La Fleur’s 2016 Lottery Conclave & Interactive Summit was held Dec. 4-7, 2016 at the Intercontinental Stephen F. Austin Hotel in Austin, Texas. It featured topics such as NFL sponsorships, API & cashless systems, lean lottery and eSports.
The Texas Lottery was the co-host of La Fleur’s 2016 Lottery Conclave & Interactive Summit. The joint conclave and summit program sponsors were IGT (dual sponsor). The conclave program sponsors were IGT, INTRALOT, NOVOMATIC Lottery Solutions, NeoPollard Interactive and NCM. The summit program sponsors were IGT, Interprod Interactive and Linq3. The hospitality event sponsors were EquiLottery, Epson America, ICF Olson and Latinworks. The webinar sponsor was Salesforce. The flash drive sponsor was Schafer Systems.
The Honorable Larry Gonzales, Texas House of Representatives House Appropriations Subcommittee Chairman, kicked off the Austin program after being introduced by Texas Lottery Executive Director Gary Grief. As a part of his introduction, Grief mentioned what a pleasure it was to have an entrepreneurial businessman involved in the Texas Legislature’s oversight of the Texas Lottery.
Gonzales emphasized how important the direct working relationship that has been established with the Texas Lottery has been in allowing him to better understand its unique challenges and opportunities. He is a full-time business owner who serves his state as a part-time legislator. This business acumen helps him understand the unique fiscal demands on the state-run lottery. Gonzales had no-nonsense, critical advice to lottery directors in the audience: Get out and meet with your elected officials. Show them your accomplishments and your challenges in pictures and graphs, not with long written descriptions.
“We were honored that Chairman Gonzales would take time out of his very busy schedule to share his valuable insights with our lottery colleagues from around the world,” said Grief. “With his background, his words really hit home to our industry issues.”
Robert Tirloni, Products & Drawings Manager for Texas Lottery, presented “Supporting Texas Education and Veterans.” In 2009, legislation was passed directing Texas Lottery to create and offer a scratch ticket to benefit the Fund for Veterans’ Assistance. After two years, annual lottery contributions were in decline. The lottery advised that the veterans step away from their ‘brand.
Contributions to veterans soared after the non-military themed scratcher games were first launched in March 2014. The first ticket was called On the Money. The Texas Lottery’s cumulative contributions to Veterans’ Assistance from November 2009 through October 2016 total $70.7 million.
Dale Bowersock, Scratch Ticket Coordinator for Texas Lottery, discussed “Scratch Ticket Initiatives: $10 and $20 Price Points.” The Texas Lottery is currently limited to offering only draw games and scratch ticket games in its portfolio. This restriction limits the growth potential of the Texas Lottery and causes the lottery to seek out new and innovative games to offer in these basic categories. He provided sales graphs and rollout initiatives on new $10 and $20 scratch ticket games recently introduced by the Texas Lottery and their sales success.
He noted the challenges with the indexing model, including “new game styles, seasonality, uniform index period, print quantities, advertised vs. non-advertised and core vs. rotational.”
In the interactive break, La Fleur’s Magazine publisher Terri Markle discussed what motivates instant players to buy new tickets. “Like any ticket, design, top prize, significant win and prize payout is what drives [scratch] sales,” said Tirloni. “We hear I want to support veterans but that is not what sells. Money or gaming themes sell.”
Bowersock noted that “warm and fuzzy” doesn’t sell tickets.
He added that Texas Lottery will launch a $1 all-Spanish instant ticket in 2017. “We are also moving forward on a Best Buy ticket. I insisted that we have their branding people at the table from the very beginning,” said Bowersock.
Eric Sudol, VP, Corporate Partnership Sales & Service for the Dallas Cowboys, gave an overview of the Cowboys’ new Star headquarters and then spotlighted the team’s partnership with the Texas Lottery.
Using a book metaphor, Sidol examined the “chapters of our partnership”—Chapter 1: the start/introduction, why partner (audience, engagement, effectiveness), the overall game plan, activation/Draft Day, wild weekend, training camp, ticket and results.”
Chapter 2 examined why an organization like the Texas Lottery would want to partner, alignment of goals and economics for partners, overall game plan, activation (entitlement, Cowboys U, fitness and results.
Following the formal presentation, Sidol and Grief were interviewed about why the Texas Lottery took the next big step in 2016 with a key sponsorship at the Cowboys’ new state-of-the-art facility.
“The Star is a 91-acre facility. The Texas lottery brand is everywhere,” said Sidol. “We are making an investment in the future Dallas Cowboy fan. That is what the Texas lottery is doing the same for the future.”
