THIRTY YEARS OF INNOVATION IN MINNESOTA - NASPL Matrix
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GAMES FOR THE HOLIDAYS | EXPANDING THE ONLINE REACH
INSIGHTS
THE OFFICIAL PUBLICATION OF THE NORTH AMERICAN ASSOCIATION OF STATE & PROVINCIAL LOTTERIES
MARCH/APRIL 2020
THIRTY YEARS
OF INNOVATION
IN MINNESOTA
The state’s natural
resources, such as the
environment and wildlife,
are key beneficiaries
of Minnesota Lottery
proceeds.
NASPL is here to support our members as they
make their way through uncharted territory with
the COVID-19 public health crisis. These pages
will continue to explore the business of lotteries
as we look to come out the other side.
STAY HEALTHY - STAY SAFE
FROM THE NASPL
PRESIDENT
EXECUTIVE DIRECTOR
David B. Gale
DIRECTOR OF ADMINISTRATION
Thomas Tulloch
VP OF OPERATIONS
Andrew White
DIRECTOR OF PROGRAM PLANNING
Tamika Ligon
GRAPHIC DESIGNER
John Koenig
ACCOUNTING
Natalie Ross Norris
Several weeks ago, I sat in my office hopefully for the better. We will make it EDITOR
Patricia McQueen
and proudly approved a press release through this. But we better be prepared
from the Lottery celebrating the highest to take advantage of the opportunities. VENDOR RELATIONS
week of instant ticket sales in our history. Through industry collaboration, I am Jake Coy
Today, I sit in an empty office corre- certain we will come out of this on the I.T. / SOFTWARE DEVELOPMENT
sponding with my employees working other side – better, stronger, and more Paul Corey
remotely, trying to anticipate the next prepared than ever.
COMMUNICATIONS COORDINATOR
monkey wrench the novel coronavirus On a personal note, I pray you and Mackenzie Whitacre
will throw into our operations. your families are doing well and are safe
In my first column as NASPL in these uncertain times. I was terribly
EXECUTIVE COMMITTEE
President, I included one of my favorite disappointed at the fact that we need
movie quotes from “Ferris Bueller’s Day to cancel our upcoming NASPL events. PRESIDENT
Bishop Woosley
Off:” “Life moves pretty fast. If you don’t These meetings are some of few opportu-
stop and look around once in a while, you nities I get to see my lottery friends each FIRST VICE PRESIDENT
Angela Wong
could miss it.” That has never been truer year.
than the last two weeks. In times like these, I like to remind SECOND VICE PRESIDENT
We are all drinking from a firehose myself about things that make me happy Sarah Taylor
now. As soon as a problem is resolved, and reflect on how lucky I have been TREASURER
two more pop up. Sales are falling; in my 46 years. Below is a quote from Gretchen Corbin
budgets are being busted; retailers are Ellis Boyd “Red” Redding, in the movie
SECRETARY
struggling; NASPL conventions are being “Shawshank Redemption” – one of my Cindy Polzin
canceled; and changes are coming faster favorite characters, from one my favorite
IMMEDIATE PAST PRESIDENT
than we can come up with solutions. movies. It's the final scene in the movie; Charlie McIntyre
To some, the future might seem grim. Red has finally been released from
To me, this looks like an opportunity. prison and is on a bus heading to Mexico PRES. INTERPROVINCIAL LOTTERIES
Kevin Gass
Through it all, I see a silver lining. to see his friend, who had escaped from
This is a chance to rethink our approach Shawshank years before. It’s a quote REGION I DIRECTOR
Gordon Medenica
to almost every facet of what we do. about hope and friendship. And I think
I believe this crisis will have a wide- it’s rather timely right now. REGION II DIRECTOR
ranging impact on the industry, and on “I find I'm so excited that I can barely Beth Bresnahan
consumer behavior in general. It will sit still or hold a thought in my head. I REGION III DIRECTOR
change the way we deliver our product. It think it’s the excitement only a free man Brian Rockey
will change the way we sell our product. can feel. A free man at a start of a long
REGION IV DIRECTOR
It will provide us with a discernible journey whose conclusion is uncertain. Barry Pack
argument to sell lottery through channels I hope I can make it across the border.
that most of us have been prohibited I hope to see my friend and shake his
CIRCULATION:
from utilizing in the past. And finally, hand. I hope the Pacific is as blue as it
after years of warnings, we will finally has been in my dreams. I hope.” Insights ISSN 1528-123X,
March/April 2020,
have the data to show our governors I hope to see you soon too. Stay safe. Volume No. Twenty, Issue One.
and legislatures what lottery sales look Published bi-monthly by NASPL
(North American Association of State
like when you are not prepared to sell in and Provincial Lotteries)
alternate channels. The opportunities are
7470 Auburn Road, LL1
endless. Concord, OH 44077
What we are enduring now is scary BISHOP WOOSLEY
© 2020 All rights reserved.
for our industry and for each of us Director, Arkansas Scholarship Lottery
personally. Things are going to change, NASPL President NASPL Email:
info@nasplhq.org
Websites:
www.naspl.org / www.nasplmatrix.org
p 440.361.7962
2 | NASPL INSIGHTS March/April 2020 f 440.867.2327
March/April 2020 NASPL INSIGHTS | 3
INSIDE INSIGHTS | MARCH/APRIL 2020
24 30
Expanding the
Online Reach
36 76
6 Up Front 30 A “Lotto” Pride in Minnesota 84 Lessons Learned on
Industry news and updates. After 30 years, and more than $3.1 billion Cashless Operations
to the state, the Minnesota Lottery’s history A year later: Revisiting the Ohio
of innovation is serving it well. Lottery Cashless Project – six things
12 What Should the Next By Patricia McQueen to consider.
National Game Do? By Fivi Rondiri, Director Account
By Stephen Wade, Principal, Lottery Management, INTRALOT USA
Management Consulting, LLC 36 Games for the Holidays
The holiday season continues to provide
benefits to lotteries, and new ideas combine 86 What Is Proof of
20 Research Corner: with tried and true methods to keep the fun Integrity?
Two Cents Panel Drives going. Lotteries must understand proof of
Innovation at the Colorado integrity and why it is so important
Lottery in the industry.
