Public Gaming Magazine Sept/Oct 2021

14 PUBLIC GAMING INTERNATIONAL • SEPTEMBER/OCTOBER 2021 We have a great product development team and a great vendor relationship with Pollard Banknote who has been our primary instant-ticket vendor since 2007. We analyzed everything -- prize structures, product mix, price points, gaming design -- focusing on details and incremental improvement, with special attention to optimizing the execution at retail. We implemented a highly regimented monthly launch cycle. We also set expectations for the retailers and our field people on what needed to happen when new games were launched, and they were given very specific guidelines on activating new games and returning dormant and old stock so product was always fresh at retail. We did a lot with self-service vending machines provided by our systems vendor, Scientific Games. By this time next year, we will have over 2,000 self-service vending machines. Of those, we anticipate around 1,800 will sell both scratch-offs and draw game products and about 200 hundred will sell draw games only. I spend time out in the field conducting “regional advisory board meetings,” where we engage with retailers on their turf and on their schedule, selling lottery-focused concepts in small doses so they aren’t overwhelmed, rewarding them with incentive and bonus programs. Over the 12-month period of FY 2021, retailer commissions averaged more than $44,000. That’s the average, which means some retailers made more than that. Retailers take notice when a single product generates $50,000 in net profit. All six Maryland casinos were either closed or operated with capacity limitations for most of 2020. It wasn’t until May 2021 that those limitations were lifted, and yet, despite that, Maryland’s casinos contributed an all-time record of $723.5 million to the state in Fiscal 2021. I should add that the Maryland Lottery, our retailers, and the casinos were extremely sensitive to the needs of our players and followed strict safety protocols to protect them from COVID. We also devoted more attention to Responsible Gaming messaging to ensure everyone stayed safe and played responsibly. Maryland is now a big casino state. Do you think the increase in scratch-off sales can be attributed to casino players turning to lottery during the shut-down? J. Martin: Absolutely. When you track the trends for week-in/week-out sales, there is no other way to explain it. When the casinos began to re-open, we saw some of that increased revenue begin to recede slightly. We absolutely had casino players on a trial basis, trying this lottery thing. Of course, we want to deploy new games that may continue to appeal to them and retain some of that new consumer group. However, I admit that most casino players will likely migrate their spending back to casinos as opposed to sticking with the lottery. I don’t believe it is realistic to think we are going to peel off anything more than a small portion of casino players’ spend over to lottery. Nevertheless, even retaining a portion of those new revenues is a big win for lottery. It’s not just casino players who showed up for lottery. The closing of restaurants, movie theatres, and other social activities caused consumers across the board to have extra discretionary income, which may have been spent on the lottery. We hope we can capitalize on this increased exposure and continue to appeal to these new consumer groups. Should we be concerned about attrition – losing players to casino and sports betting? J. Martin: No, I don’t think so. This past year has really demonstrated the enduring appeal of lottery gaming. Consumer engagement may be temporarily swayed in one direction or another. Of course, it is exciting when a completely new product category like sports wagering bursts onto the scene. People tend to migrate back to what they are familiar with and enjoy because they have been enjoying it for decades. The challenge for us is to produce fresh games, excite the players with fun and engaging promotions and make them readily playable through multiple channels and media. This challenge is completely independent of all the other external influences. Those are our customers and shame on us if we do not continue to refresh games and concepts, distribution channels and points of presence to keep our players engaged so they remain loyal to our products rather than leave us to explore other gaming options. Do we have strategy sessions about bringing in new consumer groups? Not really. We do, however, strategize about producing great products and making them readily available to our players. Instead of worrying about who might be stealing our lunch, we should focus on making a better lunch. How would you prioritize your focus for the rest of FY 2022? J. Martin: Along with the other things we have been discussing, we are seriously looking at our product mix. We see an opportunity to refresh our draw games. Maybe a serious re-boot to invigorate specific products in our portfolio. Our Fast-Play product has performed so well since launching in February 2020 that we want to make sure we optimize its full potential. Again, hats off to our product development team and our partner Scientific Games for keeping these priorities top-of- mind. We also need to explore in-lane retail solutions as a retailer acquisition strategy with national chain stores like Dollar General. In a broader sense, I’ve introduced our C-O-R-E 4 initiatives for the next 18 months: “C” is for Celebrate. We are starting now to build momentum for celebrating the 50th anniversary of the Maryland Lottery in 2023. We have formed an inter-departmental project team to look at everything from customer-facing products and bells-and-whistles marketing events to internal employee programs and we are exploring ways to infuse everything with the excitement and pride of having served the people of Maryland for 50 years. “O” is for Organization. Fifty years is a long time to arrive at this point, with many I think this disrupted environment represents an opportunity for us to introduce new ideas, new games and play-styles and new ways to interact with and play the lottery to a new audience that is much more receptive to fresh, new and different than ever before.