18 PUBLIC GAMING INTERNATIONAL • SEPTEMBER/OCTOBER 2023 than the other? It depends on a lot of factors – including the objective (product specific is probably better for acquisition, for example). We are all making these decisions as to what we think is best for our lotteries based on our individual market conditions. We are all looking at what is going to deliver the best returns for our beneficiaries and players, and executing on that plan.” Speaking as a lottery partner that supplies instant scratch games as well as digital game extensions and second-chance promotions to lotteries, Jeremy Kyzer said Scientific Games works with customers to rise above the noise and reach players with data-driven content. “There is so much noise in the market – sports betting, casinos, iGaming – that lotteries need to differentiate themselves from all this competition to get the players’ attention,” he said. “Portfolio management planning is more complicated than it was 5-10 years ago, given the range of pricepoints and other products. But working together, lotteries and their partners can drill down into the data to choose the right products to release at the right time. That is one key to success.” Mark moved to the many challenges facing lotteries and their products. A number of states have seen sales of instants flatten or even decline, not something that the industry has faced in its history, or at least the last 40 years. “We are no longer a standalone industry,” he said. “We are facing competition from other gaming sources. In North Carolina, sports betting has now been approved. How are these challenges impacting lottery? What about macroeconomic issues such as inflation? How are all these factors impacting our instant ticket portfolios?” While Texas doesn’t have as many different forms of gaming as some states, Ryan said he is under no illusion that the Texas Lottery is not impacted by competition. “Even without sports betting, I know that we are not insulated from competition,” he said. “Look at what happened to the lottery during COVID. With no theaters, cruise ships or casinos operating, everyone turned to lottery for their entertainment. The challenge for us is - now that everything is back, how do we keep talking to the players who have come to lottery during COVID, but now have more options than ever appealing to them to spend their money in other ways? We need to have a broad view of where lottery sits in the entertainment world and work to provide our players with attractive and engaging products.” Jeremy said some lotteries have found the key to keep those players engaged. “Higher price point games have worked wonders for a number of lotteries,” he said. “It was a product that was maybe missing from their portfolio and once offered, lotteries were able to convert people to becoming long-term players. Inflation, including gas prices, have impacted lottery sales. We’ve not seen correlations between inflation and instant game sales until 2022. Now there’s no denying that we’re getting impacted. It’s certainly something to watch.” Matt had a different take on the impact of competition on lotteries. “I think the amount of advertising that’s been spent on sports betting and other forms of gaming have helped us,” he said. “To me, the more we see advertising for different forms of gaming, the more people will consider it as an accepted form of entertainment. And lottery will get included in that discussion. It is something to watch as now some states are looking to curtail the amount of advertising sport betting companies can run. Given the limits many state lotteries have on their advertising budgets, more attention to gaming is probably a good thing, at least in the near term.” Tom pointed out an important downside to all the sports betting advertising. “At some points in the year, it’s hard to buy any time for lottery advertising,” he said. “If it’s an election year, we can almost forget about getting any lottery ads on TV. Traditional advertising is still important for us to create awareness so we definitely get squeezed at some point. It forces us to plan out many months in advance to lock in our buys. That’s quite a change for many lotteries.” Another seismic change with instant tickets is how they are purchased. “Retail is still king, but many states now offer iLottery and players can purchase and play eInstant tickets as well as other products,” said Mark. “In North Carolina, we’ve seen a dramatic growth in that area, in fact about 25 percent of our draw play is now online. There’s no argument that retail will remain important to our sales, but now that people are becoming more familiar with buying products online, how do we satisfy both purchasing avenues?” Matt said that lottery needs to maintain and grow some of the “old school” tactics that have made instant tickets so popular. “In-store promotions are critical,” he said. “The old rule of thumb is to place point of sale in a minimum of three places in their traffic pattern. With so many distractions at retail, in store promotion will help reinforce the purchase decision. They’ll see where the dispensers are located and they can have their minds made up by the time they reach the counter. If we’re not promoting in-store, retail sales will be hurt and we’ll especially not reach infrequent players.” Online sales are not in the discussions in Texas, so Ryan and his team keep a strong focus on retail. “Whether you can sell online or not, you can’t neglect the importance of a strong retailer network and clear, concise in-store promotions,” he said. “At the same time, you need to look at ways to simplify the purchasing process. We’re working on in-lane sales which we believe will attract the younger player who just wants to get in and out of the store. Couriers are also present in Texas. We know they are selling to a much younger audience than the average age of retail customers. So there are options for everyone. They just look a little different state by state.” Tom expressed frustration at the slow pace of iLottery expansion and said it has forced lotteries to be creative. “What is the fear about selling online?” he said. “The process of educating our legislators has been long and arduous but we need to keep doing it. In the meantime, couriers have shown that players want the online option, and it has been a good experience for Colorado. They are bringing younger players into the fold. It has helped us show that online and retail can successfully co-exist.” Additional sales initiatives, such as the courier model, will continue to be driven by vendors, Mark said. “While lotteries have smart internal groups working on the many issues we face, there’s a lot we can learn from “There is so much noise in the market – sports betting, casinos, iGaming – that lotteries need to differentiate themselves from all this competition to get the players’ attention.”
RkJQdWJsaXNoZXIy NTg4MTM=