Public Gaming International September/October 2022


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4 PUBLIC GAMING INTERNATIONAL • SEPTEMBER/OCTOBER 2022 Publisher & Chief Executive Officer Paul Jason President Susan Jason Brand and Design Dan Eggers Design Lottery Industry Consultant Jim Acton 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: September/October 2022 Volume 51, Issue 5 ©2022 all rights reserved. Public Gaming Research Institute cISSN: 1042-1912 12 Thirty-seven years: reflections on partnerships, progress and learning from each other Interview with Rebecca Paul, President & CEO, Tennessee Education Lottery Corporation; President, World Lottery Association (WLA); Chair & Founder, Women’s Initiative in Lottery Leadership (WILL) 18 Report from the EL (European Lotteries Association) Legal and Regulatory Work-Group on Advertising Piet Van Baeveghem Secretary General, Legal and Regulatory Affairs Management, Belgium National Lottery; Executive Chair, EL Legal & Regulatory Work-Group 22 Customer Relationship Management (CRM) IN THE SPOTLIGHT Gretchen Corbin, President and CEO of the Georgia Lottery, President, NASPL (North American Association of State & Provincial Lotteries) Drew Svitko, Executive Director, Pennsylvania Lottery Stefano Monterosso, Senior Vice President, Global Lottery Product and Sales Development, IGT Marcus Glasper, Executive Director, Washington Lottery Merv Huber, Senior Director Growth Marketing, Scientific Games 26 Early Adopters Show Path to Digital Success Rob Wesley, Deputy Executive Director of Lottery, Virginia Lottery Adam Barry, Corporate Development Executive, Camelot Shannon DeHaven, Vice President of Digital Engagement, Pollard Banknote Stephanie Weyant Fidler, Deputy Executive Director, Marketing & Product Development Pennsylvania Lottery Steve Hickson, Vice President Game Development, Scientific Games Rhydian Fisher, Founder & Chief Executive Officer, Instant Win Gaming (IWG) Peter Sullivan, Founder & Chief Executive Officer, Jackpocket 38 IGT OMNIATM & Upward: the comprehensive and modular retail/digital solution to drive the next phase of growth for lotteries 40 Customer Relationship Management: The long-term strategy for engaging with players and maximizing sales Jim Acton, Lottery Industry Consultant CONTENTS S E P T E M B E R / O C T O B E R 2 0 2 2 F E A T U R E D A R T I C L E S 12 18 22 10 10

6 PUBLIC GAMING INTERNATIONAL • SEPTEMBER/OCTOBER 2022 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. D E P A R T M E N T S F E A T U R E D A R T I C L E S C O N T . 42 How Family of Games Sales Exploded Scientific Games 48 How to Thrive in a Rapidly Changing Market Alistair Boston-Smith, Chief Strategy Officer, Bede Gaming 50 Solving the Rubik’s Cube Puzzle through Retail Integration: Abacus Drives Lottery Everywhere 52 Under 30? Underwhelmed! Simon Jaworski, Executive Vice President Lottery & Gaming, Leger USA 54 The newest convenience and wagering enhancements to IGT’s award-winning mobile app optimize the player experience 56 Smartplay's non-traditional drawing machines engage and excite the next generation of lottery players Jim Acton, Lottery Industry Consultant 8 From the Publisher Paul Jason 10 Biographies of the newest members of the Lottery Industry Hall of Fame 30 Meet FLEX – the Game Management System modernizing MUSL operations MUSL NEWS (Multi-State Lottery Association) 34 Lotteries Expand Responsible Gaming Protections as Their Online Product Offerings have Grown, But Illegal Operators Without Such Protections Are Still Allowed to Operate Mark Hichar, Shareholder, Shareholder with Greenberg Traurig, LLP and Marlene D. Warner, Executive Director of the Massachusetts Council on Gaming and Health 36 Sustainability and diversity at heart of the European Lotteries (EL) work model 64 Scenes from PGRI Lottery Expo NYC, Photo Collage 69 Scenes from Hall of Fame Induction Ceremony 70 Pulse of the Industry: Synopsis of Recent Gaming Industry News 73 The Global RFP: From 2006 to Morocco Philippe Vlaemminck, Managing Partner, Dawid Muller, Founder and co-owner at Division One Advisory Launched: March 2022 Performance: 18% higher (first 8 weeks of sales compared to other families in the market). Family price points: $1, $2, $5, $10, $20 Highest performer: $10 Top prizes/multipliers/ bonuses: $1 – $5,000 (2X, 4X, 5X, 10X), $2 – $25,000 (2X, 5X, 10X, 20X), $5 – $100,000 (5X, 10X, 20X, 50X), $10 – $250,000 (5X, 10X, 20X, 50X, 100X), $20 – $500,000 (5X, 10X, 20X, 50X, 100X, 200X) Strategic Product Enhancements: Fluorescent inks, premium silver metallic ink “The multiplier family of games, as well as all multiplier-themed games, have become core games at each price point in our portfolio. Our revenue forecast each fiscal year is dependent on these games performing well.” – Mike Smith, Gaming Director, Arkansas Scholarship Lottery Y games have been part of the Ohio Lottery’s scratch-off portfolio since the They’re very popular with our players and consistently perform well with mily of games having had a great impact on our sales.” – Ron Fornaro, Scratch-Off Product Manager, Ohio Gaming Arkansas Scholarship Lottery: X The MoneyMultiplier Family o be an integral part of the scratch