Public Gaming International Magazine July/August 2022

JULY/AUGUST 2022 INDUSTRY EXPERTS’ CALL-TO-ACTION Drew Svitko Pennsylvania Lottery Competing head-to-head with gambling Gary Grief Texas Lottery Lottery Aligns with the Rapidly Changing Retail Environment Gregg Edgar Arizona Lottery Optimizing the Brand

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4 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2022 Publisher & Chief Executive Officer Paul Jason President Susan Jason Brand and Design Dan Eggers Design Lottery Industry Consultant Jim Acton 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 Contact Information PGRI, Inc. 1769 Flagstone Terrace, The Villages, FL 32162 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: July/August 2022 Volume 51, Issue 4 ©2022 all rights reserved. Public Gaming Research Institute cISSN: 1042-1912 10 Competition within the Games-of-Chance Industry Drew Svitko, Executive Director, Pennsylvania Lottery. Drew was joined by: Derek Levesque, Director of Product Management & Business Development, IGT Lynne Roiter, Secretary General of the World Lottery Association, formerly President and Chief Executive Officer, Loto-Québec Matt Strawn, Chief Executive Officer, Iowa Lottery Lorne Weil, Executive Chairman, Inspired Entertainment 12 Focus on the Brand – Lotteries, Games and Mission of Service to Society Gregg Edgar, Executive Director, Arizona Lottery. Gregg was joined by: Brad Cummings, Founder & Chief Executive Officer, EQL Games Stephen Durrell, Executive Director, Kansas Lottery Ryan Mindell, Lottery Operations Director, Texas Lottery Brian Rockey, Executive Director, Nebraska Lottery 14 Changes at Retail: Is the Lottery Industry Ready? Gary Grief, Executive Director of the Texas Lottery. Gary was joined by: Michelle Carney, Vice President Global Lottery Marketing, IGT Maxwell Goldstein, Vice President Sales - Americas, Carmanah Signs Michael Martin, Vice President, Retail Solutions, Scientific Games John McCormack, Vice President, Operations, Intralot, Inc. Ryan Mindell, Lottery Operations Director, Texas Lottery Terry Presta, Head of Business – North America, Abacus Solutions CONTENTS J U LY / A U G U S T 2 0 2 2 P A N E L D I S C U S S I O N S 10 12 14

©Scientific Games, LLC. 2022. All rights reserved. For Good. Playing Strength of security paired with the thrill of the new. Delivering the industry’s favorite lottery games and the most advanced technologies to drive a sustainable tomorrow. This is Scientific Games.

6 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2022 Visit Our Family Of Websites industry news & information videos of conference presentations PGRI conference information magazine archive of past issues listing of lotteries and vendors 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: with “add to Daily Digest list” in the subject line. D E P A R T M E N T S 16 8 From the Publisher Paul Jason 16 Progressive Product Management: David Barden and Drew Svitko Step into New Leadership Roles at MUSL MUSL NEWS (Multi-State Lottery Association) 46 Pulse of the Industry: Synopsis of Recent Gaming Industry News 18 Play On: The Players Project Live IGT 22 Capitalizing on the incredible brand awareness of Powerball® and Mega Millions® Simon Jaworski, Executive Vice President Lottery & Gaming, Leger USA 26 50 Years of Science - Built into every game Scientific Games 34 Creating a Winning eInstant Player Experience IGT 36 Keeping the Balance in a Changing World IGT’s 15th Annual Sustainability Report IGT 18 22 26 F E A T U R E D A R T I C L E S 10, 16

