Public Gaming International July/August 2023 JULY/AUGUST 2023

LETTER FROM THE CEO To our valued clients and partners, It continues to be a dynamic time in both our world and our industry, but I am encouraged knowing that we have collectively emerged from the pandemic and can now shape the future together. Rapid expansion of technology and artificial intelligence and the ever-growing popularity of iGaming and mobile sports betting present exciting possibilities and fresh challenges across an increasingly virtual world. As the evolution of our industry continues, I am appreciative of our personal relationships and how important they will be to our progression. At GLI®, we are accepting more submissions and delivering at a higher volume than ever before. Our dedication to addressing your testing needs and providing high-quality, integrated compliance support has allowed for, and even required, continued growth. It takes a global village to operate consistently anywhere in the world, and building global relationships is an investment that enables us to provide unmatched value to our customers. The expansion of our combined GLI, iTech, and Bulletproof ® teams to 1,453 employees across 27 offices worldwide will be critical to ensuring 2023 is the year of full velocity for us and our customers. This year’s Regulators Roundtable, GLI’s premier annual conference and networking event, was unbelievably successful, with over 303 regulators in attendance for the two-day conference and 85 supplier representatives joining for our regulatory/supplier mixer. Sharing in thought-leadership and community building is how we can change the industry together, so thank you for collaborating with us. As the biggest regulatory conference in the world, we enjoyed seeing so many familiar faces and meeting so many new ones. We missed those of you who were unable to attend and hope to see you at the Palms Casino Resort next year, April 24-25. In 2022, over 2,000 gaming suppliers and more than 567 regulators trusted us with their needs. Of those, 820 were new. In the first quarter of 2023 alone, we are pleased to have welcomed over 300 additional new companies to this total. I can’t express how appreciative we are of those who trust us with their business and recognize the value we provide. You are the reason we do what we do. We welcome straight, honest feedback from our customers; it is invaluable. While our most recent survey showed broad customer satisfaction, our work is not done until every customer gets the same world-class customer service that we strive for day in and day out. To ensure this, we have continued to add to our team and train new hires quickly, never sacrificing the high quality of our work. Recent evaluations reflect 99% on-time delivery and revocation rates of less than one-tenth of 1%. Additionally, our cybersecurity company, Bulletproof, continues to protect you from known and evolving risks, which will be essential in the expanding digital age. In the end, our goal is to lead all our clients to a true GLI Experience by providing on-budget execution and world-class customer service, centered around delivering our clients the things they value most. Thank you for entrusting us with your needs as you grow. We are committed to being your reliable partner in the regulatory arena. As we advance, let’s progress boldly into the future of gaming. I look forward to seeing you soon. Sincerely, James Maida ILLUMINATING YOUR PATH TO GREATNESS

©2023 IGT. ©2023 Califon Productions, Inc. 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 herein are subject to change. A time-tested, proven brand for lotteries. Now with a second chance promotion that’s bigger and better than ever. Give your players a new and improved player experience with VIP trips to L.A. and a chance to win millions on the set of Wheel of Fortune. Contact your IGT account executive today. AMERICA’S GAME®

4 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2023 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: May/June 2023 Volume 52, Issue 4 ©2023 all rights reserved. Public Gaming Research Institute cISSN: 1042-1912 10 Online Store Syndicates: A Retail Innovation that transfers to the Online World with Great Success Andrew Shepherd, Chief Customer & Marketing Officer, The Lottery Corp. Antony Moore, Chief Channel Officer, The Lottery Corporation 14 iLottery: Managing iLottery for maximum growth, maximum player engagement, and maximum overall sales including retail Drew Svitko, Executive Director, Pennsylvania Lottery Kelley-Jaye Cleland, Chief Product & Program Officer, New Hampshire Lottery Brad Cummings, Founder & Chief Executive Officer, EQL Games Mike Lightman, Chief Commercial Officer, IWG (Instant Win Gaming) Derek Levesque, Director Business Development, IGT Jennifer Westbury, Executive Vice President, Sales & Customer Development, Pollard Banknote 18 Optimizing the overall sales of Powerball, Mega Millions, & Multi-State Games David Barden, President & CEO, New Mexico Lottery, and President of MUSL (Multi-State Lottery Association) Mark William Bracken, Executive Director, Massachusetts Lottery Norm Lingle, Executive Director, South Dakota Lottery John Martin, Director, Maryland Lottery Drew Svitko, Executive Director, Pennsylvania Lottery, Chair of Powerball Group Bret Toyne, Executive Director, MUSL CONTENTS J U LY / A U G U S T 2 0 2 3 F E A T U R E D A R T I C L E S 10 10 14 18 20

