www.PublicGaming.com JANUARY/FEBRUARY 2025 LEADING IN TURBULENT TIMES Andreas Kötter Chief Executive Officer, WestLotto, Germany Chairman of the Eurojackpot Lottery Cooperation Randy Spielman North Carolina Education Lottery Pat McHugh Scientific Games Chris Shaban Aristocrat Interactive Renato Ascoli IGT Melissa Pursley IGT Also Featuring Interviews with …
ILLUMINATING YOUR PATH TO GREATNESS LETTER FROM THE CEO To our valued clients and partners, Our journey together has always been defined by a shared commitment to go further – beyond expectations, beyond borders, and never settling for “good enough.” With the momentum we’ve built this year, I’m excited to set a fresh pace for the future. Whether you’ve partnered with us for decades or are just beginning your journey with GLI, thank you for your trust. After 35 years, it’s incredible to say – we’re just getting started. Our focus remains, as it has since the beginning, on accelerating your time to market and getting it right the first time. With over 40 seasoned professionals averaging 15 years at GLI, our senior global management team delivers unmatched depth and expertise to clients worldwide. Since August, we’ve welcomed 140 new team members globally, adding to our 1,400 professionals, with plans to hire 140 more in early 2025. These seasoned leaders are shaping the next generation, instilling GLI’s legacy of core values while embracing modernization and new technologies. This ensures we deliver on time, on budget, and with the unmatched quality for which we’re known. Backed by a global Quality Management System and growing teams, we’re committed to delivering secure, consistent testing for all – regardless of your business size or location. Our cybersecurity services, now a core division of GLI, provide a seamless, one-stop solution for advanced platform security alongside the compliance expertise you rely on. As technology evolves, integrity remains our compass, ensuring we lead the way in setting and raising industry standards. I’m proud to share that our Gaming Security Framework (GSF), the first industrywide cybersecurity standard, has seen widespread adoption. I look forward to connecting with many of you at ICE in Barcelona and again at our 2025 Regulators Roundtable in Las Vegas, April 16 -17. We’re on track for record-breaking attendance, with regulatory experts worldwide joining our annual networking reception – an unmatched space for regulators and suppliers to exchange insights. As the largest regulatory event globally, we look forward to welcoming new faces alongside our longstanding regulatory partners. This past year, we’ve strengthened our connections with you – logging nearly 750 flights, countless miles, and over 1,500 hotel nights. Each visit has been a privilege – reconnecting with familiar faces, meeting new ones, and witnessing the innovation driving our industry forward. These conversations remind me of the gaming industry’s tremendous progress and GLI’s role in pushing boundaries alongside you. As we move forward together, we’re committed to breaking boundaries while maintaining the worldclass quality that defines GLI. Thank you for letting us be part of your journey and here’s to turning today’s goals into tomorrow’s milestones. I look forward to seeing you somewhere on the globe. gaminglabs.com James Maida “When we exceed your goals, that’s how we know we’re on the right track”
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4 PUBLIC GAMING INTERNATIONAL • JANUARY/FEBRUARY 2025 Publisher & Chief Executive Officer Paul Jason pjason@publicgaming.com President Susan Jason sjason@publicgaming.com Brand and Design Dan Eggers Design Honored Founders Doris & Duane Burke Subscriptions United States: $145 USD Canada & Mexico: $160 USD All other countries: $225 USD For email address changes, subscription requests and requests to be placed on our e-Newsletter distribution list, e-mail Susan Jason at sjason@publicgaming.com Contact Information PGRI, Inc. 1769 Flagstone Terrace, The Villages, FL 32162 PublicGaming.com T: +425.449.3000 F: +206.374.2600 Public Gaming International Magazine Published six times a year and distributed to readers all around the world. Electronic version is e-mailed and is also available on our news website: PublicGaming.com January/February 2025 Volume 54, Issue 1 ©2023 all rights reserved. Public Gaming Research Institute cISSN: 1042-1912 10 LEADING IN TURBULENT TIMES Andreas Kötter Chief Executive Officer, WestLotto, Germany Chairman of the Eurojackpot Lottery Cooperation President of the World Lottery Association (WLA) 16 ACHIEVING EXPLOSIVE GROWTH IN THE FIRST YEAR OF DIGITAL INSTANTS SALES Randy Spielman Deputy Executive Director of Product Development and Digital Gaming, North Carolina Education Lottery 22 SUPPORTING THE GLOBAL DIGITAL EVOLUTION OF LOTTERIES: NEOGAMES TRANSITION TO ARISTOCRAT INTERACTIVE Chris Shaban Managing Director of iLottery, Aristocrat Interactive 26 DRIVING PERFORMANCE ACROSS THE LOTTERY ECOSYSTEM Pat McHugh Chief Executive Officer, Scientific Games 28 NEW YEARS EVOLUTION Renato Ascoli Chief Executive Officer Global Lottery, IGT Melissa Pursley Sr. Vice President Lottery Product & Sales Development, IGT CONTENTS JANUARY/FEBRUARY 2025 FEATURED INTERVIEWS 10 16 22 28 28 26
