Public Gaming March/April 2024 MARCH/APRIL 2024 LEADING WITH GRATITUDE MATT STRAWN Chief Executive Officer, Iowa Lottery ALSO INCLUDING INTERVIEWS WITH … ; Jay Gendron Chief Operating Officer Global Lottery, IGT ; Stephanie Weyant Deputy Executive Director Marketing & Products, Pennsylvania Lottery ; And Corporate Profiles of the Leaders of the Global Lottery Industry

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4 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2024 Publisher & Chief Executive Officer Paul Jason President Susan Jason 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 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: March/April 2024 Volume 53, Issue 2 ©2023 all rights reserved. Public Gaming Research Institute cISSN: 1042-1912 10 LEADING WITH GRATITUDE Matt Strawn, Chief Executive Officer, Iowa Lottery 14 UNLOCKING THE POWER OF THE PLAYER-CENTRIC APPROACH Stephanie Weyant Deputy Executive Director, Marketing & Products, Pennsylvania Lottery 30 A GLOBAL VIEW ON LOTTERY GROWTH OPPORTUNITIES Jay Gendron, IGT Chief Operating Officer Global Lottery 24 2024 RETAIL OPPORTUNITES RESPONDING TO TRENDS AND ENSURING RELEVANCE WITH LOTTERY RETAILERS Scientific Games 28 THE TENNESSEE EDUCATION LOTTERY CORPORATION CELEBRATES 20 YEARS OF WINNING FOR EDUCATION—AND SO MUCH MORE CONTENTS M A R C H / A P R I L 2 0 2 4 10 14 30 F E AT U R E D I N T E R V I E WS F E AT U R E D A R T I C L E S 28 Best-in-Class Platform Award-Winning eInstant Games Data-Driven Managed Services Best Omnichannel Solutions Unleash Your True iLottery Potential

6 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2024 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. 34 FIVE FUTURE-FORWARD TRENDS DRIVING LOTTERY GROWTH Global Consumer Trends analyses from IGT and Foresight Factory 40 LONDON CALLING: GREETINGS FROM THE 2024 MARKETING SEMINAR From Bricks to Clicks and Back in Totalizator Sportowy’s Omnichannel Mastery Ewa Ulicz, Marketing and Product Development Director, IGT Sebastian Meitz, iLottery Account Development Director, IGT 43 HELPING LOTTERIES GLOBALLY GENERATE REVENUE AND THRIVE, Q & A WITH Karri Paavilainen, Vice President iLottery Products and Services, IGT F E AT U R E D A R T I C L E S C O N T . A Special Report Screen Time SHAMRCK RAINBOW LADYBUG CHRRIES CHRRIES SEVEN HORSHOE HORSHOE DICE Future Forward Trends Driving Lottery Growth A Special Report 8 FROM THE PUBLISHER Paul Jason 18 2024 NASCAR POWERBALL PLAYOFF LAUNCHES DURING DAYTONA 500 MUSL NEWS (Multi-State Lottery Association) 20 EXAMINING THE GAME PLAYING AND SOCIAL TRENDS OF AMERICANS: Simon Jaworski, Founder & CEO, Lotto Research 44 PHOTO COLLAGE: Scenes from the North American Association of State & Provincial Lotteries (NASPL) Conference in Milwaukee, WI 48 SPOTLIGHT ON THE LEADERS OF THE GOVERNMENT-GAMING INDUSTRY 57 PULSE OF THE INDUSTRY: Synopsis of recent gaming industry news D E PA R T M E N T S 43 34 18 48 20