6 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2023 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 F E A T U R E D A R T I C L E S C O N T . 20 Retail modernization and Optimization: Applying the most progressive tools, methods, and 'best-practices' to drive sales at Retail Justin Rock, Deputy Secretary of Product and Sales, Florida Lottery Jay Finks, Executive Director, Oklahoma Lottery Maxwell Goldstein, Director of Sales & Marketing, Carmanah Signs Burbank Herndon, Vice President Sales - Retail Solutions, Scientific Games Terry Presta, Head of Business North America, Abacus Lottery Solutions Frank Suarez, Executive Director, DC Lottery 22 The Quest for Progressive Jackpot Adventure: High-performing iLottery Game Series Sends Pennsylvania Players on Journeys of Pursuit Scientific Games 24 How AI can assist iLotteries to achieve their goals Aditya Bhushan, EVP Technologies, NeoGames 26 Cloud, Simplified: Why it Matters to Today’s Lotteries IGT 30 U.S. State Regulators petition the U.S. Dept. of Justice to Enforce laws against offshore gaming sites 32 EL Congress Croatia 2023 Wow. Congratulations to Team EL 33 Hazen Paper Introduces a New “Holiday Themed” Series of Holographic Patterns for 2023 36 Spotlight on RMI (Retail Market Insights®) IGT 8 From the Publisher Paul Jason 16 Developing the Next Multi-State Game Boom MUSL NEWS (Multi-State Lottery Association) 41 Scenes from PGRI Smart-Tech Miami 2023 45 Pulse of the Industry: Synopsis of Recent Gaming Industry News mpany’s digital game designers ed with the Pennsylvania Lottery team to create a new series of e jackpot games that would appeal to sed on Scientific Games data analytics laystyles and themes that had already ccessful in the state. comes down to fun. It started with of offering an ongoing Cash Quest e jackpot with a growing selection adventures to choose from and the cepts from Scientific Games sparked aborative creativity,” says Kara Sparks, f Products for the Pennsylvania Lottery. important to ensure the right balance in the portfolio. A 33-person SG eam of front-end game developers, game develop rs, nimators, and digital led by a creative worked with the nia Lottery team (made h Scientific Games and nia Lottery product and professionals) for six o get the first game in right. es are developed with continuity, but each h charms with its own personality. Marketing ake the most of the fresh thematic details to beckon our players to join the fun – again!” explains Sparks. In October 2022, the Treasure Chest Quest linked jackpot game debuted. Since launching, Treasure Chest Quest has generated more than 12 million in online wagers (through June 28, 2023). It is currently the No. 1 performing game in the series, with its highest ever progressive jackpot currently at $290,000 – and rising. Nearly 73,000 unique players have played more than 6.9 million rounds of the game. By the end of May 2023, three more games in the series – Castle Quest, Deep $ea Quest and Big Top Quest – launched. With Big Top Quest on track to top Treasure Chest Quest, the fifth game, Cave Quest, is set to launch this summer. ssive jackpots h ve exploded recently in digital games. But when fic Games and the Pennsylvania Lottery knew they wanted to add essive jackpot game to the iLottery portfolio, they set out to offer an adventure with a twist. In total, the Quest series has generated more than $33 million in online wagers (through June 28, 2023). Nearly 183,000 unique players have played more than 18.6 million rounds of the games and a total of more than $738,000 has been paid out in progressive jackpot wins. Paul Le Fondre, Scientific Games Head of Art and Animation for SG Studios, shares the science inside the game, “The magic happened with the right recipe of math, game mechanics and playstyle. While we are continually developing new games, there are games that players keep coming back to because they like the game and are loyal to that game. So, we set out to capture that loyalty over a series of games. We flipped our creative process.” In the Quest series, there is a unique, linked progressive jackpot – meaning wagers made in one game of the series will contribute to a jackpot that continues to grow and is visible in all the games of the series. “Thekey to TreasureChestQuest’s success wasn’t one of those teammembers, it was all of them coming together,” Le Fondre explains. “Our studio atmosphere is open and highly creative. There is a constant feed of ideas happening all around us every day.” The creativity combined with analytics and planning paid off. With a rock-solid foundation, the fifth game in the new Quest series, Cave Quest, is planned for a summer 2023 launch. “The Cash Quest approach takes game refresh and progressive jackpot families to a new level. Each new adventure delivers what our players want most: a fresh, new, chance to win. I am really pleased to see each introduction shows a consistently strong bump to sales,” shares Sparks. “Player enthusiasm is not waning. I look forward to seeing what the Cave Quest brings.” La Fondre credits the company’s relationship with the Pennsylvania iLottery team, which has developed over five plus years planning, launching and managing the iLottery program – the first in the industry to reach $1 billion in sales in less than two years. With digital content studios in the U.S. and Europe (following the August 2021 acquisition of Sideplay, now SG Studios), Scientific Games provides iLottery and digital lottery to 30 lotteries worldwide. “O p u e p in T lo g s p re In $ a p p S P s m p m m a THE GAME OF LIFE and HASBRO and all related trademarks and logos are trademarks of Hasbro, Inc. © 2023 Hasbro. © 2023 Scientific Games, LLC. All Rights Reserved. SG Studios team members brainstorm the next games in the Quest digital game series (front left to right) Giancarlo Achler, Michael Cheung, Fabien Sacriste, and (back left to right) Paul Le Fondre, Ross Coupland, Tyler Thorne. *Last t Th Pennsylvania iLottery program has received the distinguished Internet Compliance Assessment Program certification. Scientific Games is among the first companies globally certified by the World Lottery Association as a responsible gaming provider. 22 24 26 33 36