“It was perfect synergy for the Texas lottery to partner with the Dallas Cowboys,” concurred Grief. “The Jones family has put the best people possible in every position in the organization. You can’t begin to gauge the value of the Cowboys ticket in dollars sold or number in impressions. The true value is in associating with a world class brand like the Dallas Cowboys—elevating your brand to that level with the brands that associate, firms like Ford and Dr. Pepper who also work with the Cowboys. That is where we see the lift in the chatter in the player world.”
“I tell everybody I am in the business of integrity statements,” said Sidol. “There are very few things that engage the public like sports. The NFL is by far the best. We have to continue to push our thinking on what we can do.”
The Texas Lottery’s goal for the partnership is ambitious. “The Star is going to be a world-class destination. The hope is that we will become more ingrained into the millennial society. The Texas lottery will be part of their lives,” said Grief.
He ended noting that the first thing visitors see when they walk into the Star is the monument that details the Texas Lottery’s contribution to education.
Grief encouraged other U.S. lotteries to share best practices. “The great thing about the lottery industry is that many lotteries are working with their NFL teams,” he said. “I am always looking at how other teams are leveraging their relationships with the teams. We can take the best ideas and adapt them to us.”
Andrew Leeper, Creative Coordinator for Texas Lottery, focused on lottery event marketing which features music. “Music is the number one medium in people’s lives over TV, sports and movies. Yet it is a key passion point that is often underutilized or treated as an afterthought by marketers. As the lottery industry looks for ways to connect to new players, marketing ties with live music provide great opportunities for increased brand relevance.”
His presentation showed how the lottery leverages music from a marketing perspective. He explored some of the best-in-class music marketing programs from some of the top global brands.
The Powerball panel discussed projections for major jackpot rollups. “The Grand Prize Carry Forward Pool (GPCFP) started July 1, 2016 so it was not part of the big rollup in January. It has activated several times since then. It seeds the $40 million jackpot. The GPCFP allows us to get to $100 million more quickly. That is a trigger point. We can expect a new billion dollar runup about once every 10 years,” said MUSL Executive Director Bret Toyne.
Product positioning for the two national bloc games was examined. “I don’t see why the two jackpot games can’t complement each other. What better situation can you have than two strong brands sold in the same place. Maybe we can package the two brands,” said Maine Lottery Executive Director Gregg Mineo.
And the impact of the prior year’s $1.6 billion jackpot on fiscal 2017 sales was also pondered. “We say that everybody expects a shortfall in sales—everybody that is except for your legislative oversight and Governor. No matter how many times you tell them all that they will see less money; they will see it is as the lottery failing. It has an impact on advertising,” warned Texas Lottery Executive Director Gary Grief.
Arizona Lottery Executive Director Gregg Edgar presented “Arizona Cardinals Scratchers.” Launched last August, the $5 NFL-licensed ticket was the state’s first.
Edgar demonstrated how ticket sales helped widen appeal to less frequent lottery players while also generating outstanding earned media value, website traffic and database sign-ups for the Arizona Lottery. Players can win cash prizes as well as enter a second-chance drawing to win game day tickets, merchandise and experiential prizes.
Among the key wins were outstanding earned media coverage and social engagement, solid creative and paid media placements, excellent second- chance engagement and positive feedback from players.
Key losses? “The game started late. On-site stadium ticket sales aren’t covering cost of activation. We had to end the game too soon due to a second-chance tie. The pack sizes were not accepted by a major c-store retailer. The team record under-delivered,” said Edgar.
Mike Purcell, Director of Sales for the Florida Lottery, focused on “Lucky Fan On-Site Promotions.”
The Florida Lottery works to increase the visibility of its draw games by incorporating on-site Lucky Section drawings using retired ball machines. During a time out, the lottery draws numbers that correspond to a section within the stadium.
“This creates a buzz of anticipation within the stadium and it allows us to raise awareness for our products and highlight our retailer partners,” said Purcell. “The Florida Lottery works hard to forge partnerships that bring awareness, drive growth beyond the organization’s core business, and help our organization maximize revenue for education.”
The presentation included promotional highlights from partnerships with the Tampa Bay Lightning, Miami Dolphins and Jacksonville Jaguars.
These sports presentations were followed by an interactive break examining sponsorship best practices.
“Our major sports sponsorships are vital for the relationship the teams have with the community,” said Edgar. “We get a bump from both the players and the beneficiaries. We have to recognize the power of our brand. It is not about putting the lottery banner up in a stadium. We look beyond that to ‘Can I get to a demographic I normally don’t or can I bring a beneficiary message?’ We have 80% recognition. We don’t need a banner.”
“The key word is cultivate,” stressed Purcell. “It is easy to partner then just walk away. Cultivation is finding out what they want and they find out what you want. Communication is key. Start the discussions early. If you don’t, you won’t get your full ROI. Know their objectives and followup. Make sure they know yours. Follow up before, during and after.”