8 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2024 From the Publisher 2024 began with the event we have attended for 15 years now: the EL/WLA Marketing Seminar in early February. Always a great event and this year better than ever with a theme “The Future of Digital Marketing”. The presentations were all about what is happening right now, how the race to the future is already well into its fifth or tenth lap and the case studies for its impacts are being shared now. Digital Marketing and AI are being applied right now to transform the way consumer-facing brands connect with their customers, the way promotions and advertising strategy as well as the content itself is created, and is penetrating every aspect of the way business is conducted and value is added. There is also the largest games-of-chance trade show in the world held during the same week: ICE Totally Gaming. Having been in London for the past 15 years, both ICE and the WLA/EL Marketing Seminar are moving to Barcelona next year, end of January in 2025. See page 58 for a brief write-up on the EL/WLA Marketing Seminar, and look for articles on some of the most impactful presentations to appear in our next issue, which ties in with EL Industry Days Salzburg being held in June. Susan and I hope to see you all there! For those of you who are reading this issue in Fort Lauderdale on March 12, 13, or 14, Welcome to PGRI Smart-Tech! Thank you for being here and best wishes for having a wonderful conference experience. What a uniquely fun and fascinating set of interviews we are featuring this month. Matt Strawn shares a personal journey that has reshaped his views on leadership and what it means to connect with people as we move into the middle of the 21st century. I’m not sure which came first – my request to Matt for an interview or my request to lead a session on Leading with Gratitude at our Florida conference. Ditto with our Stephanie Weyant interview. A discussion in London about our conference theme The Player Journey Runs Through Digital Lottery led to both a wonderful interview that dives into the most forwardleaning issues and opportunities we are facing, and also a session that focuses on this topic at our conference. Thank you, Matt and Stephanie for sharing, and for the thoughtful vision for how the world is truly changing for the better in this post-pandemic era. IGT has multiple features in this issue. They all reflect the positive, optimistic vision expressed by Matt and Stephanie. We so appreciate the research into consumer trends and insights from the Foresight Factory that IGT shares with our readers periodically. And Jay Gendron gives us the “heard-on-thestreet” insights of someone who knows first-hand why we should be optimistic about the future of lottery. We all know that many of the issues we face are universal. The importance of RG, the role of lottery as service to society and good causes, the need to compete in a more crowded games-of-chance market-place, changing consumer lifestyles and shopping behavior and playing preferences, etc. Jay’s global perspective helps us better see the inter-relatedness of things, how we can learn from the way trends and market dynamics are evolving in other parts of the world. We all know there are differences between markets, regulatory and political environments, legacy gaming cultures and player behavior, etc. How much more productive, though, to look at and learn from the commonalities shared by operators all over the world. The value and insights of Scientific Games editorials is based on their global footprint, hands-on engagement with all aspects of lottery distribution, retailing, game development, marketing, promotion - and their 50 years of experience. Congratulations for your Silver Anniversary. Let’s Celebrate! Their article this month explains how retailing trends provide lots of headroom for Team Lottery to improve sales by maintaining relevance at retail as well as increasing access and purchasing options for the consumer. Other great features include Tennessee Education Lottery’s celebration of 20 years of service to public education, to the people of Tennessee, and to continual sales increases that fund the good causes supported by Lottery. What a wonderful follow-up article to the amazing MUSL collaboration with NASCAR. And what a unique thrill it is for fans to get right into the middle of the action of their favorite sport. And what a thrill it is for Team Lottery to leverage the value of its lottery brands to connect with the huge audiences that affiliate with uber-consumer-brands like NASCAR. And thank you to Simon Jaworski for launching a new PGRI column on consumer research and trends, and applying these insights to gamesof-chance and lottery. Simon has contributed many fabulous articles over the years and we welcome this new addition to appear in every issue. He converts speculation and geuesswork into evidence-and-survey-based data about how and why player behavior is evolving the way it is. Best wishes going forward for a fabulous 2024! Paul Jason, Publisher Public Gaming International Magazine

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10 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2024 Leading with Gratitude Matt Strawn Chief Executive Officer, Iowa Lottery PGRI INTERVIEWS PGRI INTRODUCTION: There’s good news and there’s great news. The good news is the Iowa Lottery is continuing its winning streak, piling further increases in sales on top of the high benchmarks set by its record-breaking FY 2023 which closed June 30. Iowa Lottery sales increased to $481.5 million, an 11.3 percent rise from the previous year's total of $432.7 million. Lottery proceeds to good causes increased to $108.2 million, up 10.5 percent from the previous year. The great news is that Matt Strawn is more energized than ever. Diagnosed with cancer in January 2023, Matt underwent intensive treatment and is now happy to have a new lease on life. Recent tests reveal the cancer to be in complete remission. These are exciting times for Matt, for the industry which benefits from his service, and for his family and many friends who are thankful for the grace of God and for Matt’s fortitude in the face of adversity. Matt Strawn is an Iowa native, business entrepreneur, and lawyer whose career in public service and private enterprise includes serving as a senior congressional advisor, leading a minor league professional sports franchise that he helped bring to Des Moines, and co-founding a highly successful public affairs firm. Matt has served as the chief executive officer of the Iowa Lottery since 2019, is on the executive committee of MUSL (Multi-State Lottery Association), and chairs the MUSL Audit Committee. Onward and upward to converting life experiences and adversity into insight. One of the most popular Harvard Business Review features of 2023 adds a new audience to the traditional “B2C” (business to consumer) and “B2B” (business to business) models. That’s “B2H”: business to humans. It’s all about connecting with people and inspiring them to action. The B2H approach breaks down silos and the distinctions between internal and external messaging to tap into the universal principles that motivate all of us to care. That’s what drives performance and results. And that’s what Matt’s story is about. Paul Jason: Let’s start with the great news that the cancer you were diagnosed with last year is in complete remission. How has that whole experience reshaped your attitude toward life? Matt Strawn: My story starts with gratitude, quite frankly. You won’t find a more grateful guy walking the streets of Des Moines, Iowa. I’m grateful to be cancer-free and my amazing medical team for guiding me through this journey. But I couldn’t do it alone. I’m grateful for my deeply-supportive family and friends. Outside of those close networks, I’m thankful for Governor Reynolds, my team at the Iowa Lottery, and the Department of Revenue who gave me the professional flexibility and personal support to overcome this disease. One of the most overwhelming sources of support came from the lottery community, to include close friends in the industry, fellow directors, and individuals I’d barely or never met before. It’s a testament to the character and empathy of the people in our industry. It’s wonderful to hear about that support. And I believe you’re also grateful for the impact that your decision to go public with your diagnosis has had?

