by Terri Markle
La Fleur’s 2020 Final-e-Conference broadcasted on September 1-2, 2020 concluded La Fleur’s Summer eConference series. Conference programming focused on how lotteries can pandemic-proof an organization through digital sales, touchless prize redemption, in-lane interactions and social media engagement.
La Fleur’s Magazine Publisher Terri Markle interviewed directors from four Mid-Atlantic lotteries (DC, Maryland, Pennsylvania on Virginia) on how their operations are changing as a result of adding non-traditional games, such as iLottery, sports betting and VLTs.
All the panelists run lotteries which expanded into non-traditional gaming by government-mandate. “If we do not modernize and diversify our portfolio, we will lose relevance with the new generation of players,” said Beth Bresnahan, Executive Director, DC Office of Lottery & Gaming.
During the pandemic, revenues from non-traditional games, such as sports betting and VLTs, took a major hit while revenues soared for iLottery jurisdictions.
Launching iLottery is no easy task. “The launch of iLottery was a challenge because we crammed it into too little time,” said Pennsylvania Lottery Executive Director Drew Svitko. “Our invention process started about eight years before. We were developing the audience through social media and our players club.”
The same accelerated iLottery startup occurred in Virginia which launched iLottery on July 1. “We got iLottery, oversight of casinos and licensing of sports betting all at once, pre-COVID,” said Virginia Lottery Executive Director Kevin Hall. “In preparation we had a robust online subscription effort and retail-tethered mobile app. It was a matter of designing a realistic work plan to roll out iLottery. We did in 13 weeks what should have taken 13 months. The pandemic added urgency and focus to the effort.”
Launching sports betting during a pandemic is a whole different story. “Starting sports in a pandemic when you do not have sport events to bet on is difficult. As sports has come back, we have had over 100,000 bets since launch,” said Bresnahan.
If Maryland approves sports betting, it will mean that sports betting is regulated by lotteries in all mid-Atlantic states. “For many years we have been working on sports betting. This year in November that will go before a referendum. We are optimistic that it will pass for sports in 2021,” said Maryland Lottery & Gaming Director Gordon Medenica.
Gold Sponsor Scientific Games presenter Kyle Rogers discussed the impact of the pandemic and how “we can never lose sight of our responsibility to protect lottery funding.” With 30%+ of North American lotteries’ $89 billion sales earmarked for good causes, it is essential to maximize and protect them.
“With the vision to modernize, the ability to adapt and, most importantly, with investment, lotteries can strengthen their resiliency to successfully ride out the storm and come out on top,” said Rogers. “The good news for the lottery industry is that pandemic or no pandemic, a Lottery’s mission never waivers, even in the face of a pandemic. So, neither does ours—maximize profits to the good causes you support.”
Rogers stressed that “this is not planning as usual but there are three areas of proven resilience. They are partner services, modernization of distribution channels and new game entertainment. Investment in these areas will keep your lottery vital relevant and growing strong. Game performance is both an art and science. We rely heavily on the millions of data points derived from our system. Since COVID, we have seen a 99% increase in iLottery sales. The Pennsylvania Lottery experienced record-breaking sales across retail and digital. Content is king. Disney+ and Netflix added 21 million new subscribers in three months. The 007 game showed that players want a cross platform play experience,” said Rogers.
National Powerball Ads
There have been discussions for the last decade about creating a new national ad campaign for Powerball—America’s Game. Who can forget the Powerball advertising ads featuring music legend Ray Charles? Fifteen Powerball lotteries signed on and ran the commercials in late 2001 and early 2002. By entering a joint advertising campaign, the participating jurisdictions were able to procure outstanding production values and a recognized national talent in Ray Charles. Three U.S. lottery executives discussed the pros and cons to running national Powerball ads.
“Powerball has to start thinking like a national brand. We think we are but we don’t act like it. We need to promote the brand nationally. It is so much more efficient to promote on a national scale. The question is how do we build a dialogue to get to a solution. If the barrier is one state cannot have a tie in with the NFL, well it is Powerball that has the relationship,” said Jay Finks, Deputy Director, Oklahoma Lottery.
“We have to step past our own ‘me first’ mentalities and treat ourselves as a national brand. We are seeing change come. We can get something nationally that will work for everyone. We have a 14-member marketing committee for MUSL that is looking at which way to go. We have to start with the question, ‘What is the brand?’ We need to develop partnerships that bring in new Powerball customers,” said Arizona Lottery Executive Director Gregg Edgar.