6 PUBLIC GAMING INTERNATIONAL • JANUARY/FEBRUARY 2025 Visit Our Family Of Websites PublicGaming.com industry news & information PGRITalks.com videos of conference presentations PublicGaming.org PGRI conference information PGRIDigitalLibrary.com magazine archive of past issues PGRIDirectory.com listing of lotteries and vendors PGRIAwards.com Showcase of industry honorees recognized by the Lottery Industry Hall of Fame PGRI Lifetime Achievement Award Sharp Award for Good Causes Lottery Industry Statesman and Stateswoman Award Rebecca Paul Mentorship Award Collaboration Award Subscribe To Our Free Digital Newsletters Receive our daily newsletters at no charge, published 5 times a week to bring you the latest breaking news in the global lottery industry. Send an e-mail to: sjason@PublicGaming.com with “add to Daily Digest list” in the subject line. FEATURED ARTICLES 8 FROM THE PUBLISHER Paul Jason 20 POWERBALL ELECTRIFIES NASCAR CHAMPIONSHIP WEEKEND WITH $1 MILLION DRAWING MUSL News (Multi-State Lottery Association) 38 GAMES-OF-CHANCE BATTLE OF THE BRANDS INTENSIFIES Simon Jaworski, Founder & CEO, Lotto Research 40 SPOTLIGHT ON THE LEADERS OF THE LOTTERY INDUSTRY 47 PULSE OF THE INDUSTRY: Synopsis of recent gaming industry news 49 AI & CYBERSECURITY IN GAMBLING FROM A EUROPEAN PERSPECTIVE Philippe Vlaemminck, Managing Partner, Vlaemminck.law Beata Guzik, Director Public Affairs, Vlaemminck.law Valentin Ramognino, Associate at Vlaemminck.law DEPARTMENTS 32 TRANSFORMING ILOTTERY WITH PERSONALIZATION AND INNOVATION: THE ZEAL STORY Alex Green, Vice President Games, ZEAL 34 BEST PRACTICES & ACTIONABLE STRATEGIES TO HARNESS THE POWER OF LOYALTY PROGRAMS New IGT Research 42
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8 PUBLIC GAMING INTERNATIONAL • JANUARY/FEBRUARY 2025 From the Publisher The genius of Malcom Gladwell is how he applies the science used to understand bio-physical phenomena to explain the psychology and sociology of human behavior and cultural/sociological trends. For instance, in The Tipping Point (his first book, written twenty-five years ago), he applies the science of epidemiology (how infectious diseases spread) to the way ideas spread, the way cultural trends take hold, and the ways that societal mores and attitudes evolve. One of the main insights of this book is that change rarely happens in a steadily climbing progression. More often, just like a pandemic, the progression of an idea or trend starts slow and stays slow until it hits the proverbial tipping-point at which time it explodes. For instance, there were a small number of super-spreader events (a technology conference in Boston, some big sporting events, MardiGras, etc.) in the U.S. in late February of 2020 that turned COVID-19 into an out-of-control global pandemic. Jumping over to the realm of ideas and public sentiment: The Viet Cong TET offensive is usually identified as the tippingpoint that turned public opinion against the Vietnam war. COVID-19 was a tipping-point for the decline of going to movie theatres, and the pop phenomenon of Barbenheimer the tipping-point event for the return to theatres. COVID-19 is also the tipping point catalyst for the dramatic increase in social media usage, especially TikToc, because people needed something to do with all the time we had to play on our Mobile devices. The closing of casinos could perhaps qualify as a minor tipping-point to cause consumers to turn to lottery and cause lottery sales to spike. Angry Birds and the Apple App Store were a tipping-point for Mobile Gaming. The U.S. Supreme Court overturning of PASPA in 2018 was the tipping-point that presaged the explosion of sports betting in the U.S. This whole Gladwellian narrative gets much more interesting with the introduction of overstory in his most recent book Revenge of the Tipping Point. The term “overstory” was first used to describe the uppermost layer of trees that form a dense overhead canopy in tropical rainforests. Studying the life-forms that reside on the floor of the rainforest is not very productive without understanding the effects of this dense upper canopy that absorbs over 90% of the sunlight. Reconstituting the way humidity and sunlight combine to produce photosynthesis for everything beneath it means that everything that happens on the ground is determined by what happens far above the ground, in that canopy of treetop cover. Likewise, the understanding of specific human behavior (like why people play lottery games) is enhanced if we think about it as a part of an overstory not of tree canopy but of ideas, underlying trends, and cultural change. That is what Gladwell does. He applies the scientific concept of the rainforest overstory and the process of transforming the elements that sustain life (photosynthesis) to the way ideas and cultural phenomena evolve. The TET offensive, COVID-19, and the overturning of PASPA may have been tipping-points. But that’s not the real story any more than the high price of eggs is the reason Donald Trump was elected, or the low price of a lottery ticket the reason people like to play the lottery. Gladwell is pointing us towards the overstory to understand the underlying drivers of human behavior, mega-trends, and paradigm shifts in societal attitudes. Or, as the case may be, what attracts people to play games-ofchance. Public sentiment towards Vietnam happened far below the over-arching canopy, the overstory, that was reshaping American culture. We take some of these things for granted now, but that was when TV news first delivered war-time coverage into our living rooms and so emerged as the shaper of societal attitudes and cultural