Partnerships is about selling credibility statements. “You have to look beyond the immediate benefit,” said Nebraska Lottery Director Brian Rockey. “A good example is our relationship with minor leagues. They have been a partner for 10 years and a retailer for eight ages. They will do any thing for us because we have nurtured the relationship.”
Rockey added that college sponsorships can align with a lottery’s beneficiary message. “The UofN (University of Nebraska) wants nothing to do with us, but the smaller colleges are interested in a sponsorship relationship. Half of our beneficiary money goes to need-based college grants, so this is a natural fit. We show them that we can drive relationships to them. On the collegiate level, there is the alumni database that can be very valuable.”
The “Instant Ticket Trends” panel examined the role of innovation and risk in marketing instant games.
“I get jealous sometimes when I hear about innovative things other jurisdictions can do that we cannot because we have a monthly 30% mandated return. I tell the legislature that if the players don’t win, good causes don’t win,” said New Mexico Lottery CEO David Barden.
“The most fun I have had in the 17 years I have been in the business is with scratch games. I feel like you can take a risk with them,” said Tracey Cohen, Interim Executive Director, D.C. Lottery. “If we say we are in the ‘Fun’ business, we should have fun. We should be innovative. We are a city lottery so we can go out and engage the player on the street with an instant game. That is hard to do with a terminal game.”
Both directors talked about runaway hits. “As a lawyer, I can tell you that lawyers like doing what has been done before. As a director now, I think it is incumbent to push innovation. We did a Diaz de los Muertos ticket. Millennials loved it because it was genuine,” he said.
Cohen concurred: “With our 7s ticket, we had seven different images in a collect and win format. We put them out with no promotion and it was one of our best tickets. Players love collect and win.”
Both directors see potential for multi-state scratchers. “Regional games work. We could see a Maryland, DC, Virginia scratch game,” said Cohen.
A Southwestern bloc scratcher is also under consideration. “We have talked to Texas about doing an instant game,” said Barden. “You could have a mega jackpot instant game with five or six states. We have to figure out how to do it—not how not to do it. Change is inevitable; growth is optional. My wish list would be to have a $20 instant. I think you have to leverage what a group has. Maybe say if you want to be in this group you must carry this game to stay in the group. I can tell you what would happen in New Mexico. The legislature would say, ‘Yeah, ok, take the game.’”
Florida Lottery Secretary Tom Delacenserie’s retail presentation examined Application Programming Interface (API) and cashless systems—two important initiatives receiving industry attention. API is software that allows two or more systems to communicate. “Our ‘lottery’ sales data is integrated into the retailers’ point of sale system,” he said.
Delacenserie said lack of data integration is negative to retailers and limiting to the lottery. It is an issue with a lottery’s existing corporate retailers.
The objectives with cashless is to optimize sales, increase profits, player satisfaction and support impulse purchases. Delacenserie noted it is “not as important as the data collection but something many consumers prefer since a declining number carry much cash. It is something the lottery industry has been somewhat immune from but it could change and impact future growth.”
API has the industry’s full attention. It is not new but it has not been implemented in the U.S. “API is basically a software program that allows one system to talk to another,” said Delacenserie. “In the case of retailers, it would be required if the lottery industry wanted to sell anything through the check lane, such as Powerball Quick Picks.”
Cashless systems are also critical since many consumers do not carry or pay in cash. But the industry needs to figure out who pays for the credit card fees.
Mandy Carter, Senior Sales & Marketing Manager for IGT Texas, focused on the Texas Lottery-IGT-Fiesta Mart Grocery In-Lane Scratcher Ticket Merchandiser Pilot.
IGT embarked on a development initiative in December 2014 to develop a user-friendly merchandiser. After developing five production models, the final in-lane merchandiser prototype was solidified in April 2016. Two Fiesta Mart stores were chosen for the pilot.
“Fiesta Mart is a grocery chain that embodies a customer-first retailing philosophy and has been unique in affording a lottery destination for their loyal customers since the inception of the Texas Lottery,” said Carter.
Collaborative reporting creation is underway between IGT and Fiesta Mart to incorporate ticket by ticket sales/scan data with settlement and validation data. “Initial results show large increases in sales on holiday weeks in-lane versus state sales,” said Carter.
Veronica Varhaug, Manager, Lottery Marketing at B.C. Lottery Corp., discussed the Lotto Express project. “It is an integrated in-lane lottery solution targeting light and casual lottery players by intercepting them on their current path to purchase at high traffic multilane retailers,” said Varhaug.
She said the player strategy is to “interrupt path to purchase, trigger more regular play and provide relevant messaging.” Sales solely consist of Lotto Max and Lotto 649 and Extra side games. Varhaug said “40% of lottery revenues are driven by these brands.”
Currently, there are three primary supermarket chains in Canada. Varhaug said “92% of our target visit these locations weekly.”