By Jennifer Thiebaut, Market 76 Expanding the Online Reach By Helena Pereira, Marketing
Research Manager, Colorado Lottery Lotteries with online sales continue Director, Szrek2Solutions
to enhance their services for everyone
involved, and cross-channel opportunities
24 Making a Difference are a hit with lotteries, players and
Jay Finks, Deputy Director, retailers.
Oklahoma Education Lottery By Patricia McQueen
4 | NASPL INSIGHTS March/April 2020
At IGT we are working around the clock to ensure our
employees remain safe and connected, and that our
customers have what they need during this difficult time.
Across the world, please stay safe and healthy.
© 2020 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 respon-
sible gaming. Our business solutions empower customers to choose parameters and practices that become the foundation of their Responsible Gaming programs.
March/April 2020 NASPL INSIGHTS | 5
7-Eleven Provides Growth
Opportunity for Oklahoma Lottery
OKLAHOMA LOTTERY
to $3,500, 7-Eleven prizes and second
chance drawings for 7-Eleven gift
cards. With a print run of one million
tickets, the company made a tremen-
dous commitment in offering prizes for
the game.
In just the first week of lottery
sales at the local 7-Elevens, there was
a strong sense that first-time lottery
players were among those buying tick-
ets, since about a third of sales were
$1 and $2 scratch tickets. “It’s really
early, but the biggest win is that we are
seeing trial,” said Finks. “It looks very
promising.”
And as it turns out, that was the tip
of the iceberg. About the same time
Mary Martha Ford, Director of as the deal with the locally-owned
Sales and Operations 7-Eleven stores came to fruition, those
stores were sold back to the corporate
7-Eleven, which has been a lottery
F
supporter for a long time. Given time,
ebruary 24 was a watershed date the Oklahoma Lottery. The machines the Lottery might not have had to do
for the Oklahoma Lottery. That’s sell all of the Lottery’s products, can all that groundwork, but Finks doesn’t
when Oklahoma City’s largest issue vouchers to cash in-store for really mind. He can look forward to a
retailer, 7-Eleven, began offering lot- prizes up to $600, and accept cash and big expansion in what is still the largest
tery products at all 108 of its stores for debit card transactions. retailer in Oklahoma in terms of num-
the very first time. It was a culmination “We challenged ourselves to look ber of stores, one which will now likely
of years of effort by the Lottery to at our options and we did our home- expand beyond Oklahoma City, with
strike a deal with the chain, which was work,” said Finks, noting that a major the addition of terminal and counter
locally owned and not part of 7-Eleven chain in another part of the country, sales in addition to self-service.
corporate, which has offered lottery Wawa, is self-service only. Thinking “It’s a good story in how we pur-
products for years. they could make that model work sued, for so long, such a large chain,
“We approached them every year with 7-Eleven in Oklahoma City, they and just couldn’t make it work until we
since launch and every year the answer pitched it to the company. “We thought came up with a new solution.” Through
was no – a very frustrating proposition we could not only pull this off, but still it all, the dialogue between the Lottery
for us,” said Oklahoma Lottery Deputy have the sales we were anticipating,” as and 7-Eleven changed how everyone
Director Jay Finks. To go from that long as guidelines were followed about views the partnership. And now, an-
frustration to success in 2020 took machine placement and other best other large chain which heretofore had
an unusual approach, starting over practices. A bonus for the Lottery is rejected lottery self-service machines
a year ago with meetings with the the addition of an impressive 43-inch is now asking for them. Some retailers
company’s executive team. “They were Lottery InMotion screen, Scientific are eying that 7-Eleven Cold Hard
not interested in selling lottery over Games’ digital advertising display, Cash ticket and asking how they can
the counter, so we spent the last year above the counter in each store. have their own game. “It’s no longer
working closely with them to develop Another important initiative came just about what the Lottery can give
a business model that could fit their out of those discussions – the Lottery’s a retailer; it’s about what the rela-
business needs and still achieve our first limited-edition Scratcher, avail- tionship can provide both parties so
market goals.” That model ended up able only at 7-Eleven stores. 7-Eleven everyone benefits,” said Finks. “That’s
being entirely self-service, a first for Cold Hard Cash offers cash prizes up where we will see more growth.”
6 | NASPL INSIGHTS March/April 2020
March/April 2020 NASPL INSIGHTS | 7
Eighth Annual New Horizons in Responsible
Gambling Conference Focuses on Future-Proofing
Through Collaboration
Keynote speaker Tim Miller
H
undreds of industry experts,
researchers and policymakers
gathered in Vancouver for
British Columbia Lottery Corp.’s
eighth annual New Horizons in
Responsible Gambling conference
March 10-12, 2020, to discuss how
best to prevent future harms to players
in B.C. and around the world.
Tim Miller, Executive Director
of the UK Gambling Commission,
delivered the keynote address
titled Future-Proofing Through Misha Glouberman, the second • Reducing harms associated
Collaboration. His remarks focused on keynote speaker, supported attendees with gambling products and/or
the central question: How do we tackle in meeting this challenge by facilitating environments; and
key issues facing the industry today, two sessions to teach delegates a dif-
while continuing to grow in a socially ferent approach to networking based • Developing a culture that priori-
responsible manner? on finding common areas of interest, tizes the well-being of consumers.
He challenged the audience to and following up with concrete action.
follow up with at least one new connec- New Horizons 2020 featured 16 Industry experts produced three
tion made during the conference and sessions, with each session focused on whitepapers beforehand to provide
collaborate on an idea, challenge or one of three themes: a foundation for discussions at
initiative of common interest, and re- New Horizons, based on what we
port back at next year’s New Horizons • Promoting safer play behaviors/ know, don’t know, and need to know
conference about the results. decreasing risky play; more about. Dr. Kahlil S. Philander
8 | NASPL INSIGHTS March/April 2020
Bridging the gap between
lottery and retail
The Abacus gateway connects consumers, retailers, vendors and
lotteries, bridging the gaps between the different parties for frictionless
ticket sales and gameplay, enabling lottery to be played everywhere.