trends. Walter Cronkite simply arched an eyebrow to express skepticism at the proclamations of battlefield successes being spouted by General Westmoreland and President Johnson (who commented "If I’ve lost Cronkite, I’ve lost Middle America"). This period also included the emergence of an activist college student body. It included the first cracks in public confidence in the integrity and even efficacy of government institutions and authority in general. The TET offensive may have been the tipping-point, but tipping-points happen on the forest floor. We continue to struggle to understand the formative impacts of the real overstory that reshaped U.S. culture in the late sixties and early seventies and the “long-tail” effect it has on us even today. Gladwell does over-simplify. Mobile gaming would have happened without AngryBirds. If Apple didn’t create its App store, someone else probably would. Social media certainly existed before TikTok and in fact was growing before Thank you to Randy Spielman, Pat McHugh, Chris Shaban, Renato Ascoli, Melissa Pursley, and Philippe Vlaemminck for your fabulous interviews and digging right into the issues that will make us successful in the coming years. And a special thanks to Andreas Kötter. What started out as an informal discussion turned into a far-reaching interview that addresses much of the top-of-mind issues that affect our industry going forward. The theme of Smart-Tech Fort Lauderdale is What causes the modern consumer to choose lottery over other recreational games-of-chance? A corollary to that: How might we tap into the overstory to recreational gaming, gambling, and lottery? See PublicGaming.org for more information and conference updates. You can always visit our main news website PublicGaming.com for access to any of PGRI’s informational resources. Thank you for your support – and best wishes for a prosperous and healthy 2025! Let’s continue to strive to make a difference. What’s our Overstory? continued on page 39
10 PUBLIC GAMING INTERNATIONAL • JANUARY/FEBRUARY 2025 continued on page 12 LEADING IN A PERIOD OF TREMENDOUS OPPORTUNITY AND DISRUPTION Andreas Kötter Chief Executive Officer, WestLotto, Germany Chairman of the Eurojackpot Cooperation President of the World Lottery Association (WLA) Paul Jason: In addition to being CEO of WestLotto and president of the WLA, you are also chair of the Eurojackpot Cooperation. That’s a lot for one person to have on his plate! Andreas Kötter: Thankfully, I am surrounded by incredibly talented and hardworking teams. Last year, before the election at the WLS in Paris took place, we set up a new unit for international cooperation. Eurojackpot has been managed by WestLotto since its launch twelve years ago. Looking at the demographics of the team and the profile we need the near future, we also started the transition last year. In the future, we will mitigate operational risks by involving more people involved and sharing tasks across member states. Personally, I have transferred my mandates within the national cooperation of the German Lotto and Toto Block (DLTB). So I´m ready for the challenges ahead. I would like to take a moment to thank Rebecca Paul for her six years of service to the WLA. Rebecca has had an outsized influence on this industry and her contributions to the WLA are greatly appreciated. Together with the Executive Director Luca Esposito, she has set up a professional and forward-looking team for the WLA over the last years. PGRI INTERVIEWS PGRI Introduction: Andreas Kötter’s responsibilities traverse a wide range of areas, influencing the evolution of many sectors of the industry. With so much ground to cover, we have separated our discussion into three sections. Thank you, Andreas, for sharing your vision! Eurojackpot was launched in 2012 and has since become Europe’s largest lottery cooperation in Europe. Starting with state-licensed lottery companies from seven countries, the Eurojackpot cooperation has now grown to 34 lotteries from nineteen countries, with the Greek company OPAP being the most recent to join the cooperation. Eurojackpot is managed by the Admin Unit at WestLotto with the support of an Executive Committee consisting of six CEOs from five Eurojackpot member countries. Andreas Kötter has chaired the cooperation since 2016, and was recently re-elected to continue in this role. Visit eurojackpot. com for more information about Eurojackpot. The World Lottery Association (WLA) elected Andreas Kötter as President at its General Assembly on October 24, during the World Lottery Summit in Paris. Andreas has been actively involved at WLA, including as a Member of WLA Executive Committee, since 2017. He has been Chair of the WLA Illegal Lotteries and Betting Committee, which is dedicated to reviewing the tools and resources available to help member lotteries maintain territorial integrity with stakeholders in every region, since 2018, and Senior Vice President of WLA since 2022. Visit world-lotteries.org for more information about the WLA. Consumer trends, marketing innovations and the proliferation of gambling options (including illegal gambling) is transforming the lottery industry. In addition to the above two roles, Andreas is also the CEO of the largest lottery operator in Germany. This shapes his perspective as someone who is responsible to stakeholders to deliver material results that generate funds for good causes, support societal goals and protect players.
