Keith Cash, Vice President & General Manager, IGT Instant Ticket Printing & Services, spoke with La Fleur’s on the company’s mission to support lotteries in growing the $87.5 billion global instant business. The interview spanned a wide range of topics on how IGT works with instants customers to deliver value—including new 2019 initiatives for linked games and augmented reality lottery products showcased at IGT’s NASPL experience, “Transforming Play.”
LaFleur’s: What does it mean today to be an instants growth partner for lotteries?
Keith Cash: For IGT, it means that we try to operate not just as a supplier of instant games but as a true collaborator, to support lotteries in pursuing all the growth opportunities available to them. One thing I noticed right away when I joined the company earlier this year is the depth of resources customers can access from IGT, and I’ve since seen how many ways customers work with us to put those resources and insights to use in growing their business. It involves so much more than printing the ticket. It extends to consumer promotions, logistics and distribution, retailer needs, digital opportunities and more. When lotteries strategically leverage these areas—and there are many lotteries succeeding by leveraging what IGT refers to as The Six Pillars of Instant Success—they develop synergies that accelerate responsible growth and help sustain profitability.
IGT’s goal is to support customers in taking an integrated approach that maximizes each of those areas of opportunity.
La Fleur’s: You’ve spoken previously about the value of an Open Market strategy for instants. Can you explain the concept and why lotteries should adopt it?
Keith Cash: An Open Market strategy simply gives a lottery the flexibility to produce instant games with the suppliers it chooses at any given time, versus a one-time decision at the beginning of a contract that a lottery must adhere to throughout the term. It gives lotteries more choices, and it encourages ongoing competition among suppliers to do the best they can for each lottery.
Open Market differs from a multi-vendor relationship, in which a lottery apportions some percentage of its instants needs among suppliers, giving the lottery a chance to produce a wider variety of games. An Open-Market approach offers lotteries true flexibility to get the best games available at any given time to support their strategy. It recognizes that ongoing vendor competition is valuable to lotteries, and it’s practical because suppliers do not have the same ideas and the same resources to offer.
The argument that is usually made against Open Market is that it results in a non-cohesive strategy, yet we see that lotteries run complex businesses and bring complex products to market. They can implement and monitor a strategy while benefitting from the flexibility to work with the right supplier at the right time. We are not endorsing the practice of guaranteeing a certain percentage to anyone. Lotteries do not have to split their games. They can design a business model that fits their organization, not what fits a vendor’s model, and we view the ongoing competition this creates as being key to lotteries’ continued success.
La Fleur’s: What are you seeing in jurisdictions where Open Market has been put into practice?
Keith Cash: Multiple IGT lottery customers, including Iowa, Kansas, and Texas, are succeeding with this approach. The Texas Lottery holds an annual “Yes/No” meeting where they ask all suppliers to bring the best games from their portfolio to the table for consideration for the next year, and through the staff’s expertise and knowledge of their own market, they choose the ones that will work best with their strategy. It’s a perfect example of how an Open Market model benefits the lottery. IGT has run a few dedicated BIG (Brainstorming Innovative Games) meetings to develop concepts specifically for the Texas Lottery in their drive to innovate, and four of the Super Ticket® concepts that came out of those meetings have since been implemented with record-setting success.
The Kansas Lottery has long worked with an Open Market environment, printing games with whichever vendors they choose. IGT is privileged to print approximately 40% of the business in Kansas, and four Super Ticket games have resulted from that collaboration.
The Iowa Lottery has worked with IGT to launch numerous instant games since our partnership began in 2015, including the $10 Super Triple 777s, which has been the strongest performing $10 game since its launch in January 2016. Iowa recently awarded IGT a new four-year instant ticket contract and remains an open-market environment, having operated with that business model for a while now.
La Fleur’s: Turning to NASPL, IGT’s booth this year is themed around the concept of Transforming Play. What does this mean for instants customers and what can lotteries expect for 2019?
