38 PUBLIC GAMING INTERNATIONAL • NOVEMBER/DECEMBER 2022 R. Paul: Matt, as a customer what do you see as a partnership? Matt Strawn: Like most state lotteries, we have healthy partnerships with all three instant ticket manufacturers – IGT, Scientific Games, and Pollard Banknote. Schafer Systems produces, right in western Iowa, some of our merchandising solutions. Our pull-tabs are also printed in Iowa – by Pollard Banknote’s American Games. John and his team (Scientific Games) have not only been a longstanding provider of our instant products but a longtime provider of our central gaming system. And a shout-out to Merv Huber as the Iowa Lottery is next in the queue to integrate the Optimove CRM platform that Scientific Games uses. The philosophy of the lottery when I came in was one of working closely with our vendor partners; and I have continued to encourage that spirit of collaboration and partnership. Our relatively new leadership team is continuing an evolution from merely utilizing suppliers’ products and services to better leveraging their expertise to the benefit of our State and lottery beneficiaries. Our vendor partners share responsibility for outcomes, and we appreciate that. I believe we can move even further along the path toward integrating vendor input into our business planning decisions, and not limiting it to portfolio management analytics. We have seen how much the vendor community can help in external advocacy efforts, messaging to policy-makers, and helping stakeholders recognize the value lottery brings to our state. I think we all recognize the value that forging productive, collaborative working relationships represents for all lottery stakeholders. R. Paul: It is great to hear that we are all in agreement. So where, then, are the disconnects, the bumps in the road to perfect harmony between technology partner and lottery? Lorne? L. Weil: I have been on both sides of the vendor ecosystem. As CEO of Scientific Games, we were responsible for central systems as well as being a primary supplier of instant tickets. At Inspired Entertainment, we are a third-party vendor who must integrate with the primary suppliers for our product to be a part of the lottery’s portfolio of products. So I do appreciate the challenges that Jay and John face. You run a large, complex enterprise with multiple initiatives vying for focus and resources. Executing third-party integrations consume resources, can be technically complicated, and take time to implement. Your well-planned roadmap gets interrupted by third-party vendors who want you to integrate a new product or service, and to get it done right away please. You understandably ask – which of my other customers in the queue should I bump in order to prioritize your implementation? But it is in all of our interests to overcome the obstacles that impede the ability to integrate solutions and products that unlock new revenue-generating possibilities for the benefit of lotteries and the good causes funded by lottery revenues. Part of the answer is for the industry to come together – primary suppliers, third-party vendors, and lotteries – and agree on a set of standard interfaces that facilitate the integrations. It’s vital, really, to enable a faster, more efficient, more costeffective process to implement new products, and new solutions and services. The industry is being held back by technical issues that are solvable. R. Paul: NASPL has been working on an API which would make it easier for us to plug and play, to integrate new products and solutions. L. Weil: On the face of it, I think an Application Programming Interface (API) solution would be the keys to the kingdom. It would free up all of this time and energy that’s getting ground up trying to fit a square peg into a round hole. Then we would be able to focus our energy and resources on developing the best products and best player experience. To move forward, though, we all need to embrace an ecosystem that supports everyone’s agenda. A mind-set that supports that approach is for all of us to appreciate that the way to get what we want is to help others get what they want. J. Gendron: Lorne is right. One thing I’ve learned through the years is there’s almost no such thing as a seamless integration. But certainly having a common, standard API would go a long way toward enabling thirdparty integrations to more efficiently connect into the traditional Facilities Management infrastructure. I would like to take this opportunity to switch over the discussion to the RFP structure, because I do think it’s extremely important. Over the past several years, the duration of contracts in the United States is moving into the 15 to 20-year range. Lotteries want vendors to invest in Research and Development. The vendors want to win states’ business at attractive returns and comply with the rules put forth by the states. But when the RFP stipulates a 60/40 technical to price ratio, the value of being technically differentiated is rendered less relevant, and it becomes a price bid. The lottery historically has wanted the vendor community to invest in R&D, innovation, and in continuous improvement of technology. We too want to invest in growth, innovation, and technology, and we welcome bids that put more of an emphasis and award value in these areas. Unfortunately, the RFP focus on bottom-line price is effectively discouraging investment. It just does not make sense for the vendor to invest in a technically superior proposal if the award is based on price. That, to answer your original question, Rebecca, is in my opinion the disconnect. And that is unfortunate, because it is more important than ever that your technology partners invest in the future, particularly when the terms of the contract are growing longer. Since costs are such a small percentage of revenues and net funds transferred, your vendor partners should be incentivized to invest in growth. A way to do that is to change that technology/cost ratio from 60/40 to 90/10. That formula still ensures we deliver superior value along with investing in the future of lottery. All of us in the vendor community want to invest in the technology, products, and services that drive growth. And we can do that within a construct that manages costs and maximizes value to the lottery. Doing that – shifting the focus from minimizing costs over to optimizing results – will be a huge win for state lotteries. Having said that, I do recognize that some states have procurement procedures that are highly restrictive and require that disproportionate focus on price to the detriment of other considerations like technology, service, investment in R&D and such. I would only observe that is unfortunate because government lotteries generate significant revenues that benefit good causes in their respective jurisdictions, and so it is very much an oversight to focus on costs more than on opportunity and outcomes. Further, I should mention that IGT is privileged to have 25 facilities management contracts in the United States, and each one receives the same level of service and corporate resources from IGT. And they all have access to me. We have the same-store sales group led by Stefano Monterosso, who works with every one of our customers in the U.S. Wendy Montgomery and her team work with NASPL, Mega Millions, MUSL, PGRI, and all the various Creating Alignment of Mission, Purpose, and Action continued from page 16
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