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12 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2024 Continued on page 33 M. Strawn: Absolutely, and I respect that anyone in this situation has to make the best decision for themselves and their family. My family and I decided to be open about my diagnosis because it has raised awareness about the importance of getting screenings. Like I told my team and I’ll tell anyone reading this, if you’re over age 45, please get your health screenings scheduled now. You mention discussing your diagnosis with your team. Have those experiences impacted how you think about leadership? M. Strawn: Being transparent about my diagnosis reinforced an important component about leadership: It’s okay to be human and show vulnerability. Actually, its more than okay, it’s transformative. By showing that vulnerability, I connected on a different, deeper level with my team. And that connectivity is something everyone craves; people want to be seen and feel that they matter. The whole experience made me realize gratitude was the thread that had really defined my leadership philosophy at the Lottery, which brought me to the whole idea of “leading with gratitude.” I’m fascinated by that idea. Could you share more about how you put it into practice? M. Strawn: Well, let me start with an example from the Iowa Lottery December board meeting. The meeting always starts with my CEO report, which is normally operationally driven. But last December, days after returning from my medical absence, I started by sharing a message from an Iowa Lottery player whose child had a terminal disorder. She had won an experiential prize and was writing to express her deep gratitude for an experience that otherwise would have been unavailable to her and her spouse. Sharing and prioritizing messages like that sets a tone of gratefulness and reminds us that what we do every day at the Lottery has a major impact on people’s lives. I shared that message at a public board meeting because I want to infuse this concept of leading with gratitude throughout our entire organization by creating a sense of connection and appreciation. That story makes me think of Simon Sinek’s “find your why.” Does that idea resonate with you? M. Strawn: Yes, I’m a big believer in knowing your why in terms of understanding what motivates you as a leader. But it’s equally important to clearly communicate that why so it acts as your organization’s North Star. When I hosted my first big annual team meeting, I held it away from Lottery HQ and at a venue in the shadow of Iowa’s golden dome State Capitol. This was intentional, as I wanted every Lottery colleague to see that dome as they arrived at the meeting. I did that because that dome is a reminder and a symbol the why: We do what we do to serve the people of Iowa. Now, five years later, my team knows by heart my refrain from that morning: “We are not a lottery, we are not the lottery, we are the Iowa Lottery.” The Iowa modifier matters because it drives why we conduct ourselves with operational integrity and why we work to maximize revenue for the multiple great causes that the Lottery supports. And what’s the connection between finding your why, communicating that why, and leading with gratitude? M. Strawn: It reminds me of Theodore Roosevelt’s line, “Voters don’t care what you know until they know that you care.” That same principle applies to leading an organization. Knowing and communicating your why starts to demonstrate you care, but it’s not the whole journey. Leading with gratitude is a more actionable extension of Sinek’s principles because once you’ve communicated your why, the logical next step is to communicate the how. That’s where leading with gratitude comes in. It’s about appreciating your people, your mission, your stakeholders, and the opportunity to serve. And how can you put those things into practice? M. Strawn: First, you’ve got to make sure everybody gets a turn at bat, which means everyone has a voice in the conversation. That doesn’t mean that everyone gets everything they want, but it does mean they have an opportunity for input, are invested in the process and have a stake in the outcome. In Iowa, we have been very intentional about broadening the voices around the table by bringing people in at the earliest stages of our business planning processes. That also makes us much more efficient in our decision-making — no Iowa Lottery projects get blown up on the last mile because a colleague wasn’t kept in the loop. We’ve extended this philosophy to our supplier and marketing partner relationships. We don’t view them as merely providing a commodity or service, but rather as an integrated partner. Our gratitude-based approach is that we appreciate their contributions to our shared success and include them where appropriate in our business planning meetings. It seems like gratitude creates operational benefits by involving a wider circle of expertise. Can it also help navigate the tensions potentially associated with giving more people a say? M. Strawn: Yes, gratitude helps to lower the silos and lessen the turf wars. It stops people putting their arms around their territory in efforts to keep others out. In our philosophy, everybody has an opportunity to contribute. Leading with gratitude also diffuses tension with our retail partners. The Iowa Lottery is successful because of our strong relationships with 2,500 retail licensees. Get any grouping of that size, and you know there is also potential for disputes over issues including sales commission levels, bonus structures, and merchandizing space. Now, take the approach of leading with gratitude. We first show respect to our retail partners. Our senior leaders attend It’s about appreciating your people, your mission, your stakeholders, and the opportunity to serve.