game s have outperformed every other family main reason we decided to launch eam, and SG have continued to work l family of games in our portfolio. was to increase performance by ate.” h, Director of Product Development, South Carolina Education Lottery a Gold Multiplier Family ed in 2022 due to the success of the MONOPOLY was slightly different, as the $30 ticket launched in January mily following in February. This gave the $30 game time to grow and e success of the rest of the price points. Ultimately, the $30 game is the most cessful of all $30 games ever launched in Ohio. esting note: Every winter, the Ohio Lottery launches a family of games in February or nd MONOPOLY has been a consistent winner in terms of sales. Next year, a family of planned based on the Lottery’s wildly popular Cash Explosion franchise and game hio. ancements: Foil stock, premium metallic ink, combination spot outh Carolina has launched multiplier families before, this was h enhanced multipliers of 10X, 20X, 50X and 100X – different X, 20X and 50X multipliers. The Lottery further improved to ensure the multipliers are significant and appealing to enough to produce meaningful wins. The family is part ottery’s 20th Anniversary Second-Chance Promotion ers per month. Anniversary promotion, the Carolina Gold family entries at the lower price points. The Lottery s in 2014-15, with each launch gaining popularity. es each year. Portfolio strategy: Optimized prize structures for an engaging and entertaining player experience through the life cycle of this family of games. Strategically identified and selected game design and enhancements that highlighted the multiplier theme, while differentiating this family from previous year’s families, as well as other games in market. Using historical data, optimized order quantities to deliver meaningful prizes to players and insuring games remained in market until the next family launched. Kept in mind how the family would be displayed in all planograms and dispensers, as well as in point-of-sale materials. Interesting note: The Arkansas Scholarship Lottery’s first multiplier family of games launched in March 2013 at the $1, $2, $5, and $10 price points. Due to the success of this family, since then the Lottery has launched a multiplier family every March. For the past four years, it has expanded to include a $20 price point, which performed extremely well. The multiplier family launched in March 2022 generated over 38% of total sales for that month. 36 30 10 10 56 54 42

8 PUBLIC GAMING INTERNATIONAL • SEPTEMBER/OCTOBER 2022 From the Publisher The sure sign that we are returning to normalcy is a busy fall schedule of conferences to participate in. We held our PGRI Lottery Expo NYC a little earlier than usual to allow some time to lapse between us and the lottery industry biggest event. I hope you are all coming to Vancouver to attend the World Lottery Summit. The production is a team effort between the World Lottery Association (WLA), the host lottery (BCLC, British Columbia Lottery Corp) and the regional association, NASPL (North American Association of State and Provincial Lotteries). Go to worldlotterysummit. org to view the program, the bio’s of the keynote speakers, the breakout “plenary” sessions, and to register and reserve hotel rooms. Normally, we need to wait two years to convene with our colleagues from all across the globe, as this event is held only every other year. But it has now been four years since the last WLS, which was held in Buenos Aires. A lot has changed since then. There is at least one person who has continued to travel the world, speaking at other WLA regional events, meeting with the international community of lottery leaders, and learning from everyone every step of the way. As president of the WLA, and my best friend, Rebecca Paul is very excited to visit with you and share your reality as she pursues a deeper understanding for how our industry functions and serves its stakeholders, and society writ large. We bring you a very special feature in this issue – not just an interview but a retrospective on what has got to be the most storied career this industry has ever seen. Thirty-seven years of service and leadership experience informs a perspective that at its heart remains hungry for more knowledge, more understanding, and more opportunity to help all of us achieve our goals. Our industry serves good causes, society, and a broader set of stakeholders. And so our interview delves into the way our industry is evolving, and how we might accelerate our progress down the path of continuous improvement during this time of extreme disruption. Rebecca’s focus, though, has always been on people and supporting everyone’s personal success. To that end, she co-created (with my father-in-law Duane Burke) the PGRI Lottery Industry Hall of Fame. David Barden and Drew Svitko were inducted into the Hall of Fame at PGRI’s Lottery Expo NYC conference on August 31. Romana Girandon and Luca Esposito will be inducted at the World Lottery Summit Vancouver at 5:00 pm on Tuesday, October 18. You are all invited to join us in honoring the class of 2022 Hall of Famers, and to then walk across the hall to enjoy the reception