Public Gaming International May/June 2020

41 PUBLIC GAMING INTERNATIONAL • MAY/JUNE 2020 Gregg Edgar, Executive Director, Arizona Lottery It is widely accepted that COVID -19 is a generational event with disruptive impacts across all industries. e focus I believe we need to embrace is looking for the opportunity that can come from these impacts and changes. e question is, can we overcome the fear of failure or the paralyzing e ects of what we don’t know in these moments? As a country, we have always bene tted when we were willing to take bold moves in times of adversity and embrace the opportunity to succeed in the face of fear. At Arizona Lottery, we are looking hard at the opportunity that COVID-19 is giving us. From the no brainer of looking at increased telecommuting to the out-of- box of rede ning game development to bring cross-generational entertainment to our players and deliver on our bene ciary mission. ere is one fundamental truth in this environment for the Lottery industry - the need has not diminished. All of our bene ciaries’ situations have changed and not for the better. e pressure will be even bigger to produce more revenue in public service than we have ever done. How do we accomplish that objective? As we look at the impact of COVID-19 on overall lottery operations and sales, we need to look holistically at the issues we have faced and implement solutions that get to root problem-solving. For Arizona, the story of FY20 will begin with the systemic problems in the multi-state games and culminate in the retail disruption created by the Stay Home, Stay Safe and Stay Connected Executive Order that Governor Doug Ducey issued to atten the curve of the pandemic. Continued at publicgaming.com Pat McDonald, Director, Ohio Lottery Commission Challenges e COVID-19 crisis has damaged the persistent myth that lotteries are immune to shifts in the economy. In three short weeks, the Ohio Lottery shifted from forecasting pro t gains over its scal year pro t commitment to planning operating cuts to mitigate persistent revenue shortfalls. Lotteries are part of the local economy and will continue to see negative revenue e ects alongside retailer partners. With decreasing foot tra c to retail locations as a result of social distancing, our consumer base will inevitably decrease for a period of time. ere is also the possibility that, after the current crisis, some retail partners may shutter, resulting in a contraction of the Ohio Lottery’s retail base. Finally, the likely decrease in consumers’ discretionary entertainment income will directly impact our industry. e present social and economic circumstances are di cult for everyone as a result of this virus, but the Ohio Lottery has remained vital through diversi cation. While we had to close the racinos we regulate, and many of our bars and taverns are closed due to government orders , certain traditional sales networks have remained key revenue contributors. Daily draw games, lotto products, and scratch-o tickets continue to contribute to our bene ciary, and also continue to help keep retailer revenue owing in this critical time. e trade channels that include social lottery products, such as Keno and EZPlay, are invariably impacted by this virus. is will continue to constrain a lottery's ability to generate revenue. roughout this crisis, we have seen consistent sales decreases of 60-70% in the social products within our portfolio, illustrating that lottery activity is impacted alongside the rest of the local economy. But these sales decreases would become a complete elimination of revenue in our monitor game category, for instance, if it weren’t for our “Keno-to-go” product launch several years ago. Diversification A key item that we will need to consider in the future is to continue ensuring we are diversi ed enough to manage these sorts of crises. is type of innovation illustrates that using novel channels for existing products are a key metric to overcoming economic challenges. After the end of the COVID-19 crisis, state governments and their lotteries may follow private industry innovations and become more modern in their methods of o ering existing products in new ways. Diversifying into more digital mediums (whether that means prize cashing, direct activity, or consumer engagement) will become more than an innovation -- it'll become a part of a lottery's critical infrastructure. I believe it’s also critical to be explicit when discussing the bene ts of o ering products and services over a myriad of consumer platforms and maximizing customer convenience. When talking to stakeholders, legislators, and regulators, the key is always to be open and communicative as to what responsible o erings can do for a lottery bene ciary. ere is no better alternative in the long run than to be honest and open with our partners and stakeholders. Stakeholders are ultimately more receptive to change when they’re shown the whole picture. The Future For quite a while, change in the way that government and industries interact with citizens and consumers will be the order of the day. But, thankfully, not everything will change after social distancing lets up. Our mission will always involve generating money for education in Ohio. e fundamentals of the way we operate will also remain unchanged. Ultimately, Lotteries need to be responsible public stewards, considering integrity rst and foremost, alongside its commitment to its mission and stakeholders. To illustrate the importance of the commitment to integrity and fairness to stakeholders, we modi ed our retailer incentive program this quarter so as not to punish our retail network for a social and economic crisis that was outside of their control. For the Ohio Lottery, the ultimate mission of generating pro ts for education will always remain. Although there will inevitably be economic and social challenges to navigate through, we will take what we have learned from the COVID-19 crisis and implement new strategies for future growth and success. ■ LOTTERY INDUSTRY LEADERS SHARE THE VISION