14 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2024 THE MORE COMPLEX THINGS BECOME, THE MORE VITAL IT IS TO FOCUS ON THE PLAYER Stephanie Weyant Deputy Executive Director, Marketing & Products, Pennsylvania Lottery PGRI INTERVIEWS Paul Jason: You are best known for your leadership role in the development of iLottery. But you are also responsible for marketing and product development for traditional lottery, and for all channels of distribution. Can you tell us a little about how you’ve balanced those different aspects of your role? Stephanie Weyant: My team has grown and works on all aspects of lottery, both retail and online, from the games to marketing, research and digital. That integrated approach reflects the reality that you won’t hear customers talk about traditional lottery versus online lottery - they just play the lottery. Our goal is to create a seamless, friction-free player journey that respects the players’ point of view. That collaborative approach has really helped to break down the silos that can separate organizational departments. I guess lotteries with separate iLottery divisions would argue that approach enables this new initiative to flourish without being constrained by the legacy ideas of traditional lottery? S. Weyant: Each model has pros and cons, and what works best for a given lottery depends on factors such as their starting point, culture, structure, and the flexibility they have with hiring new staff. The integrated model works best for us. Also, we did not have much choice, as our launch schedule for iLottery was so tight that we didn’t have time to hire staff and create a new division. We launched with our existing team, who was excited that Lottery finally got approval to sell online. We drew upon the expertise of our vendor partners Scientific Games, IWG and experienced colleagues, such as the Michigan Lottery. Integration enables us to look at our product and marketing plans holistically and we can easily do cross-product-line launches and cross-promotions between retail and online. Our goal is to be one Pennsylvania Lottery and not be siloed between traditional and online because our players expect everything to be integrated and seamless. PGRI INTRODUCTION: Stephanie has served the Commonwealth of Pennsylvania for 24 years in various communications and marketing roles. She was previously the spokesperson for PA Lottery and its first deputy director of digital marketing. She served in the PA legislature as the communications director of the House Appropriations Committee, before returning to Lottery in 2016 as deputy executive director. Stephanie was the executive lead on the successful launch of Pennsylvania’s iLottery program in 2018. Stephanie’s perspective on digital lottery and iLottery is informed by this much broader charter to integrate all aspects of the business to coalesce around the player. Stephanie holds a degree in communications from Pennsylvania State University.

