www.PublicGaming.com JULY/AUGUST 2024 Community service has always been a core value for McHugh. The Boston-area son of Irish immigrants found his off-the-beaten-path way to the industry after a service-focused start as a volunteer leader for community youth programs in college, coaching high school track and field, and then working in law enforcement. By luck, Pat met a former director of the Massachusetts Lottery who encouraged him to take an entry-level job with a lottery tech provider. It would be a turning point in his life. Logging around-the-clock hours traveling the globe, Pat learned everything he could about lottery systems and operations in project management, leading teams on some of the industry’s largest lottery start-ups and conversions. He joined Scientific Games in 2004 and following a series of promotions over the years – including running the company’s U.S., then global, systems business – Pat was named Lottery Group CEO in 2018. Throughout his career, his core focus has remained on the industry’s beneficiary funding mission and leading high-performing teams to achieve together. Under his leadership team, Scientific Games successfully navigated challenges brought about by the COVID-19 pandemic and emerged stronger. In 2022, following the most financially successful year in its history, the Scientific Games Lottery Group was sold to Brookfield Business Partners, one of the world’s most successful investment companies. Pat and his team led the company through the process, steering the ship for the now independent and 100% lottery-focused Scientific Games. After standing up a new organization with all the right people, parts and pieces needed to keep the company and its customers running smoothly, he’s leading change and evolving culture for Scientific Games’ more than 3,000 employees worldwide while achieving record revenues for the company with major wins globally across all retail and digital business lines. Two years into the company’s transition, Pat continues to drive growth and help sustain the global lottery industry, through innovation and customer service excellence. P i a O h p s s t m e g W 2 s r m s t o h W s b b k s e o w o M V o p o M t 1 f c r Pat McHugh epitomizes the commitment to innovation, integrityand performancethat makes Scientific Games a leader in helping lotteries maximize good-cause funding for their beneficiaries. Q j Cindy Polzin Director, Wisconsin Lottery and President of NASPL Ryan Mindell Executive Director, Texas Lottery Commission Also Featuring … MUSL debuts bold product development timeline Turning LVMs into MVPs, Part II, IGT EL (European Lotteries Association) Highlights the Positive Impact of Lotteries Pat McHugh CEO, Scien ific Games Feature Interviews
ILLUMINATING YOUR PATH TO GREATNESS LETTER FROM THE CEO To our valued clients and partners worldwide, Our collective passion, and what inspires me daily, is our role in bringing new gaming and wagering technology to market safely and responsibly as we work between regulators, operators, and suppliers. I saw it firsthand at our annual Regulators Roundtable in Las Vegas. We made history with a record-breaking attendance of nearly 400 regulators and industry experts traveling from across the U.S., Australia, Europe, and Latin America to collaborate on some of the biggest issues our industry faces today. Our highly anticipated cocktail reception also drew over 150 supplier representatives eager to network and join in discussion with regulators. That drive to collaborate and problem-solve speaks to our determination to find new ways to bring new technology to market that was simply unimaginable just years ago. I am energized by the strides we continue to make as suppliers and operators innovate with input from regulators, who adjust to embrace novel ideas. Working together, we are changing the future of our industry. As technology evolves and gaming moves more remote, one of the most significant issues our industry continues to face is cyberattacks. Last year, more than 60% of online gaming platforms and their casino affiliate programs experienced breaches or attacks. We saw a need for an organized security standard governing technology in the gaming industry, and so, assisted by our integrated cybersecurity company Bulletproof, GLI introduced our new Gaming Security Framework (GSF) that provides a standardized security approach for online, land-based, and cloud technology platforms. We also increased our global testing footprint with the addition of Trisigma in April, adding their Spanish and Dutch offices to our testing platform. It joins our growing list of global testing labs, where we have completed 1,424,600 tests and 75,179 certifications in 463 unique jurisdictions over the past year – all while providing the highest quality, consistency, and world-class service. These numbers are a true testament to your dedication to safety and accuracy as our industry continues to innovate. Our world changes daily, so adaptability will continue to propel us forward, and together, we can continue to redefine what’s possible. Looking forward to seeing you somewhere on the globe, gaminglabs.com James Maida “We’re constantly innovating in an industry that’s always changing. One thing that won’t ever change, that can’t ever change, is quality.”