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12 PUBLIC GAMING INTERNATIONAL • JANUARY/FEBRUARY 2025 Are there new hotspots that could become relevant in the battle against illegal gambling? A. Kötter: A key trend of our industry is digitalization. This does also mean that the borderline between gaming and gambling is becoming more relevant and difficult to manage. We see that more and more lotteries are moving forward legally and responsibly forward with gaming elements, e.g. for digital scratch cards in their product portfolio. The regulator sets clear restrictions how the individual gaming element should look like. On the other hand, there is a new generation of highly entertaining multiplayer online competitive games that involves players paying money to acquire tools to help them win. Technically, though, the money is not being wagered or gambled as there is no monetary prize. So even though there is money being spent, these games do not fit the traditional definition of gambling as having Chance+Wager+Prize. Even so, the player experience has many similarities to gambling and involves spending money to play a game that is potentially even more addictive than gambling. In fact, a growing number of players are spending huge amounts of money on these games, and the operators are making huge profits. The problem is that these games are often not clearly regulated and are played by people of all ages including children. This raises problematic questions: What is the interface between gaming and gambling? How should these games be regulated? How do we protect children and consumers from the dangers of problem gambling when it comes to new forms of gaming that are not properly classified and often not even regulated? We are already seeing an increase in the number of young adult players showing problematic gambling behavior. I consider this an important issue as these games are becoming more and more popular because they are so entertaining. It would seem like this could be an issue in which the interests of lottery converge with the interests of commercial gambling operators. Wouldn’t everyone in the games-of-chance industry want to see tighter regulations applied to gaming that is not taxed and regulated as they are? A. Kötter: Operators driven by pure short-term commercial interests will always lobby for less regulation and lower costs. At present, they seem less concerned about problem gambling and harm to consumers and children. Our role, as state-sanctioned lotteries, is to serve society and fund good causes. Protecting the consumer is part of our DNA. Our stakeholders expect lottery operators to be the adults in the room, protecting society's interests. And they’ll hold us accountable if those standards of integrity and player protection are not met. We want everyone, parents and children alike, as well as our political constituents who shape regulatory policy, to be educated and informed about the risks and to be able to find the right solution or regulation. I hope that in the future lotteries are not finding themself at a significant disadvantage compared to large operators who are not subject to the same high standards as we are. This scenario has already happened time and again. Illegal online operators build up their customer base to a point where governments decide they have no choice but to regulate and tax their earnings. A. Kötter: Their player base, which was acquired illegally, instantly puts them into the dominant market-share position in some regions. The result is that criminal behavior is rewarded, and the operators who have complied with the local laws and regulations are then put at a competitive disadvantage because the illegals have the players, and the capital acquired from years of either not paying or underpaying taxes. The operators who have been profiting illegally for years while build up their player base are now lobbying to come into the legally regulated markets. We talked about this cycle at the PGRI conference in Fort Lauderdale in 2019. The syndrome has gained momentum since then. Some operators even continue to operate illegally in markets where they cannot get a proper license, while operating legally in other markets with a proper license. This simply gives these illegals the best of both worlds and the opportunity to maximize their profits. Some illegals push hard to obtain a proper license to operate in the legally regulated markets, even to the point of ending their illegal activities in that jurisdiction. One reason for this may be that the availability of investment capital to grow the business, or to hedge the risk winning a high jackpot, is discouraging illegal activity. So, the air is getting thinner for these operators. Isn’t it the case that the WLA and the EL (European Lotteries) increased their level and effectiveness of communications with political stakeholders and that had some influence on these trends away from illegal online gambling? A. Kötter: In 2014 the Council of Europe created the Convention on the Manipulation of Sports Competition - also known as the Macolin Convention. The WLA was one of the parties that created the first draft. The final version was the joint effort of more than 50 states worldwide. We have put forward the concept that if a company is operating illegally anywhere, then they should be considered an illegal operator. And no jurisdiction should condone illegal operations by rewarding them with a license to operate legally. The WLA is working intensively with the EL and the regional associations on this important issue. How did the World Lottery Association contribute to those initiatives? A. Kötter: The important starting point was a common understanding of what is illegal. Based on this, the WLA compiled a list of current illegal activities and legal measures taken against them. We produced white papers clarifying the difference between legal and illegal gaming, illegal gambling business and lottery operations and even templates that could be sent to the regulation bodies. Together with some multi-jurisdictional lottery cooperations we even touched on the issue of brand protection. “NO JURISDICTION SHOULD CONDONE ILLEGAL OPERATIONS BY REWARDING THEM WITH A LICENSE TO OPERATE LEGALLY.” continued on page 14
14 PUBLIC GAMING INTERNATIONAL • JANUARY/FEBRUARY 2025 A cornerstone of supporting policy advocacy initiatives and protecting our ecosystem are the certification programs to ensure the highest quality of security and responsible gaming. The WLA only accepts members who comply with all aspects of the legal and regulatory framework. We have developed programs to help our members to achieve the highest operational standards in our industry. We must need to be able to demonstrate these standards through a certification process that is respected by all our stakeholders. Combine this operational excellence with great games that consumers love to play, funding for society and good causes, and a commitment to continuous improvement and innovation… we see this as the path to continued success. In the U.S., we have seen the power of well-funded lobbying campaigns to determine regulation that is not consistent with the interests of the citizens. It’s not that sports betting should not have been legalized and regulated. But how can legislators justify, for instance, legalizing online sports betting while prohibiting online iLottery? A. Kötter: This is a similar problem in many countries around the world that are facing market liberalization, driven mainly by new and digital business models. However, from my own experience, lottery companies in Europe recognized early on the importance of digital lottery, online sales and building a registered player base. While purely commercial operators lobbied hard for regulatory changes that would be favorable to them, lotteries pushed to be allowed to build a digital platform and sell lottery products online. We recognized that the key to long-term success is Knowing Your Customer (KYC). The digital connection is mission-critical and the key to