Can you discuss Aristocrat’s acquisition of NeoGames and what it means for your customers?
Rob Wesley, Vice President of North American Customer Development, Aristocrat Interactive iLottery: The acquisition of NeoGames combines Aristocrat’s global leadership in land-based and social gaming with NeoGames’ interactive platform, content, and managed services leadership. Now, as a unified company, we can leverage the differentiators that make us leaders across all our verticals.
For example, we can take top-performing land-based gaming brands and develop premium eInstant content for lottery customers that leverages the popularity and brand recognition of these games. Another example is using the most effective acquisition and engagement strategies from our social gaming division to create unique and positive experiences for lottery customers, helping them drive responsible growth. Acquisition is the biggest, and the most challenging, opportunity for U.S. iLottery programs, and applying the strategies and tactics used in social gaming can help lotteries breakthrough in acquiring new players, and then ensure players continue to return and become the lotteries’ advocates.
2024 was a banner year for the now-Aristocrat Interactive team. What were your significant accomplishments last year?
Wesley: It has been a very busy and successful 2024 for Aristocrat Interactive, and there’s a lot we could talk about, but let’s focus on a few key accomplishments in the U.S. iLottery market. First, our four iLottery platform customers—Michigan, New Hampshire, North Carolina, and Virginia—continue to hold the top four rankings in gross iLottery sales per capita among states with a full iLottery program. Using the quarterly Eilers & Krejcik report, these customers have consistently retained leadership positions throughout the past few years. These rankings demonstrate the result of having the industry-leading technology solution, content, and managed services, while also proving our ongoing investment in new features and integrations that are helping our lottery customers continue their top performance and growth.
In addition, there were two new iLottery contracts awarded this past year through competitive RFP processes, and both went to NeoGames, now Aristocrat Interactive. We were selected by the New Hampshire Lottery and the Michigan Lottery, and we look forward to partnering with both organizations to drive continued growth, success, and leadership in the industry. Lastly, through our NeoPollard Interactive joint venture, we have signed a two-year contract extension with the industry-leading per capita iLottery program at the Virginia Lottery, extending our contract through late 2028.
After those big wins, I’ve also noticed you’ve been building out the U.S. team to support these contracts. Who have you brought on, and why were these individuals critical to your team’s success?
Wesley: We know our success starts with our people. We aim to be the trusted leader and advisor for lotteries that want to expand into iLottery programs and grow their digital business—even before they launch iLottery. We achieve this by building the best team possible with those who can deliver on our promise to be the trusted leader and advisor for lotteries. Our ability to attract, hire, and retain the best talent as we grow our North American team is going to be a critical aspect of our continued growth and leadership.
As we started expanding the team to support our business success and growth, we’ve added key industry professionals to our North American team: Stephanie Duval (former Virginia Lottery), Director of Customer Marketing, North America; Jesse Teague (former Kentucky Lottery), iLottery Marketing Director (New Hampshire); Shane Taylor (former Massachusetts Lottery), Account Director (New Hampshire); and Ryan Eddy (former New Hampshire Lottery), Digital Games Coordinator.
We want individuals on our team who align with our vision, determination, and collaborative culture, who work closely to help our lottery customers succeed by being a trusted partner, genuine, and transparent. It all starts with a supportive and unified approach internally, which extends to our relationships with our customers.
Now let’s talk a bit more about what is happening in the marketplace. Many non-iLottery states are currently building their digital infrastructure to improve their existing operations and prepare for a potential iLottery launch. What are the most important areas they should focus on?
Wesley: Throughout the past couple of years, this topic has been covered many times in industry publications and at industry conferences. Creating loyalty programs, enhancing second-chance capabilities, and leveraging CRM technology seem to be the most covered tactics—all of which are important. The most critical elements are establishing the right technology infrastructure and focusing on establishing and growing a single-player database.
Whether you have a loyalty program capturing registered player transactions or customers signing up for emails or text messages through traditional marketing channels, the most important part is capturing those transactions in a single database. This enables lotteries to understand player behavior, establish behavior-based segmentation, and deliver timely, relevant, and personalized content and offers to players—while making sure it is done responsibly and doesn’t target vulnerable individuals. Lotteries do not need to wait for iLottery legislation to implement modern technology solutions to begin establishing and nurturing relationships with players. The same platforms that operate iLottery programs and allow those states to establish strong relationships with their players can be leveraged in states who are waiting for iLottery to become a reality.
What omnichannel experiences can also help build the lottery’s player database?
Wesley: Loyalty and second-chance programs are already being worked on by many lotteries. Those are key components for engagement and player database growth in an anonymous retail environment. But there are also other opportunities to not only grow the player database but expand the relationship directly with players.