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8 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2023 From the Publisher It was great fun seeing everyone at the EL Congress in Šibenik, Croatia. It had been four years since the last big EL Congress trade-show cum conference so there was a lot of catching up to do. Congratulations to Arjan van’t Veer and Team EL and the Croatia Lottery for producing a fabulous event with spectacular receptions, great content, and a well-run tradeshow. Now, we look forward to NASPL’s annual trade-show/ conference in Milwaukee the end of October. Of course, we hope to see you all before then, at PGRI lottery Expo Nashville Sept. 11-13! We have all been reading about the transformative impact that Artificial Intelligence will have on everything – on the way we live and work, on the way business is conducted, that goods and services and software code that runs the world are produced, that information is captured, processed, and disseminated and even the way knowledge is produced and transformed into action. The advent of Generative AI in the form of ChatGPT (and Google’s Bard, and software programming tools Github and AlphaCode, and Dall-E 2 to translate text into images, and probably countless others in the development pipeline as we speak) has catapulted this one subset of AI (i.e. large language models that enable the Generative Pre-Trained Transformer that is the “GPT”) to be the current top-ofmind AI application. Some may think AI is mostly overhyped or not ready-for-prime-time. I am throwing down hard with those who think that this technological revolution is the real thing, that the impact will be much greater than any technological innovation that has preceded it, and that it will all unfold at an exponentially faster rate than any innovation in the history of the world. It was over thirty years ago that Geoffrey Moore wrote Crossing the Chasm in which he describes the gap in time between early-adopters of new technology and the mass-market deployment and acceptance of an innovation. Just looking at more recent history, for instance, it was decades before electricity and the automobile (both introduced in late 19th century) gained wide-spread use. Later, it took more than ten years for the ATM to go from initial launch in late 1960’s to widespread deployment in the early 1980’s. Likewise, small-business/decentralized computing from the mid 1970’s to the late 1980’s. The far more impactful innovation of the Internet took much less time, and newer technologies like the iPhone and virtual assistant technologies like Alexa, Siri, and Google Assistant are taking even less time. Moore observed that the common perception has always been to over-estimate the short-term impact of innovation, but to underestimate the long-term impact. Hence the push-back from those who caution against overreacting to the hype of a new technology. Moore also predicted, and history has shown to be correct, that the timeline it takes for new technology to go from launch to widespread use is being compressed in a very big way. While Microsoft/OpenAI’s ChatGPT is a phenomenal technological breakthrough, it still is representative of the earliest stages of product development, and is prompting Google, Apple, IBM, Meta, and others to accelerate the commercialization of their own AI products and applications. The days when we could wind through a lengthy “chasm” of time while we figure things out and get our ducks in a row are long gone. It would appear that we can expect AI (and its subsets of Machine-Learning, Natural Language Processing, Expert and Autonomous Systems, Intelligent Personalization, Deep-Learning, Computerized Vision, Data Analytics, Virtual Assistance and Chatbots, Cybersecurity, etc. and countless more that we don’t even know about yet) to go from early-stage development to massive build-out in warp speed time. Others are much better than I at talking about the transformative impact of AI. Just have a conversation with ChatGPT to drill down on these, or any other topics, and be amazed at the power of this first-generation AI knowledge worker. PGRI’s goal is to focus on the intersection of AI and Lottery. As can be seen in our magazine, digital channels, and conferences, we try to push into the most cutting-edge forward-looking story angles while focusing on the range of lottery-specific topics like Retail Modernization, iLottery, Digitization, Marketing & Promotion, New Game Development, Regulatory Change, etc. Now I look forward to your guidance on how we might frame the issues and shape the dialogue to understand how AI is being, and will be, applied to transform the lottery playing experience. Paul Jason, Publisher Public Gaming International Magazine

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10 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2023 Syndicate shares have long been a popular product offering in retail stores for Australian lottery players. A “syndicate” is simply a group entry where players pool their funds to buy a larger entry than they might otherwise purchase as an individual. An example might be where friends or family pool their funds to purchase a ticket and agree to split any winnings. A store syndicate is a syndicate that’s been set up by a local retailer, who then offers shares in this syndicate to their customers in store. Local lottery retailers are used to setting up an appealing mix of syndicates catering to customer preferences in their area. Store syndicates have been part of the Australian lottery landscape for many years, but until now they’ve never been available online. That’s all changed with the recent launch of The Lottery Corporation’s Store Syndicates Online initiative which allows lottery retailers to sell shares in their store syndicates online via the Lott App and website. This program, launched late last year, allows lottery retailers to offer shares in their syndicates to customers online. It’s part of the Australian lottery operator’s omni-channel strategy to offer seamless experiences across all channels. Customers using the Lott app or website can click on the Syndicates button and access syndicates available within their state. Players can search for store syndicates by suburb name or by postcode and filter results by game, entry price or number of shares. They can also select a favorite store. Many people like to buy a share (or shares) in a store syndicate from their local retail outlet in the online world just like they do in the physical world. From the retailer’s point of view, being able to offer shares in their store syndicates online gives them the chance to share in digital growth, service their existing customers in a new way, and reach new customers. Lottery retailers receive the same commission rates for store syndicate sales completed online as they do for store-based sales. The Lottery