Compromise can make it work. “Powerball is such a great brand—one of the strongest around. If we put our heads and wallets together, I think we can stand out with production quality. We have done it before with the Ray Charles promotion. We need to revitalize the core brand so that it is not so jackpot-driven,” said Colorado Lottery Director Tom Seaver.
Gold Sponsor INTRALOT, Inc. presenter Scott Hoss examined the steps that INTRALOT has taken in the absence of live sports during the shutdown in spring 2020 due to the pandemic. “Here is an update on where we are. March 9 was supposed to be the week Montana Lottery started sports. Sports around the world shut down for COVID. Both Montana and D.C. lotteries delayed the launch of the sports game,” said Hoss.
INTRALOT took advantage of the short time without sports to upgrade its system during the shutdown. “We became partners with MLB and NBA which allows us to use their logos. Leagues are pivoting to provide a new experience for players. The NHL is putting chips in the puck that will allow in-game bets. Live in-game bets will be more popular than before game bets as league official data grows. So, lotteries, get ready,” said Hoss.
INTRALOT also engaged third party providers to enhance its products. “We will be able to offer new acquisition/retention and player engagement tools. We are moving toward partnerships to offer both virtual sports and e-sports,” said Hoss.
New England Lottery Panel
How did the New England lotteries fare during the pandemic? Results varied by jurisdiction, between large and small population states. But anything was possible by working together, supporting staff and cementing relationships with retailers to weather this invisible storm.
Three New England lottery directors (Connecticut, Massachusetts and New Hampshire) discussed FY20 sales, forecast for FY21 sales and best opportunities to increase sales.
“It was close to a record [FY20] year because of iLottery. We were asked to prepare a two-year budget. I put more qualifiers on it than a prescription drug plan. I said, ‘listen gang, I know lottery but I don’t know what happens if X,Y, and Z happens,” said New Hampshire Lottery Executive Director Charles McInytre.
“[In FY20] we saw a decrease but we still have the third highest on record,” said Massachusetts Lottery Executive Director Michael Sweeney. As for the future, “sports betting and iLottery are budget considerations. Over the next two or three years the states are going to need more revenue and will need more traction.”
“We finished down about a week’s worth of sales from budget [in FY20]. Like most lotteries, our draw sales were down significantly. We were in the Governor’s budget but the legislative session ended early. iLottery will have its day in the sun but right now the legislature has more pressing matters,” said Connecticut Lottery Executive Director Greg Smith.
Gold Sponsor NeoPollard Interactive (NPI) presenter Julin Shaw discussed iLottery in times of change in an impromptu interview with LaFleur’s Magazine Associate Publisher Byron La Fleur. “Innovation is just an essential part of what we do. Technology just changes too fast for us not to. So this year teaches us that consumer expectations are going to shift—they have shifted. Continuing to bring new features will be an essential part of our role in modernizing with lotteries as they grow,” said Shaw.
2020 was the first time that NPI had to do virtual project implementations. Due to the pandemic, NPI had to remotely kickoff two iLottery projects in North America (Alberta and Virginia).
“We moved our customers and ourselves over to continuity plans including 75 members of our team to remote working. We had to do remote project implementations. Virginia Lottery launched on July 1,” said Shaw.
In terms of how iLottery is performing across the industry during the pandemic, Shaw said “the key performance indicators (KPIs) have gone up dramatically. The retail numbers did not take long to recover but the iLottery numbers are still quite high.”
In terms of additional jurisdictions legalizing online sales, Shaw said “iLottery is always a government affairs conversation. That has not changed. What has changed is the need and pace of the dialogue.”
Top Grossing Lotteries Panel
Markle interviewed executive directors from three U.S. lotteries (Florida, Georgia and Texas) which rank among the Top 6 Grossing U.S. lotteries in fiscal 2020, according to La Fleur’s Magazine. Annual sales range from $5 billion to $7.5 billion. Panelists discussed FY20 performance as well as key things that each lottery needs to help navigate these abnormal times in FY21.
“Our FY20 sales were led by instant sales and digital products. We were able to return $1.23 billion to the Hope and Pre-K programs. What we need to keep things going is a credible drive to keep our team members going. Our retailers have never been more important to us. We need our shareholders understanding what we are doing and how they can help us,” said Georgia Lottery Corp. President & CEO Gretchen Corbin.
“Our fiscal year just ended August 31 but our sales came back strong in May led by instant and our daily draw game. We were able to transfer over $1.7 billion, a record for Texas lottery. We need a legislative session that won’t take away our ability to return money for good causes. If we can just have status quo, we can continue to support our needed work,” said Texas Lottery Executive Director Gary Grief.