8 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2022 From the Publisher What a joy it was to see our European friends at European Lotteries Association (EL) Industry Days conference in Wiesbaden, Germany. Congratulations to Hansjörg Höltkemeier (CEO Berlin Lottery), Dr. Heinz-Georg Sundermann (CEO Lotto Hessen), and Arjan van’t Veer, executive director of EL, and Level 1 partners IGT and Scientific Games for producing a most fabulous event. No trade-show, just great keynote speakers and world-class presentations to address the timeliest of issues in this time of extreme disruption. We may have thought the rate of change was breakneck before the pandemic. It may not feel this way exactly, but we will look back on this time, right now as we hope to begin the transformation into a post-pandemic world (I know the timelines on even that aren’t clear yet) and appreciate the auspicious inflection point we occupy at this very point in time. That’s my take-away from Industry Days. I know it’s a cliché, but the choices we make and the actions we take will have more dramatic upside, and potential downside, impact than ever. Of course, let’s focus on the upside! PGRI conferences try to capture the zeitgeist, the essential ideas that are catalyzing forward momentum in our industry. The content focus is guided by lottery directors and their technology partners. Who better to lead a discussion that looks at how the competitive landscape has changed over the last five years than Drew Svitko (who operates in hyper-competitive Pennsylvania). Drew’s expert panel explored the implications of the head-tohead competition we find ourselves in with other games-of-chance options like sports-betting, casino gambling, online casino-style eGaming, and unfortunately, an increase in online and off-line illegal gaming options. Retail Modernization is a perennial topic that continues to be mission-critical to our industry. Gary Grief agreed to moderate but only if his panel could context it as a call-to-action. The pre-pandemic rate of modernization will not serve us well in a post-pandemic environment of much more rapid change. And a shout-out to my friend Jim Acton who edits and writes many of the great features in PGRI Magazine, including this month’s executive summaries of PGRI conference panel discussions – Thank you Jim! The Multi-State Lottery Association (MUSL) has never been more energized with positive expectations and forward momentum. We look forward to an exciting future as David Barden and Drew Svitko assume the roles of president of MUSL and chair of the Powerball® Group respectively. Thank you, Simon Jaworski, for converting research and survey-driven data into meaningful insights. Simon, who contributes three or four articles a year, signs-off with “Trust me I’m a researcher.” Well, I trust Simon to stretch to help us glean meaning from the data and turn research into relevant business intelligence. Research is a science and practitioners like Simon are keen to avoid impinging on the objective facts with interpretation which, sorta by definition, is subjective. Years ago, I asked Simon to take the next step and help us understand the underlying implications of data and consumer survey results. Actually, I begged and he relented. Of course, he does not prescribe an action plan. But he does frame some interesting questions and endeavor to answer the question that I pose to him “What does this mean for Lottery?” In this article, Simon provides the metrics to compare the consumer awareness of, and trust in, different consumer-facing brands; to see how Lottery’s flagship brands measure up, and fully appreciate the incredible assets owned by government lottery. This topic was recently addressed by Gregg Edgar and panel of experts at PGRI Smart-Tech in April. And we will be drilling down further at our next event (Lottery Expo NYC end of August). The executive summary of that panel discussion introduces us to the idea that there is lots of headroom to leverage the value of these brands to increase reach, impact, sales, and ultimately funding for Lottery’s beneficiaries. One of the strategic directions is to develop relationships with other mega-brands like the NFL, and media personalities like Ryan Seacrest. In order to come to equitable agreements, though, we need our partners to accord proper valuation of the brand equity that Powerball and Mega Millions brings to the table. Simon’s research reveals, for instance, that as huge as brand NFL is, Powerball and Mega Millions are almost its equal in brand awareness, and actually higher in brand trust. These data-points are quite relevant to the goal of striking a deal that fairly allocates costs and profits in a collaborative relationship. And a special thanks to editorial contributors Scientific Games and IGT. I appreciate our partnership, the leadership you provide this industry, and the brain-trust you share with our readership. We’re getting back to normal when it comes to Fall conferences. PGRI Lottery Expo NYC will be held a little early this year to allow some time before we head up to Canada for the World Lottery Summit Vancouver, October 16-20. The WLS is a bi-annual event, moving to a fabulous location on a different continent every two years. They had to skip 2020, so the last one was in 2018 in Buenos Aires. (2016 in Singapore; 2014 Rome; and 2012 in Montreal). The World Lottery Association collaborates with the regional association (this year that is NASPL in North America) to produce the biggest conference/trade show in the industry. We hope to see you all there! But first, we hope you will come to PGRI Lottery Expo NYC on August 30 to September 1. Keep up with conference updates on PGRI’s news website Paul Jason, Publisher Public Gaming International Magazine

10 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2022 Continued on page 24 With more than 30 U.S. states offering gambling of some type – casinos, sports betting, mobile gaming, the lottery industry today faces competition unlike any other time in its history. How should lottery executives respond to the ongoing expansion of gambling options? Do we now think of ourselves as being in head-to-head competition with these other games-of-chance options – with players spreading a similar spend across more and more gaming categories? Or are multiple gaming options bringing new players into the marketplace and creating new potential lottery customers? How do we defend against the threats and optimize the opportunities represented by this new competitive landscape? These type of issues and questions were tackled by experts with front-row seats to the changing nature of the gaming market-place, and how it is impacting lottery. Moderating the panel titled “Competition Within the Games-Of-Chance Industry” was Drew Svitko, Executive Director, Pennsylvania Lottery. Drew was joined by: Derek Levesque, Director of Product Management & Business Development, IGT Lynne Roiter, Secretary General of the World Lottery Association, formerly President and Chief Executive Officer, Loto-Québec Matt Strawn, Chief Executive Officer, Iowa Lottery Lorne Weil, Executive Chairman, Inspired Entertainment Drew kicked off the session by recounting what has taken place in the Commonwealth of Pennsylvania over the past two decades. The Pennsylvania Lottery has been dealing with the issue of increasing competition since 2004 when casinos were legalized. The first retail sportsbook opened in November 2018 and online sports betting launched in May 2019. Sportsbooks in the state recorded their first month of $100 million in handle in August 2019. “This is an interesting topic,” said Drew. “We take competition seriously at the Pennsylvania Lottery. We operate in a competitive gaming environment, with 164 land-based casinos, and more on the way. Pennsylvania has more slot machines in those casinos than there are in Atlantic City. Pennsylvania has legalized sports gaming which the lottery does not run. The casinos also sell online, so we have iGaming offered throughout the Commonwealth. And we also have an estimated 60,000 illegal skill machines in the marketplace. So it’s a crowded gaming market to say the least. Not to mention, all of the other natural competition that we have for those discretionary entertainment dollars.” “So I’ll ask the panelists a question I wrestle with every day, ‘How much do we have to worry about losing lottery customers?’ Player acquisition is one thing but what about attrition? How much do we have to actually worry about losing players to the other gaming categories? Industry veteran and Inspired Entertainment CEO Lorne Weil took the first shot. Lorne has been involved with all forms of gambling from horse racing to traditional lottery to virtual sports COMPETITION WITHIN THE GAMES-OF-CHANCE INDUSTRY P A N E L D I S C U S S I O N Executive Summary from PGRI Smart-Tech 2022 Miami Conference