On the retailing panel, the discussion turned to API and cashless systems. “On the API front all we have to do is look at what BCLC is doing. They have perfected it as they have in Europe. The window of opportunity is closing. We can prove that we can play with the big boys,” stressed Delacenserie.
“We have to understand what cashless and API means to us,” said Varhaug. “Our API is a fairly easy integration. There are five steps to integrate into the ECR.”
“Millennials do not carry cash,” stated Carter. “That is critical. API is an opportunity to show that we can work with the very largest retailers. The easier we can make the integration for the big retailer the better. We cannot just tweak the gross margin like a package good company could.”
“We always look at fees that come from API or anything and make sure the fee justifies the extra sales,” Connie Fuentez, Compliance Officer and Senior Courtesy Booth Operations Manager at Fiesta Mart.
Innovation Case Studies
Jean-Marc Landry, Director, Customer Innovation at Atlantic Lottery Corp. (ALC), put the spotlight on “Atlantic Lottery’s Innovation Platform.”
It is a three-part process how a lottery generates ideas and concepts (Catalyst), solves problems (Outreach) and builds products (Outpost).
“As a lottery industry, we need to recognize that entire industries are being disrupted by new market entrants who defy the rules and offer amazing customer experiences through the use of state-of-the-art technology,” said Landry. “Large firms are noticing and are rapidly deploying innovation programs which seek to innovate at the speed of startups and defend their market stronghold.”
He then discussed ALC’s embrace of “Lean Lottery”—Empathize, Define, Ideate, Prototype, Test. After one year, ALC has interviewed 100+ consumers, generated 1,000+ ideas and sent 30+ initiatives in flight.
Dante Anderson, Director, Lotto Marketing at OLG, discussed how eSports has turned into a big business.
“Did you know the DOTA 2 International has a $10 million prize pool? That’s bigger than the Masters. Up until recently, ‘gaming’ was often considered a waste of time stereotyped, misunderstood and relegated to bedrooms across the globe. Things have changed. The eSports phenomenon is taking the world by storm—multi-million dollar prizes, six-figure incomes, international leagues, match betting, underground gambling, corporate sponsors, TV broadcasts, and acquisitions by pro sports organizations—all driven by a massive, highly engaged global community eager to invest loads of cash and time.”
John Gorman, Marketing Director at D.C. Lottery, discussed the importance of homegrown scratchers in the nation’s capital. “The lottery has been pursuing a strategy of embracing some of the things that people love about D.C. and developing instant tickets that allow us to connect with our players on an emotional and sometimes even personal level. These products have gone on to be some of our best selling tickets,” he said.
Gorman explored the development process and marketing strategies behind some of the lottery’s most successful D.C.-centric games and also provided a sneak peek at the new “Neighborhoods” scratcher to be launched in spring 2017.
Diana Pratt, Brand Manager, Instants at OLG, discussed the “OLG Gift Card Program.” In fall 2016, OLG introduced two types of Gift Cards: LOTTO MAX and LOTTO 6/49 cards with partners Blackhawk Networks and lnComm as well as a Declining Balance gift card for all OLG lottery products at retail. Pratt addressed how the gift cards work, the obstacles that were overcome to launch these products, the marketing support plan and sales results to date.
IGT Marketers’ Luncheon
IGT’s Private Marketers Luncheon presented “Insights & Trends: Leveraging player understanding to row your business today and tomorrow.” The two co-presenters were Nathan Striner, Account Manager, North America at Foresight Factory, Jessica Powell, VP, Marketing & Player Engagement at IGT. Michelle Carney, VP, Strategic Customer Initiatives at IGT, moderated.
IGT presented a sneak peek of IGT’s Global Gaming Study for a global study of player motivations. The study included phase one (qualitative); phase two (quantitative) consisted of 8,000 total online interviews conducted in 10 countries, said Powell. Study examined differing emotional expectations for non-lottery gaming, such as social interaction, in comparison to lottery customers.
Foresight Factory discussed future trends and their impact on gaming. Attendees were able to take live polls to determine attitudes. The key themes for Vision of 2025 are future brand positioning and the consumer world view. “I want it my way: the consumer,” Striner said. Implications for lottery could mean offering a la carte purchasing/playing options.
The workshop concluded with new IGT initiatives such as playstations, cashless payment, digital window signage, product bundles and more.
In-State Draw Games
The lottery director panel on in-state draw games discussed strategies for growing instant terminal games (ITGs).
“Using the printer in the terminal to produce an instant play just seems like a good use for the assets and offering new products. We are working on the cadence of introductions,” reported Hoosier Lottery Executive Director Sarah Taylor.