“We are very blessed in Florida. We ended with record FY20 sales led by scratch which is 75% of our sales. We are focused on our mission to return money to good causes. Technology is a big deal for us because a majority of our employees are still teleworking. We ask ourselves are we optimizing how we deliver our product,” said Florida Lottery Chief of Staff Samantha Ferrin.
Gold Sponsor Carmanah Signs presenter Max Goldstein focused on how to create success with jackpot awareness at in-lane lottery and non-traditional retailers. With 23,000 in-lane jackpot signs installed globally, Carmanah has collaborated with many lotteries, vendors and retailers. Goldstein said the evolution of jackpot communication “from the early days of jackpot window signs to present, where jackpot communicators have been deployed in various forms to increase sales in multi-lane grocery settings and non-traditional retailers, such as Dollar stores,” he said.
Jackpot awareness is essential to sales lift. “Jackpot communication is critical to advertise ‘lottery sold here,’ attract attention and encourage play. Loterie Nationale in Belgium immediately tripled in-lane sales after installing with no cannibalization at the service center. BCLC and OLG determined that in-lane jackpot signs were critical to the success of any in-lane pursuit. In Texas we were privileged to work with Texas Lottery, IGT, InComm and Dollar General deployment of 1,700 locations. Dollar General stores have no lottery terminals so Carmanah deployed an Ethernet jackpot solution,” said Goldstein.
Texas Lottery Operations Director Ryan Mindell gave an update on the in-lane projects. “In the last 365 days, we launched two different in-lane projects—QuickTicket and Receipt Ticket,” said Mindell. We launched QuickTicket last year with Dollar General at 1,500 incremental retailers in Texas.”
Player awareness is important to address with in-lane sales. It has led to excitement with Dollar General in what comes next. Next the Texas Lottery launched the Receipt Ticket available for Powerball and Mega Millions printed on the receipt at HEB stores. It works the same as a regular draw ticket. Mindell said in-lane is important as it helps lottery reach “incremental retailers and adapt to a changing retail environment. It is a long-term investment.”
Gold Sponsor InComm presenter Mark Smith started his presentation with a South African proverb. “’If you want to go fast, go alone. If you want to go far, go together.’ If you want to go far and drive change, you need a partnership. That is what InComm offers.” He then discussed how InComm is working together with multiple lotteries to help them sell in-lane. Partner lotteries include the Arizona, Florida, Oklahoma and Texas lotteries. Arizona Lottery will launch Quick Ticket in Dollar General in September. Incremental retailers include CVS Health, Dollar General, Family Dollar and Walgreens.
InComm also assists lotteries, like Arizona, with Loyalty, Awards and Promotional (LAP) digital card fulfillment. It allows lotteries to distribute prizes via email with an embedded link to open the card.
John White, Deputy Director, Finance at New Jersey Lottery provided an update on its courier system. “NJ Lottery was among the first U.S. lotteries to promulgate courier regulation. Jackpocket was the first approved courier; it began in December 2019. It was important to our players, our existing retailer base and our very integrity that the resulting regulation contained all the necessary safeguards to ensure: consumer protection; financial integrity of the couriers; the necessary cyber security protocols are in place; promotion of responsible gambling to customers who will procure lottery tickets via couriers; under age play is not taking place; adequate prevention against fraud and malfeasance and; no erosion of other lottery jurisdictional monopolies,” said White.
Gold Sponsor Jackpot presenter Peter Sullivan discussed the growth of the New York-based company founded in 2013. “I started Jackpocket to help my dad buy lottery tickets on his phone and create an application that could attract affluent and tech-savvy players.”
Jackpocket’s mission is to help lotteries create incremental sales using bleeding-edge technology and the best user experience. Jackpocket is live in nine jurisdictions, launching two more in September. “We’re projected to sell nearly $400 million in tickets in 2021,” said Sullivan.
There is no integration required to launch Jackpocket. Also “we commit major marketing budgets to advertise the solution. We attract an incremental user to the lottery (70% of our users are under 45 years old),” he said.
Jackpocket ran a pilot program with Circle K to introduce the app to potential users. “In 70 stores across Texas, lottery purchasers were offered $5 in Jackpocket credits. We want to get where 1+1 equals 3. Once the player activated our offer, they get offers from Circle K.”