12 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2022 Continued on page 21 Arizona Lottery Executive Director Gregg Edgar knows something about brands. Prior to joining the lottery industry, Gregg spent more than 20 years as a marketing and communications strategist, working with U.S. and international companies to build and expand their brands. In addition to his work as Executive Director, Gregg has been a member of MUSL’s Marketing & Promotions Committee for a number of years. So moderating a panel focused on the brand of lottery – from games to beneficiaries – was “on brand” for Gregg. Joining Gregg were industry experts with their own wealth of experience in branding: Brad Cummings, Founder & Chief Executive Officer, EQL Games Stephen Durrell, Executive Director, Kansas Lottery Ryan Mindell, Lottery Operations Director, Texas Lottery Brian Rockey, Director, Nebraska Lottery Gregg began by recounting the recent work of his MUSL committee to expand the reach and impact of the Powerball brand. The group has been meeting with potential partners for more than a year and the results have been interesting. “When we’ve been in corporate board rooms talking about lottery and how we operate, it becomes obvious that our message of ‘giving back’ still has room to grow,” he said. “In jurisdictions where the word ‘education’ is in the name, people might know that the lottery supports education. But they are stunned at just how much revenue the Lottery actually generates for education. Increasing that awareness is something we need to continue to focus on. Lottery’s role of service to society is a unique gem that we need to use more in our discussions with our corporate partners, our players, and our retailers. “Our committee has been quite actively looking at some big initiatives to help build the Powerball brand,” he said. “Of course, the Powerball First Millionaire of the Year promotion is now in its fourth year and our collaboration with the New Year’s Rockin’ Eve program has been very successful. We’ve been in discussions with the NFL and NASCAR as well as consumer product brands like Pepsi. But beyond that, we are also looking at how we can continue to adapt in a changing consumer environment. How are we approaching our brands and conveying our brand message to our many constituents?” Brad Cummings of EQL Games said it is the uniqueness of lottery and our offerings that needs to be communicated. “The consumer is now faced with more gaming options than ever. What separates lottery from everything else is the incredible reach of its network of retailers,” he said. “We should leverage that competitive advantage to even better effect – look for new ways to deliver more product, service, and an always improving POS player experience. When EQL is creating games, we always keep the retail reach in mind – making sure the content is interesting, understandable, and fun for the retail player. We have such a unique channel to connect with our players and we should always be stretching to help our retail partners separate our offerings from our competitors.” For Ryan Mindell in Texas, advertising budget cuts have made it challenging for the lottery to communicate with its players. But with challenges FOCUSING ON THE BRAND – LOTTERIES, GAMES AND MISSION OF SERVICE TO SOCIETY P A N E L D I S C U S S I O N Executive Summary from PGRI Smart-Tech 2022 Miami Conference

FPO © 2022 IGT. The trademarks and/or service marks used herein are either trademarks or registered trademarks of IGT, its affiliates or its licensors. Artwork, descriptions, game play, photographs, videos, and other product details depicted are subject to change. IGT is committed to socially responsible gaming. Our business solutions empower customers to choose parameters and practices that become the foundation of their Responsible Gaming programs. Stay Connected Get a 360-degree view of players across retail and digital channels. Provide tailored experiences driven by purchase data and analytics to enhance loyalty, and so much more... Connect the dots at Future Forward. Results Driven.