ABACUS and TOSHIBA - Working together to provide the gateway of
choice connecting lotteries to the BIG BOX retailers
The Abacus and Toshiba lottery solution is easy to deploy,
enabling retailers to sell lottery products through Toshiba POS
systems. Combining Abacus’s lottery experience and
Toshiba’s #1 grocery POS market share in North America, as
well as a substantial presence in Europe, this is a game
changing development in the lottery industry .
e : info@lotteryeverywhere.com
w : www.lotteryeverywhere.com
JANUARY/FEBRUARY 2020 NASPL INSIGHTS | 9
Dr. Jamie Wiebe leads
a panel on “Where do
we go from here?"
discussed organizational culture and responsible gambling, • Dr. Jamie Wiebe (BCLC), Tim Miller, Per Einar Karlsen,
Dr. Jonathan Parke addressed the safer design and situation Ryan Persaud (BCLC) and Mike Randall (GLI and
of games, and Judith Glynn tackled player safeguards and Portfolio Solutions) on future-proofing the gambling
prevention. industry – where do we go from here?
Speakers, panelists and attendees had the opportunity to
review the whitepapers prior to the start of the conference to All of the speakers and conference topics are listed on the
level-set the three days of conversations around how best to conference website at horizonsrg.bclc.com.
safeguard players from future harms. The whitepapers are BCLC is synthesizing the information generated at New
now available here. Horizons, including the findings and questions posed in
A diverse representation of subject-matter experts from the whitepapers, into a final summary paper. The paper
different areas of the industry ran sessions as presenters and will provide a list of priorities for researchers and industry
panelists, spearheading discussions and offering perspec- professionals to consider putting into action, and it will also
tives around current challenges and solutions: be available on the conference website.
The talent, research, experience and knowledge that
• Tim Miller on his experience at the helm of the UK’s came together at New Horizons 2020 will determine some of
National Strategy to Reduce Gambling Harms; the next steps we can all take to make the gambling industry
safer for future players.
• Dr. Kahlil S. Philander (Washington State University)
and Dr. Ray Cho (Center for Gambling Studies at Rutgers
University) on what we know about geography, commu-
nity characteristics, and risk;
• Per Einar Karlsen (Norsk Tipping) on Norway’s
monopoly on player safety;
• Judith Glynn (Strategic Science), Dr. Luke Clark (UBC
Centre for Gambling Research) and Ryan Persaud
(BCLC) on the definition and measurement of risk;
10 | NASPL INSIGHTS March/April 2020March/April 2020 NASPL INSIGHTS | 11
What Should the Next
National Game Do?
By Stephen Wade
Principal, Lottery Management Consulting, LLC
W
hen asked whether they What are the properties of a game – making the exception to interact with
bought a lottery ticket that support steady spending? I a clerk or a machine to actually buy a
within the past year, about suggest that there are a few that are ticket. Once in the queue or in front
half of survey respondents nation- essential: of the self-service, they may spend
wide answer “yes.” There is some well beyond the minimum needed to
variation across the country, and the • The top prize must be worth be “in the big game.” If the luck of the
number answering “yes” can peak playing for; draw allows, spending may accelerate
around 75% after a particularly large • The top prize must be known to to deliver the memorable big jackpots
and well-publicized jackpot in Mega be winnable; and that are the signature of these games.
Millions or Powerball. The first jackpot • The actual experience of playing Other, in-state draw games typically
to approach (and eventually exceed) $1 the game must entertain. show a lift in sales when the multistate
billion brought unprecedented media games peak. This further suggests that
attention in January of 2016. Despite These properties are not equally it is not the money cost, but the time
the bonanza in free advertising (and important to everyone. For people and attention cost, that keeps these
the brief celebrity of lottery directors), who are absolutely regular players of valuable players away from the big
surveys after the event revealed that Powerball or Mega Millions regardless games most of the time.
all but about 5% of people who bought of the roll, the first two, and the sat- If the top prize has grown to be
a ticket during that run had also been isfaction of being “in the running” for “big enough,” what makes people
on board for earlier jackpots of no a big prize, offset the sparse winning think that the top prize is winnable?
more than half that size. The success experience provided. The fact that the I suggest that they simply remember
of lotteries in that event came not so
much from gaining new players, as
from inciting players to spend more. As the jackpot grows, a jackpot that is “big
Getting significant increases in enough” eventually brings in players who
yield from multistate games will
depend on getting people who already are fairly sure they will lose their wager.
play at least sometimes, to play more
often and to spend more per play. Our
current games exploit the excitement cost of play is low makes it easy to play. hearing or seeing something about a
of a jackpot reaching a new record Steady spending from these players win. The actual number of top prize
high to gain episodes of accelerated is what allows the jackpot in Mega wins provided by a game may not
spending. This can be fun, but this Millions and Powerball to grow. be important. Powerball and Mega
excitement is ever harder to come by, As the jackpot grows, a jackpot that Millions provide only a few wins per
and the spending episodes tend to is “big enough” eventually brings in year, but most people can remember
weaken with repetition. An alternative players who are fairly sure they will hearing about someone winning. Not
would be to strive for steady spending lose their wager. The barrier to getting all wins are equally memorable. The
supported by properties of the game these players is not the cost of the wins that are most accessible to mem-
that are consistently, reliably present. wager, but the departure from routine ory, and that consequently provide the
12 | NASPL INSIGHTS March/April 2020Lottery doesn’t always
make it on the shopping list
Nearly half of lottery purchases are unplanned, which makes being
seen critical to being top of mind. Our integration with big box retailers
and 91% of grocery make us the gateway to new players. Our access to
high-traffic areas like checklane and gift card racks allow you to connect
better with your players and increase sales to infrequent and casual
players.