The progressive ITGs are the top performers for lotteries. “We have a lot of success with terminal games and progressive jackpots. Our top three games account for 90% of our sales and they are all progressives,” explained Idaho Lottery Director Jeff Anderson. “My biggest concern is that it cannibalizes instant sales. The prize payout for progressives is higher—about 78% for the $20 games. It creates a lot of churn. It works well for our players and retailers.”
Progressive ITGs dramatically impact sales for category. “Instant play [ITG] games have increased four-fold since adding progressive play,” asserted Arkansas Lottery Director Bishop Woosley. “I would recommend it to anyone. Theme doesn’t really matter on progressives. When the players see that jackpot go up, they are going to buy. It doesn’t matter if it is a macaroni and cheese theme.”
Three companies were sponsors of the Interactive Summit at the Austin conclave.
Christopher Wright, Instant Win Game Product Manager for IGT, presented “Mobile First Strategy.”
Wright provided key indicators on the growth of mobile gaming. “In 2016, mobile gaming will generate $36.9 billion in revenue worldwide across all gaming categories,” he said. “Smartphones have become the number one gaming device (71%), ahead of PCs, tablets, and consoles. On average, among mobile game spenders, most gaming occurred while waiting (approximately 45%), followed by commuting/traveling and work (Source: TNS Survey).”
He stressed that mobile games must be “entertaining, adaptable, convenient and unique.” He then showed an instant win game demo for Snowman Raceway.
Manolo Calvo, Owner, Interprod, presented “Ticket Games: The Evolution of the Traditional Scratchoff Is Here.”
Calvo said the Interprod machine provides a new sales medium for a lottery with “amazing results in different countries.” The Interprod lottery vending machine is a “multi-platform, high graphic quality.” The Interprod machine is used by several South American lotteries.
Players can view a digital scratch ticket on the screen. Games offer the possibility of jackpots, bonuses and special awards with “prior unalterable and verifiable draw,” said Calvo. “All plays are possible winners. The ticket is printed before any move is made.”
The lottery director panel on video lottery terminals (VLTs) and table gaming focused on annual turnover and product innovation.
Delaware: “We are down because of competition. We expect the opening of National Harbor will hurt us as well,” said Delaware Lottery Director Vernon Kirk. “We would like to get more of our locations to take Mega Hits. That is the five-state progressive jackpot.”
Rhode Island: “We create a free market on the VLT floor. Licensed games are very limited because of the fees. There is always this debate with licensed games as to whether they bring in new players or just move revenue around the floor,” said Rhode Island Lottery Director Gerald Aubin. “It is important to remember that innovation costs money. The more expensive a VLT is the longer it takes to amortize it. I want newer, better games with free play.”
South Dakota: “We are hampered by old legacy games, keno being the number one game. We are starting to see good traction with our poker machines,” said South Dakota Lottery Executive Director Norman Lingle. “We limit the number of machines per establishment. On our wish list would be going from a $2 max bet to $5 and up the maximum prize. I would love to have a small progressive.”
West Virginia: “Our VLT sales will probably decline because of the condition of the West Virginia economy. We have seen 20 casinos open around us,” said West Virginia Lottery Interim Director John Myers. “I would like to see more innovation in the gaming space. Our locations are destinations so we need more engaging games, shows and entertainment.”
Colorado Lottery Director Laura Solano presented “Lucky for Life: Colorado Lottery.” The game launch included TV, radio, POS and digital pushes. The bloc lotto billed as “The Game of a Lifetime.” Solano shared the strategy behind the campaign, the creative elements and the details behind the successful free digital game, Infinite Luck.
“Over $5.7 million in sales to date,” reported Solano. “Strong sales out of the gate—$361,00 per week. Over-delivered media value by 27%. Game awareness measured at 1 in 3 of Coloradans. Infinite Luck mobile game had more than 22,000 plays.”
The panel on event marketing focused on high value propositions.
“The Powerball Power Cruise is an interesting deal,” said Iowa Lottery CEO Terry Rich. “This cruise will be a real experience for our players. The killer in our industry is it takes a long time. There are national organizations like NASCAR who would like to do experiential promotions with Powerball. Power Cruise shows that we can get it done.”
Event marketing also delivers the beneficiary message. “All of our promotion, sales and branding activities reinforce the notion that all of our proceeds go to Colorado outdoor programs,” said Colorado’s Solano. “Most people think it just comes from statutory requirements. Everybody in the organization lives that experiential journey for the player.”
Both directors stressed that employees should have fun at work. “Memories are the new souvenirs,” stressed Rich. “Where does it say lottery employees can’t have fun? Most of us sit up in our corporate offices. You have to get out.”
Solano said after the lottery ran a lucky dog promotion, “we invited the employees to bring in their dogs for photographs. Staff voted on the top three and those dogs got on an instant.”
Ned Shugrue, Business Development Manager at Olson 1to1, focused on “Loyalty and the Lottery.” All lotteries want loyal players who celebrate the lottery and share their experiences.