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16 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2024 Continued on page 38 Until recently, the players of different games seemed to stay in their own lanes: lottery players didn’t typically go to casinos and vice versa. But now casinos are so accessible everywhere, and sports betting has introduced a new category, so should we think of ourselves as competing head-to-head with other gambling options? S. Weyant: Lotteries generally have a broader player base than other forms of gambling. Most people have played the lottery at one time or another because it’s easy, fun, and offers a wide range of games. And when the jackpots get big, they bring in infrequent players who don’t normally play the lottery. The big jackpots drive the whole FOMO (fear of missing out) syndrome, resulting in a very broad player base and an almost universal awareness of lottery. That’s very powerful, and I don’t think that necessarily applies to other forms of gambling – except maybe betting on the Super Bowl. To address your real question, though, I think lotteries should look for opportunities to collaborate. Pennsylvania law requires casinos to be lottery retailers, and they have turned out to be some of our best retailers. For example, one casino buys Scratch-Off tickets to give to their loyalty club members as rewards. I think there is huge potential to build mutually beneficial bridges with other gaming categories, even in the online space. We used to say “multi-channel.” Now we say “omni-channel.” Is there a difference beyond just the number of channels? S. Weyant: I think there is a difference. When you start with the customer at the center, you break down the organizational silos that obstruct the genuine connection we want with our players. Maybe we should call it “omnipresent” as the goal is to shape our presence to align with how the customer thinks, behaves, and wants to engage with the lottery. Omni-channel does mean making products available where and when the customer wants to engage. But it is also a mission to think like our customers so that their perspectives drive everything we do. Can you give us some examples of how starting from the players’ perspective is creating a seamless experience for your customers in Pennsylvania? S. Weyant: Currently, although we sell Powerball® online, our Second-Chance Drawings are only for people who played at retail. But from the player’s perspective, it shouldn’t matter if you buy your Powerball ticket at retail or online, you should be able to enter that ticket into the same Second-Chance Drawing. We are working to enable all Powerball tickets, wherever they are purchased, to be entered into the same Second-Chance Drawing. Another innovation we expect to launch in Q4 is the Lottery Wallet, which will offer mobile cashing of retail tickets and be fully connected with iLottery, further improving player convenience. Are you also trying to create familiar images, protocols, or processes across different consumer-facing media like self-service terminals, point-of-sale displays, Mobile and desktop lottery interfaces to generate familiarity and make playing easier? S. Weyant: Yes, that’s partly why we do so many cross-product line game launches. We’ll take a licensed property or a theme and run it across different product lines to spread familiarity and recognition. When we launch a licensed property, players will see it at retail with bonus codes to try the online version. So, cross-promotions and the retail game-playing experience gives the player a reason to try the online experience? S. Weyant: Exactly. A goal of our marketing strategy is to take people from online to retail, retail to online, and back again because data shows that omnichannel players are more engaged, loyal, and valuable than players that just shop at retail or just online. Data also shows that, on average, retail sales accelerate faster in states that have iLottery than in states that don’t. That may seem counter-intuitive, but enabling players to engage with lottery wherever and whenever they want improves their experience and ends up benefiting everyone, including land-based retailers. Why do you think that is? S. Weyant: I think when you have a new online player, they’ve probably walked past the lottery signs and displays in retail stores for years without really noticing them. But after they’ve bought online, they’re more likely to notice the lottery displays whenever they’re in the store, making them more likely to buy a ticket there too. And we’ve used some simple strategies to help strengthen the connections between playing online and spending at retail, like having online coupons that can be redeemed in stores, and they have the highest redemption rates of all of our coupons. And the great thing about couponing is we know where those coupons are redeemed. So, we can provide our sales team and retailers with information to say, “Here are how many online players we drove into your store.” Pennsylvania is probably the US’s most competitive gambling markets, but despite that, you keep growing. What does that growth say about the potential for different forms of gaming to coexist? S. Weyant: We operate in a market saturated with gambling options. There are 21 online operators in Pennsylvania, that offer higher payouts than the Lottery, which affects our per capita performance numbers. Our market share of online gambling in Pennsylvania is only 1.4%, but we generate 8% of the net revenues that are turned over to the Commonwealth. So, we are overperforming in profit. And we do keep growing, in double-digits this year, despite the everincreasing competition. So, when people ask me whether iLottery can co-exist with online gaming, the answer is “absolutely.” Since inception, iLottery in Pennsylvania alone has generated $400 million in profit to support senior programs. Our goal is to create a seamless, friction-free player journey that respects the players’ point of view.

18 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2024 Powerball® has jumped back into the fast lane with NASCAR®. For the second racing season, Powerball will captivate audiences as the Official Lottery Game of NASCAR. The partnership between the super brands, first announced last year, has already spurred an entertainment synergy and the successful rollout of a new national Powerball promotion in 2023 called the NASCAR Powerball Playoff. Back for its second installment this year, the NASCAR Powerball Playoff will, again, culminate with four lottery players winning a VIP trip for two to NASCAR Championship Weekend™ in Phoenix, Nov. 8-10, and a 1 in 4 chance to win $1 million during a drawing televised live from the NASCAR Cup Series Championship Race™ on Sunday, Nov. 10. The Powerball promotion launched nationally this past February, with the premiere of a new 30-second commercial during the NASCAR Cup Series DAYTONA 500 on FOX. The new TV spot showcases the exhilaration and emotion that unfolded at last year’s NASCAR Championship Weekend™, when Stephanie Walker, of West Point, MS, was declared the promotion’s $1 million winner during a drawing held in Victory Lane. “This year, we’re able to utilize footage taken of our players from the first NASCAR Championship Weekend and the $1 million drawing in Victory Lane to showcase the raw emotions and reactions of the players involved. This valuable footage also allowed us to reignite this promotion,” said Drew Svitko, Powerball Product Group Chair and Pennsylvania Lottery Executive Director. “We’re excited to offer our players this once-in-a-lifetime opportunity to experience NASCAR Championship Weekend first-hand, in addition to the chance of becoming a millionaire on the spot!” Twenty-five lotteries will participate in this year’s promotion, with the Idaho Lottery and Maryland Lottery joining the lineup for the first time. The Powerball promotion will begin at the state level with lotteries activating in-state contests and second-chance drawings throughout the spring and summer to form a national pool of entrants. At the end of the NASCAR regular season, 16 semi-finalists will be drawn from the national pool to advance to the Powerball Playoff drawings, beginning in September. The Powerball Playoff drawings are a series of elimination drawings that mirror the elimination rounds of the NASCAR Playoffs™. As the playoff field of drivers is reduced, Powerball will reduce its playoff field MUSLNEWS MULTI -STATE LOTTERY ASSOCIATION $1 million drawing at 2023 NASCAR Championship Weekend 2024 NASCAR POWERBALL PLAYOFF LAUNCHES DURING DAYTONA 500 Continued on page 42