Corporation launched Store Syndicates Online in late November 2022 and it has experienced strong take up. At the company’s half-yearly results presentation in February, The Lottery Corporation revealed that about 95,000 customers had bought syndicate shares online in the month following launch. More than 1,700 of the company’s network of about 4,000 lottery retailers had offered their syndicates online. And the online channel in that first month accounted for 13% of syndicate entry sales. Public Gaming Interviews … Paul Jason: Where did the idea for the Store Syndicates Online initiative come from? Antony Moore: It’s one of those situations where a crisis accelerated some inventive thinking and ultimately led to an opportunity. The idea came about during the COVID-19 pandemic when our retailers, while they remained open, were experiencing a drop in foot traffic and sales due to lockdowns. The digital team had research that players online wanted to access store syndicate entries and we also had insight that players typically purchased syndicate shares on top of their existing purchase behaviour. We saw taking store syndicates online as a way to benefit retailers and offer more choice to customers. Has this been done before? Andrew Shepherd: As far as we’re aware, no. We’ve called it a world-leading initiative in recognition of that. How does this initiative align with your strategy? A. Moore: Like many businesses we have customers with different preferences. Many customers like to purchase in person – retail remains our largest channel and accounts for 62% of turnover as of December 31 last year. And of course we have customers that purchase digitally, and we have many customers that use both channels at different times. Our omni-channel strategy is about creating as seamless as possible an Store Syndicates Online: A Retail Innovation that transfers to the Online World with Great Success Andrew Shepherd, Chief Customer & Marketing Officer, The Lottery Corporation Antony Moore, Chief Channel Officer, The Lottery Corporation

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12 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2023 experience across channels and allowing customers to buy lottery tickets when and how they like. What were some of the challenges to execution? A. Shepherd: We always like a challenge! This was a significant change and one we wanted to execute in a relatively short period of time. It was something we needed to do while we were completing The Lottery Corporation’s demerger from Tabcorp, along with the separation of the two businesses from a logistical and technological standpoint. It was important to us that we used our internal capacity to design and build the system. That meant more than 100 people were involved from 25 different teams across the business including Digital, Channel, Marketing Operations, Technology, Customer Experience, and key corporate functions. The project required more than 27,000 hours in tech development and was 18 months in the making. It’s really satisfying to see it up and running and delivering for our lottery retailers and our customers. What has the reaction been from customers? A. Shepherd: Customers have embraced Store Syndicates Online as a convenient way to buy shares in store syndicates from their device while retaining that local connection. Players have told us that they’ve enjoyed the diversity of store syndicate offerings online and the fact they don’t have to keep a paper copy of the ticket. We’ve given our customers the power of choice in terms of how and when they buy in a way that allows our lottery retailers to share in the benefits. What has the reaction been from lottery retailers? A. Moore: They’ve been really pleased. It’s a way to get their offering in front of a greater pool of customers as well as serving their existing customers in a different way. Say, for example, they have a regular customer that normally comes in to buy a store syndicate entry, but they go on holidays or they are busy at work, then they can still buy a ticket with their local lottery retailer via the app or website. And, of course, retailers receive the same commission rates on these online store syndicate sales as they do for in-store sales. Additional sales without additional labour for the retailer is a huge benefit, as well as helping retailers to sell out their shares in syndicates. What are some other ways The Lottery Corporation is ensuring retailers are aligned with digital sales growth? A. Moore: We have had a program in place since 2018 to reward retailers for digital growth. Retailers can share in commission from digital sales in two ways: from digital sales to customers of that retail outlet and via a signup bonus when they sign up a customer to the Lott app. Many retailers have experienced difficult times since the pandemic with customers’ purchasing habits changing and difficulties with inflation and staff availability. We recently increased commission rates by up to 200 bps or two percentage points for qualifying outlets. The enhancement of the commission rates and the launch of Store Syndicates Online are two ways in which we are helping to ensure the financial sustainability of our retail network. What was the most satisfying thing about the project for you both? A. Moore: The implementation of Store Syndicates Online was a huge step change in our omni channel journey and seeing such a large proportion of our network engage via the platform so quickly was truly amazing. A. Shepherd: Seeing our cross functional teams work as one to deliver something our retailers and customers love. n About The Lottery Corporation: The Lottery Corporation is the driving force behind Australia’s largest lottery games. The Lottery Corporation was created following the Tabcorp demerger in 2022 and is now home to The Lott and Keno – brands and games that have been adding excitement to Australians’ lives for decades. Operating in every Australian state and territory except Western Australia, we bring these brands to life, offering exciting games that not only deliver life-changing wins to our customers, but make a meaningful difference in the community.