Shugrue explained “the six stages of loyalty—build upon a shared experience, demonstrate empathy, foster trust, make a sacrifice, signal affiliation and celebrate the connection.”
He then showed case studies to illustrate the principles using multiple examples, such as Apple, Zappos.com, Old Chicago beer and Klimpton Hotels.
“We should look at best practices from outside our industry and how we can leverage these applications to increase our own loyal lottery base,” stated Shugrue. “Lotteries must become a loyalty business, and not just a business with a player rewards program.”
Jaime Clausen, Media Director at Latinworks, focused on “The New Media Mix.” Consumer media habits have dramatically shifted over the past several years, providing many opportunities as well as challenges for marketers.
Mobile adoption and multi-screen dependence have reshaped the media landscape, with consumption shifting away from more traditional channels. As a result, advertisers have quickly pivoted marketing budgets towards more effective media mixes in order to stay relevant with consumers.
“Millennials live for experiences: 82% of millennials attended a live event in the past year; 34% of consumers post about the experience in social media with videos or photos,” said Clausen.
Consumers are seeking hybrid experiences, such as SXSW, All-Star games or Wanderlust festivals.”
Clausen explored trends shaping the industry, future predictions and best practices from the Texas Lottery and other top advertisers.
Kristen Knape, Strategic Planning Director, and Chris Kwak, Strategist, David & Goliath, co-presented “Co-Creation & the California Lottery.”
“Intrigued by the core values of millennials, the California Lottery used a unique cocreation research methodology to innovate new lottery ideas. The California Lottery, David&Goliath and millennial respondents got in a room together, rolled up their sleeves and talked frankly about how these key values translate to potential product and promotions.”
The project involved working with millennials to gain four insights on the theme of discovery: “They want to see the world through a local eye. Memories are the new souvenirs. Authentic doesn’t mean roughing it. They prefer to take the road less traveled.”
Knape and Kwak then outlined some proposals to the California Lottery that dealt with millennials’ fear of not being interesting—Treasure Hunt Scratchers and Ticket to Discovery.
Eden Pulchinski, Enterprise Sales, Epson America, gave an overview of Epson’s POS Solutions which offers smart, connected printing in one small footprint that deliver cloud services.
Epson Canada supplies its terminals to B.C. Lottery Corp. for its Lotto Express in-lane sales project.
There are 81, 000 Epson employees working in 105 countries. Annual worldwide revenue totals $11 billion. “Design and engineering is all in-house, no outsourcing,” said Pulchinski.
Brad Cummings, Founder & CEO of EquiLottery, staged a horse race in a video demonstration of the EquiLottery game.
EquiLottery has made a name for itself in the lottery and horse racing industries since its public unveiling in July of 2014. This game concept allows players to enjoy a sport important to state economies while introducing an exciting and profitable new gaming option for state lotteries and their players.
Day three of the conclave program featured an interactive workshop branded “JamSession.” Presentations follow below:
o Arizona Game & Fish Scratchers: “The Arizona Lottery seeks to develop a Scratchers ticket in partnership with the Game & Fish department . . . We’d develop creative ticket concepts with three separate pulses for a $2 instant Scratchers ticket with opportunity for second chance play. The primary target audience is adults 18-55 who have hunted or fished in the past 12 months (65% of demo in Phoenix Area),” said Nikki O’Shea, Public Information Officer, Arizona Lottery.
o Emoji Lottery: “Imagine opening up your favorite messaging service and calling up LotBot to enter your emojis into tonight’s Emoji Lottery draw. This would be a fun way to get lots of publicity and create interest in the lottery. Plus, just like numbers, everyone has their favorite emoji (smiley poop maybe?) During this session, we will share the idea and some relevant facts about emojis so that we may be able to develop the world’s first and uber modern lottery concept for digital consumers,” said Jean Marc Landry, Director, Customer Innovation, Atlantic Lottery.
o Gamification: “The California Lottery wants to become less of a gambling entity and more of an entertainment brand. We believe that gaming and gamification could be a natural angle to get players more involved with the lottery. Gaming benefits include: cognitive development, motivation, emotion and social. This equals increase in relatable and relevant experiences for our players. Despite studies proving that gaming isn’t just for kids, how can we make recommendations that steer away from promoting to youth, but still play on the benefits of gaming for adults?” said Kristen Knape, Strategic Planning Director, David & Goliath.
o D.C. Lottery Trivia Challenge: “‘We’ve Got Questions, You’ve Got Answers’ is the catchy tagline for the hugely popular ComcastSportsNet Trivia Challenge tournament held year-round in the most popular social settings in Washington, D.C. The D.C. Lottery will sponsor this season’s tournament, and that sponsorship comes with the opportunity to market to a captive audience of millennials. We are currently brainstorming over clever ways to utilize the 3.5” x 2.5” ad space allotted to us on the trivia scorecards to engage with these participants via a digital social media experience or content,” said John Gorman, Marketing Director, D.C. Lottery.
