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.”
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