or To do this, a standardized approach
uals were engaged in sports betting.
casino games in the past 12 months. developed by the Pew Research
However, it should be noted that
The analysis revealed that 20.7% Center was used. The Pew genera-
“sports betting” was self-defined in
of the adult population were not tional definition is shown in Table 1.
the survey and could include sports
engaged in gaming activities during In the Harris Poll sample, these
betting activities through casinos or
the prior 12 months. U.S. Census data generations were estimated to be
that are not currently sanctioned by
from 2019 estimated that the popula- distributed in the population as
states (e.g. fantasy sports leagues,
tion of adults 18 and older was 253.82 shown in Figure 2.
esports wagers, wagering with book-
million. On that basis, it is estimat- The chart indicates that Baby
ies and so on).
ed for the September 2019 survey Boomers, at this time, constitute
Examination of the total popu-
that the number of non-players is 34% of the sample in this study,
lation of gaming players suggests
approximately 52.54 million. This will Gen Xers are just over 26% of the
that large portions of the total U.S.
population has engaged in gaming
during the previous twelve months. Table 1
The number of players of state lot- Birth Years For Different Generations
teries and scratch-off lottery tickets
are at or above 160 million players. Generation Name Birth Year Range
Such player estimates indicate that
Silent Generation 1928-1945
gaming has very widespread appeal
in the country; in fact, it is hard to Baby Boomers 1946-1964
think of many aspects of American Generation X 1965-1980
society that are more popular.
Millennials/Generation Y 1981-1996
At the same time, it will be im-
portant to understand the size of the Generation Z 1997-
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Visit InComm.com to learn more.sample, while the Millennial gen- Figure 3
eration is similar in size to that of Participation in Any Gaming Activity During the Previous Twelve Months
the Baby Boomers – just over 32% 84%
of the sample. Gen Zers, over age
83.3%
18, currently represent about 5% 82%
81.2%
of the sample. Over time these
proportions will shift due to aging, 80%
such that the proportion of surviv-
ing Silent Generation members and
78%
Baby Boomers will decline while the 76%
76.0%
proportion of Gen Xers, Millennials 74.4%
and Gen Zers will grow. At this time, 74%
a large number of Gen Zers (born in
1997 and later) have not yet reached 72%
the legal gaming age of 18 but will do
70%
so in the coming years.
To examine differences in gaming 68%
behavior, survey analysis focused on Baby Boomers Plus Gen X Gen Y-Millennials Gen Z
gaming activity patterns across dif-
ferent generations. Considering the
small number of Silent Generation
members in the sample and prelim- Turning to generational differ- • Millennials and Gen Zers are
inary analyses indicating that Silent ences in specific games, the survey disproportionately more likely
Generation members act in similar examined participation in: to engage in sports betting while
fashion to Baby Boomers, these two Baby Boomers Plus and Gen Xers
generational categories were pooled • State lotteries (draw games appear less likely to participate in
into a category that is labeled Baby including Powerball and Mega sports betting.
Boomers Plus. Since the survey Millions) • Baby Boomers Plus and Gen Xers
asked respondents to indicate which • Instant scratch-off games are disproportionately engaged in
gaming activities they have partici- • Keno games all forms of casino games includ-
pated in during the previous twelve • Sports betting (including sports ing table games, video lottery and
months, the analysis focused on: 1) picks and over/under picks) online games. Millennials and Gen
what proportion of each generation • Video lottery machine at a casino Zers are less likely to actively par-
engaged in any gaming behavior in • Casino-type games played online ticipate in casino-based games.
the past year, and 2) how the gener- • Table games at a casino
ations varied in their participation in These data suggest that, over
specific types of games. The data suggested the following time, as Baby Boomers Plus are
findings: replaced by younger gaming partic-
Across-the-board differences in ipants (such as Millennials and Gen
gaming participation. The data on • Lottery participation by dif- Zers):
whether survey respondents partic- ferent generations are roughly
ipated in any gaming activities in the proportional to the size of 1. Draw games will not substan-
previous twelve months is shown in each generation in the overall tially be affected by generational
Figure 3. population. change.
The chart shows that over 80% • Baby Boomers Plus are the more 2. A number of games will expe-
of Baby Boomer Plus and Gen Xers prevalent players of scratch- rience reduced activity and
participated in some form of lottery off games while Millennials are revenue including:
or casino activity over the previous under-represented as scratch-off • Keno
twelve months, while only 75% or so players. • Scratch-off games
of Millennials and Gen Zers partici- • Baby Boomers Plus dispropor- • Casino-based games
pated in some types of lottery and/ tionately participate in Keno 3. Younger gaming participants will
or casino-based games. These dif- games while Millennials are seek participation in different
ferences were statistically significant under-represented in the ranks games that provide sports betting
(Chi-Square=99.39, pMay/June 2020 NASPL INSIGHTS | 25
March 2020 Harris Poll Survey of Figure 5
Gaming With a Focus on iLotteries Generational Differences Among Respondents in Likelihood
of Signing Up for iLottery
With these findings in hand, the
research team initiated a second 40%
Harris Poll survey on March 2-4,
2020. The second survey involved
34.9%
35% 33.7%
33.4%
2,011 respondents to explore the 31.3%
likely impact of iLottery programs 30%
offered by state lotteries. As of that 25.3%
date, eight U.S. lotteries offered iLot- 25%
tery with single-draw sales. These
19.5%
offerings enable gaming participants
20%
to play a variety of online lottery
15% 14.1%
games using a desktop or laptop PC
as well as various mobile devices
10.4%
10% 9.80%
including cellular phones and tablets,
encompassing both Android and 5% 3.50%
5.10% 4.50%
Apple devices. The games can only
be played while the participant is 0%
physically located in the state that
Gen Z (N=209) Millennials (N=562) Gen X (N=510) Boomers Plus (N=731)
Somewhat Likely Very Likely Already Signed Up for iLottery
offers iLottery.
