La Fleur’s Lottery INNOVATION Exchange conference was held June 26-28, 2018 at Ryerson University in Toronto, Ontario. The agenda featured external speakers discussing how agile companies innovate. There were also lottery innovation case studies and panels. Videos of presentations and panels are available at lafleurs.com.

La Fleur’s Magazine would like to thank the following: OLG (VIP Host Jurisdiction) as well as our Gold Luncheon Sponsors (Carmanah Signs and IDEMIA Identity & Security France), our Gold Sponsors (Bede Gaming and Lazlo326 LLC), our Silver Sponsors (Epson Canada and UP), our Hospitality Event Sponsors (Blackhawk Network, Blake Jarrett & Company, IGT and The Hive) and our Social Media Sponsor (Pollard Banknote).

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Panel: Canadian Lottery CEOs

The Canadian Lottery CEO Panel focused on their reaction to the Millennial Safari panel as well as how innovation drives their organization.

o Brent Scrimshaw, CEO, ALC: “We have lost about half of our 19-35 year old player base. That is common across the country. Our innovation is focused on two areas. One is how do we communicate with a younger age group. They do not see themselves as players. The other aspect is creating games specifically for them.

One of my takeaways was that the millennial panel didn’t see where our products fit into their lives. I wish we had the convenience stores in here when the millennial panel talked about how they felt about c-stores. When you have a brand totally tied to selling cigarettes, you have a problem.

What I like is the level of sharing that goes on in the ILC. The first step to tackling innovation in a government organization is to forget that you are a government organization. If we look at ourselves as a crown agency, we will fail. We have tried to convince our board to set us free. Innovation can’t be a department. It has to be an enterprisewide venture.”

o Kevin Gass, VP, Lottery Gaming, BCLC: “All of the things we heard from the millennial panel underscores the lottery’s need to be relevant. It is a challenge. We have not made progress on it. We call in-lane ‘follow the feet.’ We look at what the customers do and what they want to do. We are 80% in groceries. We need to find other outlets for that.

We want to leverage what we already have as well. For example, PlayNow is 13 years of double digit growth. The quest becomes how do we leverage that in our casinos and retail. We have developed something for the casino market called Live Dealer, so people who may be intimated by going into a casino can experience that.

Millennials do not tend to like the locations that have typically sold lottery. We have developed in-lane. We are looking at QSR. In B.C., we had a net loss of 600 retailers in the past three years in which we have had record sales. We have to rethink what a transaction is. What is the difference between a digital transaction on PlayNow and one on Amazon? To the players there is no difference. We heard from younger players that there is a winnability gap with younger folks. We need to communicate better.”

o Isabelle Jean, President of Operations-Lotteries, Loto-Québec: “The main takeaway from the Millennial Safari is that we should not be afraid to try new things. Three years ago Loto-Québec began a switch to live products. eSports was part of that. To build bridges Loto-Québec began to participate. Now they see us as partners. We host events-eSports. We are working on a mobile solution that will allow second-chance entry and mobile ticket checking. It will reach a younger audience.”

o Greg McKenzie, EVP & COO, OLG: “I was glad to see that our investment in in-lane was paying off for the millennial audience. We’re less focused on a particular innovation and more on creating an environment to innovate. A great example is Big Spin which has been tremendously successful.

Moving forward is about creating a broad set of capabilities. OLG is engaged with eSports but the trick for all of us is how to you incorporate that into your experience offering or indeed generate revenue. We can’t do things just to experiment. It must have a revenue component. As we move beyond our monopoly model, the margins are exceedingly low. We have to be open to the milieu of creativity but we have to be far more attentive to margin than we have in the past.”

OLG Welcome Address: Greg McKenzie, OLG

Greg McKenzie, EVP & COO, OLG gave the welcome address at the 2018 Toronto conference.

Eighteen months ago, OLG set out on a new path of innovation. Their goal was to give world class gaming to the citizens of Ontario. “We’re moving into this realm of innovation,” said McKenzie.