© 2024 IGT. The trademarks used herein are either trademarks or registered trademarks of IGT, its affiliates or its licensors. Now players can experience Crossword like never before! Engage new audiences and loyal fans with vibrant colors and innovative, unique ways to play — brought to life by IGT’s cutting-edge, NextGen game programming and Infinity Instants™ printing technologies. Learn more at IGT.com/ Infinity New Era of Crossword
4 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2024 Publisher & Chief Executive Officer Paul Jason pjason@publicgaming.com President Susan Jason sjason@publicgaming.com Brand and Design Dan Eggers Design Honored Founders Doris & Duane Burke Subscriptions United States: $145 USD Canada & Mexico: $160 USD All other countries: $225 USD For email address changes, subscription requests and requests to be placed on our e-Newsletter distribution list, e-mail Susan Jason at sjason@publicgaming.com Contact Information PGRI, Inc. 1769 Flagstone Terrace, The Villages, FL 32162 PublicGaming.com T: +425.449.3000 F: +206.374.2600 Public Gaming International Magazine Published six times a year and distributed to readers all around the world. Electronic version is e-mailed and is also available on our news website: PublicGaming.com July/August 2024 Volume 53, Issue 4 ©2023 all rights reserved. Public Gaming Research Institute cISSN: 1042-1912 10 NURTURING AN INDUSTRYWIDE CULTURE OF COLLABORATION AND SUPPORT Cindy Polzin Director, Wisconsin Lottery and President, North American Association of State & Provincial Lotteries (NASPL) 24 LEADING GROWTH AT SCIENTIFIC GAMES Pat McHugh Chief Executive Officer, Scientific Games 14 CHANGE BRINGS OPPORTUNITIES FOR THE TEXAS LOTTERY Ryan Mindell Executive Director, Texas Lottery Commission CONTENTS J U LY / A U G U S T 2 0 2 4 Community service has always been a core value for McHugh. The Boston-area son of Irish immigrants found his off-the-beaten-path way to the industry after a service-focused start as a volunteer leader for community youth programs in college, coaching high school track a d field, a d then working in law enforcement. By luck, Pat met a former director of the Massachusetts Lottery who encouraged him to take an entry-level job with a lottery tech provider. It would be a turning point in his life. Logging around-the-clock hours traveling the globe, Pat learned everything he could about lottery systems and operations in project management, leading teams on some of the industry’s largest lottery start-ups and conversions. He joined Scientific Games in 2004 and following a series of promotions over the years – including running the company’s U.S., then global, systems business – Pat was named Lottery Group CEO in 2018. Throughout his career, his core focus has remained on the industry’s beneficiary funding mission and leading high-performing tea s to achieve together. Under his leadership team, Scientific Games successfully navigated challenges brought about by the COVID-19 pandemic and emerged stronger. In 2022, following the most financially successful year in its history, the Scientific Games Lottery Group was sold to Brookfield Business Partners, one of the world’s most successful investment companies. Pat and his team led the company through the process, steering the ship for the now independent and 100% lottery-focused Scientific Games. After standing up a new organization with all the right people, parts and pieces needed to keep th company and its customers running smoothly, he’s leading change and evolving culture for Scientific Games’ more than 3,000 employees worldwide while achieving record revenues for the company with major wins globally across all retail and digital business lines. Two years into the company’s transition, Pat continues to drive growth and help sustain the global lottery industry, through innovation and customer service excellence. Pat McHugh epitomizes the commitment to innovation, integrityand performancethat makes Scientific Games a leader in helping lotteries maximize good-cause funding for their beneficiaries. FE ATURED I NT ERV I EWS
6 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2024 Visit Our Family Of Websites PublicGaming.com industry news & information PGRITalks.com videos of conference presentations PublicGaming.org PGRI conference information PGRIDigitalLibrary.com magazine archive of past issues PGRIDirectory.com listing of lotteries and vendors PGRIAwards.com Showcase of industry honorees recognized by the Lottery Industry Hall of Fame PGRI Lifetime Achievement Award Sharp Award for Good Causes Lottery Industry Statesman and Stateswoman Award Rebecca Paul Mentorship Award Collaboration Award Subscribe To Our Free Digital Newsletters Receive our daily newsletters at no charge, published 5 times a week to bring you the latest breaking news in the global lottery industry. Send an e-mail to: sjason@PublicGaming.com with “add to Daily Digest list” in the subject line. FE ATURED AR T I CL ES 8 FROM THE PUBLISHER Paul Jason 20 MUSL DEBUTS BOLD PRODUCT DEVELOPMENT TIMELINE MUSL NEWS (Multi-State Lottery Association) 28 THE POWER OF POWERBALL Simon Jaworski, Founder & CEO, Lotto Research 50 PHOTO COLLAGE: Scenes from the PGRI Smart-Tech Conference in Fort Lauderdale, March 4-6 53 PULSE OF THE INDUSTRY: Synopsis of recent gaming industry news D E PA R T M E N T S 18 THE FUTURE OF THE IN-STORE SHOPPING EXPERIENCE Tom Seaver Executive Director of the Colorado Lottery Jason Barrs, Senior Vice President Global Sales & Business Development, Carmanah Signs Tonya Beenders, Chief Sales Officer, Missouri Lottery Amy Drooker, Vice President Chief Revenue Officer, Kentucky Lottery Michael Martin, Vice President Retail Solutions, Scientific Games Terry Presta, Head of Business, North America, Abacus Lottery Solutions Justin Rock, Deputy Director of Product & Sales, Florida Lottery 22 INSIGHTS FROM RETAIL EXECUTIVES Eric Grubbs, Deputy Executive Director, Sales, of the Pennsylvania Lottery Jarrod Cummins, Director Commercial Business Lines and Digital Solutions, Kroger Personal Finance Nick Murtagh, Category Analyst Lottery, Sheetz Inc. 30 TURNING LVMS INTO MVPS, PART II: OPTIMIZING THE PERFORMANCE AND PLAYER EXPERIENCE OF LOTTERY VENDING MACHINES IGT 34 EL INDUSTRY DAYS 2024 HIGHLIGHTS THE POSITIVE IMPACT OF LOTTERIES 36 PHOTO COLLAGE: SCENES FROM EL INDUSTRY DAYS IN SALZBURG, JUNE 16-19 38 EL (EUROPEAN LOTTERIES ASSOCIATION) ANNUAL REPORT: UNVEILING EL’S NEW STRATEGY 40 THE EUROPEAN LOTTERIES’ (EL) MANIFESTO FOR THE NEW EU TERM LOTTERIES IN EUROPE: AT THE SERVICE OF THE COMMON GOOD 41 RESPONDING TO THE CHANGING FACE OF RETAIL Pollard Banknote 44 LOTTERY LOVE: ALWAYS IN SEASON IGT 18 44 34 42