14 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2022 Forced to change by unplanned and unexpected outside forces over the past two-plus years, the retail industry successfully emerged from the pandemic by adapting to the needs of its customers. Increased health precautions, curbside pickup, home delivery, touchless checkout – these are just some of the initiatives that were created and/or grew to help solve the issues faced at retail. How has lottery kept pace with these changes? Did the industry modernize and change the way it conducts business to match its retail partners? And going forward, what are we doing to make sure that lottery stays aligned with its retailers and doesn’t get pushed aside by other consumer product sectors that are driving progress and innovation at retail? Delving into these and other critical issues was a panel led by Gary Grief, Executive Director of the Texas Lottery. Gary was joined by: Michelle Carney, Vice President Global Lottery Marketing, IGT Maxwell Goldstein, Vice President Sales - Americas, Carmanah Signs Michael Martin, Vice President, Retail Solutions, Scientific Games John McCormack, Vice President, Operations, Intralot, Inc. Ryan Mindell, Lottery Operations Director, Texas Lottery Terry Presta, Head of Business – North America, Abacus Solutions Gary started the session by noting that consumer behavior has changed greatly since March of 2020, often guided by decisions made by retailers. “We now have technologies that reduce or completely eliminate our physical exposure to others in the retail setting,” he said. “Contact-less activities such as food and grocery delivery have exploded in popularity. Traditional convenience store lottery retailers have started to pick up the pace and offer alternative means for purchase and modernize on other fronts as well. “But are we evolving along with our retail partners? We know we must incorporate initiatives such as in-lane purchasing, selfcheckout and ticket-by-ticket activation of scratch tickets at the checkout counter. And the retail and digital landscapes are continuing to merge. The question is, ‘How will the retail environment be different in the future; and what retail trends from the pandemic will remain and which will fade?” Michelle Carney of IGT kicked things off. “While most retail experts acknowledge that the future is an all-digital experience at retail, until that day arrives, the at-retail experience will continue to evolve,” she said. “Merchants are installing solutions like interactive signage, smart price tags, and remote checkout systems, all to enable consumers to have more autonomous shopping experiences. You can now use your mobile device in-store to purchase items and cashless payment is a critical initiative for the lottery industry. The acceleration of technology will certainly impact the consumer shopping experience and how players interact with lottery.” John McCormack of INTRALOT also sees the growth in self-service options as key to lottery’s future. “The one-sizefits-all lottery terminal is being phased out and will IS LOTTERY READY FOR THE CHANGES AT RETAIL? P A N E L D I S C U S S I O N Executive Summary from PGRI Smart-Tech 2022 Miami Conference

15 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2022 not even exist in the near future,” he said. “Larger retailers, like Walmart, have dictated the parameters for their own self-service terminals and different venues warrant different terminal solutions. A sports-centric venue might not want the same self-service terminal that works for a traditional momand-pop retail establishment. While I agree with the importance of cashless payment options, I also think the method for paying at self-service terminals will expand to include payment apps and other technology. Seamless payment transaction is critical to lottery sustainability.” For Michael Martin of Scientific Games, the future is personalization and using data to give consumers exactly what they want. “The player research and retail analytics available to Scientific Games customers is being used to improve their players’ at-retail experience,” he said. “iLottery is far behind most other industries. Look at Uber, Amazon. They use every piece of data to personalize their interactions and improve the experience for their customers. We have to bring this same business intelligence to lottery, using data to deliver a more personalized player experience. The airline industry is another example we should look to. You use your phone to buy your ticket, get your boarding pass, then see the traffic you’ll encounter on the way to the airport, check in for your flight, and, finally, use your mobile device to board the plane. This works because of the connectivity of devices and systems being processed together. It’s where the lottery retail evolution needs to be, and where we are focused on innovation and continuing our ecosystem.” CHALLENGES AT RETAIL Gary pointed out that some of the issues facing retail are not just the natural evolution of consumer habits, but disruptions brought on by the pandemic, namely the lack of workers. The worker shortage certainly makes the need for technology advancements even more pressing. For more insight into the implications of these changes for the lottery business, Gary turned to vendors who work in the retail trenches every day, honing the technology solutions “We can’t maintain the status quo and continue to do business the same way and expect to continue with record-breaking results.” PROVIDING LOTTERY PARTNERS WITH POWERFUL OMNI-CHANNEL PAYMENT SOLUTIONS Visit to learn more. Continued on page 32