Atlantic Lottery’s Merrill Fullerton talked about “Gamifying Second Chance.” ALC runs 2Chance.ca, which is the lottery’s second-chance program. It is a year-long program available for retail and online purchases (scratch, draw, sports and digital instants). There is integrated sign-on with www.alc.ca. There are 100,000+ returning members (5.5% of total population).
ALC ran a 2nd chance program tied to its Original 6 instant ticket with a $30,000 prize package. “The lottery had 9,201 contest participants. There were 48,908 tickets entered. ALC experienced some player expansion into 35-49 age group in Q3,” said Fullerton.
Gold Sponsor Splashdot presenter Scott McWilliam focused on why lotteries can benefit from second-chance programs, digital contests and omni-channel loyalty programs. Splashdot helps lotteries acquire new digital players and extend the play experience beyond traditional play.
“Our goal is to give lotteries the tools to engage with players on a more frequent basis. An engaged player is more valuable to the enterprise. Frequency of play and known player base are the outcomes,” said McWilliam.
Splashdot’s software platform is called ‘ncentive’ and it was built for lottery and gaming. It has unmatched security and flexibility.
“Splashdot can work with any gaming platform. Splashdot empowers lottery marketers. Our platform is secure and flexible. Splashdot does this with marketing automation. The key is to make it as easy as possible for the players but that is only the first step. Consistently reengaging players with incentives to specific targets is key. Real time data and analytics put the marketer in control,” said McWilliam.
Pandemic Impact Panel
Markle interviewed directors from around the country, including the Midwest, South and West Coast. The discussion revolved around how the lotteries are forecasting FY21 sales and how the pandemic might impact it; surge in instant sales; impact of low jackpots for national lotto bloc games; and best opportunities to increase sales in FY21 through new games, technology and selling online.
North Carolina Education Lottery (NCEL) just reached the annual milestone of $3 billion in FY20. “The first six weeks of sales in the new fiscal year are over budget. We had a little different situation. My mission when I started here was to overhaul the instant category. We embarked on instant ticket optimization that looks at every aspect of the instant category. We increased even beyond what we expect,” said NCEL Executive Director Mark Michalko.
Total sales increased 1.7% for Washington’s Lottery in FY20. “We continue to see higher than normal sales. We are already on target for more this year. We have a large casino presence so when those closed our sales double from the lack of other entertainment options,” said Washington’s Lottery Director Marcus Glasper.
Nebraska Lottery Director Brian Rockey reported that “we are expecting about 2% growth in FY20. We set records in May and are still above the same from last year. We have some plans for our in-state games. Powerball and Mega Millions are down but we started a program a few years ago to regularly promote our in-state draw games. We have draw games which are up 24%.”
Sales for the new Mississippi Lottery Corp. (MLC) reached $340.5 million in FY20. “We are less than a year old so the pandemic delayed a lot of things we wanted to do. The 3-digit game was delayed even though we have it budgeted. We have launched 40 games in 10 months and are getting 90% of our sales from the instant portion,” said MLC President Tom Shaheen.
The VLT panel featured three lottery directors who operate VLTs in Ohio, Oregon and West Virginia. Each director talked about the impact of turning off, then back on VLTs in their jurisdictions. They also examined unique issues surrounding VLTs during the pandemic vs. traditional games.
Oregon Lottery has a network of 2,000 video retailers spread across the state—including bars, taverns and restaurants. The VLTs were turned off in mid-March. “We had to shut down our network for almost two months. We lost a huge chunk of revenue in that time. Once our governor established reopening frameworks for counties across the state, we had to figure out how to turn counties back on at different phases . . . Right now we have 85% of our network back up and generating revenues,” said Oregon Lottery Director Barry Pack.
Ohio Gov. Mike DeWine required the Ohio Lottery to close down its seven racinos in March. “They are very professional and have done a good job working with the administration and myself to make sure the protocols are in place to reopen,” said Ohio Lottery Director Pat McDonald. “As of now, they seem to be well-staffed. The casinos are doing great. Their sales are higher than they were this time last year. There are no lines at the racinos. The occupancy rate is 50% less than a year ago.”
West Virginia Lottery shut down both limited video (LV) retailers and its racinos in West Virginia on March 18. “We had about 11,000-12,000 video machines taken out of operation. We then worked to bring that back up about two months later,” said West Virginia Lottery Director John Myers. “In restarting, we tried to focus on establishing consumer confidence again. We saw this particularly in our small VL locations where you can only have seven machines maximum. These locations had more business on the front end than the casinos because people didn’t want to be around large groups of people.”