8 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2024 From the Publisher Responsible Gaming, and the broader commitment to the betterment of society, are the DNA cornerstone ideals of government lottery. The community of commercial gambling operators have always proclaimed that there is nothing the government lottery sector does that commercial gambling operators can’t do just as well. That may be true. But the reality is that they don’t do it. They do not put the customer before profits until and unless they are required by law. Their charter to pursue profit within the boundaries of the law causes them to deliberately act in ways that they know to be detrimental to the well-being of their customer, i.e. the players. See top left column of page 55 for brief news items about how measures to protect the consumer that are required by law in the UK and other jurisdictions are not being applied in the U.S. The commercial operators are not breaking the law in the U.S. They are just exercising their rights to conduct business in ways that comply with the laws that apply jurisdictionally. The fact that they know their business practices are harming the consumer is not part of the calculus. Contrast this with government lotteries. Check out the feature on EL (European Lotteries Association) Positive Impact of Lotteries for an in-depth look at lotteries’ genuine commitment to the welfare of its players and society in general. Lotteries and their regional and world associations do this because it is the right thing to do. I wish that our political stakeholders might appreciate this difference between commercial and government operators. It often seems like they don’t. Or maybe they do but choose to side with commercial operators because they contribute to political campaigns. In any event, government lotteries’ dedication to the welfare and improvement of society should be leveraged as a competitive differentiator. Lottery deserves the whole-hearted support of government constituents and media in the competition for playership. Slight digression: Commercial operators like Allwyn, IGT, The Lottery Corporation, FDJ, and others are licensed to operate what I call “government lotteries”. I still refer to them as government lotteries; not only for the mission to serve society, but for the culture they inhabit. To my mind, these commercial operators adopt the player-first and society-first ideals of what I call “government lotteries, which is why I still refer to them as government lotteries. I hope that is OK! Thank you to our feature interviewees: Cindy Polzin leadership of NASPL includes hosting the last annual event in Milwaukee and navigating a post-pandemic era in which many assumptions are being revisited. This year, for instance, the annual NASPL event in Kansas City will focus on the conference instead of trade show. As Cindy says, we need to be open to change, to experimenting with new ways of thinking and meeting the needs of our constituents. We so look forward to seeing Cindy, Team NASPL, and all of you at NASPL’s A State of Winning event in Kansas City! Ryan Mindell has been with the Texas Lottery for seven years now and so brings a wealth of lottery experience, and hands-on leadership experience with the Texas Lottery, to his new role as Executive Director. All lotteries are unique in some ways. The Texas Lottery is so interesting for many reasons, one of which is its intense focus on building the digital connection with the players even though it is prohibited from selling tickets online. Pat McHugh has led Scientific Games through what must be counted as one of the most transformational periods in its history. It feels like a culmination of sorts. Merging with casino suppliers and other game categories and then de-coupling to return to its core value and competency of government lottery. And doing that just in time to navigate the pandemic and set a fresh course for its future. Thank you, Pat, for sharing the vision of where Scientific Games is going from here. We started to include executive summaries of PGRI conference panel discussions and so hope you enjoy the focus on retail with the two summaries in this issue. Continuing the focus on retail are articles by IGT on optimizing LVMs (self-service Lottery Vending Machines) and Pollard Banknote on big-picture retail and consumer shopping trends. And thank you to Simon Jaworski for his ongoing research into the players’ attitudes and perceptions of Lottery’s uber-brands like Powerball and Mega Millions and how they compare to other giant consumer brands, and how we might leverage these insights into increased player engagement. Next up is NASPL annual conference in Kansas City, Sept. 9-12. Visit NASPL.org for complete info. Susan and I look forward to seeing you there! Paul Jason, Publisher Public Gaming International Magazine
Performance measured in the rst 30 days live. Scienti cGames.com Science Inside THIS IS THE We’re applying 50 years of science to iLottery with 250+ premiere eInstant games from SG Studios. In 2023, our games brought in nearly 23% more unique players and 21% higher total wagers than competitive games. Now, with the SG Content Hub Partner Program, we’re adding even more innovative, high-performing eInstant games from other lottery-focused content studios worldwide to drive pro ts for good cause programs. eInstant Game Titles and Growing © 2024 Scienti c Games. All rights reserved.