o Retailer Training Module: “Our retailers are extensions of our brand. They’re crucial to the success of our organizations, to the sales of our products and contributions to our beneficiaries. It is important that we promote this partnership through better training. This idea is to get store managers and clerks more engaged in the lottery and wanting to learn more, to incent them for taking part in lottery training, and to make it a fun experience that matches the fun customers get from playing our games,” said Jennifer Gove, VP Managing Director, Lottery, ICF Olson.
o eSports Lottery: “What if there was a way to bring competition and games of chance together? Each team puts in $10 via hybrid online matchmaking (existing)/ lotto system (new). Teams/individuals are matched up based on skill—can be facilitated through existing matchmaking services. Match occurs. Winning team is rewarded with a random multiplier PLUS non-monetary bonus prizes funded from prize structure. Each team reveals a randomized monetary prize through an animated mechanism, multiplied for winners,” said Dante Anderson, Director, Lotto Marketing, Regional, OLG.
o Go LOTTO TEXAS®: “Players will have a chance to win several getaways that offer the best of Texas. It will be interactive to attract new players and drive Lotto Texas sales. It will utilize the newly-launched Texas Lottery app to drive players to retail for a chance to win on Lotto Texas and the second-chance drawings,” said Julie Terrell, Draw Game Coordinator, Texas Lottery.
o Game of Shares: “This 21st Century Lotto leverages mobile communication to engage players. Each player can make choices in play that affect outcome. It allows players to express themselves through choices in the individual vs. collective dimension. It enables cooperative play for social networks of any size. Earned social media becomes a main marketing driver. It is scalable for populations from a few million to a few hundred million,” said Dr. Stephen Wade, R&D Manager, Washington’s Lottery.
Sponsor Spotlight: IGT
IGT presented “How Big Data Drives Retail.” Adam Perlow, VP, Sales Force Automation Solutions, IGT, showed how big corporations use big data.
“Andrew Pole at Target looked at data to predict when a woman was going to have a baby. He looked backward from birth records to predict it,” said Perlow. “Ozone.RU is the Amazon of Russia. They noticed when the weather was bad people bought hats gloves, scarves and books. So when the weather was predicted to be bad, Ozone.RU launched a promotion. Red Roof used external data from cancelled flights to maximize the effectiveness of their Adwords campaign. They saw a 375% increase in conversion. 7-11 uses weather data to send better experience. It has increased the purchase per visit by $4. CVS uses discounting to pull the customer in. They focus on margin. They focus on the 30% of the clients who drive 80% of the margin. CVS President Helena Fouks says ‘our strategy with the customer is to establish a routine and create a reason for her to visit us weekly.’”
Perlow explained that customer-driven personalization allows CVS to leverage data to produce relevant and personalized communication. Customer level data can be used to model and predict behavior. “CVS’ average weekly spend is up 38% and average redemption rate is up almost 2X,” said Perlow.
For IGT, big data provides “performance intel” for the sales department—lottery sales reps, retailer/store managers, key account specialists, lottery inside sales reps and lottery retail managers. “We want everyone paddling in the same direction. By feeding them all from the same data source using the same KPIs (key performance indicators) and metrics, everyone has the same map,” said Perlow.
Sponsor Spotlight: INTRALOT, Inc.
INTRALOT, Inc. presented “Create Top Seller Retailers through a Retailers Club.” INTRALOT Marketing Director Vasia Bakalis discussed how to reward lottery retailers.
“The retailers are the face of the lottery,” asserted Bakalis. “We need to meet the players’ needs and exceed their expectations. Make your product easier to buy than the competitor or they will buy it from them.”
The lottery’s objectives are to train retailers who exhibit effective customer service skills and selling techniques to increase sales. This should include techniques to identify player needs, successfully handle player objections and use suggestive selling techniques.
Bakalis used an acronym (PRIME) to describe the profile of a Top Seller Retailer: Prepare (know your products), Rapport (building player communication), Identify Needs, Make (sale happen) and End (complete sale).
She said a Retailers Club would be a key way to keep retailers motivated while instilling the importance of retailer training.
“Create a Retailers Club for the clerks using the lottery terminals. Make them feel part of the lottery family,” said Bakalis. “Clerks get points for each ticket they sell. They can cash them at the lottery’s website for gifts.”
“Players expect retailers to be able answer the player’s questions,” she stressed. “Players don’t want to read. They want it to be simple. The retailers should know the player’s preference and suggest a sale.”
“At INTRALOT we asked what would it take to motivate the clerks, not the shop owner,” said Bakalis. “We came up with the Retailers Club. The terminal operator gets the benefit of prizes. We introduced this program in Europe and Latin America. We saw a 10% lift in sales.”