March/April 2020 NASPL INSIGHTS | 13best “proof,” are the wins with a story.
When a workplace pool wins, that is a
story. When someone wins on the only
ticket they ever bought, that is a story.
Sometimes a picture suggests the
story – does that winner remind you
of someone you know? The absolute
size of the jackpot is less memorable
than its relatable human connections.
The low probability of winning is an
abstract concept; the story of the win
becomes a fact.
If we wish to explore the poten-
tial for increasing steady revenue
from national-scale games, we must
understand which obstacles most limit
our success. I suggest that the money
is there, and that effective storytelling
can amplify the effect of even a small
number of wins. But really big jackpots
are by definition rare: When $100
million became commonplace, it was
not big anymore. There is a big oppor-
tunity in providing entertainment for 25 of them would win something. likely. Every prize level defined in a
a steady player, beyond daydreams In just the same way, if one player particular instant game is represented
about an incomprehensibly big prize. bought 100 tickets, we would expect in the chart ($5, $10, $20, etc.), or
What we want is engagement that is that about 25 of these would win some in the list below the horizontal axis.
steady, not episodic. prize. Whether that player goes on to Only those that are more likely than
buy a next ticket surely depends upon not to be won at a represented level
The Engaged Player the entertainment provided by those of spending appear in the body of the
(roughly) 25 wins. If all of them were chart. The body of the chart answers
Within the lottery portfolio, we break-even prizes, our player would the question, “What is the winning
already have games that excel at not likely be keen to buy another. experience that sustains engagement
sustaining steady engagement. Instant Intuitively, we understand that in of players?” Further, the chart shows
games teach us that while the size order to sustain play, some of the wins both “What are the parts (prize levels)
of the top prize can be an important need to be “big enough.” Likewise, of this experience?” and “What do the
motivator, the odds of winning the intuitively, we understand that as parts add up to?” – the overall rate of
top prize have almost no effect on game designers we need to think return for the player, or RTP.
sustaining play. What sustains play in about “just big enough.” After all, the The chart uses colored wedges
instant games is the actual winning lottery needs to make money for good that begin (going left to right) at the
experience. I have been particularly causes. Effective game design is a very amount of spending where the corre-
interested to understand how the size quantitative art. sponding prize is more likely than not
and frequency of wins keeps players Like many quantitative subjects, to be won. The thickness of the wedge
engaged. What do players of a popular this one is easier to understand by increases to represent the likely RTP
$5 scratch game actually win, most of using visual tools. The chart above from this particular prize level, over all
the time? is a visual tool that represents how players spending this amount of mon-
We need to understand how “what greater spending by a player makes ey. As spending increases, multiple
I am likely to win” relates to “how hard winning particular prize levels more prize levels are represented by wedges;
I play.” Every ticket has a statement
about the likelihood of winning any
prize, like "Overall odds are 1 in 4."
From this it is easy to understand We need to understand how “what
that if we buy only one ticket, it is
more likely to be a non-winner than
I am likely to win” relates to “how
a winner. If 100 people each bought hard I play.”
one ticket, we would expect that about
14 | NASPL INSIGHTS March/April 2020March/April 2020 NASPL INSIGHTS | 15
their combined thickness adds up to the top prizes in a manner less than
the likely overall RTP. The overall RTP random. That is, if we think of the
is read on the vertical axis. So, as a common game as having, for example, 100 mil-
This particular chart represents a lion consecutively numbered tickets,
$5 scratch game, similar to hundreds sense player, will I ten of which are top prizes, we can be
that sell briskly every week across approach the game pretty confident that there will be a top
North America. It's just typical of the in the same way prize somewhere in the last 10 million
type, and of course within this big and tickets. The precise location of any top
successful category of instant games,
next week, knowing prize is unknown, but on the other
there are many variants. But, after that someone in my hand finding one of those top prizes
looking at hundreds of these, I am state won the big certainly decreases our expectation
comfortable making some generaliza- that its close neighbors have the same
prize this week?
tions, in particular regarding overall value.
RTP and its components: This is a fact known to many
lottery insiders. It is also a universal
1) Among the first 100 tickets, wins expectation among players, simply on
of anywhere between four times the basis of common sense rather than
and 10 times the wager are likely, lower cost than this. Again, instant insider knowledge. So, as a common
and these comprise a big share of game prize structures show that top sense player, will I approach the game
the overall RTP. prizes big enough to incite play do not in the same way next week, knowing
2) The overall RTP reaches about need to cost more than 5% of revenue. that someone in my state won the big
50% within the first 100 tickets. Instant game top prizes do not need prize this week? If the common sense
3) A player who buys 300 tickets is to grow, and they do not have to be players decline to buy tickets that they
likely to experience every prize offered at particularly good odds. think have no chance of winning big,
level the game will show him, even They just need to be big enough to be this creates both a logistic problem
if he goes on to buy 1,000 tickets. attractive. And, as with any top prize, (withdrawing all those printed tickets
memorability (more than accounting) from the market) and a financial prob-
Just by way of contrast, a similar provides “proof” of winnability. lem (the game falls short of its target
chart prepared for Powerball would GGR if all the big wins are claimed,
show, for $1,000 spent, a likely RTP of Next National Game with lots of other tickets outstanding,
9% and no prize larger than $7. But of when the game closes).
course, the overall RTP of Powerball Nevertheless, I do not suggest Further, if a printed game with
is by design about 50%, with the rest that a printed instant game is the 10 top prizes is being shipped to 40
going to the complement of RTP, gross best “next thing” for a national-scale states, some states are sure to have no
gaming revenue (GGR). If the expe- lottery game. This is largely because top prizes. Is there some way to make
rience from scratch games suggests the printed instant game is in effect a all participating states feel that they
that 50% RTP is the price of sustained perishable product, and its logistical are presenting the same value to their
engagement, does this mean that a problems become daunting with players? Should every state receive
national game that engages players increased scale. “slices” from all parts of a run of 100
steadily, regardless of a rolling jackpot, Printing an instant game makes million tickets? These are problems
must give up 50% RTP even before prize liability a fact, rather than a prob- that are very likely arise when consid-
considering the funding of top prizes? ability. Only a certain small number of ering multistate scratch games on a
I suggest that this is exactly what top prize tickets can be printed. Once grand scale.