10 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2024 Nurturing an industry-wide culture of collaboration and support Cindy Polzin Director, Wisconsin Lottery President, North American Association of State & Provincial Lotteries (NASPL) Paul Jason: What a fabulous NASPL annual conference & Trade Show you hosted last October in Milwaukee. Cindy Polzin: Yes, wasn't that special? I have known the NASPL team for many years now, but gained a newfound respect for them, seeing everything that needs to be done to make all the parts move in the right direction at the right time to produce a great event. Since it was in Milwaukee, I wanted there to be a Wisconsin touch and feeling on everything. And since I was going to be NASPL president, I wanted a true understanding of what the NASPL and Wisconsin Lottery staff and others have to go through for these conferences. Walking side-by-side with them and seeing David Gale's (Executive Director of NASPL) leadership and all of the hard work that his very close team put into it is truly astonishing. It’s so great to recognize the talent and hard work that goes into a production like that. David Gale and Team NASPL deliver on that front and others as well. C. Polzin: Yes! Now that I have been in president of NASP, I see just how much they do. Of course, we are all aware of the educational seminars and other outputs of the association. But getting up close and personal with all the work involved to produce the seminars and deliver all the services provided by NASPL has given me a new perspective and appreciation for David Gale and Team NASPL. I feel so blessed for the opportunity to get to know them so well over the past year. I'm sure there were times David Gale wished I wasn’t so involved! But in the end, I think we worked very well together. And honestly, I am forever grateful for them and their support and all that they do to make this industry what it is today. And a shout-out to our vendor partners who are so vital to the success of this industry and so appreciated for their support and guidance on the conferences too. I’m probably speaking for you and Susan too, who already know what it’s like to produce an event like this. PGRI Introduction: As Cindy Polzin says “I’ve been in politics my whole life.” She served for fifteen years in state government including Deputy Chief of Staff to the governor of Wisconsin in 2016 just prior to her appointment to lead the Wisconsin Lottery. That prepared her for some of the mission-critical functions of a lottery director. For the rest, she learned on the job. This discussion is largely about that process. How does a new director, who often has no experience in this industry, or business management or consumer products marketing, begin the leadership role on day one? Now, seven plus years later, Cindy brings a fun and thoughtful perspective to this interesting journey. PGRI INTERVIEWS
Winning Moment Future Forward. Growth Driven. Going Pro has never been this fun. Meet the Retailer Pro S2, a clerk terminal with optional player-facing touchscreens in a smaller footprint. IGT.com/Pro © 2024 IGT. The trademarks used herein are either trademarks or registered trademarks of IGT, its affiliates or its licensors. Pro. Evolved. Confirm Wagers Player Screen Options Select Payment Game Promotions
12 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2024 Continued on page 49 Yes you are, thank you, Cindy! Susan and I work great together, as long as I never forget who the real boss is! But there’s no comparison to what NASPL does. The number and scale of their events and services increases the complexity and challenge exponentially. C. Polzin: We changed it up a little bit last year for Brewing the Best in Milwaukee. We wanted to celebrate a little bit of Wisconsin culture and so I hope everyone loved it! The main thing is that we need to push ourselves to evolve, to disrupt and reinvent and try new things. Mistakes will be made and learned from and that’s okay because it is the only way to drive progress. This year in Kansas City will be something new as well. The focus will be on the conference as there won’t be a trade-show. Our valued sponsors and vendor partners are helping more than ever as well. It will be an interesting event with a whole different feeling to it. The trade-show component to the annual NASPL event will be back in 2025. That will be in Niagara Falls, which should afford lots of opportunity to do some fresh and different things as well. But we are all gearing up and excited about A State of Winning from Sept. 9-12 in Kansas City. NASPL, and Lester Elder’s (Exec Director of Missouri Lottery) whole team at the Missouri Lottery, the vendor partners, and everyone involved are all stretching to produce a refreshed and fabulous conference event. They all deserve a lot of respect for all they are doing to create a new and special experience. I promise everyone will be impressed by the format, the content, the social and networking time, and love the whole experience! What are some of the high-priority goals of your tenure as president of NASPL? C. Polzin: I appreciate and am humbled by the opportunity to serve as president of NASPL. The presidency is for only one year, so part of our job is to just provide continuity for strategic plans that are already in place. But I do have two goals. My first goal is prefaced with a bit of a story. I was appointed lottery director in 2016. The first time I met my colleagues was at a MUSL strategic planning meeting in Iowa in Spring of 2017. Of course, I did not know anyone. I don’t think I even knew what “MUSL” or “NASPL” stands for. And I walked into the room and realized I didn't know what I was doing there, or what was expected of me. It was very uncomfortable, right? Thankfully I sat next to this lovely man named Gary Grief, who helped me get acquainted with things. The interim Director of the Wisconsin Lottery before me told me to find a woman named Sarah Taylor – that she would be a great mentor and friend for me. She was and is to this day! The long and short of it is that we should make it easier for new directors to be brought up to speed on who does what, on the mission and purpose of the different associations, committees, working groups, task forces, etc. So one of my goals was to start a mentorship program for new directors. We now have a skeleton blueprint for that. My friend Adam Prock (Director of Minnesota Lottery) had the same idea which we discussed shortly after I was elected president of NASPL. Adam’s guidance has been very helpful as the program developed. Team NASPL put together and we sent it out a first version of the new director mentorship program for directors to review. Since that time, there have been at least five new directors appointed. I want to also thank the four regional directors of NASPL for their support and engagement. They have always been so generous with their time to pitch in and help me and others as needed. David Gale has always reached out to the new director, to introduce NASPL, offer to help or connect, talk any time, etc. After that, the regional director reaches out to the new director and offers their mentorship or to find another director who may have experience or insights into particular issues that the new director is interested in. I, of course, also reach out to the new director. We share with them the activities of the associations and ask them if they have thoughts on how they might like to be involved with NASPL, MUSL, and the industry in general so we might offer guidance on how to proceed. The new crop of directors since I've been president are outstanding! I can't wait to see what they bring to the industry! The new director gets great guidance from their own senior staff. Of course, we all so value our senior executive team, and all our staff, as they are the ones who keep this business running. But there are some issues that can only be understood by someone at the director level, someone who truly understands the complex diversity of stakeholders. Too, incumbent staff is likely to be too invested in procedures and methods that have been in place for years and may be ready for a change. The new director needs friends in a similar position to help them navigate some of these issues. So, I am proud of this initiative, proud of David and the regionals for advancing it, and “The main thing is that we need to push ourselves to evolve, to disrupt and reinvent and try new things.” Cindy at Vending Machine