transforming your players from anonymous consumers into loyal customers. The transformative power of data analytics is then applied to your Customer Relationship Management (CRM) infrastructure, enabling us to win in an increasingly competitive gambling market. As you know, the lottery starts with the largest customer base, probably more than most other consumer products and certainly more than any other gambling product. Strengthening the interactive online relationship, embracing KYC, investing in CRM and creating customerfocused products are key to retaining that customer base. Eurojackpot has grown from €894 million in sales in 2013 to €4,960 million in 2024. Could you describe how your strategies and methods have evolved over that period to keep the players so engaged? A. Kötter: The creators of Eurojackpot had the advantage of seeing what worked so well with games like EuroMillions and even Powerball and Mega Millions in the US. We could therefore also identify product details that might not work well in our cooperation. Sustainable development was at the top of the list of our objectives. We wanted the cap to be above our local offerings. And we decided that the cap should be below €100 million, so we set it at €90 million. The jackpot did not reach €90 million very often, but when it did, there was a lot of publicity and excitement. Eurojackpot was a huge success from the beginning and popularity and sales continued to grow. We anticipated that raising the cap to triple digits, over €100 million, would be an exciting marketing event. As more and more countries joined Eurojackpot, the volume of sales increased, the game became even more stable, and the time we needed to reach the €90 million jackpot was shrinking. And we saw that we had no jackpot fatigue even at jackpots in the range of €50 or €60 million. We looked at all sorts of ways to add to the game or change the game. We wanted to be conservative and not make too many changes to avoid what we call change fatigue. In March 2022, ten years after the launch, the time was right, and we increased the jackpot to €120 million and introduced a second draw on Tuesdays. For this change we had a 100% agreement among our cooperation partners, and we have been successful with an increase in turnover of around 30% since then. Eurojackpot works as a cooperation where WestLotto, Danske Spil in Copenhagen and Veikkaus in Helsinki have operational support functions like first and second control center, Administration Unit or Draw Center. Lastly, Eurojackpot represents a common European value that strengthens mutual respect and cooperation between several European countries. It is exciting to work on a product and business model that can only be achieved by working together with our neighbors, with a joint European approach, building something that benefits each of us and the society we serve. The games-of-chance industry has changed dramatically over the last ten years. How have the needs of WLA members changed, and how has the association evolved to continue to deliver value and exceed its members’ expectations? A. Kötter: The challenges in our industry are driven by changes in consumer behavior, illegal activities, liberalization of markets, digitalization, new approaches in gaming and gambling and for some of us even by the capital markets to name just a few. The WLA is committed to supporting its members adapt to change, to continuously improve their level of performance, to evolve their individual business strategies and methods to meet the needs of the consumers, and to succeed in their mission to serve good causes and society. To this end, the WLA Executive Committee has built a new strategic framework that will be rolled out starting now and being implemented over the next four years. There are four components to our new strategic plan. First, we want to ensure that our value proposition is distinct from and complementary to the regional associations. The WLA will remain “THE WLA VISION IS TO BE RECOGNIZED AS THE GLOBAL LOTTERY AND BETTING GAME AUTHORITY AND TO SUPPORT ITS MEMBERS IN CONTRIBUTING TO SOCIETY.” continued on page 37
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16 PUBLIC GAMING INTERNATIONAL • JANUARY/FEBRUARY 2025 ACHIEVING EXPLOSIVE GROWTH IN THE FIRST YEAR OF DIGITAL INSTANTS SALES Randy Spielman Chief Product Officer, North Carolina Education Lottery (NCEL) Paul Jason: How did you achieve suchexplosive growth in the very first year Digital Instants sales? R. Spielman: Our launch of Digital Instants was somewhat unique in the North American experience. We started selling draw game subscriptions online in 2013; then moved to lottery single draw sales three years later. So we had years of experience selling games online prior to adding Digital Instant games in November of last year. That served us well when it came time to launch Digital Instants. First, we had the technological infrastructure, internal resources and contractual elements in place that positioned us to move quickly to implement another digital product. Second, we had around 500,000 registered depositors built up over years of selling draw-games online, having been able to market our online program during significant jackpot runs over the past four to five years. The other thing that we had working for us was a well-established loyalty program. In addition to the 500,000 depositors, we had another million players in the database that were engaged in one form or another with our loyalty program. From a technological, cultural, and registered player data-base standpoint, we started from a really good place. Digital Instants folded right into our existing infrastructure. Implementation went quickly and smoothly. E-commerce is so different than traditional retailing, and digital lottery much different than traditional lottery. KYC (Know You Customer) works better when you actually do know your players, as you do in the online world and don’t in the retail environment. Key Performance Indicators are based on data-sets that simply aren’t available in the retail space of anonymous players. And unlike the retail world, digital is a market-place that demands more products being launched at a much faster rate, along with constant updates of everything from user interfaces to promotional initiatives. Our crawlwalk-run approach to e-commerce enabled us to learn about digital commerce and digital gaming over years of marketing draw-games online. Turning on Digital Instants was a big step, but we had all the pieces in place and knew what we needed to do to make everything run smoothly. How did you stage the rollout of Digital Instants? R. Spielman: The digital Instants launch went live on all digital channels, including our Mobile app, simultaneously. We knew it was vital to launch the new Digital Instant games across all of our Digital Instant channels at once, including our robust and fully vetted Mobile app. We had a large number of active draw-games players who we anticipated would be quick to try digital instants. So we went with a slightly smaller portfolio of games than we really wanted in order to ensure that we could launch the program on day one on our Mobile app. Now, less than a year later, 70% of our Digital Instants transactions come through the Mobile app. PGRI INTERVIEWS PGRI Introduction: Randy Spielman joined the North Carolina Education Lottery in June of 2007 as a Financial Analyst and has worked in a number of product development roles prior to his current position. Now, with over 16 years of experience in the lottery industry, Randy is responsible for all game development efforts as well as digital platforms and programs at the N.C. Education Lottery. He has been responsible for significant product and program launches at the lottery during this time, including the digital instant games rollout in November of 2023. Prior to rejoining the Lottery, Randy worked as the Director of Customer Success for Pollard Banknote, where he was responsible for working with their key accounts to optimize their scratch-off game portfolios.