Several lotteries have implemented programs that let players cash their retail tickets remotely; some process them manually, or players mail them in and have the money deposited into their lottery accounts. Allowing players to check their tickets on a mobile app and cash tickets into an online wallet can be used as an acquisition tool to grow the player database, and it provides valuable insights into player behavior that can be leveraged to deliver timely, relevant, and personalized content and offers.
When a lottery can finally sell online, what steps should they take to prepare for the RFP process?
Wesley: Without a doubt, the first step should be to talk to lotteries that have already been through this process. From a lottery’s perspective, every time an RFP is issued, you learn something new. You inevitably discover things you wish you had done differently. For those just getting started, learning from other lotteries, and gathering those lessons learned is key.
Another critical point is to ensure that issuing an RFP is part of your overall plan from the beginning. We know there’s a lot of discussion about having a single platform that spans both retail and online. While some lotteries do this successfully, it may not be the best fit for everyone. Without going through the RFP process, you never get the chance to evaluate which approach makes the most sense for your lottery. Additionally, lotteries should consider the current industry results. As we discussed earlier, the top four per capita iLottery programs are running the Aristocrat Interactive platform. They do not have the same retail gaming system and iLottery system. This includes the online sales of draw-based games. Each of those lotteries sells, reconciles, and reports online draw-based games sales separately from the retail gaming system. Higher per capita performance means higher returns to good causes and should be considered when lotteries discuss their approach to preparing for an iLottery RFP.
There have also been recent discussions about creating great customer experience by having a single platform. The reality is that retail gaming systems handle most transactions anonymously, and do not capture player-level transaction data. The player-level data only exists for high-tier winning ticket claims, second-chance and loyalty programs.
The key, as we’ve touched on before, is having a single view of the player, but it doesn’t require a combined online and retail platform. Lotteries need a database that combines data from any source, so they can then have the best retail gaming system, the best online gaming system, the best mobile app, the best website, the best loyalty program, and the best second-chance programs. Ultimately this single-player database, with the best technology, will create the best customer experience and deliver a positive return to good causes.
What are the most important best practices or concepts lotteries should consider during the iLottery RFP process?
Wesley: It’s interesting—one of the main challenges for lotteries in the RFP process is that vendor responses can be very similar. Based on my experience on several RFPs throughout more than 25 years with the Virginia Lottery, RFP responses typically include claims that suppliers have technology and can provide services that can deliver on all RFP expectations and maximize sales and profits for Lotteries. The critical factor, then, is assessing each vendor’s actual experience in successfully delivering what they propose, and the revenue results that have been delivered. Proven experience and success should be a meaningful factor in RFP scoring, not only what is in a written response claiming what can be done. It’s one thing to say you can do something in an RFP response and another to have a track record of execution and delivering results.
Another key point is pricing. The industry has improved in this regard by reducing the scoring weight in this area, but too often, prices become an overriding factor. If you choose a vendor purely on cost, you may miss out on superior technical solutions or operational benefits that can drive significantly higher revenue. A higher-quality solution and the ongoing investment in new features and innovation throughout the term of the contract could cost more but will deliver a better operation, create better customer experiences, and ultimately maximize profits, and lotteries should factor that into the evaluation rather than penalizing it. A low price may save some cost, but a superior solution will deliver significantly more over time when compared to a low-price solution.
It is also important to consider that, unlike retail systems, the pace in the digital world is much, much faster, and the traditional batch process for technology upgrades no longer works. Therefore, agility, speed to market, and innovation become critical factors. Once a contract is awarded—whether it’s for five, six, seven, or ten years—technology is needed that can continuously evolve, improve, and innovate. Otherwise, lotteries risk being left behind and failing to achieve the desired results.
Then there is the draw-based system question. There’s a perception among some customers I’ve spoken with across the industry that the draw-based game system must be tied in with retail. The answer is unequivocally no—you want the best experience for players, whether it’s an eInstant game or a draw-based game. As stated, a bit earlier, the top four per capita lotteries each have a separate draw-based gaming system from their retail gaming system, proving they do not need to be the same. So, it’s important to keep that in mind as lotteries evaluate options that will serve them for the years to come.
Finally, look for a vendor that not only provides a robust platform but also has industry-leading eInstant content, which currently accounts for 85–90% of iLottery revenue.
Once the dreaded RFP process is complete, how does a lottery go about planning for running the new operation?
Wesley: I’ve been asked this question many times when I was in Virginia. The answer often depends on what the lottery can do in terms of hiring. It also depends on the talent, skill set, and digital knowledge of the staff. For example, some lotteries have seasoned talent in digital marketing and customer engagement and only need a vendor to handle execution. Others may have extensive experience in retail but not in digital, so they outsource more of their marketing activities to a vendor.
Ultimately, the short answer is that it depends—both on the lottery’s flexibility in hiring, budgeting, and operations, and on the skill set and knowledge of the internal team.