we should plan for. The instant they are all consumed, most lotteries An electronic instant game, as com-
category has become increasingly are required by rule to withdraw all pared to a printed game, may avoid
important for lotteries, because the remaining tickets from the market. these logistical problems. However, in
engaged player sustains a frequency Withdrawing printed tickets from the short term, only a few jurisdictions
of play that overcomes the thinner the market can be a logistic hardship. would be able to legally join a consor-
GGR margin of instant games. Lower Failing to sell lots of tickets can have tium for such a game.
margin with higher volume has been a a negative impact on the GGR of the In a draw game, on the other hand,
path to success. game – after all, the top prize con- the top prize is always there. It follows
But in Powerball and Mega sumes the intended share of revenue a truly random distribution and cannot
Millions, funding the top prize alone only if essentially all the tickets are be depleted. The likelihood of award-
consumes more than 30% of revenue. sold. ing the top prize varies, as the volume
Clearly, the top prize in a high-volume To reduce the risk of this outcome, of play in the particular drawing varies,
national game must be funded at the manufacturing process distributes in a non-linear but calculable way. The
16 | NASPL INSIGHTS March/April 2020Engaging lottery players in a digital world. Camelot Lottery Solutions change the game for communities. We think for lotteries to grow responsibly, players need both a connection to the game, and a tie back to their communities. By making the lottery relevant to the modern player, we help lotteries drive new growth through player engagement. Because we win when lotteries and communities succeed. Visit camelotls.com
drawings are independent events. The level. If we could make their play worth Of course, any new game carries a
implication is that awarding a top prize $5 rather than $2, we could increase risk of cannibalizing both our existing
in tonight’s drawing has no effect on revenue by 5/2, or 2.5 times. If we national games and single-jurisdiction
the likelihood of awarding a prize in could do both at once, we could gain games. This risk may be reduced by
tomorrow night’s drawing. 1.75 *2.5 = 4.375 times the revenue we clear differentiation not only on price
A game where the outcomes are currently handle. Calculations like this and play frequency, but on top prize
revealed for every player in a sched- prove nothing, of course. However, it value. There may be room for a game
uled drawing also has the potential to may not be crazy to think that a new with a set top prize in the low tens of
briefly draw the attention of a huge game, with double the revenue of our millions, for instance.
audience nationwide. This flicker of current multistate games, is possible. Is it even possible to design a draw
synchronized attention should be In Powerball and Mega Millions,
game that would provide the values
valuable to a creative marketer. we might currently handle about
discussed here? After all, the algo-
For these reasons, I suggest that $8 billion per year at 50% RTP, for
rithm that distributes prizes over play
it is worthwhile to think about a GGR of $4 billion. If we can increase
outcomes in instant games can be as
national-scale draw game that delivers revenue by factor 2 (to keep the mental
complicated as may be needed. It need
an instant-like winning experience, math easy) to $16 billion, we could
not be explained to anyone outside
through frequent play at a premium earn the same GGR by retaining only
a very small circle of experts in the
price. Let’s say daily, at $5 per play. one-quarter of the revenue. In other
A daily national game is not a goal words, we could build for an RTP of house that manufactures the product.
in itself, it is a way to reach the goal of 75% – right up there with the current Draw game rules, on the other hand,
providing more revenue for the lotter- spectrum of premium-priced instant need to be simple.
ies’ beneficiaries. How big might the games. We know how to build $5 prize This article does not begin to
opportunity be? We can get some idea structures that engage players to play suggest how to build such a game.
of scale by comparing to the current every day – we are doing that right Rather, it suggests a set of properties
reality of Mega Millions and Powerball. now, and further we are doing it with that might qualify a game for serious
If we can get people to play a new game RTP considerably less than 75%. It consideration as the best “next thing.”
daily, i.e. every day rather than twice may be possible to allocate funding so If you can explain a draw game struc-
per week, we could increase revenue as to offer a very distinctive top prize in ture that provides these properties,
by factor 7/4, or 1.75 times the current a new game. you deserve our close attention!
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18 | NASPL INSIGHTS March/April 2020March/April 2020 NASPL INSIGHTS | 19
RESEARCH Corner
Two Cents Panel Drives
Innovation at the Colorado
Lottery
By Jennifer Thiebaut, Market Research Manager, Colorado Lottery
F
or the first time in history, the to help manage the panel, topics,
Colorado Lottery is receiving assessment and analysis. While the
two cents instead of giving it. data gathered from the research is
In July 2018, the Colorado owned by the Lottery, Toluna owns
Lottery began full implementation and runs the community platform,
of a new research tool, a community This new which encompasses the technology and
panel called Two Cents. The panel platform gives the framework.
is a means to elicit player feedback This new platform gives a voice
faster and more consistently for a voice to to both Colorado Lottery customers
quicker adaptability to changing both Colorado and infrequent and non-players.
product strategies, lottery trends, and Lottery The quantitative and qualitative
consumer attitudes and opinions. information we receive helps drive
Since the panel is proprietary, it
customers and innovation, messaging, outreach,
allows the Colorado Lottery to control infrequent and product development, advertising
topics and survey frequency, tone non-players. campaigns, and other strategic goals
and messaging. This oversight and every single month.
flexibility provides us with the freedom Currently, there are 1,400 panel
to collect meaningful feedback quickly members, a mix of non-players and
and in a voice that is consistent with infrequent, mid-level, and core players,
our brand. who regularly participate in surveys.