14 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2023 Continued on page 25 The explosive growth of all forms of gambling – sports betting, landbased casinos, iGaming – has put U.S. lotteries in an offensive position as they look to protect their decades-earned position as providers of gaming content to their customers. This fight is critical to the mission of lotteries, as any revenue slips will mean a drop in the funds transferred to the causes they support. Preserving Lottery’s competitive position is also critical to the vast network of lottery retailers who depend on lottery sales to keep their businesses solvent. Pennsylvania Lottery Director Drew Svitko has faced these challenges firsthand over the past few years as the gambling options have increased in Pennsylvania. The lottery is now up against casinos, sports betting, iGaming, fantasy sports, horse racing, and video gaming terminals at truck stops. The lottery has countered with one of the industry’s most robust iLottery programs but it is still a struggle to compete. “With this crowded landscape, we are all fighting to break through to our customers,” he said. “The question is ‘what steps should we take to compete in this current environment and continue to attract players to the lottery?’” Kelley-Jaye Cleland, who’s lottery statutorily oversees all gambling in New Hampshire, said it is not easy to battle the deep pockets of national gambling companies. But she has an answer – good content. “I’ve stopped looking at this as iLottery content vs. sports betting and focus on what the player wants from us rather than what we want to give them,” she said. “Our iLottery demographics show a player about ten years younger than our traditional player. For Sportsbetting, the players trend more male and tend to be highly educated. We are trying to understand what they want to see and then offer that content. We can’t win the ad spend fight with the national gaming companies but we can certainly win the content battle.” Given the competitive landscape, in both iLottery states and jurisdictions that can’t sell online, Derek Levesque said analyzing what you can do and then executing on it are critical. “For states with iLottery and non-lottery competition, there needs to be a value proposition for the players,” he said. “When you look at the payouts from a few years ago, the well-defined best practice was the payout needed to be around 85-87%, and bonusing and marketing spend needed to be 7-8% of gross gaming revenue. In a hyper-competitive market, those numbers are correct. But over the past few years, we ‘ve seen that the aggressive approach isn’t necessary in states like Georgia with less competition. They have the second lowest eInstant payouts in the U.S. but they are one of the fastest growing lotteries in the industry. It’s about understanding your market before you adjust your iLottery approach. Best practices are not stationary, they have changed over the past few years as other forms of gaming P A N E L D I S C U S S I O N Following is an executive summary of a one-hour panel discussion held at the PGRI Lottery Expo Conference in Miami. Drew moderated a panel of industry veterans well-suited to handle these and other vexing questions. He was joined by: Kelley-Jaye Cleland, Chief Product & Program Officer, New Hampshire Lottery Brad Cummings, Founder & Chief Executive Officer, EQL Games Mike Lightman, Chief Commercial Officer, IWG (Instant Win Gaming) Derek Levesque, Director Business Development, IGT Jennifer Westbury, Executive Vice President, Sales & Customer Development, Pollard Banknote iLottery: Managing iLottery for maximum growth, maximum player engagement, and maximum overall sales including retail Best in class platform Award winning eInstant games Data driven managed services Best omni-channel solutions

16 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2023 The Multi-State Lottery Association (MUSL) is strategizing its next course of action following a year of unprecedented growth in the national games category. The Association just achieved a new fiscal year sales record, with sales of products facilitated by MUSL totaling $10.7 billion through the end of FY2023. For leaders on the MUSL Board of Directors, the sales surge underscores the essential role played by MUSL in optimizing the performance of the national games category. “The national games category adds up to billions of dollars in net revenues,” noted New Mexico Lottery CEO David Barden, who has begun his second year as MUSL Board President. “To maintain that progression, it’s beneficial to have an organization, like MUSL, that has the foresight to spearhead new development opportunities.” Barden has tasked Hoosier Lottery Executive Director Sarah M. Taylor to chair MUSL’s Development Committee. Taylor is well-versed in the evolving national games category, having previously served as MUSL Board President during the implementation of Powerball’s third weekly drawing and the Double Play® add-on feature in 2021, and most recently, as the Board’s liaison to the Mega Millions Consortium. Like Barden, Taylor recognizes MUSL’s unique ability to chart the next progression of multistate games. “MUSL has a robust Committee structure that serves as an incubator for game development initiatives,” said Taylor. “We have the ability to leverage the combined expertise of 38 member lotteries, alongside a dedicated team at MUSL, and a comprehensive infrastructure capable of providing full support, from concept development to market.” Although MUSL is commonly associated with its flagship product, Powerball®, the organization encompasses much more, both in terms of its portfolio and governance structure. The Association and its products have always been owned and operated by MUSL’s member lotteries. The governance encourages member lotteries to actively participate in the decision-making and management of the multi-state games they offer. “All lotteries have a stake in the health of these products,” Taylor added. “We have a shared goal of maximizing the draw game category, so it can continue to be reliable source of funding for our beneficiaries.” In addition to new game opportunities, MUSL leaders also see the potential to expand the organization’s existing products. Alongside Powerball, MUSL facilitates Lotto America®, 2by2®, and the Double Play add-on feature. Game leaders expressed that all three products are primed for expansion into new lottery markets. Lotto America has hit a new cadence since introducing a third weekly drawing in Fiscal Year 2023. The $1 draw game now shares the same draw nights as Powerball – Monday, Wednesday and Saturday. Like Powerball, the 13 lotteries that offer MUSLNEWS MULTI -STATE LOTTERY ASSOCIATION Sarah Taylor David Barden DEVELOPING THE NEXT MULTI-STATE GAME BOOM