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18 PUBLIC GAMING INTERNATIONAL • JANUARY/FEBRUARY 2025 Do you now think of yourself as a DigitalFirst company? R. Spielman: Well, of course, we think of ourselves as a customer-first company. Like other retailers, we believe we can be successful at retail and successful online, and the two can complement each other. But to your point, it was back in 2019 that we converted to our current iLottery platform and that is when Mark (Michalko, director of the N.C. Education Lottery) recognized the direction everything was going in and shifted our mentality to see online as being mission-critical to building the direct interactive relationship with the players that is so key to long-term growth and sustainability, and he established a department focused on optimizing the full potential of digital channels and gaming. Online iLottery is no longer just about convenience for the players, an additional way for them to interact with Lottery. It is a true growthdriver that adds tremendous value to the overall player experience and to our ability to continually enhance that experience. Digital platforms provide an incredibly rich canvass to innovate, modernize, create new gaming experiences, and otherwise enhance value to the players. What percentage of the Noth Carolina Lottery sales come from digital channels? R. Spielman: In the first twelve months of Digital Instant program, we did a little over $2 billion in sales. And it continues to increase as Digital Instants have exceeded scratch-off sales in the last three months. Total online sales including draw games now comprise approximately 40 percent of total North Carolina Lottery sales. And retail sales continue to increase as well? Online sales aren’t cannibalizing retail sales? R. Spielman: I think some of the player activity may have migrated from retail over to online. But the net effect of our online connection is absolutely positive for retail. Digital enables a CRM (Customer Relationship Management) approach that is nothing short of transformative. It enables us to reach consumer groups who weren’t even playing lottery and bring in new players who proceed to also play at retail because we apply promotions that incentivize the players to interact with us on all channels. It enables us to connect with core players better with promotions and messaging that appeal to their play styles and preferences. Digital enables the omni-channel relationship that is based on seamless interaction with the consumer and that is what drives sales across all channels, including retail. Digitally-driven CRM helps us tailor promotions and messaging that appeals to the specific interests and preferences of the players. And the players appreciate that, so in turn they pay more attention to our messaging. As we get to know which players prefer to only play Instants, which players only prefer draw games, which players try new products, which play the same games again and again, which players are more likely to respond to promotions that are redeemed at retail and which players never play at retail, etc. ... our promotional response and conversion rates go up because the players appreciate that the messaging and promotions are more relevant to their individual interests. And once we have these insights, we can drive players to retail as well as create a better experience for them wherever they choose to play. This type of relationship and understanding of our players’ behaviors wasn’t possible prior to the expansion of our digital channels. The digital platform brings in players who didn't play or regularly engage with lottery previously. Now, with our focus on KYC and CRM, we are able to nurture that player base and provide incentives that drive players to retail which benefits everyone including the players. How relevant would the digital connection be if you did not sell lottery tickets online? R. Spielman: Super relevant. Digital Lottery is all about the online connection with your players, completely apart from where they play the lottery. The future of any consumer-facing industry is CRM and KYC and those are based on digital channels. You have to Know Your Customer to nurture and sustain the long-term relationship that is key to success. Digital lottery is about loyalty programs, second-chance programs, digital messaging, providing informational resources to the players, and the dynamic interaction that does not happen at retail. Amazon has shown how Customer Relationship Management is the decisive competitive differentiator. This will be even more true going forward. Look at how casinos have built tremendous loyalty programs even though their goal is to get the customers to come into the casino, not play online. Commercial operators in the games-of-chance space, like Jackpocketnow-DraftKings as well as casinos, other sports betting operators, and online casino operators are all highly focused on CRM as the pathway to building loyalty which is the basis for long-term sustainable growth. We all need to invest more in Digital Lottery regardless of whether we are currently selling tickets online. Lotteries have limited budgets. But there are many ways to engage the players online that fall within whatever budgetary constraints apply. The ROI is absolutely there even though it can be hard to quantify. The data shows us that the value of players who are active on the loyalty program is easily twice that of players who are not engaged with the loyalty program. And that is just over a short-term, like six months. The lifetime value of the engaged loyalty program player is exponentially higher. And to be sure, other gaming operators without an effective CRM program will be very vulnerable going forward. CRM is also important as a defensive measure with the ongoing expansion of gaming across the country. “DIGITAL LOTTERY HAS TRANSFORMED OUR UNDERSTANDING OF DATA AND ANALYTICS AND HOW TO TURN DATA INTO ACTION-PLANS.” continued on page 33