14 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2024 Change Brings Opportunities for the Texas Lottery Ryan Mindell Executive Director, Texas Lottery Commission Paul Jason: Nobody really goes to college with plans to pursue a career in the lottery. How did you go from being a New York City lawyer to being the executive director of the Texas Lottery? Ryan Mindell: I graduated from Duke University in 2007. New York has that “If you can make it there … ” aura, so I thought that it was a good place to start my career. The actual work of being a lawyer is not as exciting as it might appear on TV. But it was a fabulous learning experience, preparing me for opportunities in ways that may not have happened if I had stayed in North Carolina. And it’s where I met my wife, so we have a very special fondness for New York. My wife and I had been in New York for a few years and were starting our family and decided it was time for something different. We considered the places where she and I had family and friends. There were some personal connections to Austin, so I applied to the office of the Texas Attorney General and was hired. It happened that the lawyer who dealt with the Lottery retired shortly after I arrived and right before legal issues came up that threw me into the deep water right away. I worked with Gary Grief and others at the Texas Lottery directly on these issues. Two years later, in 2016, a legal position at the Texas Lottery opened up. I applied and was hired and that’s how I ended up at the Texas Lottery. I see that you were then promoted to be Director of Lottery Operations just 18 months later. Legal Counsel to Op’s seems like an interesting leap. R. Mindell: My attitude is that the best way to qualify for the job you want is to excel at whatever job you are currently doing. I did not join the Texas Lottery with a plan to move to operations or to be appointed executive director. I must admit, though, that it did not take long to be absorbed in all aspects of the lottery business! I asked to be included in planning and problem-solving meetings in other areas of the business so I could learn and grow. One thing led to another as I embraced the opportunity to make a difference beyond legal issues. How does private sector work differ from working for an agency of state government? R. Mindell: In successful private sector companies, the focus is on results more than the execution of tasks. It might seem like the client is the boss who is yelling at you. But the real client is the customer who pays for the product or service your company produces. In my case, if a client like JP Morgan is not PGRI INTERVIEWS PGRI Introduction: Ryan Mindell joined the Texas Lottery in April 2016 as Deputy General Counsel and moved over to Director of Lottery Operations in February 2018 before being appointed Deputy Executive Director in September 2022. Ryan had been on the front lines for many years prior to his appointment as Executive Director in April 2024. While our discussion ranges across a variety of topics, it focuses on how lotteries operating within constraints (like prohibition to sell online) can still take an ambitious approach towards technological and digital innovation. Congratulations, Ryan, on your appointment to lead the Texas Lottery! “The runway for experiential prizes and ability to tap into a new universe of players on social media appears to be without limits.”
16 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2024 happy with our work, they could easily get another law firm. And whoever is held responsible for losing a big client is typically invited to leave the firm. The focus on accountability for outcomes is intense. This level of hyper competition can be very counterproductive. Our priority at the Texas Lottery is decisively different. We support a hospitable corporate culture that nurtures mutual respect and a collaborative team spirit. We help our colleagues be the best that they can be, so we all win as a team. We do hold fast to an intense customer-first focus, and personal accountability for producing results. But the result we want most is to win as a team for the benefit of all our stakeholders, especially public education, veterans, and the other causes supported by the Texas Lottery. I would observe that lotteries are incredibly innovative at forging creative pathways to enhance the player experience. Many of the fundamental attributes of the games are immutable. Lotteries operate within statutory and regulatory constraints far more rigorous than those applied to private operators. And lotteries hold themselves to even higher standards of security, integrity, and responsible gaming. Lotteries turn over a much higher percentage of wagers than do private operators. But the history of lotteries is a success story unmatched by most in private enterprise for their innovation, creativity, and results that benefit everyone. Is the sales growth trajectory of Instant Scratch-Offs starting to soften? R. Mindell: I would call it a re-solidification. Our sales are down around 2% compared to last year. But we should put these trend lines into proper context. The pandemic disrupted the whole games-ofchance industry in the middle of 2020. The closing of casinos and curtailing of sports betting and other entertainment options left consumers with fewer ways to spend money to have fun. Convenience stores stayed open and continued to offer lottery products. Consumers turned to lottery as a source of entertainment. This situation and perhaps other factors contributed to a spike in sales that began in the middle of 2021 and for many lotteries lasted into 2023. But those sales increases were never going to be fully sustainable as consumers slowly drifted back to pre-Covid behavior patterns. For that reason, it is probably more useful to compare current sales to pre-Covid sales. Do that and you see that sales at most lotteries, including the Texas Lottery, are way up. Texas Lottery sales increased from just over $5 billion in 2018 to $8.7 billion last year. That’s a massive increase. The fact that we may end up at $8.3 billion this year still reflects a pretty robust trend line for a mature lottery. That leads most of us to be confident that there is still lots of headroom for innovation to continue to enhance the player experience, bringing in new players and continuing to drive sales increases. Higher price-points have boosted sales over the last decade or more. Has that pathway to growth run its course? R. Mindell: The kinds of innovation in scratch tickets that have appealed to players extend far beyond high price tickets. Second-chance promotions and licensed properties have been around for years because players love these additions to the experience, and they continue to represent huge opportunities for change and innovation. As always, we need to deconstruct and drill down on the underlying motivations. For instance, some of the players who jumped on higher-priced tickets were not playing the lottery when tickets were only available at lower price points. The data clearly show that we brought new players in by launching a $100 ticket because that is what those players wanted. Granted, we likely lost some of those players who returned to casinos and sports betting. But the data also clearly shows that some of those newcomers continue to play lottery at the higher price-points. What does this mean? Should we be creating products with Continued on page 46 “Everything is changing in ways that represent incredible opportunities for all of us as we learn how to tap into them and make disruption work for us.”