Sponsor Spotlight: NeoPollard Interactive
NeoPollard Interactive presented “The Way Forward.” Jennifer Westbury, EVP, Sales & Customer Development for NeoPollard Interactive, presented five lottery case examples.
“The challenge is to create a solution that works with the regulatory and omnichannel we are in. Michigan’s iLottery generated $38 million. Instant lottery has grown 55% while GDP has grown at just 37%. During this decade the player base has remained constant. That is not sustainable.”
In Michigan, iLottery represents 13% of sales (8%-keno, 11% instant respectively.)
“There is a lot of competition for the player’s attention,” asserted Westbury. “Do what you can with where you are when you can. We have great brands and high traffic websites. We can put that together.”
Even if a lottery cannot sell on the internet, other options exist (game apps, loyalty programs, 2nd chance websites and utility apps). “We have developed Space Between™ Apps,” said Westbury.
She then cited a program run in Switzerland. Loterie Suisse Romande has developed a POP game, which a player buys at retail and loads up on mobile. A player takes the winning code and ticket to retail for cash. “It plays like Candy Crush. It is anonymous and digital,” said Westbury.
She also cited three other examples. Pollard’s Playon® loyalty program has been implemented for the Kansas Lottery. The Virginia Lottery is using its subscription program. “We have eSubs in Virginia which allows eWallet purchases. In Vermont, we worked with the lottery on enhancing their second-chance entry,” said Westbury.
Content is critical. “Licensed interactive games rise 22% when we present them digitally than without the digital,” explained Westbury.
There are many things we can do within the regulatory environment.
Sponsor Spotlight: NCM
National CineMedia (NCM) presented “Benefits of NCM For Lottery Campaigns.”
Steve Reid, NCM’s VP of Regional Sales, provided statistics on how lottery players engage with movie ads. “We are going to talk about what is happening at the movies this year and how the lotteries can work with that,” said Reid. “About 37% of moviegoers play the lottery. That is pretty low considering 75% of moviegoers are millennials. Ads at the movies have a 75% recall. Plus, there is not a remote and people generally don’t get out of the seat. There is a 75-foot screen to show your ad.”
Lottery ads with NCM score 75% with likeability (71%). “Moviegoers are very social. They have a 55% intention to buy,” said Reid.
The frequent moviegoers are more likely to use online gaming sites, use social media and play the lottery.
NCM worked with the Colorado, Georgia, Hoosier, Iowa and Missouri lotteries in 2016 with a special Ghostbusters scratcher ad program.
“We have had some great case studies from Ghostbusters,” said Reid. “It is a captured audience.”
NCM also attracts younger moviegoers. “Our core audience is millennials,” said Reid. There are 80 million millennials total, 60 million go to the movies. They are very optimistic. They consume a lot of media—67 hours a week. They multi-screen. They are social advocates.”
Reid then gave a fast-paced look at the 2017 coming attractions. “We have a lot of franchises (sequels),” he said. The 2017 lineup also includes exciting newcomers (franchises), unexpected female leads, all-star casts and TV to Movies. Multiple previews were shown.
“Roll out the red carpet for your lottery,” said Reid. “Get on-screen today.”
Sponsor Spotlight: NOVOMATIC Lottery Solutions
NOVOMATIC Lottery Solutions (NLS) presented “Bringing Love Back to Local Draw Games.”
“We are part of NOVAMATIC Gaming—one of the largest gaming companies in the world with $4.5 billion in sales,” said Pall Pallson, Senior Director of Corporate Innovation & Strategy, NLS. “From our analysis, there are 27 jurisdictions that we think could improve draw sales.”
There is a real opportunity for U.S. lotteries to increase sales and strengthen their local brand. “As a European, I see the U.S. as the ‘Land of Instants’ with 58% of sales coming from that category. Draw games represent about 24%,” said Marc Chabrand, Director, Marketing & Distribution Services at NLS. “Consider the evolution of the instant market, which has doubled in the last decade. Price points are a main driver of that growth. Draw games have better margins than instant games.”
Using clips from Wonder Years, a popular 1980s TV show, they showed how attraction works. “Draw games are like the girl next door: familiar but worth another look,” said Pallson. “What we see is that the smaller states have a larger portion of sales from multi-state games. That makes smaller states more susceptible to fluctuations inherent in large jackpot games.”
One thing a marketer can do is tap into the creativity of local lotteries. “Take advantage of the knowledge of your retailer. And take some chances. You do not have to keep a game in the market for 10 years. Proximity is very important for the field marketing strategy,” said Chabrand.
He cited Lotería de Catalunya’s La Grossa as a great example of a local game that competes successfully with Spain’s large national games. La Grossa taps into the local pride players feel in playing a game just for their region.