20 PUBLIC GAMING INTERNATIONAL • JANUARY/FEBRUARY 2025 The championship dream fueled by Powerball® and NASCAR® has been re-ignited! The two entertainment partners recently announced the NASCAR Powerball Playoff™ will return for a third edition alongside the 2025 NASCAR season. The national Powerball promotion offers the chance for four lottery players to win an all-expenses paid, VIP trip for two to 2025 NASCAR Championship Weekend™ at Phoenix Raceway®, Oct. 31 – Nov. 2, plus entry into a $1 million drawing held just before the start of the NASCAR Cup Series Championship Race™. The $1 million drawing has quickly become a pinnacle of the MUSLNEWS MULTI-STATE LOTTERY ASSOCIATION Moments before the drawing, courtesy A. Bannis Richard Petty and Meagan Lewis Phoenix Raceway crowd, courtesy E. Rea POWERBALL ELECTRIFIES NASCAR CHAMPIONSHIP WEEKEND WITH $1 MILLION DRAWING National Powerball promotion returns for third edition in 2025 Custom-built Powerball stage Players experience the speed of a pace car ride
21 PUBLIC GAMING INTERNATIONAL • JANUARY/FEBRUARY 2025 Continued on page 24 Championship pre-race ceremony, bringing a high-energy element to the race day experience. Last November, a custom Powerball stage was built to showcase the drawing from the track’s inner crescent. Hundreds of red rally towels were distributed to spectators in the crowd, building anticipation for the big event. Louisiana Lottery player Meagan Lewis, 47, of New Orleans, was declared the drawing’s $1 million winner in a thrilling finale broadcast live on NBC. Lewis bent over in astonishment when her number was drawn from the machine. “I have no words,” said Lewis. “I got 42 text messages by the time I got off the stage!” Lewis was then congratulated by NASCAR Hall of Famer and racing legend Richard Petty who signed her big check. In a full circle moment, Petty went from congratulating Lewis on her $1 million win to thanking her, after he learned that she had previously volunteered at Victory Junction – a summer camp founded in honor of his late grandson that serves children with illnesses and medical conditions. The encounter was one of many highlights from 2024 NASCAR Championship Weekend that wowed the four finalists and their guests. Winning moment, courtesy E. Rea Pace car rides Pit box tour of RFK Racing 2024 NASCAR Powerball Playoff Champion Meagan Lewis, courtesy E. Rea Powerball Chair Matt Strawn interviewed at Phoenix Raceway
22 PUBLIC GAMING INTERNATIONAL • JANUARY/FEBRUARY 2025 SUPPORTING THE GLOBAL DIGITAL EVOLUTION OF LOTTERIES: NEOGAMES TRANSITION TO ARISTOCRAT INTERACTIVE Chris Shaban, Managing Director of iLottery, Aristocrat Interactive PGRI INTERVIEWS Paul Jason: It is exciting to see the seamless transition from NeoGames to Aristocrat Interactive. Good for your clients who depend on your world-class iLottery platform and service, good for the players who love your games, and good for Aristocrat. Chris Shaban: As you mentioned, NeoGames was founded almost twenty years ago in Europe to create groundbreaking content and - later - an IT platform for online lotteries. Around ten years ago, NeoGames formed a joint venture with Pollard Banknote to create NeoPollard Interactive (“NPi”) to provide the iLottery platform, games, and services for the Michigan Lottery, which was soon followed by other lottery customers. The Michigan Lottery truly revolutionized iLottery in North America with an incredibly successful launch and sustainable growth. We are immensely proud of the fact that it is the NeoGames (now Aristocrat Interactive) technology and the NeoGames GameStudio content that continues to support the Michigan Lottery, and other successful iLottery programs operated by our customers in Alberta Canada, New Hampshire, North Carolina, Viginia, and now West Virginia. Now, as Aristocrat Interactive, we are applying all the assets of NeoGames technology and the NeoGames Studio combined with the resources, technological breadth and depth, and product extensions of the broader Aristocrat group, a global entertainment and gaming content creation business that spans regulated land-based gaming, mobile games publishing and regulated online real money gaming. In what ways have the iLottery sector been reshaped by NeoGames/Aristocrat technology and manner and methods? C. Shaban: One of the things that makes the Aristocrat Interactive platform for iLottery unique is that all results are abbreviated to a single code. What that means is instead of waiting three or four months (or more) for a technical upgrade to be deployed, Aristocrat Interactive customers receive it seamlessly in a single batch of technical changes, innovations, and upgrades implemented to all our customers each month. The single code enables the smallest change or largest technical upgrade to be deployed PGRI Introduction: Over the course of twenty years following its inception in 2004, NeoGames(TM) built a reputation as a worldclass, technology-driven provider of end-to-end iLottery and iGaming solutions, including a complete platform, online marketing and operational services, as well as cutting-edge game content. NeoGames was acquired in April 2024 by Aristocrat Leisure Limited (ASX:ALL), a global entertainment and content creation company that spans regulated land-based gaming, mobile games publishing and regulated online real money gaming. Aristocrat Interactive (TM) was formed in 2024, with the combination of the NeoGames businesses and Anaxi, Aristocrat’s existing online real money gaming business. The business is an industry leader in content and technology solutions for online RMG, with a full-service offering that includes content, proprietary technology platforms and a range of value-added services across iLottery, iGaming, Online Sports Betting (OSB), and Gaming Systems. Along with their industry-leading platform and turnkey services, the NeoGames Studio is the game development arm of Aristocrat Interactive which has retained its brand name because of its recognized expertise, experience, innovation, and ongoing performance. The NeoGames Studio has produced award-winning eInstant content for lotteries worldwide for over seventeen years and is rapidly expanding its global presence. In North America, the Studio’s industry-leading games are live in Michigan, New Hampshire, North Carolina, Virginia, West Virginia, Atlantic Canada, and Alberta Canada. Launches in British Colombia, Kentucky and Pennsylvania are scheduled for later in 2025, further expanding the Studio’s presence in North America.