19 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2024 Abacus the lottery innovators at retail Putting lottery everywhere. In-lane Self-Checkout Mobile e-commerce Contact the Abacus team for more information:

20 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2024 35% of 18-34 year old Americans have never bought a Powerball ticket. That’s even with a $2bn Powerball jackpot less than 16 months ago. Yet more than 50% of the same age group has placed at least one bet on sports in their lifetime. In fact, past year sports betting among the youngest age group is now at 37%, just 3% points behind their annual play of Mega Millions. This is just one of the major trends happening within the 47 Lottery jurisdictions in the United States of America right now of which the data is based. TikTokToe. The future players have very strong App-etites. If you think these 18-34 year-olds are too busy watching YouTube videos and Instagram Reels…then you would be correct. Instagram is now this youngest group’s second most popular social media app, with more than 72% using it frequently, closely behind the 76% using YouTube. According to my teenage boys Ethan and Ashton, Insta “Reels” is where it’s at. TikTok comes in a strong 4th place at just short of three out of five youngsters in the Millennial/Gen Z crossover age group, a little behind Facebook still at 67% (which is still where a majority of 35-54 year-olds spend their time). However, the endless time spent staring at their devices doesn’t preclude the 18-34 year-olds from actively gaming on their iPhones and Androids. Au contraire, 32% claim to have played some type of Lottery game online since early 2023, whilst 31% has gambled online (with Casino style game) in the past year, significantly higher than the 35-54 year old age group (who are still at impressive 29%). Fantasy sports still remain prominent in the portfolios of the younger gamer, with almost a third having played in at least one league annually, whether it be Fantasy Football, Baseball or even Basketball (and a note to you dear reader, I play them all!). Not everyone has Very Little Tolerance for those ‘games of skill’ This is not to say that other forms of gaming and gambling that entail the player actually leaving their house, bedroom or even basement, aren’t thriving. 13% of Americans have played standalone Video Lottery Terminals (VLTs) in the past year, while 18% claim to have played a Video terminal/Skill machine, which are one of the many banes of existence for the Lottery industry. Both these skew slightly younger, but 24% of that all important 35-54 year-old age group has also chanced their arm at the “skill” machines. Casino visits are also getting back close to pre-COVID levels, which saw past year visits as low as in the early 20% range in 2021, and are now above 38%, driven primarily by both 35-54 year olds (44%) and the Hispanic population (46%). Eyes down for a full house in the Bingo renaissance. The biggest discrepancy in terms of the gender breakouts is the 37% of women who have played Bingo in the past year, significantly higher (some 9% points) than their male counterparts. Contrary to the Bingo in what my mother would classify as “the good old days”, Bingo has become a young person’s game, with almost half of all 18-34 Americans to have played some form of it in the past year. Bingo is also a fond past time of African Americans (41%) and EXAMINING THE GAME PLAYING AND SOCIAL TRENDS OF AMERICANS Simon Jaworski, Founder & CEO, Lotto Research

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22 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2024 Hispanics (46%). Cheektowaga, New York, with one bingo hall for every 6,800 residents, is believed to have the highest concentration of bingo halls in the United States, but with a proliferation of online Bingo derivatives, plus the likes of Keno and Quick Draw (Bingo in disguise), the popularity of the fast paced numbers draw game seems only likely to increase. And if you aren’t aware of the British bingo phenomenon of calling out catchy phrases with the Bingo numbers, we’ll leave “Two fat ladies, 88”, “Kelly’s eye, number 1” and “Two little ducks, 22” for a conversation over a nice pot of tea, or a pint of Boddingtons, at the next PGRI conference in Fort Lauderdale. Instants, scratching that itch every week. Weekly scratch play still leads the gaming industry with 18% of Americans having bought in the past week, driven by 35-54 year-olds (21%), and even split between male and female players (both just over 18%), and even those 55+ are still heavily involved at a 16% purchase clip. Insert somewhere around here Image_Jaworski_Article_3 Monthly spend on scratch is around $35 a month, although the youngest group (18-34 year-olds) spend the highest average amount among the demographic breaks at $63, almost double the average level. Hey big spenders… Casino play has the highest average spend of all the regular gambling types in the USA, and it is driven by the oldest age group (averaging $200 a month), and the Asian/Pacific Islanders at $246 per month. It also skews higher income with those earning more than $100k per year spending just over $204 on their trips to play craps and roulette. Mega Millions and Powerball spend averages around $33-$34 dollars per month, definitely on the lower end, but this accounts for a lot of the older crowd who are spending around $22 per game (so basically with 8 Mega draws a month, and 12 Powerball draws, somewhere around the minimum $2 per play per draw). Meanwhile, at the higher end, both Online Gambling and Sports Betting average more than $90 per month per player, driven by younger players and also Asians. Stream a little stream of you 57% of Americans now stream their televisual entertainment in 2024, with Cable usage now down to 39% and declining. Netflix is still the market leader in terms of streaming services at 64% (79% among 18-34 year olds), with Amazon Prime at 59% and Hulu at 46% (Hulu again skews younger with 64% of 18-34 year olds subscribing). So what does this all mean? Americans are spending more time on their smart phones (4 ½ hours every single day on average) than ever, screen time is paramount and it is only going to increase, so the fight for their time and money is well and truly on. Incidentally, the Florida Lottery has 110,000 Instagram followers… #lotteryleader Trust me, I’m a researcher. n Simon Jaworski, Founder & CEO, Lotto Research (609) 558-1019