16 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2022 New Mexico Lottery CEO David Barden and Pennsylvania Lottery Executive Director Drew Svitko are MUSL’s newest Board President and Powerball Product Group Chair, respectively. The two lottery veterans, elected by the Association’s 38-member Board of Directors, started their new roles on July 1. The leadership transition comes nearly one year after the organization implemented several changes to its premier product, Powerball®, which included adding a third weekly drawing on Monday nights and Double Play®, an add-on feature now offered by 14 lotteries with the Montana Lottery becoming the latest to join on July 18. Both officers agreed that their predecessors, Hoosier Lottery Executive Director Sarah M. Taylor and former Missouri Lottery Executive Director May Scheve Reardon, left MUSL with a solid foundation in place. Barden and Svitko plan to carry forward with that type of progressive product management in mind. “For a sizeable organization with diverse members, MUSL has shown it can execute big changes for the long-term health of its products,” Svitko said. “Progressive product management doesn’t mean you stop when you’ve had a good year,” added Barden. “We’re reviewing our portfolios, assessing whether our products are relevant, and ensuring that we have the games our players want.” The MUSL Board of Directors has continually identified the development of new products as a top priority in its Strategic Plan. Svitko, who previously served as Chair of MUSL’s Development Committee, said there has been a significant focus on researching game categories for potential growth combined with listening to member input. “The Development Committee, now led by Puerto Rico Lottery Director Armando Perez Cruz, is making tremendous strides on creating new game content for MUSL members, including work toward a multi-state progressive fast-play game,” Svitko said. “We’ve done enough homework on product portfolios across jurisdictions to know where the opportunities lie.” MUSL’s infrastructure supports the rollout of new products – both in terms of draw services and technology. Over the last year, the organization has expanded its draw services with daily Lucky for Life® drawings, tri-weekly Powerball and Double Play drawings, and most recently on July 18 with Lotto America®, which added a third weekly drawing on Monday nights. MUSL is also debuting a new online game management system, called FLEX, that will modernize how lotteries and vendors report sales and winner data to the Association as part of the draw process. A primary benefit for product development will be the ability to quickly program new games and changes to existing games. MUSL is currently implementing a phased transition of lotteries and vendors to the new FLEX system with completion expected later this year. Barden and Svitko also emphasized the importance of strengthening dialogue between MUSL and the Mega Millions Consortium. Both noted that communication between the two organizations is critical for strategic planning in the national games category. “The more input we have from the Mega Millions Consortium, the better we can schedule product changes and promotions,” said Barden. “We feel this collaboration benefits all U.S. lotteries that have Powerball and Mega Millions® in their portfolios.” Both leaders see online sales as a huge opportunity to inject further growth into the national games category. Currently, Pennsylvania is one of the U.S. lottery jurisdictions that offers iLottery wagering. Svitko said there is some urgency for U.S. lotteries to add online sales to their distribution channels, “As other gaming products become more entrenched in the digital marketplace, it will become more difficult for lotteries to acquire customers. It would be ideal if MUSL could help states get in the position to sell online. In the long run, it will help Powerball.” Svitko added that lotteries face even wider competition for discretionary entertainment dollars – outside of gaming. With players able to shop and interact with brands on-demand through their smartphones, it only makes sense for lotteries to meet them on their mobile devices, a sentiment echoed by Barden. “One of our biggest obligations to players is to make it easier for them to purchase our products. We must be able to reach players through the convenience of their smartphones.” The two officers made multiple references to MUSL’s Strategic Plan when talking about the Association’s future endeavors. They termed it the “playbook” that has the support and approval from MUSL’s Board of Directors. Moving forward, Barden hopes to build consensus among MUSL’s 38-member lotteries by fostering a transparent environment. “All members will continue to have the opportunity to attend any meetings – we’re an open book,” said Barden. “I think that will strengthen our ties. We want to be a strong, unified Association as we undertake these initiatives to be a reliable revenue source for our beneficiaries.” Q MUSLNEWS MULTI -STATE LOTTERY ASSOCIATION PROGRESSIVE PRODUCT MANAGEMENT David Barden and Drew Svitko Step into New Leadership Roles at MUSL

In the awe-inspiring city of Vancouver, attendees will experience firsthand the lottery industry’s latest technological innovations and gain insight into trends on the horizon. Thought-leaders and lottery professionals from around the world will converge in a stunning waterfront venue for this world-class lottery event. Beyond the walls of the Vancouver Convention Centre, attendees will get a taste of the west coast through dramatic landscapes and delicious eats in this culturally-rich city. Register now for the World Lottery Summit 2022, happening October 16-20. Head to for more information. The World Lottery Summit is back.

18 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2022 Two years after the onset of the COVID crisis, consumers face rapidly rising prices and renewed economic uncertainty. However, there is evidence to suggest that small, entertaining indulgences like lottery play remain important to people in challenging times. This insight was among many findings and observations that IGT shared in a recent keynote presentation at the European Lotteries (EL) Industry Days in Germany. The latest installment in IGT’s multi-year Players Project series, the live event welcomed behavioral scientist Owain Service, who joined IGT’s Srini Nedunuri, Vice President Global iLottery, to lift the lid on consumers’ current attitudes and sentiments toward lottery. “The freedoms that consumers expected to enjoy after the end of the pandemic have been replaced by new fears as they feel the economic squeeze and have to stretch their budgets further to accommodate rising prices,” said Nedunuri. “But recent research by IGT and our partners at global trendspotting agency Foresight Factory has uncovered some perhaps surprisingly good news for the industry.” PLAY ON When the realities of life are challenging, consumers want moments of light relief from their everyday routine. New insights reveal that lottery remains one of their bright spots.