17 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2023 Lotto America have been able to engage their frequent players an extra night, and as a result, additional sales from the Monday drawing are generating dynamic jackpot growth. Lotto America jackpots start at $2 million, but under the new tri-weekly draw schedule, the game achieved a new jackpot record of $40 million last April. “Lotto America has shown us that a $1 multi-state draw game can still deliver a lot of value to a lottery portfolio,” said Adam Prock, Lotto America Product Group Chair and Minnesota Lottery Executive Director. “Our players like the improved jackpot odds (1 in 25.9 million) compared to the larger national games (Powerball 1 in 292.2 million, Mega Millions 1 in 302.5 million), and the game has one of the highest player participation rates (27.7%) in the prize multiplier feature for an extra dollar.” 2by2 is $1 daily draw game with a top cash prize of $22,000 every day of the week, and up to $44,000 on Tuesday. The game has a fun premise – players pick two red ball numbers from 1 to 26 and two white ball numbers from 1 to 26. Players win a prize by matching a single number; they win the top cash prize by matching all four numbers. The game has developed a loyal following in Kansas, Nebraska, North Dakota, and most recently, Wyoming. “For lottery directors that are looking to expand their daily draw lineup, I strongly encourage them to consider 2by2,” said Brian Rockey, 2by2 Product Group Chair and Nebraska Lottery Director. “2by2 is a stable product with a reliable performance, and it fills a nice niche between the daily pick games and larger national games.” Lastly, the Double Play add-on feature has been wildly successful since its debut and expanding quickly. The New Mexico Lottery became the 17th lottery to begin Double Play sales in June 2023, with planned launches in Iowa, Oklahoma, Virgin Islands, Mississippi and Kentucky before the end of the calendar year. By 2024, more than half of all MUSL member lotteries will offer Double Play. Double Play gives players another chance to match their Powerball numbers in a separate drawing with a top cash prize of $10 million. Players can add the Double Play feature to their Powerball ticket for an additional $1 per play. The Puerto Rico Lottery requires a qualifying purchase of Power Play ($1) before Double Play ($1) can be added to a Powerball ticket ($2), making for a $4 purchase. “Double Play lotteries have boosted their Powerball sales, including the add-on features, by an average of 9 percent,” said Drew Svitko, Powerball Product Group Chair and Pennsylvania Lottery Executive Director. “We expect that Double Play will eventually reach the same level of lottery participation as Power Play.” The MUSL Board of Directors will meet in August to revisit the organization’s Strategic Plan and explore development opportunities. Barden and other Board leaders acknowledge the challenge of surpassing the record sales year, however, they express confidence in MUSL’s track record of success. “MUSL and its member lotteries have dedicated years to the development and evolution of these products, transforming them into billion-dollar brands,” added Barden. “Their success is a testament to MUSL’s return on investment.” n Drew Svitko Brian Rockey Adam Prock

18 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2023 With four multistate lottery game jackpots of more than $1 billion since 2021, and three of those in just the past year, the expectations of lottery players have permanently shifted. Gone are the days when media outlets set up remote broadcasts outside convenience stores for $200 million jackpots. Sometimes even $750 million jackpots don’t get you much attention. With most U.S. lottery jurisdictions now selling both Powerball and Mega Millions, plotting the future of these flagship brands is a collective effort for the country’s lottery directors. The directors all acknowledged that Powerball and Mega Millions are at one of the most important inflection points since 2010, when “cross-sell” allowed the MUSL states to license Mega Millions and the Mega Millions states to license Powerball, effectively enabling all jurisdictions to sell both Powerball and Mega Millions. More than ten years after MUSL raised the Powerball price point to $2, the Mega Millions consortium, made up of New Jersey, Massachusetts, Virginia, Maryland, Georgia, Michigan, California, Ohio, Washington’s Lottery, and Illinois, is about to increase the price of its ticket to $5. This change, which will start later in 2023, has added to the conversation on the future of these two games which, despite the meteoric rise in the sale of scratch tickets, remain critical components of most lottery’s game portfolios. David Barden kicked things off with a topic of great debate in the U.S. lottery industry – are we better off with two groups managing the two different national games? Does it make sense to have a MUSL group consisting of 38 states voting on Powerball issues and a Mega Millions group consisting of 10 states voting