It’s no secret in our industry that the lottery category lags behind other consumer products when it comes to how games are accessed and purchased at retail. Despite $348 billion in annual retail sales globally, conversations at industry conferences seem stuck on replay. Every year, the same challenges are rehashed on panels, commiserated during coffee breaks and debated at after-hours gatherings. Meanwhile, time ticks by with minimal movement on adapting to consumer trends which are racing forward faster than ever. With the bulk of lottery revenue currently generated at retail, what’s really happening out there? Are lotteries and their partners working with current retailers in ways that will keep their products relevant in changing retail environments, the new generation of consumers – and the next generation of players? Are they growing consumer touchpoints by onboarding non-traditional retailers? But there’s an elephant in the room…most government lotteries are unable to invest significantly in the technology needed to modernize their business. More than ever, their technology partner’s ability to support rapid and cost-effective migration to new retail technologies is the difference between good performance and great performance. And that adds up to multi-millions of dollars. While the holiday season was still strong despite the economy and low but slowly rising consumer confidence, it’s important for lotteries to identify and focus on retail opportunities in 2024. To do this means getting inside the minds of the retail community to understand the trends they see on their horizon and align lottery efforts for maximum results. The National Retail Federation predicts that the average U.S. store size will continue to shrink. With shoppers’ waning attraction to mega-sized stores, smaller-footprint stores will continue trending, putting counter and display space at an even greater premium. New and redesigned stores are playing a significant role in optimizing the customer experience. And shopper expectations are high. Retailers are balancing the in-store experience with the transaction, which translates to purchases and loyalty. Convenience stores are redesigning and re-engineering how and where merchandise is displayed – including lottery scratch games. With retailers welcoming more technology into their stores, new tech-driven layouts are designed to offer convenience and a seamless path to purchase. “Both retailers and players require real-time information to achieve that frictionless shopping experience,” said Michael Martin, VP of Retail Solutions for Scientific Games. “We recommend SCiQ digital menu boards to streamline and modernize space in the store and engage both retailers and players with dynamic real-time information such as new games, next available ticket number and key promotions.” Progressive Grocer reported that while Gen Z may be leading the way, shoppers across demographic groups appreciate the convenience of self-checkout. A survey of 4,000 shoppers in the U.S. and UK found that two-thirds of survey respondents said they would choose retailers that offer self-scanning at checkout. Why the gravitation to frictionless buying? Speed. More than a third – 34% – of those polled also noted they don't like to stand in line for regular checkout and 33% said that they appreciate less interaction with people. Not the best stats for clerk checkout, particularly during a Powerball run. And with the shortage of retail workers not predicted to let up in 2024, self-service is here to stay. And that means both self-checkout and selfservice vending machines. “Consumers aren’t willing to tolerate an inconvenient purchase experience. We’ve got to meet them where they are with cashless sales at both self-service and self-checkout with proven solutions to sell lottery products, or risk losing players,” said Joe Fulton, Director of Payments and Commerce for Scientific Games. New & Redesigned Stores

