Public Gaming International Magazine July/August 2022

32 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2022 that will attract new players and keep lottery sales strong. Maxwell Goldstein of Carmanah Signs said that staffing issues are a key factor driving the need for technology that provides players with automated lottery product information. “With about 70% of lottery sales taking place at convenience stores, and those stores having some of the highest employee turnover in the retail industry, lotteries face both a challenge and an opportunity in how they reach and engage their players,” he said. “Carmanah’s solution is to provide high-visibility advertising, such as Digital Menu Boards, Digital PlayStations, and small footprint screens at the point-of-sale. This technology enables lotteries to attract and engage all levels of players – from lapsed or light players to core players. Technology replaces the need to ask a clerk for information while also speeding up the checkout.” "Traditional retailers are picking up the pace of technology adoption, and there is a need to keep lottery products on a level playing field with other impulse purchases,” says Goldstein. “Advanced digital experiences will assist retailers in serving their customers and will be particularly beneficial for lottery.” Terry Presta of Abacus said the competitive pressure has never been greater for lotteries, as casinos have continued to grow and offer competing products and content that are starting to erode some of lottery’s player base. “What casinos do much better than lottery is provide winning opportunities and understandable models,” he said. “The casinos take your money and a percentage goes to winnings and a percentage goes to the casino. For the lottery, we keep about 40% of the money wagered and it goes to the retailer, lottery expenses and good causes. Lottery can offer higher payouts and that will drive sales but that doesn’t work for all lotteries. We also need to focus on using our technology to compete with the casinos and sportsbooks that are taking our players and revenue. These challenges are being addressed and vendors, such as Abacus, have solutions that will help lotteries secure their positions with players.” Gary turned to his Texas colleague, Ryan Mindell, to further expound on how lotteries are working through the retail issues. “The last two years have changed the expectations of our customers,” he said. “If we’re not going to meet those expectations then we’re going to start to fade away. Convenience stores are already exploring ways to create an in-store shopping experience with no clerks. It’s one thing for a large grocery store to provide self-serve check-out. But for a convenience store to explore that level of automation should be a wakeup call for lottery because I don’t think we’re ready to meet those customer and retailer expectations today. It doesn’t mean that we can’t get ready. We just need to start having those conversations.” “I think retailers are going to impose higher expectations on all their suppliers, including lottery, to bring more to the table. They are under pressure to modernize and they expect us to help them adapt and change,” he said. “I had a meeting with a retailer recently in which we tried everything we could to get an in-lane pilot for scratch tickets. And at the end of the day, we could not make it happen because we weren’t connected to their point-of-sale and so they couldn’t track those sales like they track other sales. It was a nonstarter. It doesn’t matter what liabilities we were willing to accept, what terms, or what business processes we were willing to change. That one piece meant that we couldn’t get there.” LOCATION, LOCATION, LOCATION Gary turned the conversation to the physical lottery location and how lottery is presented to consumers. “In a recent study, almost 50% of consumers said they would rather use self-service checkout in stores than checkout with a live person,” he said. “And that number is even more pronounced for Gen Z and Millennials. The question for lottery is ‘how do we handle this need for change?’ It seems like an opportunity for us to gain new customers but how do we execute on this new situation?” Max said we only need to look to other countries as a guide. “In the U.K, Ireland and Canada, lotteries are actively promoting self-service checkout,” he said. “Carmanah has been working with many lotteries on this because self-service must be accompanied by clear signage that explains the offer and how to purchase your tickets. The big box stores in the U.S. are starting to explore lottery self-service checkout and once someone like Walmart has moved in that direction, you’ll see others follow. In reality, this is how we’re going to stay relevant to a new generation of players.” Michelle said that while lottery certainly needs to evolve with the changing nature of retail, it is not as simple as just making the products available at a self-service checkout. “We really need to look at the accounting side of our business as well as the business model in general,” Michelle said. “Things like ticket-by-ticket activation and in-lane sales are not easily accountable with our current systems. Tying into the retailer POS has taken many years to get right. Many of these technologies are works in progress, as retailers continue to change their business models. “In terms of the consumer and the player experience, we need to always talk about mobile, because it is probably the most critical part of the consumer experience,” she said. “Even if you’re not an iLottery state, there is so much that can be done through mobile in terms of player communication and promotions. You can provide content via a lottery app while the player is in the store. Let them know about jackpots. Today’s technology allows for many forms of player engagement, and we need to take advantage of what is available.” Is Lottery Ready for the Changes at Retail? continued from page 15 Continued on page 50

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