Not just a tool for player sentiment, Panel members are classified by the
the panel provides insight regarding short turnaround. The panel makes the Colorado Lottery’s seven motivational
how familiar our players are with Colorado Lottery more agile and able segmentations – Living Large
the Colorado Lottery’s three pillars to tweak strategies based on real-time Dreamers, Karma Seeking Dreamers,
that drive its mission – revenue, feedback. Fun Money Dreamers, Jump Start
responsible gaming and conservation. When we began researching online Dreamers, Working Realists, American
In the last couple of years, the community panels, we saw that they Dreamers, and Retirement Driven
Colorado Lottery decided to enhance were already a well-utilized research Realists, and then segmented further
its research efforts beyond more platform for private sector companies, by our Scratch game segmentations.
traditional methodologies, such as but still relatively new to the lottery Panelists are recruited first through
focus groups, consumer intercepts industry. After reaching out to the our MyLottery platform – sending
and tracking studies, to deliver few other state lotteries already using an email to MyLottery members and
more quantifiable information. An online communities and investigating inviting them to sign up if they are
online community panel allows the corporate panel research firms, we interested in participating. After that,
Colorado Lottery to collect targeted landed on Scientific Games, our we use research firms that specialize in
information on narrow topics with a Scratch ticket vendor, as our partner recruiting individuals to participate in
20 | NASPL INSIGHTS March/April 2020RESEARCH Corner
Valuable Insights
Quick polls might include questions
about how panelists would spend their
money, their favorite sport, favorite
thing about the holidays or where they
get their news. Answers to these types
of questions can influence social media
themes, game development and even
budgeting. Discussion board topics re-
quire a bit more thought. For example,
we might ask, “Is there a shop, restau-
rant or retail location that does not
sell lottery games, but if they did you
would purchase them there?” or “Did
you buy a Mega Millions ticket for the
$1.6B jackpot? Share a story about this
purchase.” Surveys might get players’
opinions on casinos or multipliers, or
tell us how they use our website or how
they enjoy the projects that are funded
The Colorado Lottery Attitudes and Usage surveys (A&U) show how Colorado compares by Lottery proceeds.
to the same A&U survey fielded on Scientific Games’ national panel. One example of a Two Cents
Community Panel survey that influ-
enced game development is the Scratch
community panels. Individuals must
My Back panel. From this panel survey
be invited to participate in the panel;
we learned that a large group of players
there is no call for signups. We’ve
recruited panelists twice since we appreciate the ability to play at a
implemented Two Cents. On average, By segmenting higher price point. Knowing this value
the Colorado Lottery asks panelists to proposition resulted in the creation
complete one survey, one quick poll our players by of more nuanced product positioning
and differentiation within our $20
and one discussion board each month. psychographics price points. These panel findings were
By segmenting our players by
psychographics we can see them we can see them further supported by focus groups and
through different filters. In some helped the product marketing team
cases, behavior is influenced by the through different make the decision to keep this group-
region where they live, in others by filters. In some ing of products in the product line.
Another revenue-boosting panel
their age or gender. By being able to
interpret the nuances of what players cases, behavior is discovery: A family that plays together
or potential players want, we can stays together. Research showed us
offer products and services that will
influenced by the that advertising the full family of
grow the Colorado Lottery in fun and region where they games, as well as positioning them
together in displays, increased player
responsible ways.
Most surveys take about five live, in others awareness of those games. These
minutes. Members remain engaged by insights helped us overcome any
earning points for every survey, poll
by their age or resistance from retailers to spend the
and discussion board topic that they gender. additional time necessary to position –
complete, and points can be redeemed and reposition – families together with
for electronic gift cards. Surveys are each new launch. Interestingly, we
posted for 7 to 10 days at a time. now have additional data that supports
22 | NASPL INSIGHTS March/April 2020the belief that families of games drive the survey were in perfect alignment
purchases of tickets both up the price with the external survey. Analytics
point scale and down. We credit some showed which games tested best and
of the strength of our $1 product to guided recommendations on which
our increased number of launches and licensed property games would be best
awareness of families of games. to launch. This survey is an excellent
Our Two Cents Licensed Property example of how panel feedback drove
Study measured brand familiarity, the product development for licensed
likeability, likelihood to purchase, product games.
willingness to pay to play a mobile The bottom line is that research
game and the desire to play a mobile is critical for any new product
game for free, along with several other development. The speed at which we
variables. This study coincided with are introducing new games means up-
another external licensed property to-date and current research can make
survey completed at the same time and or break a new product launch. But
with the same properties. Results from that’s just my Two Cents.
March/April 2020 NASPL INSIGHTS | 23MAKING A DIFFERENCE
Jay Finks
Deputy Director, Oklahoma Lottery
G
etting things done isn’t al- He oversees all day-to-day activities
ways easy, and not everyone
"I haven’t seen at the Oklahoma Lottery, including
thrives on a challenge. But anything that Jay is marketing, sales, accounting,
if you talk with Jay Finks, not only afraid to take on. He operations, administration and
will he tell you how to get things security.
is a protector of his
done, but how energizing it is to And he gets things done. He
be up to the challenge. As Deputy time and the time of spearheaded the legislative change
Director of the Oklahoma Lottery, our employees." in 2017 that removed a crippling
he has managed to get things done profit requirement from the lottery
in a way that has translated into - Rollo Redburn law – more on that later. Most
millions of extra dollars for the recently, he succeeded in bringing
Lottery’s beneficiary, education. all 108 Oklahoma 7-Eleven stores
“Jay has been with the communicates well and clearly with into the lottery fold for the very first
Oklahoma Lottery from the very his employees to make sure they time; they had been independently
start; he was hired from the understand their responsibilities owned and had resisted all previous
private sector and has consistently and how to achieve their goals. I efforts to add lottery. For that story,
demonstrated his value to the haven’t seen anything that Jay is see page 6.