of WiLL (Women in Lottery Leadership) supporters. See the bio’s of David, Drew, Romana, and Luca on page 10 of this issue. Read about the Lottery Hall of Fame in the “Awards” department of Our news website also includes a section on WiLL. Our NYC conference kicked off with a panel discussion led by Gretchen Corbin (CEO of the Georgia Lottery Corp.) on Customer Relationship Management (CRM). Lotteries have built an ambitious array of digital initiatives over the last twenty years. Gretchen’s panel explored the ways in which those initiatives are being integrated and harmonized to add real value to lotteries’ products and services. CRM moves the focus away from the technology over to the player. After all, the customer doesn’t think about the technology, or channels, media, and platforms. Jim Acton edits many of the great features in PGRI Magazine, including this month’s executive summaries of PGRI conference panel discussions (Gretchen’s CRM and Rob Wesley’s iLottery panels in this issue) and writes additional features like the one that explores the CRM strategies and initiatives being implemented in lotteries across the U.S. – Thank you Jim. Thank you to our regular editorial contributors Philippe Vlaemminck and Mark Hichar for helping us understand the legal, political, and regulatory environment that has such a profound impact on the success of government lotteries. Philippe does a deep dive into the ways in which the modern RFP can be designed to drive better collaboration and alignment between technology partners, lottery operators, and the objectives they are working to achieve. Mark calls out the failure to effectively prevent the operations of illegal online gambling websites. He explains how and why there is no reason why existing laws can’t be enforced to hold all operators to the highest standards of accountability – and why it is vital that we do so to protect the interests of the players, of good causes and lottery stakeholders, and of society which is the owner of the government lottery. Wonder whether the young adult will continue to migrate over to lottery as they get older and their lifestyle changes? Or if the mass adoption of videogames and other social phenomena might disrupt that traditional customer journey? Regular contributor Simon Jaworski shares some research into this mission-critical question. And a special thanks to all of our editorial contributors and advertisers! I appreciate our partnership, the leadership you provide this industry, and the brain-trust you share with our readership. See you in Vancouver! Paul Jason, Publisher Public Gaming International Magazine

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10 PUBLIC GAMING INTERNATIONAL • SEPTEMBER/OCTOBER 2022 Congratulations to the newest members of the Lottery Industry Hall of Fame The 97 members of the PGRI Lottery Industry Hall of Fame have voted for and elected four industry leaders to be inducted into the Lottery Industry Hall of Fame for 2022. The Lottery Industry Hall of Fame was founded in 2005 as a means of honoring those who have done the most to promote excellence and integrity in our industry and make the world lottery industry the great success. The recipients of this award are all a credit to that ideal and are joining a select and distinguished group of world lottery industry professionals. Visit the “Awards” section of to read more about the Hall of Fame. DAVID BARDEN President & Chief Executive Officer, New Mexico Lottery President, Multi-State Lottery Association (MUSL) David Barden has served as CEO of the New Mexico Lottery for the past eight years after first serving as its Interim CEO. With more than 21 years of lottery experience, David specializes in positive change and industry innovation that have maximized revenue returns for three US lotteries: the New Mexico Lottery Authority, Arkansas Scholarship Lottery, and the South Carolina Education Lottery. In addition to serving as New Mexico’s CEO, David has served in several nationwide lottery industry positions including Chairman of the Powerball Product Group, Chairman of MUSL’s Legal Committee, Chairman of the Hot Lotto Game Group and NASPL Secretary. Most recently, David was unanimously elected to the position of President of MUSL. As a result of his experience with lottery start-ups, he has testified before legislaLUCA ESPOSITO Executive Director, World Lottery Association General Secretary of the Global Lottery Monitoring System (GLMS) Luca Esposito holds a master’s degree in Computer Science and Telecommunication from the University of Calabria. He has been a technological consultant to various major global concerns, including Accenture, McKinsey & Company, and Cambridge Technology Partners. He began his career in the lottery sector in 2009, when he joined IGT as Technology Director for central Europe. Here, he served the technological needs of gaming-industry clients in Switzerland, Germany, Belgium, and Luxembourg. In 2013, Luca was promoted to Country Manager for IGT, responsible for managing all operations, which included taking responsibility for profit, revenue, cash and quality targets, with overall responsibility for managing revenue and cost elements of