17 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2024
18 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2024 The world may be changing at a dizzying pace, but Lottery’s relationship with retail remains essential to sales success, with around 90% of revenue coming through stores last year. But what challenges will that relationship face from new technology, business models, and competitive channels? And what actions can lotteries and vendors take to optimize partnerships with retail and go from strength to strength? Moderator Tom Seaver (Executive Director of the Colorado Lottery) led the discussion with a panel of experts from the lottery and vendor communities. Alongside Tom were panelists: • Jason Barrs, Senior Vice President Global Sales & Business Development, Carmanah Signs • Tonya Beenders, Chief Sales Officer, Missouri Lottery • Amy Drooker, Vice President Chief Revenue Officer, Kentucky Lottery • Michael Martin, Vice President Retail Solutions, Scientific Games • Terry Presta, Head of Business, North America, Abacus Lottery Solutions • Justin Rock, Deputy Director of Product & Sales, Florida Lottery Tom began by inviting the panel to highlight their key takeaways from the prior conference discussions about the relationship between retail and Lottery. “We keep talking about retail as if it’s one entity,” Michael Martin responded. And it’s just not. Retail has so many different facets, strategies, and components. Some stores are all about speed to keep creating space in the parking lot for the next customers. Others focus on being a destination, dwell time, and creating an in-store experience that will get people to stay. So, we have to approach retail flexibly; it’s not one size fits all, and we have to adjust and adapt accordingly.” Similarly, Tonya Beenders stressed the importance of understanding each retail partner to enable mutually beneficial collaborations. “We talk about KYC—know your customer—but it’s also essential to KYR—know your retailer. Every time we face a decision, we should put ourselves in the retailer’s shoes and think about what’s in it for them and how we can help them be more profitable.” Thinking about retail innovation, Terry Presta pointed out, “Innovation can be more than technology. It can be design or tactics. But often we still only have one lottery terminal and maybe one vending machine in a superstore. So, we’re losing sales at peak times or when there’s a big jackpot when lots of people want to buy tickets, but they haven’t got time to wait in line. And when you’ve lost that sale, it’s lost forever. So, let’s change the design so we’ve got Lottery everywhere.” Justin Rock also reflected on how some retailers are increasingly prioritizing vending machines. “It’s scary for us because we’re so used to doing business at the counter with customer service. But we’ve got to adapt because lots of retailers are looking for different ways to integrate Lottery into their stores.” P A N E L D I S C U S S I O N This article is based on a panel discussion held at the PGRI Smart-Tech Conference on March 13 in Fort Lauderdale, FL. You can view the video on PGRItalks.com. The Future of the in-store shopping experience L to R: Tom Seaver, Jason Barrs, Tonya Beenders, Amy Drooker, Michael Martin, Terry Presta, Justin Rock Continued on page 42 “Every time we face a decision, we should put ourselves in the retailer’s shoes and think about what’s in it for them and how we can help them be more profitable.”
Raise the Bar at Retail Build a communication platform at retail. Increase player satisfaction with the lottery purchase experience. Automate content with real time jackpots and featured games, proven to diversify purchase behavior. Join the lottery leaders using Carmanah’s digital signage to modernize retail and increase funds raised for beneficiaries.