Lottery,” said Executive Director afraid to take on. He is a protector This year, Finks is working on
Rollo Redburn. “He thinks outside of his time and the time of our a bill to give the Lottery’s security
the box continually, and attacks all employees. In addition, he is a team more investigative powers,
new problems with a determination devoted husband and father, coach and also to allow lottery retailers
to develop a solution that is a win- for youth athletics, and a dedicated to accept all forms of payment,
win for all involved, and if that isn’t ‘doer of good.’” including credit cards (debit cards
possible, then most certainly a win Starting at the beginning in were approved just two years
for the State of Oklahoma. Jay is 2005 as Media & Promotions ago.) He thinks all the goodwill
one of those rare employees who Manager, Finks became Marketing generated from the 2017 legislation
communicates with his employer Director in 2007, Director of and its fiscal impacts have made
to keep them well-informed, but Marketing & Administration in legislators much more receptive
also to pool resources and develop 2012, and was named Deputy to conversations on these and
a winning plan before he attacks Director – essentially the chief op- other issues. “We’ve really worked
potentially caustic issues. He erating officer – in January 2018. hard to position ourselves to be a
24 | NASPL INSIGHTS March/April 2020JAY FINKS, Deputy Director, Oklahoma Lottery
resource for them and help them in school students. Both his daughters, interview I convinced the Director
any way possible.” 15 and 17, play for him on the team. of Sales and Marketing that hiring
Finks still loves his roots in market- He and his wife Jennifer also have an someone with experience would be in-
ing, creative and media strategy. He’s older son. valuable at launch. She then combined
proud to say that all of the Lottery’s Finks has a bachelor of science de- two of the marketing positions into one
instant tickets are designed in-house, gree in promotions management from and I became the sixth employee of the
and thinks Oklahoma has some of the the University of Central Oklahoma, Oklahoma Lottery.
best-looking tickets in the industry. “If and he spent the early part of his
you are creating an impulse item, don’t career in advertising and media buying Did your early media buying and
you want it to look absolutely the best for agencies and private corporations. advertising experience help you with
it possibly can?” Another thing he’s He was honored with a NASPL Powers your lottery duties?
proud of – proving it’s not always the Award in 2010, recognized for excel- Absolutely. I was hired on Aug. 24,
big challenges that provide satis- lence in the field of lottery marketing. 2005, and launch was Oct. 9, which
faction – are the 10-second jackpot left a very tight window to prepare. My
trigger spots that air on radio stations What first brought you to the experience with navigating creative,
throughout the day on draw days once Oklahoma Lottery? media strategy and other marketing
Powerball and Mega Millions get over In short, fantasy football. A friend efforts made that timeline a little more
a certain jackpot level. “It’s a simple who played in my fantasy football manageable. My strategic marketing
call to action and it works,” he said. league suggested it to me as his father background has been a foundational
Outside the Lottery, Finks is an was just appointed to the Lottery component of how we’ve built the
avid gamer. For as long as he can Commission Board. The idea of marketing department here at the
remember, he’s played video games. marketing a new lottery and all of its Oklahoma Lottery. We take on the
But he gets plenty of outdoor activity products sounded intriguing to me so primary role of an ad agency internally
as a soccer coach – he’s now in his I applied for the job. At the time, the and utilize our agency as a secondary
eighth year coaching a local recreation- Lottery was only offering entry level resource when needed. Our marketing
al girls’ soccer team comprised of high marketing positions, but during my team does all the creative for instant
March/April 2020 NASPL INSIGHTS | 25MAKING A DIFFERENCE
tickets, negotiates media buys and different approach and started actively machines in the U.S.), we are pushing
sponsorship deals, handles print utilizing key Lottery employees to go to leadership to take a serious look at the
production, manages our website and the capital and create more meaningful evolution of lottery offerings to include
mobile app and is the primary driver discussions about our needed law initiatives like iLottery.
on all creative, media and marketing change. While we were unsuccessful For the industry as a whole, let
strategies. in 2016, it laid the foundation for the me take a deep breath and be direct.
ultimate success we had in the 2017 Powerball and Mega Millions are
How challenging was it to get the law session. never going to reach their full potential
changed, and do you have any tips for The irony was that the primary unless we stop looking at small, incon-
other lotteries trying to bring about author of our 2017 bill had been an sequential and limited changes to the
legislative change? outspoken opponent of the Lottery games themselves and start looking at
To put it in perspective, from for years. I took it on as a personal what we can do on national level. We
2006 to 2016 our bill to remove the challenge in 2016 to build a relation- can’t say we are a national brand when
35% profit requirement was only ship with her and to convince her not we don’t act like one. Powerball and
heard once in subcommittee, where it only to carry our bill but to champion Mega Millions are our most profitable
was voted down. The majority of the it. She kicked me out of her office once offerings and allow us the ability to
time the Committee Chair wouldn’t a week in 2016, but by the summer, I offer high payout instant games – we
even hear the bill. In 2016 we took a had built enough respect with her to must have a stronger commitment to
create some space to be heard. At that strengthening these brands.
point, politics were pushed to the side First, we need to pool our adver-
and we could explore the business case tising efforts on a national level and
of changing the law. That relationship utilize the effectiveness of national
was key to building the cooperation advertising to reach a greater amount
needed to get the law changed. And of people. And while many get caught
the results have been extraordinary. up in the complexity of navigating one
Our sales in FY17 were $150 million, effort across all states, in practice it is
and our goal for FY20 is $260 million. only as hard as we make it. We need to
Our beneficiary has seen year over collect a percentage of the prize pool
year growth in contributions and we on a national level and create meaning-
anticipate this trend will continue to ful sponsorships, marketing programs,
increase. promotions and media exposure on a
I have two tips for lotteries at- national level. A key group of lottery
tempting to secure law changes. The marketing professionals could steward
first one is easier said than done: the initiative and provide the games’
Retain a professional lobbyist to help leadership with the necessary approv-
work your bill. We didn’t even think als to ensure the initiatives follow the
we were allowed to do so until we dug national strategy. When you really
into the law, but doing so afforded us think about the buying power that we
a conduit to connect with key legisla- could generate nationally, it is stagger-
tive leaders and navigate the bill in a ing. That buying power would translate
more efficient manner. Two: Get up to partnering with other national
from your desk, grab a few articulate brands and growing our exposure
co-workers, and go build relationships exponentially.
with leadership, key legislators and Second, we need a jackpot man-
most importantly, key members of agement program to maximize sales
your lottery’s beneficiary. during high jackpot runs and to
enhance mid-level jackpot runs. Why
Are there any other things you’d like do we let the jackpot grow so quickly
to see changed, either in Oklahoma or at the higher levels when we could all
across the lottery industry? benefit from more draws in between?