19 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2022 New Research In a new wave of Foresight Factory research, 25% of U.S. consumers strongly agreed it is still important to treat themselves to small indulgences even when their discretionary income is lower than usual. This figure rose to 32% for weekly lottery players in the U.S., up from 30% in a pre-pandemic research wave. Among EU consumers, 24% strongly agreed, and this figure rose to 26% among weekly lottery players, up from 21% in a pre-pandemic research wave. In fact, the research found that careworn consumers say their need to indulge in light relief as a break from their daily routines becomes even more pronounced when cutbacks must be made elsewhere in their lives, such as delaying major expenditures. During previous downturns, Foresight Factory has found that consumers looked to what they term as “entertainment” and “fantasy” for the means of giving themselves these breaks. This aligned with the current wave of research, which found the sentiment to be true for 66% of U.S. consumers. The figure rises to 71% among weekly U.S. lottery players. The sentiment was also found to be true for 54% of European consumers, rising to 58% among weekly lottery players. In Their Own Words The live discussion featured video highlights from recent player interviews undertaken by IGT to further understand how current circumstances are affecting people’s choices and decision-making when it comes to lottery. In these Vox Pop (“voice of the people”) interviews—research conducted in May 2022—lottery players in seven European markets and the U.S. were asked about topics including: • How their world has changed since the onset of COVID in 2020 • How they feel today about entertainment such as casino games, sports betting, playing lottery, and playing other games like bingo • Why they engage in these types of entertainment • Whether there has been an impact on their purchasing and spending decisions for lottery and other forms of gaming • What advice they have for lotteries around game and entertainment value to earn more of their attention and participation Recruited based on their play behaviors (participants had to have played lottery online and played at least one other game such as casino or bingo within the past year), respondents answered in their own words, frequently referring to playing lottery as fun, entertaining, and mood boosting. For example: “Playing the lottery is a kind of tradition for me. It’s fun, it’s something that brings joy. I have a break from the here and now and I start thinking about what I could do if I won.” - Player in U.K. “I love playing the lottery. It's something that I can do for a lot of fun to take my mind off the everyday routine.” - Player in U.S. “It’s a kind of tradition, and it’s entertainment. I do it for fun to have a quick break from daily tasks. I play to win money of course, but I don’t spend much on it. It’s just fun, something that could bring you some extra money.” - Player in Czech Republic “I think my motivation is always to have fun. A small break from reality, time to dream of big and small wins, and what to do with the money when I finally win. I think my motivation has always been the same, and it hasn't changed since the pandemic.” - Player in France “My motivation is to try my luck and relax, to take a break and have some fun.” - Player in U.S. Many noted that they were still leaving room in their budget for lottery, due to the fun and enjoyment they got from this form of play. Several also made mention of the appeal of eInstants and online play: “Online quick instant games are less time consuming, and you can play them anytime really. It's something that could boost your mood.” - Player in Italy “I'm not changing the amount of money that I spend on buying tickets for the lottery or anything. It’s still the same for now, anyway. I'm not sure about the future, but for the present, it hasn't changed just yet.” -Player in U.K. “Prices for almost everything went up and I think I spent more money than before the pandemic. I still keep playing the lottery, but I have noticed that I choose more affordable instant games more often now.” -Player in Czech Republic

20 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2022 Swapping, Not Stopping Guest expert Owain Service, CEO of CogCo, joined Nedunuri on stage to interpret the players’ words through the lens of behavioral science. In his professional work, Service has studied what motivates people to do everything from paying their taxes on time to getting vaccinated during the pandemic. He explained how people respond to challenging circumstances, and how this affects their choices and decision making. Service noted that behavioral scientists who’ve studied lottery game designs have found that while people’s focus tends to be drawn more to the size of a prize than a complex cost/benefit analysis of the payout, it is smaller, more regular rewards that sustain player engagement over time. “But what’s especially compelling about lotteries, from a psychological perspective, is the variability of the reward. Humans find these rewards, delivered apparently at random, much more compelling than rewards that get unlocked at regular, pre-set intervals.” This was reinforced in the Vox Pop interviews as players talked about why instant games “are like surprises,” and how they “really like unexpected bonuses.” Behavioral scientists are deeply interested in human routines. When pandemic-related restrictions were introduced, they studied how daily routines were interrupted, and are doing so again now that those restrictions are tapering off. “What’s interesting is that when routines get disrupted, we often end up developing new practices,” said Service. “We start buying our shopping online for the first time, for example. And we find that people are much more willing to try new things when these disruptive moments change our existing practices.” Service believes the same tendency will apply in these current, changeable times. “One thing that I think previous recessions have taught us is that people will still be seeking out little treats during economic downturns. But behavioral science teaches us that most people think about choices in relative, not absolute terms. A Nespresso pod, for example, is an expensive way to make coffee relative to a bag of ground coffee. But it’s really cheap compared to going to a big-name coffee shop.” He emphasized that when consumers are thinking about whether to buy a lottery ticket or card, it’s not just a calculation about the absolute cost of that ticket, be it $1 or $10. It’s about what kind of value they derive relative to alternatives. As one of the players in the Vox Pop interviews expressed, this didn’t mean stopping play of instant games. It just meant switching to one that the player felt was relatively more affordable. Across the board, the insights from Players Project Live are potentially encouraging for the industry as lotteries navigate the current economic climate. Q Given these findings, what opportunities present themselves to lotteries to attract, engage, and retain players? A companion article by IGT’s Srini Nedunuri in this issue of PGRI looks at how lotteries can give players the entertainment value they seek today, as well as the characteristics of a high-engagement game portfolio to win players’ attention. To check out IGT’s iLottery Showcase, visit: Joining IGT’s Players Project Live! event at EL Industry Days was Owain Service, CEO of the company CogCo (at left, on stage with Srini Nedunuri, IGT Vice President Global iLottery). Service specializes in the application of behavioral science research. An Honorary Professor of Behavioral Science at Warwick University in the UK, he also co-founded the UK Government’s Nudge Unit, which applies behavioral science to a wide range of public policy areas. KEY TAKEAWAYS • Since the beginning of the pandemic, consumers have increasingly wanted to reward themselves in small ways, even when larger expenditures must be curtailed • Consumers continue to engage in light entertainment such as lottery to get a break from their daily routine, treat themselves, and bring fun and optimism to their day • They look forward to easy, “bite-sized” forms of fun that fit into their budget • Players may swap to a lower-priced game as an alternative, but they’ll do that rather than stop playing lottery games • Players want entertainment and value for their money via interesting games with fun features and bonus play, which make them feel like they have gotten some kind of win each time they play