Keith Cash: Transforming Play expresses IGT’s goal of helping customers achieve growth by continuing to advance all aspects of the lottery business. This means providing premium content that can be deployed across multiple products and channels, and just as importantly, providing customers with access to the depth of research and resources available to them from across the organization.
In the instants area of IGT’s NASPL booth, we will premiere the 2019 Wheel of Fortune® (WOF) linked program for lotteries, along with other products to attract the core and bring in new players. WOF is a premium brand that reaches a broad market, and we wanted to leverage it in a unique way that will allow lotteries to offer players a new and entertaining experience. IGT’s last WOF linked game was run in 2016-2017. In place of a traditional second-chance program, we have something new in store to help customers leverage WOF’s huge popularity in the lottery space.
We are also excited to offer augmented reality for interactive, 3D reveals of traditional instant games. The Rhode Island Lottery will launch four IGT Slot titles in the first quarter of 2019: Red, White & Blue, Cleopatra, Sizzling 7 and Double Diamond. These will all be integrated into the lottery’s mobile app. This is exciting technology. We want to help customers leverage IGT’s vast slot portfolio and offer popular titles that are familiar to players.
La Fleur’s: You mentioned slots—how does IGT’s expertise as the world’s biggest slot machine manufacturer lend itself to innovating in instants for lottery?
Keith Cash: There’s a lot of debate about whether the lottery player and the casino player are the same. I think IGT’s expertise in slots certainly will continue to inform what we can develop in the instants category going forward. At the end of the day, the deliverable is the same—an incredible chance to win a prize, and to do it in an exciting way. Regardless of the mechanics, it’s the same experience, and we’re trying to provide that to our customers’ players in new and fun ways, regardless of how it’s delivered.
La Fleur’s: IGT Instant Services is innovating in multiple areas—BIG planning sessions, linked games, augmented reality, lottery apps. Why is this critical for IGT and its customers?
Keith Cash: I think the word innovation is often misapplied. Innovation should improve a lottery’s profitability—this is the correct innovation, and not just creating something else to sell. One of the things the BIG team focuses on is developing specific innovations that add value for players. It doesn’t have to cost more or cause a lottery to launch a new play style.
La Fleur’s: Do you see linked games as critical to growing lotteries’ instant sales?
Keith Cash: Any time you can leverage resources across multiple jurisdictions to create bigger experiences, it has appeal for lotteries and value for players. One of the things I have experienced personally is IGT’s customized white glove service for players. It’s not enough to offer the same cookie-cutter approach to each lottery. We are very excited to provide the white glove experience for the upcoming Wheel of Fortune linked program.
La Fleur’s: Do you see double-digit growth continuing for lotteries’ instant sales?
Keith Cash: We have confidence in lottery organizations and believe they will continue to grow. In the past, growth has often been achieved through price-point progression. Today, most U.S. lotteries have a $30 ticket and some even sell a $50 ticket. This is great, but we also need other growth mechanisms. Many of our 2019 initiatives are about adding value to the player experience and growing lottery profits independent of increasing the ticket price. Families of games are another vehicle to grow instants sales. The family strategy is successful across the U.S. and catching on abroad. It gives lotteries an integrated chance to be perfectly positioned at the point-of-sale from low to high points. It’s one of the keys to responsible growth and also helps to leverage the promotional spend.
La Fleur’s: IGT has added a new printing press at its Instant Tickets Services facility in Lakeland, Florida. How much will ticket production increase?
Keith Cash: Our new Tresu printing press is capable of increasing ticket production by up to 30%. The new press gives IGT lots of flexibility in addition to added capacity. It also allows us to focus on new innovations, which is another tangible benefit for lotteries. IGT’s commitment to the instants business is evidenced by the new press and the recently expanded facility in Lakeland, and it’s one of the things that I have been most impressed by since joining this company. I see that commitment every day, and I’m excited to be working with this team.
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