20 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2024 A new slate of Board officers and Product Group chairs has stepped up to lead the Multi-State Lottery Association (MUSL) through its next strategic undertaking – the development and potential rollout of multiple new product offerings. It’s an aggressive product development schedule and one that MUSL has been sharing industry-wide to get lotteries and vendors united behind future product opportunities. • Sept. 2024 – Jackpot USA™ fast play game • Fall 2025 – NFL national game • Spring 2026 – National for Life game • Fall 2026 – potential Powerball® enhancement Leading the charge through this development Renaissance will be Board President Drew Svitko, executive director of the Pennsylvania Lottery. Svitko previously served as Chair of the Powerball Product Group for the past two years and was Chair of the Development Committee from 2019 – 2021. He was a driving force in the development of a third weekly Powerball drawing and the Double Play® add-on feature. “The national games category has seen exceptional growth in the past two to three years, and it underscores MUSL’s commitment to support member lotteries with new development initiatives,” said Svitko. “MUSL has established a bold product development timeline with exciting new offerings. Lottery stakeholders should buckle up. It’s going to be another year of ‘foot, gas, go.’” The pedal to the metal approach continues to gain momentum. For the second year in a row, MUSL has achieved a fiscal year sales record, with sales of products facilitated by the Association, including Mega Millions® sales by member lotteries, totaling $11.7 billion. The record year extended to Powerball®, Power Play® and Double Play®, which all produced record game sales in Fiscal Year 2024. The Powerball Product Group will have a new resource to aid future game development. MUSL just completed its first-ever comprehensive brand research on Powerball at the national, regional, and state levels. Matt Strawn, CEO of the Iowa Lottery, has taken the reins as Powerball Product Group Chair and is looking forward to utilizing the research findings. “The brand research is our gateway to further optimize the Powerball product, from jackpot marketing campaigns to the selection of future partners,” said Strawn. “As my colleagues and I look ahead to what’s next for Powerball, we have the ability to make informed decisions to ensure the game’s responsible growth, so that it continues to be a reliable source of funding for lottery beneficiaries well into the future.” Jackpot USA™ will be the first product launch on the new timeline. The fast play product is priced at $20 and offers a progressive jackpot that starts at $1 million. The game also offers a bonus game of key-symbol matching with prizes ranging from $10 to $50. The launch of the Jackpot USA fast play product is slated for late September. The much-anticipated NFL national product continues to progress, with both the NFL and MUSL working on the game concept and development. The collaboration has given MUSL direct access to the NFL fan base, including concept and insight studies. The final product concept for the NFL-themed game will be presented to the MUSL Board of Directors for approval this fall, with a scheduled launch in fall 2025. A new National for Life Product Group has been established at MUSL in the past year, which is led by Colorado Lottery Director Tom Seaver. The Product Group has already evaluated $2 and $5 game models, with a final decision expected soon. MUSL leaders have tentatively slated a spring 2025 launch date for the new National for Life game but depending on the progress of the NFL-themed game, MUSL leaders have a contingency to swap the two launch dates to keep the product rollouts progressing. “The MUSL Board of Directors has indicated a desire to execute strategies in a proactive manner” noted J. Bret Toyne, MUSL Executive Director. “MUSL has developed the FLEX game management system to support product rollouts, Powerball brand research has been completed, and we’re ready to assist lotteries in maximizing the national games category.” MUSL Board Officers President – Drew Svitko, Pennsylvania Vice President – Matt Strawn, Iowa Secretary – Rebecca Paul, Tennessee Past President – David Barden, New Mexico Product Groups Chairs Powerball® Chair – Matt Strawn, Iowa Powerball Vice Chair – Gwen Dean, New York M2G2 Chair – Mary Harville, Kentucky M2G2 Vice Chair – Mark Furcolo, Rhode Island Lotto America® Chair – Helene Keeley, Delaware Lotto America Vice Chair – Lance Gaebe, North Dakota 2by2® Chair – Brian Rockey, Nebraska 2by2 Vice Chair – Stephen Durrell, Kansas National for Life Chair – Tom Seaver, Colorado National for Life Vice Chair – James Carey, New Jersey MUSLNEWS MULTI -STATE LOTTERY ASSOCIATION MUSL DEBUTS BOLD PRODUCT DEVELOPMENT TIMELINE
Abacus the lottery innovators at retail Putting lottery everywhere. In-lane Self-Checkout Mobile e-commerce Contact the Abacus team for more information: info@abacuslottery.com
22 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2024 For almost the whole history of the Lottery in the US, retail has been the place “where the rubber meets the road”, the face of lottery to the consumer where all the behind-thescenes planning, marketing strategies, and product development culminate with ticket sales to customers. Recent years have seen the supremacy of stores challenged by new online options. The rapid growth of eCommerce is undeniable. But retail is evolving and will continue to be the dominant channel and consumer touchpoint for Brand Lottery. Retail has been innovating to meet the needs of the modern consumer, and is challenging lotteries to do the same and make the most of this win-win relationship in the future. Introducing this panel discussion on retail optimization, moderator Eric Grubbs, Deputy Executive Director, Sales, of the Pennsylvania Lottery, posed the question, “How are retail processes, operations, and expectations changing, and how will Team Lottery need to evolve its methods to keep up?” Welcoming the opportunity to get “unvarnished guidance” straight from senior executives who manage the lottery category for two major multistate retailers, Eric introduced the panelists: Jarrod Cummins is the Director Commercial Business Lines and Digital Solutions for Kroger Personal Finance. The Kroger Company operates 2,723 Supermarket Stores across thirty-five states and the District of Columbia. Nick Murtagh is the Category Analyst Lottery for Sheetz across three of the six states in which it operates convenience stores (Maryland, North Carolina, and Pennsylvania). Eric began by inviting the panelists to comment on Lottery’s role in the retail business model and what Team Lottery does well now. Jarrod highlighted how Lottery has become an increasingly important part of Kroger’s business in recent years. “Lottery is a trip driver, it draws in a wide range of customers who engage with it, which in turn supports our core business.” P A N E L D I S C U S S I O N This article is based on a panel discussion held at the PGRI Smart-Tech Conference on March 13 in Fort Lauderdale, FL. You can view the video on PGRItalks.com. Insights from Retail Executives on how Brand Lottery can optimize long-term success at Retail L to R: Eric Grubbs, Jarrod Cummins, Nick Murtagh “If you’re looking to develop unique omnichannel marketing strategies for your customers, I recommend trying to leverage the expertise of some of your key retailers.” Continued on page 46