21 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2022 also comes opportunities. “As our budget has been cut, we’ve had to get more agile and quick to market, and learn how to optimize social media and digital channels,” he said. “One thing that has happened over the past two-plus years is that we’ve witnessed firsthand how many of our players see lottery as entertainment versus gambling. We all believed this to be the case but our pandemic sales have shown this to be true. There were a lot more eyes on us during the pandemic when we were the only gambling option. Fortunately, a large number of those new players have stayed, and so our ongoing sales numbers have been positively impacted.” In Nebraska, Brian Rockey said they try to balance their traditional game advertising and promotions with communications and brand messaging centered on beneficiaries. “We’ve always put a fair amount of effort into advertising our beneficiaries, but we stepped it up in the last couple of years, doing a dedicated outdoor campaign and some direct mail,” said Brian. “I also think it’s critical to communicate the positive impact of Lottery to our beneficiaries. We do beneficiary briefings every fall where we sit down and explain our business decisions and explain what we do to maximize our profits. The response to these briefings has been very positive. They understand how the revenue flows and why we make certain decisions. We now have strong beneficiary partners who help spread our message.” Stephen Durrell said that in Kansas, they have seen both sides of the beneficiary message. The result has been to offer a variety of branding messages. “We have many different beneficiaries, so to communicate to all of them would be problematic,” he said. “We used to offer beneficiary-specific tickets but players thought the payouts were lower on those tickets and sales lagged. So now we use social media to get out our beneficiary messages and that has worked well and kept our social media director busy. The great thing about active social media channels is that you can get your message directly to players and answer questions quickly. And in terms of branding, we can offer quick-to-market promotions that engage and retain players. Our promotions with the University of Kansas and Kansas State University have been incredibly popular, where winners can fly with the teams to road games or win great seats at home games. These types of promotions help spread the word that the lottery brand is fun and relevant.” As someone whose company and products have evolved over the past ten years, Brad said it is critical to stay tethered to both players and lottery colleagues. “I try to focus on where our lottery players are migrating to – is it themed games, sports betting, casino games, etc.,” he said. “When you put your feet in the shoes of players, it makes it easier to craft content they want. You have then created a brand and brand-related content that answers their needs. At the same time, business moves forward more effectively when you also stay connected with colleagues who are experiencing the same pressures as you. If we can be less transactional about our work and more collaborative, I think we can all move forward with our own particular business agendas. In the end, this will best serve our players and all Lottery stakeholders.” PORTFOLIOS ARE KEY Much of the popularity of lottery lies in the diversity of its game portfolios, the mix of huge jackpot draw games with games that create lots of winners, and instant games with a wide range of prize options. Wellknown brands like Powerball have helped propel the lottery industry into the same top-of-mind status as companies like Coke and Apple. Keeping that status, preserving that brand value, is key to the future of lottery. “From the Powerball level, as we look at marketing, promotions, and brand development, we need to use the power of our brand to control the lottery narrative,” said Gregg. “When you sell 2.2 billion tickets across the country, that is incredible reach. How are we using this reach to positively impact the other games in the portfolio and the other components to the brand? Is there a ‘halo effect’ that can lift other games?” Ryan said that for the Texas Lottery, they are always looking for opportunities to tweak games and provide players with engaging games and promotions. “The change to three-days-a-week for Powerball was well received by our players and so we also changed our Lotto Texas to three days,” he said. “Increasing the time these games are in the market has been a huge success for both these games. And on the scratch ticket side, it’s all about the higher price points. Our best-selling price point is $10. We now offer a $100 scratch ticket with a $20 million top prize. Players have asked for these higher price point tickets and our sales show that they support this move. When you listen to your players, they typically reward you with increased revenue.” Nebraska is keeping it local as they spread the word on lottery to attract new players. “From a brand perspective, we increased the number of partnerships we undertake with the state to spread the lottery word as widely as possible,” he said. “Last year was the 100th anniversary of our state park system so we sponsored a scratch game with them and gave away ‘glamping’ trips. It was very popular, one of our best-selling $5 games ever, so we’re going to do another one in the coming year. We support the tourism industry. We’re doing a companion program this year with the Nebraska History Foundation. And then we’re making plans for a promotion with the statewide blood bank to promote Lucky for Life. Working with our beneficiaries to understand Focusing on the Brand continued from page 12 “Let’s reach out to engage these mega-brands in mutually supportive collaborations.” Continued on page 39