Key Findings
they would be to sign up for an iLot- is good upside potential for the
The findings from the March tery service in their state. Figure 4 iLottery concept among consumers.
survey covered several key issues, displays the results. If one takes a conservative view of
including overall interest in iLottery Those results indicate that 5% of these data using an 80/20 rule (80%
and generational differences in respondents in the survey already of “very likely to sign up” plus 20%
iLottery opportunities. subscribe to an iLottery offering. of “somewhat likely” to sign up) then
In addition, 49% indicated that it might be anticipated that approx-
Overall Interest in the iLottery they would be very likely (25.1%) imately 25% of the population will
Concept. In the survey we asked or somewhat likely (23.9%) to sign sign up for the iLottery service. This
respondents to indicate how likely up. These data suggest that there estimate should be supplemented
to the proportion in the popula-
tion (4.9%) indicating that they are
Figure 4
already signed up for iLottery, which
Respondent Likelihood of Signing Up for iLottery
leads to a total estimated demand
40% of 30%. This estimate suggests that
37.3%
iLottery can make a major contri-
35%
bution to recovery of gaming in the
post-COVID-19 era.
30%
25% 23.9%
25.1% Who Is Likely to Sign Up for iLot-
tery Service? One of the keys to
20% understanding the likely impact of
iLottery on the gaming industry is
15% to determine how likely different
segments of the population are to
10%
sign up for iLottery as a mechanism
4.9% to participate in state-sanctioned
5%
gaming. Considering the differ-
0%
ences across generations in terms
Not at all/Not Very Likely Somewhat Likely Very Likely Already Signed Up
of gaming activity identified in the
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May/June 2020 NASPL INSIGHTS | 27Table 2
Estimated Demand for iLottery Participation by Generation
Generation 80/20 Market Estimate Already Signed Up for iLottery Total Estimated Demand
Gen Z 22.58% 9.80% 32.38%
Millennials 32.98% 3.50% 36.48%
Gen X 32.02% 5.10% 37.12%
Boomers Plus 11.11% 4.50% 15.61%
September 2019 survey, the anal- Zers are also likely to adopt this new vehicle for addressing the coming
ysis was focused on differences in platform and, in fact, 10% appear to challenge of generational change
iLottery interest among Gen Zers, have already done so. Baby Boomers as Baby Boomers are succeeded
Millennials, Baby Boomers and Gen and their predecessors in the Silent by Millennials and by Gen Zers.
Xers. Generation are only about half as Younger generations appear to be
The results from this analysis is likely to sign up for iLottery. more interested in iLottery and this
shown in Figure 5. In some ways these results are will be important for future sustain-
The analysis entailed an 80/20 not surprising since the younger ability of the industry.
rule (80% of Very Likely plus 20% generations are highly dependent Our team also recommends that
of Somewhat Likely) to develop an upon mobile phones for much lottery and casino operators develop
estimated demand level for iLottery of their communication and programs for tracking changing
by generation. Earlier it was noted entertainment. preferences in gaming as a method
that approximately 5% of respon- of guiding efforts to recover from
dents already participate in iLottery Conclusions and the COVID-19 downturn and to an-
in their states. The level of existing Recommendations ticipate changing needs of younger
participation was then added to generations.
the likelihood estimate to yield an In the face of challenges con-
overall estimate of demand by gen- fronting the gaming industry over
eration. These results by generation the next few years, it appears that
are summarized in Table 2. iLottery can potentially provide
The data reveal that demand a direction that the industry can
for iLottery varies substantially by pursue as it seeks to recover from
generation. Millennials and Gen Xers the current coronavirus pandem-
appear to be the most likely to adopt ic. Study findings suggest that
iLottery, at around 36%-37%. Gen iLottery offerings also provide a
Notes
These surveys were conducted online within the United States by The Harris Poll from September 10-12, 2019,
among 2,032 U.S. adults ages 18 and older, and March 2-4, 2020, among 2,011 U.S. adults ages 18 and older. COVID-19
related surveys were conducted from April 11-13, 2020, among 2,013 U.S. adults ages 18 and older and from May 1-3,
2020, among 2,039 U.S. adults ages 18 and older. This online survey is not based on a probability sample and therefore
no estimate of theoretical sampling error can be calculated.
For complete survey methodology, including weighting variables and subgroup sample sizes, please contact Alex
Chew (alex.chew@harrisinsights.com). For other questions or for more information, please contact Dr. Barry Goodstadt
(bgoods@comcast.net) or Sarah Fulton (sfaresearch01@gmail.com).
28 | NASPL INSIGHTS May/June 2020You can also read