Given the magnitude of the In FY16, when Powerball hit $1.5
competitive market in Oklahoma (we billion, we had three draws from $550
have the third largest number of slot million to $1.5 billion. In FY19, when
26 | NASPL INSIGHTS March/April 2020VIRTUAL
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JANUARY/FEBRUARY 2020 NASPL INSIGHTS | 27MAKING A DIFFERENCE
Mega Millions hit $1.6 billion, we had
four draws above $500 million. With a
strong jackpot management program,
we could have doubled the number of
draws and reaped the benefits of the
additional sales from those draws. And
why settle for a $394 million jackpot
when we could increase it to $400
million and create a more marketable
amount? We could do that when we
do a better job of managing the earlier
jackpots. These are our games, and we
need to maximize how we are using once we got our 35% profit require- instant launch calendars: one in
these funds in order to maximize their ment removed. Most in the industry case the law wasn’t changed, and 16
impact on our sales and profits. advised us to phase out the old product new games to launch immediately in
and gradually introduce the improved case it was. The strategic plan was
What have you enjoyed the most in product (instant games with higher to remove all instant games from
your lottery career? payouts) over a six month period, the field and replace with the 16 new
I love taking on initiatives that because that is what traditionally had instant games in a matter of eight
start with “no one has ever done that” been done. We felt the right strategy business days. The bill was signed
or “we can’t do that.” Embracing new for our product and players was to by the governor in early June and
ways of thinking and bringing those remove all the old product from the new games were in the field less
initiatives to life create great moments market and start fresh. As I was work- than one month later. This was a
of enjoyment for me. One of my ing the bill through legislation, before very risky and aggressive approach
favorites was the effort to overhaul and it had been approved, our product but it allowed us to make the biggest
launch our new instant product line team was simultaneously building two impact on our sales.
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Pride in
Minnesota
After 30 years, and more
than $3.1 billion to the state,
the Minnesota Lottery’s
history of innovation is
serving it well.
By Patricia McQueen
30 | NASPL INSIGHTS March/April 2020I
t’s not surprising that the Minnesota Lottery is all than 10% of the current staff of about
about close ties to the state’s people and its heri- 155. “We have an amazing staff,” he
tage. The Lottery’s logo prominently features the exclaimed. “People really care about
the state, and we have not only talent
official state bird, the common loon, and any state
but a team mentality. That’s just
known as the “Land of 10,000 Lakes” clearly puts
amazing to see.”
a lot of emphasis on its prized natural resources.
And it just so happens that Lottery revenues help Innovative Products
support those resources in a big way. By law,
Lottery proceeds may not be used as a substitute While Wes Harms is not one of
for traditional sources of funding for environmen- those 30-year employees, he’s about
tal and natural resources activities, but rather as a as close as they come, starting with the
supplement to those traditional sources. Lottery just a few months after startup.
Currently Director of Operations,
he has seen it all over the years, and
is proud of the innovative – even
Celebrating its 30th anniversary this fantastic. Minnesotans are very proud groundbreaking – projects developed
year (the first ticket went on sale on of their natural resources and the great in Minnesota. Some have been more
April 17, 1990), the Minnesota Lottery outdoors, and we are fortunate to be successful than others, but they all
has come a long way. From inception raising money to make all that better.” represent a willingness to try new
through the last fiscal year, it had Prock is also proud to say that there things. That’s a heritage that came
generated $12.8 billion in sales, sent is plenty of evidence that the Lottery’s from the Lottery’s initial director, the
more than $7.7 billion to players in player base is expanding at a time late George Andersen, who was always
the form of prizes, paid almost $775 when all lotteries are concerned about ahead of the curve when it came to
million to retailers, and – most impor- a potentially aging pool of players. new ideas. “He could come up with
tantly – provided $3.1 billion to the “New people enjoy our products every a lot more ideas faster than we could
State of Minnesota. Part of those state single day.” They understand that execute them,” noted Harms.
proceeds benefit the Environment there are fun and innovative products, The most successful of those
and Natural Resources Trust Fund, and even if they don’t win, they can innovative products is what is now
which was created by a voter-approved embrace the knowledge that their called Print-N-Play, a progressive
constitutional amendment and is solely money contributes something great to jackpot instant-win game printed by
funded by the Lottery. The Fund’s the State of Minnesota. the lottery terminals. The game was a
programs enhance, protect and restore The Lottery’s employees love doing first in the industry when it originated
Minnesota’s environment and wildlife. their jobs that make that happen. as the slot-themed Slots Plus in March
Other proceeds benefit the state’s Prock humbly points out that 17 of the 2002; the product expanded to other
Natural Resources Fund, the Game original employees are still working themes and became known as G3
& Fish Fund and the General Fund at the Lottery after 30 years, more games in 2004. They were rebranded
(supporting important programs like
education, public safety and health and
human services).
“The thing that we are probably
the most proud of is our mission that
raises money to make Minnesota,
and the lives of Minnesotans, better,”
said Executive Director Adam Prock,
who was named to the position in
April 2019 after two years as the
Lottery’s Director of Communications
and Government Relations. With
over $1 billion of those cumulative
proceeds going to environmental
causes, there are few places in the state
that haven’t directly benefited from
lottery dollars. “I think that is pretty
March/April 2020 NASPL INSIGHTS | 31You can also read