Like most lotteries, OLG is finding it difficult to keep up with the shifting customer demographics. With record profits and revenue, McKenzie noted that is due to getting more money from the same customers. “We’re also competing for a gaming dollar that our monopoly environment just doesn’t quite go enough to allow us to compete any longer,” McKenzie said. “We see the benefits on one hand, but on the other, we’re not able to move our business forward.”

In an effort to move forward, McKenzie laid out OLG’s plan. They are launching a new player platform, new lottery terminals, a new web portal, and finally a new sports betting platform. “Investments are going on across the organization,” McKenzie said.

OLG also has its sights on future potential areas of growth. OLG is a founding sponsor of a NBA eSports team. Single event sports is another area that could bring large growth and has a lot of potential, not just from a revenue standpoint, but also a entertainment one.

But with innovation, OLG must also make strong commitment to responsible gaming. “We will continue to carry the same social responsibility, particularly from a responsible gaming standpoint, as we go forward. We are going to continue to build our ambition around our Play Smart brand,” said McKenzie.

“I wanted in the spirit of innovation theme share with you, not the solutions, because frankly we don’t have them but certainly the understanding of how we are tackling the challenge of getting to those solutions,” McKenzie said.

Serendipitous Innovation: Adam Caughill

Adam Caughill, Director, Lottery Business Development & Innovation, OLG spoke on how innovation today sparks future innovation.

An elevator pitch (or perhaps summary) of Caughill’s presentation would be: “If we hadn’t tried (blank), we wouldn’t have (blank).”

In 2016, OLG figured out how to bring gift cards to market. The project required an investment into technology integrations. Through these projects, OLG gained a strong understanding what the various vendors can do.

A year before, OLG had been working on in-lane solutions. They had preprinted tickets that would activate through retailers’ POS. Retailers were excited about the premise but shied away from the project once they understood it required a hefty IT investment on their side. “But after we launched gift cards, a light bulb went on. These new partners activated stuff. They are already in the retailer POS systems. They deliver and replenish systems… Our original gift card investment turned into our in-lane solution… This would have never happened had it not been for gift cards,” Caughill said.

Now that the in-lane solution has been invested in, what other products come from it? That’s the question Caughill pitched to his team. One product was a fast lane product that had a progressive jackpot for each store. “We just finished some new game research in Ontario and this was the top performing concept, enabled by the original investment in our innovation project,” Caughill said.

Other concepts arose that would allow for other CPG products to have lottery tickets on them, like a bag of chips or a bottle of water.

“Those are just a couple of the opportunities we have identified from this original investment in technology we made. When we discuss our process for innovation at OLG, we talk about connecting the dots between insight, opportunity, capability and available technology. And tying those together with a clever idea,” ended Caughill.

Panel: U.S. Powerball

The Powerball Panel addressed growth issues in fiscal 2019 and beyond.

“There is global interest and an opportunity to band together with some of the bloc lotteries around the world. We think we can address issues affecting the brand if we work together,” said Toyne.

“Our goal is to double Powerball sales in the next six years. That will not come from what we are currently doing,” said Gary Grief, Executive Director, Texas Lottery. “I want to say that we would never sell Powerball into any market that we did not have an agreement with that other jurisdiction.

“The U.S. lotteries have to do something to address the turnover at the executive level. In the past two or three years we have lost a third of our directors. That is a loss of experience which leads to risk averse decision making,” added Grief. “The mandate for the development committee is go develop ideas that are flexible and scalable so not all 34 jurisdictions have to sign off on a concept before it begins.”

“The Powerball brand is doing incredibly well,” said Gregg Edgar, Executive Director, Arizona Lottery. “This is the first year that Arizona participated in Power Cruise. We were astonished how well it did for us. It speaks to the value of the brand. Developing a subcommittee is an important step to addressing the strategic goal of doubling sales.”