on Mega Millions issues? “In the end, all directors are beholden to the rules of their locales and must look out for what is best for their jurisdictions,” David said. “But given all the changes we have faced over the past few years, from the localization of casinos to the proliferation of sports betting, are there efficiencies to be had with two management groups or might it make more sense to combine the management of the multi-state games into one group? The two groups have collaborated more recently than ever before, but is that enough to truly optimize synergies and the performance of the games?” Drew Svitko, who oversees a lottery which is a MUSL member, is a believer in the economies of scale. “We have worked more together recently than at any point P A N E L D I S C U S S I O N Following is an executive summary of a one-hour panel discussion held at the PGRI Lottery Expo Conference in Miami. Several of the directors who are on the frontlines of wrestling with these issues participated in a spirited panel discussion at the PGRI Lottery Expo in Miami in early spring. Moderated by David Barden, President & CEO, New Mexico Lottery, and President of MUSL (Multi-State Lottery Association), the panel included: Mark William Bracken, Executive Director, Massachusetts Lottery Norm Lingle, Executive Director, South Dakota Lottery John Martin, Director, Maryland Lottery Drew Svitko, Executive Director, Pennsylvania Lottery, Chair of Powerball Group Bret Toyne, Executive Director, MUSL Optimizing the overall sales of Powerball, Mega Millions, & Multi-State Games

19 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2023 in the history of the two games, and that is a good thing,” he said. “But I am a believer that managing both games from one point of contact would gain efficiencies, particularly for the administrative parts of the games. We can manage the products and the processes, and I absolutely think there is an opportunity to, in the end, save money and enhance the effectiveness of the overall brand management. And very importantly, we can make decisions quicker and implement changes and updates in a more efficient manner. Speaking on behalf of the Commonwealth of Pennsylvania, I want these games to be as strong as possible and selling as many tickets as we can.” With just over one year in his position as Director in Massachusetts (a Mega Millions consortium jurisdiction), Mark William Bracken brought a fresh perspective to the discussions. “I can’t speak to the past, but it does seem like there has been a historic rivalry between the two groups which I hope is changing with the increase in communication and collaboration,” he said. “In many ways, the two games are similar, even with different price points, and on the game front we only truly differ when one jackpot is different than another. MUSL is able to execute more marketing integrations, such as with NASCAR and other national organizations, which the Mega Millions Consortium doesn’t have the bandwidth to undertake. While my lottery might not be ready for one overarching organization, I appreciate the increased communication and my expectation is for the two groups to continue to improve the information flow.” David agreed with Mark about the need for continuing communication and pointed out that all jurisdictions have more in common than not. “At the end of the day, what I care most about is your jackpots rolling to amounts that move the sales needle and my jackpots rolling to similarly high levels,” he said. “We all benefit by the success of both games. That’s our common thread.” Moving to a smaller jurisdiction which mirrors a large percentage of MUSL’s membership, David asked Norm about South Dakota’s perspective. “For a smaller state, MUSL’s oversight is critical as they do things we are just not capable of handling with our already-stretched staff budget and human resources,” Norm Lingle said. “As far as the two groups are concerned, the key words are ‘communication’ and ‘transparency.’ Working together, we have a far greater chance of success. In the past, some people have been hardline about a distinct separation of the two groups but to me, that doesn’t make much sense. Would one group managing all games be best? Well, we all have the same goal which is to create revenue for our beneficiaries. I think we can get there. There might be some bumps in the road but at the end of the day, we all need to do what is best for our organizations.” Of course, change can be incremental, and David pointed out that any time the groups are coming together, the industry is better off. “Could we start by developing a new game together, something developed by a joint game committee?” he said. “Change is the hardest thing we do. Every director has been through some sort of change or has had to push for change within their lottery. And it is hard. Staff can be resistant. But you must do it because at the end of the day, change and innovation is the way to produce the big win.” John Martin, who’s lottery is a Mega Millions consortium member, said the Maryland Lottery has carefully considered all roads ahead. “It is certainly a good idea to look back at history, but you also need to consider what’s ahead of us?” he said. “Post-pandemic, we have all had to think a bit differently about what our futures look like. With the Mega Millions group, our energy has been spent focusing on a product that is differentiated from the Powerball product. Our preliminary discussions were within the Mega Millions consortium which then moved into a larger group of states. This all leads to where we are now – we all must make the decision if this is the road to continue down or should there be a singular organization that can best manage everyone’s time and efforts.” As the longest-tenured industry representative on the panel, Bret Toyne was able to provide perspective on the rise of multi-state games, particularly Powerball. MUSL supports