AI is Everywhere The ChatGPT app is officially the fastest-growing app in history, gaining an estimated 100 million users in two months – growth that took Instagram two and a half years and Facebook four and a half years to reach. Along with consumers, retailers are using AI and investing in it to improve in-store efficiencies and processes. The National Retail Federation believes AI has sparked a transformation of retail and it’s driving changes to the customer experience. The NRF shared a new study conducted by IHL Group revealing that retailers that have already embraced artificial intelligence and machine learning technologies are achieving 2.3 times growth in sales and 2.5 times growth in profits for the year 2023 when compared with their competitors. And the trend is projected to continue in 2024. From the retailer’s point of view, AI helps themmake faster, more accurate decisions when it comes to inventory management. They’re also using it to follow shopper trends and tweak store layouts based on traffic patterns captured from in-store camera data. “AI has supercharged our PlayCentral Powered by SCiQ lottery vendingmachines. Imagine personalized game suggestions and machine-based learning for inventory delivery so the retailer never runs out of product,” said Steve Beason, President of Digital and Sports Betting for Scientific Games. “AI can even predict maintenance issues and prevent fraud. By making PlayCentral smarter, engaging and trustworthy, you'll sell more games and keep customers coming back.” One major benefit of AI is it’s helping retailers shape the customer’s journey and create a more personalized experience. Everyone knows that communications from retailers are getting more personal and more real-time. According to NRF, stores are investing in tech to deliver personalization and optimization, blurring physical and digital with apps that provide a personal shopping experience. Customers might engage with a brand online, and then visit the physical store to check it out in person. In some cases, retailers might recognize a customer as soon as they click on their website or enter a physical store. All confirming that one channel can influence another channel. Interestingly, Forbes shared research that 91% of shoppers want texts from brands they like – and there’s a whopping 9899% open rate. Recommendations based on browser history should be optimized to increase loyalty. Targeted communications rather than general marketing messages help retailers connect to loyal customers and keep them engaged. “Creating a unified customer view that incorporates all player touchpoints across all channels andproduct verticals continues to become more critically important, and that’s exactly what CRM programs deliver,” said Merv Huber, VP of Digital Growth for Scientific Games. “Players demand consistently personalized engagement, not just in the marketing messages they receive but also in the experience they receive while interacting with retail and digital lottery products.” Personal Connections

Consumers are being entertained and shopping on social media. They’re exploring, making decisions and purchasing all on the same social media platform. A recent Forbes article indicated that social commerce is expected to grow 28% annually. Forbes predicts that 2024 will not be about paid advertising, as much as authentic moments the customer wants to see, which end in a “commerce moment”. In fact, 98% of customers surveyed by Influencer Marketing Hub plan to use social purchasing at least once this year, up from 68% last year. “The traditional shopper journey was disrupted years ago by consumers moving between retail and online for many kinds of purchases. U.S. lotteries are still in the infancy stage of maximizing that journey, yet now face the added complexity of social commerce. The ability for consumers to seamlessly purchase, in-the-moment, from a brand touted by influencers they trust, is here to stay. Lotteries need to harness this power,” said Jennifer Welshons, Chief Marketing Officer for Scientific Games. Retailers have the opportunity to partner with social media content creators – like the lottery – or create content themselves. For states where iLottery is permitted, opportunities for social media collaboration with retailers offer revenue opportunities. Where games are not yet sold online, retailer collaborations on social media provide additional reach for brand visibility. With the majority of consumers considering sustainability when they shop, it’s top of mind for retailers. Many have incorporated sustainability into their daily operations. In 2024, Forbes believes they’ll go deeper with their supply chain and manufacturers to keep their green commitments. Forbes predicts that 2024 will bring “green fatigue”, with skeptical consumers calling out brands who claim to be green but aren’t showing them “real actions” – what they’re doing beyond harming the planet. They want to know that the companies they purchase from are working on climate solutions and restoring damage already done. “We aren’t just talking the talk, we’re taking real steps to incorporate sustainable practices within our operations and entire value chain to minimize our impact on the environment,” said Andrew Jackson, VP of Environment, Social and Governance for Scientific Games. “This means retailers can rest assured that when their customers scratch an instant game from Scientific Games, it has been produced sustainably.” And like all sustainability efforts, communication is key. This means listening to what consumers want and demonstrating a commitment to continuous improvement beyond basic measures. Lotteries’ continued success at retail will come as a direct result of aligning their advancements with those that the retailers themselves are already experiencing. Change is never easy but will certainly make for more interesting – and productive – industry conversations. Susan Reda. “7 Retail Industry Predictions for 2024”, National Retail Federation, January 3, 2024, Lynn Petrak, “Younger Consumers Loyal to Self-Checkout”, Progressive Grocer, January 18, 2024, W8Ssja41r2jgmbFl3TUNm2QiHdMDkKC2mVz69kgKBIXIw-1JPuTmmh8wDL_GckIRjdtMhmCX3mnxOV618 Catherine Erdly, “Four Major Trends That Will Shape Retail in 2024”, Forbes, January 26, 2024, PlayCentral® Powered by SCiQ® and SCiQ® are registered trademarks of Scientific Games. © 2024 Scientific Games, LLC. All Rights Reserved. Social Commerce Sustainability Skepticism

Science Inside THIS IS THE Scienti © 2024 Scienti c Games. All rights reserved. Our innovation in omnichannel lottery entertainment and tech solutions is connecting retail and digital play. We’re moving the global industry forward. And it’s all based on ve decades of science and trusted partnerships that help lotteries around the world grow pro ts for good cause programs. Years of Innovation