22 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2022 CAPITALIZING ON THE INCREDIBLE BRAND AWARENESS OF POWERBALL® AND MEGA MILLIONS® Are we undervaluing our key Lottery brands, whilst missing out on more fun and winners? If you were a sports bettor, you’d probably wager that with the billions of dollars spent on advertising sports betting brands over the past five years, those self-same sports betting brands would have greater recognition among Americans than other, more ‘traditional’ gaming sector brands. And you’d be wrong! Powerball and Mega Millions have high brand awareness In Leger’s most recent poll of 1,000 Americans in late June 2022, the major sports (NFL, NBA) come out on top at 83% awareness, with Nintendo (82%) and Sony/PlayStation (80%) sandwiching ESPN (81%). However, the 6th highest gaming brand for awareness is actually Powerball® at 76%. Powerball. Our Powerball… higher than Xbox, MLB (is it still America’s past-time?) and another very familiar brand, Mega Millions®, which comes in at a very respectable 71% awareness. And then there is a rather sizeable gap, some may say of chasm proportions, to Caesar’s (58%), and the two big spending brands in sports betting, DraftKings (51%) and FanDuel (44%) in terms of awareness. When looking at Scratch players levels, brand awareness is up across the board. NFL is 91%, Powerball and Mega Millions are both at 87%, and Draft Kings is 64%. Powerball has a similar level of trust as the NFL Leger’s research then asked those familiar with each brand, how trustworthy they find these brands. Here the console/gaming brands rose above the competition, with Sony/PlayStation, Nintendo and Steam all hitting 44% for being extremely or moderately trustworthy, followed by EA (electronic Arts). MLB and Mega Millions come in fourth and fifth at 40% each. Powerball is next with a similar level of trust as the NFL. The four lowest ‘trust’ scores can be attributed to the sports betting quartet of DraftKings, Caesars, Bet MGM and FanDuel, all 30% or below. So what does this mean for the Lottery industry? Ultimately, Lottery brands currently have a competitive advantage over the sports betting sector, in terms of both awareness and level of trust. Despite this, as more states open the doors to both sports betting and gaming online, these big threats to traditional lottery revenues will no doubt grow. ‘Home’ and ‘Fun’ go ‘hand in hand’ Two more factors play into the equation. How ‘fun’ an activity is certainly correlates to a player’s mood and openness to repeat playing. Of all the ‘gaming’ types, we asked players to rank the games that they consider ‘most fun’. Overall, there was a tie for 1st place with 22% saying ’video games on a console (PlayStation, Nintendo, Xbox, etc)’ and 22% stating ‘mobile device games’. ‘Video games on a PC’ (14%) came in 3rd, with Scratch Tickets a solid 4th with 12%. However, as you may imagine, loyalty among past year players of the key gaming sectors is rife. Among past year Scratch players, Scratch is #1 for fun (21%), with Mobile Device Games 2nd at 19%. Among past year Lottery Draw game players, Scratch is #1 for fun (21%), Console Video Games are 2nd with 16%, and Lottery Draw Games 3rd at 14%. Past year Sports Bettors prefer Console Video Games for fun (24%) over Sports Betting which is 2nd at 16%. Finally, past year Casino players have the strongest preference for fun of any segment, with 36% stating Casino slots as their most fun game, followed by Mobile Device Games 2nd at 16%. So what does this mean for Lottery? At first glance, offering Scratch games on a mobile device seems a logical step. The same can be said for online Casino platforms offering slots in the player’s hand. For Draw Games, perhaps the question is how can we make the games as fun as Scratch, Video Console or Mobile Device gaming? So, does ‘having fun’ correlate with ‘winning’? Yes, there appears to be a strong link between the two. At a national (total sample) level, Scratch tickets are #1 for best chance of winning (33%), followed by Mobile Device Games (30%). There is then a cavernous gap to Sports Betting (12%) and Casino Slots (11%) for American’s perceptions of winning. As you can imagine, recent players of the various games have a more biased view of winning for “their” games. 41% of Scratch players feel Instants give you the best chance of winning; among Sports Bettors 43% feel it’s the best chance to win and Casino players feel Slots (27%) gives them the best chance to win. Simon Jaworski, Executive Vice President Lottery & Gaming, Leger USA Continued on page 50