It was just another Tuesday night in December at a Circle K in metro Phoenix when a man jumped behind the counter in an attempted robbery. Turning to the lottery bins, he didn’t find any tickets protruding from the dispenser as he normally would. Confused and frustrated, he grabbed some cash from the register and ran out of the store.

What the robber quickly learned in the foiled lottery ticket heist was this was no ordinary ticket dispenser. It was a SCiQ® system purchased by the Arizona Lottery from Scientific Games to prevent ticket theft, simplify retailer operations and give Arizona more insight and visibility at retail. Most importantly, no one at the store was hurt and the secure SCiQ system helped minimize lottery product loss to the retailer.
“SCiQ is an instrumental tool in our ongoing efforts to prevent ticket theft,” said Gregg Edgar, Executive Director of the Arizona Lottery. “It allows us to be proactive to protect retailers’ employees and reduce loss.”

The first defense against a would-be thief is keeping tickets locked inside the SCiQ units until they are dispensed during a purchase. Even if a thief managed to remove tickets, SCiQ’s inventory management and ticket tracking technology allows the lottery to void any stolen tickets quickly.

“One of the struggles we’ve had over the years is that if a retailer does not do a good job of inventory management, calling in which tickets were stolen becomes difficult. It becomes guesswork,” Edgar said. “SCiQ takes the guessing out of it.”

Responding to Retailer Needs

Listening to the needs of retail chains, the Arizona Lottery was looking for a solution to reduce internal and external theft, as well as create a frictionless ordering process and inventory controls. SCiQ fit the bill thanks to its real-time sales tracking and shift accounting, increased visibility of inventory and secure storage. The Arizona Lottery rolled out three SCiQ pilot units in early 2018, increasing the number of units to 27 just months later. After experiencing positive results, the Lottery purchased 300 additional units. As of December 2019, the Lottery has installed more than 100 SCiQ units.

“We worked closely with Scientific Games during their development of the SCiQ technology,” Edgar said. “They came to us early in the conversation, and we were an early adopter.”

The SCiQ retail ecosystem fits Edgar’s overall strategy of running the Arizona Lottery as a business to drive profits for good causes, he said. Like the other product categories at retail, the Lottery looks for ways to use data to continually improve. SCiQ gives the Lottery a way to measure the movement of its games at the retail level and understand how consumers interact with the products.

“We have 60 to 65 instant products in the marketplace every year, and if we’re not managing it like a business we’re not doing the best that we can in terms of the returns back to our beneficiaries,” Edgar said. “Having tools that give us the ability to be more businesslike in our operation is huge. From an inventory standpoint, SCiQ really gives us the business insights into our product that we have desperately needed.”

Speaking the Same Language

A major focus for Edgar and his Arizona Lottery team has been reducing out-of-stock games. Knowing exactly how many tickets are in a bin at any time helps them make sure retailers have games people want to buy. Across all jurisdictions where SCiQ has been deployed, the system has helped reduce bin out-of-stocks by 34%.

“To get that out-of-stock focus at the counter is a tool that we didn’t have,” Edgar said. “It makes us more like other products, and we’re talking their language. The more we can back it up with data, which is the beauty of SCiQ, the more we can show them the data of how they’re doing with their out-of-stocks. And it’s measurable—they can make changes to get improvements in those numbers.”

At the end of the day, it all comes back to offering great games. Edgar looks forward to using the data from SCiQ to help develop games players love that will provide the best return for good causes.

“Drill that down even further into what information we can garner from how tickets are moving through retail and how we can apply that into our product development,” Edgar added. “I think there’s a lot to be gained from the data we’re getting through the SCiQ machines.”