Scienti cGames.com © 2024 Scienti c Games. All rights reserved. Science Inside THIS IS THE No other lottery technology partner has more worldwide conversion experience or success. Since 2017, lotteries have trusted Scienti c Games to complete 24 systems conversions – including 10 from legacy suppliers – with two more underway. Our expertise and collaborative approach ensure a seamless transition for lotteries, retailers and players. It’s what makes Scienti c Games the industry’s trusted choice for lottery systems. Systems Conversions Since 2017
Community service has always been a core value for McHugh. The Boston-area son of Irish immigrants found his off-the-beaten-path way to the industry after a service-focused start as a volunteer leader for community youth programs in college, coaching high school track and field, and then working in law enforcement. By luck, Pat met a former director of the Massachusetts Lottery who encouraged him to take an entry-level job with a lottery tech provider. It would be a turning point in his life. Logging around-the-clock hours traveling the globe, Pat learned everything he could about lottery systems and operations in project management, leading teams on some of the industry’s largest lottery start-ups and conversions. He joined Scientific Games in 2004 and following a series of promotions over the years – including running the company’s U.S., then global, systems business – Pat was named Lottery Group CEO in 2018. Throughout his career, his core focus has remained on the industry’s beneficiary funding mission and leading high-performing teams to achieve together. Under his leadership team, Scientific Games successfully navigated challenges brought about by the COVID-19 pandemic and emerged stronger. In 2022, following the most financially successful year in its history, the Scientific Games Lottery Group was sold to Brookfield Business Partners, one of the world’s most successful investment companies. Pat and his team led the company through the process, steering the ship for the now independent and 100% lottery-focused Scientific Games. After standing up a new organization with all the right people, parts and pieces needed to keep the company and its customers running smoothly, he’s leading change and evolving culture for Scientific Games’ more than 3,000 employees worldwide while achieving record revenues for the company with major wins globally across all retail and digital business lines. Two years into the company’s transition, Pat continues to drive growth and help sustain the global lottery industry, through innovation and customer service excellence. Pat McHugh epitomizes the commitment to innovation, integrity and performance that makes Scientific Games a leader in helping lotteries maximize good-cause funding for their beneficiaries.
Pat McHugh: Scientific Games is a rapidly growing company in a continuously evolving industry. Over the last two years, we’ve hired hundreds of new employees to keep pace with our growth, including some executive-level positions to support our customers as we scale the business. Our people are what makes us unique, and I am grateful every day for the support our team gives our customers. We have a lot of employees with 20 and 30 years of experience, and several have been planning their retirements. This allowed us to make minor realignments to improve service by giving new opportunities to other experienced leaders within our organization, and a few newly hired executives joined our team. We’ve been deliberate in promoting strong leaders from within and bringing in new talent to increase bench strength and transfer knowledge. I’m incredibly grateful for several of our leaders who agreed to extend retirements to see us through our transition seamlessly. As a result, we’re stronger than ever to support our customers into the future. Mike Cardell’s appointment to Senior VPof Americas Systems is anexample of our continued investments in people and products to strengthen our systems and software delivery. Mike is an accomplished business technology leader with more than 17 years of experience. Coming to us from global fintech and payments company, Fiserv, where he most recently served as VP and General Manager of Next Gen Solutions: Signature and Cloud Solutions. As the industry’s fastest-growing systems provider, Mike is a perfect fit as we evolve our systems business beyond transaction processing into strategic technology-based products and services. Mike has a proven track record in innovating technology-based products and services, including enterprise and consumer-facing applications, transaction processing platforms, large-scale IT conversions, strategic growth and impactful results. We have also made some realignments to increase our focus around the two different aspects of marketing: marketing Scientific Games’ products to the industry and supporting our customers in how they market their products to consumers. This included aligning our analytics and lottery portfolio marketing support directing into our customer-facing teams. An exciting part of this was Beth Bresnahan’s promotion to Chief Communications and Brand Officer and member of our Executive Leadership Team. Beth has served as our VP of Strategic Communications since March 2022. This promotion came as no surprise to those who know and have worked with Beth. Her strategic vision, extensive experience in brand communications and deep knowledge of the lottery industry have earned her the respect and support of her colleagues. Before joining Scientific Games, she spent nearly 10 years in leadership roles at the Massachusetts Lottery, including serving as its executive director, as well as heading the District of Columbia’s Office of Lottery & Gaming. Beth has integrated our internal and external communications, advertising, media, customer proposals and industry trade support, creating a clear focus on Scientific Games’ message to the industry about our products and who we are today. We also just announced that Amy Steinman has been named Chief Human Resources Officer and a new member of our Executive Leadership Team. Before joining us, Amy had a 25-year career with Koch Industries serving as the organization's executive responsible for integrating enterprise software, overseeing organizational design, developing talent and building a values-based, collaborative global culture. She brings substantial knowledge spanning cultural development, change management, compliance, operations, HRIS systems, manufacturing, compensation, benefits and recruiting. The breadth of her knowledge will be instrumental in the ongoing success of our people, culture and business worldwide. And as I shared, a number of our business leaders were promoted within their groups and their teams were realigned to better serve our customers. So, we are very excited about what’s happening across the organization. Q: Scientific Games recently announced several executive promotions and new leaders joining the company. What do these changes mean for the company’s future?
www.publicgaming.comRkJQdWJsaXNoZXIy NTg4MTM=