La Fleur’s Final-e-Conference ended on Day 1 with a case study on how Belgium’s national lottery turned holiday popups into permanent lottery stores in the country. Loterie Nationale’s Joke Vermoere prepared a two-part presentation focused on why the Belgian lottery chose to sell through permanent stores and why it is important for their brand image. “Don’t just open a shop to sell but: connect people, care, make it dynamic, experiment, inform, make the intangible tangible and enjoy selling,” said Vermoere.
Day 2 of La Fleur’s Final-e-Conference featured the Lottery Marketers’ eSymposium. There were seven North American lottery presentations on marketing, advertising and sales programs implemented for instant and draw games during the pandemic.
Glenn Strong, Deputy Commissioner, Games & Marketing, Michigan Lottery examined the instant sales surge during the pandemic. “In March virtually all casinos closed. I plotted the number of casinos closed and the resulting dramatic sales growth in instant games. The surge in instant games is clearly associated with the lack of other gaming options. We are in a battle for discretionary dollars. Our Keno business was devastated after the governor’s stay at home order. We suspended game launches and advertising. Our high price games are flying out the door. The ones and twos have declined,” said Strong.
Stephanie Weyant, Deputy Executive Director, Marketing & Product Development, Pennsylvania Lottery focused on dealing with low bloc lotto jackpots. “Without the hook of the big jackpot there is nothing new for the media to talk about. The bottom line is that the jackpots are failing to meet player expectations. Pennsylvania players will make a special trip to the store for a jackpot between $400 and $600 million. Can this be solved with marketing alone? My sense is that just marketing would be incremental. On the other hand, a product enhancement would give us something to talk about,” said Weyant.
Pete Donahue, Senior Director of Marketing, Connecticut Lottery Corp. discussed launching a new product during the pandemic. “The show must go on. Connecticut launched a totally new game called FastPlay Progressive requiring player and retailer education. We had great in-person support planned but the LSRs could not get in the field. We had to get creative with the launch. We even had to get creative with our creative. We used couriers to distribute the POS and social media to promote the game. The game was a huge success,” said Donahue.
Adam Caughill, Director of Lottery Innovation, Ontario Lottery & Gaming (OLG), discussed what’s new and what’s next in game development. “In game design formula, we connect five dots: Strategy, insight, technology, capability and opportunity. What I am most proud of is designing cool products that actually get to market. OLG builds great products first by creating a ‘curiosity gap’ into the products based on gambling insights. Game design has to match the channel so we don’t create a scratch game or draw game,” said Caughill.
Chris Rogers, Deputy Director, Products & Marketing, Arizona Lottery discussed engaging players with social media. “We are uniquely positioned to engage our beneficiaries; 64% of consumers say their future purchase will be influenced by how brands promote through the pandemic. We ended paid promotions on Facebook because of their stand on publishing ‘hate speech.’ Our engagement increased from an engagement program we implemented. We ran a campaign for frontline employees with giveaways . . . With ‘Beat the Heat’ promotion, players could multiply their winnings by the soaring temperatures. It was so hot that we exceeded our prize budget by $6,666 which is proof that it is hotter than hell in Arizona.”
Terri Rose, Director of Marketing, Virginia Lottery examined advertising trends during the pandemic. “Consumers are watching more media than ever. People aged 50-64 are spending up to 14 hours a day on connected media, often on more than one device at a time. Content is king with over 640,000 programs available across all media. People are also reading more and pursuing in-home activities. In November we are going to return to more traditional advertising. Time spent consuming media will only increase,” said Rose.
Justin Rock, Deputy Secretary of Product & Sales, Florida Lottery focused on sales reps in a distant selling environment. “All of our DSRs are out of the field. We have seen a V-shaped recovery. We have seen a 30% increase in scratch. It is a different story for draw games. Pulling the reps has shifted a lot of responsibility to the retailers. POS is the best sales driver for new players. We have not been able to effectively attract new players. What is the value of our reps in the field? Comparing year-over-year data, we see up to a 40% difference in sales. We also know that retailer satisfaction is directly tied to having DSRs visiting the retailer. DSRs are now reduced to the role of tel-sell and that can be annoying. The beer man continues to visit the retailer. Why can’t the DSRs?” said Rock.
Ronnie Lawon, Marketing Specialist at the West Virginia, discussed the development of an Auto Game feature run on a tablet which could handle large volume spins at lottery events, such as fairs and festivals. A bonus was the resulting unintended positive increase in sales. “Fueled by their passion to support the state, players show up early; often, and in large volume,” said Lawson.