23 PUBLIC GAMING INTERNATIONAL • JANUARY/FEBRUARY 2025 throughout the entire family of Aristocrat customers. Innovation that happens with any of our customers is automatically deployed to all Aristocrat Interactive platforms throughout the world. We then will work with our customers to determine if, how, and when they would like those innovations to be turned on. Things move so fast in the digital world that we must continue to find the most efficient ways to execute, from new game content to technical upgrades to transformational innovations. There are new payment systems, new promotions, integrations of third-party technologies and game content, and a host of other fresh solutions to always drive better performance. The benefit we hope to bring to our customers is how Aristocrat Interactive enables the deployment of technical upgrades and innovation to happen more seamlessly and automatically. Do the benefits of these systems result in higher sales and net funding? C. Shaban: Yes, higher sales and an increase in net funding is the objective for these efforts on behalf of our lottery customers, and if fact, the iLottery programs in Virginia, North Carolina, New Hampshire, and Michigan are the top four per capita in the United States. How did the acquisition of NeoGames by Aristocrat come to happen? C. Shaban: The successful acquisition allows Aristocrat to leverage its world-class gaming content, customer relationships, and expanding capabilities across an even broader range of channels and geographies, adding further to the Group’s resilience, and accelerating growth. NeoGames was acquired for its depth and breadth of iLottery and iGaming expertise, and for its global team of digital professionals. As Aristocrat Interactive’s CEO, Moti Malul points out that NeoGames was “born digital” back in 2004. Being born digital, there is a native understanding about how Mobile apps and websites work, and how to produce the online user-experience that keeps the players engaged and coming back to their favorite – and new – games. Competencies that are mission-critical in the digital world include KYC, CRM, geo-fencing, player acquisition and retention, and dataanalytics. Loyalty programs and Players Clubs also provide new levels of potential in the digital world. In recent months, we have also been able to recruit some of the best digital lottery professionals in the industry to further complement our current team. Rob Wesley spearheaded the super-successful digital initiatives at Virginia Lottery before joining NeoGames as Vice President of North American Customer Development, a position he holds now at Aristocrat Interactive. Stephanie DuVal headed Loyalty, CRM, and Digital Engagement programs at the Virginia Lottery before joining us as Director of Marketing North America. Shane Taylor comes to us from the Massachusetts Lottery and Jessie Teague from the Kentucky Lottery. Our team is steeped in the culture of digital lottery and excited for the opportunity to continue to work with lottery professionals to drive performance for Aristocrat lottery customers going forward. In addition, Aristocrat’s European and Latin American teams have been up and running for many years with NeoGames and are now thriving under the new corporate umbrella of Aristocrat. Traditional retail channels will continue to be primary to lottery’s success. How does Aristocrat Interactive ensure that iLottery complements the retail channel so that both work together in a mutually reinforcing way? C. Shaban: As we all are aware, retail has long been the bread-and-butter foundation of the lottery business. That is why when you add the digital component, like was done in Michigan, New Hampshire, Virginia, North Carolina, West Virginia, and the others, it is helpful to reimagine the business around the omni-channel model. We are not just thinking about the iLottery or retail lottery independently. We work to take a holistic view, especially since the lottery player thinks simply thinks of any channel as part of “their lottery”. And the player wants everything to work together harmoniously, enabling seamless navigation across channels and an intuitive interaction with all lottery touchpoints. This omnichannel model works so well because it brings in new online players who might not otherwise have played lottery, and it enhances the playing experience for the casual and core players, so they stay loyal. Applying this omnichannel view of our business is more crucial than ever as more options to play different games become more readily available to players. And recent studies (including an iLottery report done by Spectrum) have shown that, when effectively executed, retail sales not only continue to increase right alongside iLottery sales, but they also increase at a rate that is higher than the national average. Stated differently, iLottery enhances performance at retail by bringing in new consumers to lottery. Using promotions to incent iLottery players to play at retail, digital lottery can drive retail traffic and lottery play. As we continue to learn and help improve the player journey, and focus on enhancing the overall experience, iLottery sales can be expansive without impairing – and in fact enhancing - retail sales. Isn’t digital lottery as much about player engagement as selling lottery tickets online? C. Shaban: Yes of course. Rob Wesley and his team ramped up Virginia Lottery’s non-wagering digital program years before they could sell online. Players Clubs, “Now, as Aristocrat Interactive™, we are combining all the assets, technology and know-how of NeoGames™ and our games development studio, NeoGames Studio™ with the resources, technological breadth and depth, and product extensions of the broader Aristocrat group—a leading global entertainment and content creation business.” Continued on page 36
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