its member lotteries with important financial structures as well as overseeing drawings and providing security standards. Along with critical back office support, those are the pillars of the value MUSL delivers to its members. But as an industry, Bret believes it’s time to move forward. “If in five years we’re in the same spot we’re in now, we have failed our constituencies,” he said. “We have two really great games, we have two models that have worked successfully. By taking the best practices from Mega Millions and joining them with the best practices from Powerball, can we create a better overall organization? On the Powerball side, we’ve been working diligently to leverage the brand with third parties, such as NASCAR and the NFL. But when you’re sitting across the table from someone and you tell them you represent 38 lotteries and there are another 10 you hope will join on, it’s a bit of a disconnect. It’s much different if you have a 48-member consortium of lotteries which includes states with some significant DMAs (Designated Market Areas). You’re in a much different negotiating position. Lotteries have spent hundreds of millions of dollars over the past 30 years developing and marketing these two brands. We can better leverage them as one block of 48 lotteries. Moving forward, we need to recognize the opportunities and take advantage of them.” As president of MUSL, David Barden said his focus has been on improving the inclusion of all lotteries and listening to all constituencies. In the end, the important factor is determining what is best for all lotteries and acting in a deliberative manner. “The lottery industry has attributes that make us different from other businesses,” he said. “But together, we can chart paths that work for all of us. I think that on the part of MUSL, we have opened our meetings and created clear paths of communication to engage the active participation of all 48 state lotteries. Moving forward, I hope for and do anticipate even more collaboration between MUSL and the Mega Millions consortium. After all, for all of us it is all about doing what is best for our lotteries and, ultimately, our beneficiaries.” n

20 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2023 As the Florida Lottery’s Deputy Secretary of Product and Sales, Justin Rock keeps his eye on all trends that might impact his state’s industry-leading sales. While COVID initially looked like it would negatively-impact business, the Florida Lottery, along with most lotteries across the country, emerged stronger than ever. But challenges continue to emerge. “We work in a business where cash-based transactions are incredibly important. Yet more and more, other industries, including some of our channel partners, are going cashless,” he said. “Our largest retailer, Publix, which makes up 20% of our sales, has added self-checkout which seemingly contradicts their brand philosophy of customer service. Racetrak and Circle K, other important retailers, are also adding self-service. What does this all mean for the future of lottery? How will lottery continue to thrive when so much is changing at our retail locations?” Helping Justin answer these and other critical questions was a panel of lottery veterans: With almost ten years in the lottery industry, between DC Lottery and NC Lottery, Frank Suarez sees the overall modernization efforts at retail as a call to lottery to change with the times and perhaps gain new audiences. “We always talk about evolving our games and methods of distribution to appeal to the younger players and that group is used to not interacting with people for their retail purchases,” Frank said. “They buy online and use self-service at retail. Some of the newer lottery vending machines are exactly what this new generation of players is seeing in other purchasing experiences. We need to continue to work even more with our retailers to modernize lottery to align with the expectations of next generation consumers and with the way consumer packaged goods marketers are meeting those expectations. Single ticket activation, for instance, is one step in the right direction as it allows us to position lottery products anywhere in the store. We just need to meet the retailers’ expectations and make it easy for them to sell lottery.” Burbank Herndon helps lead the Retail team at Scientific Games that works through these retail-related issues every day. The issues can be challenging but he said they are solvable. “As an industry, we’ve done a good job of providing a vending machine that works within the retail environment,” he said. “Easy to understand, smooth purchase, quick in and out of the store. Instead of coming through the checkout lanes, the player purchases their lottery tickets on their own in the store. We have to continue to invest in self-serve technologies. Add more bins, add debit and credit in states where it’s legal, add accessible selling features. I agree that adding in-lane is important, especially when the largest grocery store chains are telling us that up to 70% of their business is now self-checkout. We have seen that when convenience stores add self-checkout, lottery sales drop because the consumer doesn’t see lottery games at the counter and the retailer has not enabled lottery purchases through the new technology. These issues have to be solved quickly P A N E L D I S C U S S I O N Following is an executive summary of a one-hour panel discussion held at the PGRI Lottery Expo Conference in Miami. Jay Finks, Executive Director, Oklahoma Lottery Maxwell Goldstein, Director of Sales & Marketing, Carmanah Signs Burbank Herndon, Vice President Sales - Retail Solutions, Scientific Games Terry Presta, Head of Business North America, Abacus Lottery Solutions Frank Suarez, Executive Director, DC Lottery Retail modernization and Optimization: Applying the most progressive tools, methods, and 'best-practices' to drive sales at Retail Continued on page 34