IGT's profit & loss (P&L) within his jurisdictions. ROMANA GIRANDON President & Chief Executive Officer, Loterija Slovenije (Slovenian National Lottery) 2nd Vice President of European Lotteries Building on her passion for creating high-achieving, inclusive and socially responsible teams, Romana has spent two decades on different leadership positions before becoming President of the Slovenian National Lottery in 2013. Since then, mainly through her continuous focus on mission-based culture, responsible player-centric innovation and high business standards, the company she leads has become a highly respected European lottery. As the head of a small but flexible and ambitious lottery, Romana pursues a forging of collaborative partnerships across the international lottery industry. Since 2019, Romana has been a Member of The European Lotteries (EL) Executive Committee and Chair of the Corporate Social ResponsiDREW SVITKO Executive Director, Pennsylvania Lottery Chair of the Powerball Group Pennsylvania Lottery Executive Director Drew Svitko has worked in the lottery industry for 25 years, having served the Pennsylvania Lottery from 1997 to 2005 in a variety of positions in the marketing, research, finance, and security divisions. From 2005 to 2008, Drew worked as an account executive for instant ticket printer Oberthur Gaming Technologies, before returning to the Lottery as deputy executive director of marketing and product development. Drew has been the executive director for the PA Lottery since February of 2015, where he currently leads a staff of more than 275 employees. Under his leadership, the Pennsylvania Lottery was named by Gaming Intelligence as North American Lottery Operator of the Year in 2021. The Lottery also reached record sales of more than $5 billion for PGRI LOTTERY INDUSTRY HALL OF FAME Induction Ceremony Directors Barden and Svitko were honored on August 31, 2022 at the Sheraton Time Square Hotel, New York. Ms. Girandon and Mr Esposito will be honored on Tuesday, October 18, 2022 at 17:00 - 17:30; at the World Lottery Summit Vancouver: West Level 3 - Meeting Room 301 Vancouver Convention Centre West Continued on page 59 Continued on page 59 Continued on page 59 Continued on page 59 P G R I L O T T E R Y I N D U S T R Y H A L L O F F A M E

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12 PUBLIC GAMING INTERNATIONAL • SEPTEMBER/OCTOBER 2022 PGRI INTERVIEWS Paul Jason: You played a major role in the global lottery industry for many years. How has your view of the industry changed as a result of your experience as president of the WLA? Rebecca Paul: It’s truly an honor and a pleasure to serve in this role. Throughout my lottery career, I have always been impressed by the benefits our industry brings to communities. But my experience on the WLA Executive Committee and now as WLA president has given me the opportunity to focus on and interact with all regions around the world, which has been an incredible experience. And what I’ve found is that every lottery, no matter how big or small, old or young, is dedicated to its mission and eager to join forces with one another to strengthen our industry as a whole. I’ve seen collaboration between organizations that appear to have little in common—but are open to learning from each other’s strengths and weaknesses to evolve in a positive direction. Variances between regulatory structures, political climates, gaming cultures and more exist from market-to-market around the world, but I’ve been impressed with how these differences do not stop us from learning from one another. And from this experience, my belief in the foundation WLA has laid and the endless potential we have by working together has never been stronger. I’m excited about the accomplishments we have made over the years and confident in our universal commitment to continuous improvement. Ultimately, our strength as an industry is reflected in the benefits we provide to stakeholders who depend on the funds we generate. Opportunities abound, and the platform for sustainable growth has never been stronger. Is the future rich with opportunity, but perhaps fraught with uncertainty? R. Paul: Definitely. And the time we live in now is probably even more disruptive than usual. But uncertainty goes with the territory, and it’s our job to navigate through challenges, identify opportunities, clarify action plans, and execute. We’re fortunate that we’re not alone. We have colleagues around the world who are facing similar challenges. And we’re all working hard to meet and exceed our short-term financial obligations while positioning our organizations for long-term success. I hope to see all of you at the World Lottery Summit in Vancouver in October. There, you will see what I mean. The event features world-class speakers who connect global trends and big-picture themes to our own industry, and the break-out sessions that PGRI INTRODUCTION: Rebecca Paul’s lottery career started in 1985 with her appointment to lead the Illinois Lottery. She then went on to lead the start of the Florida Lottery in 1987, the Georgia Lottery in 1993, and the Tennessee Lottery in 2003. She was elected as president of the World Lottery Association (WLA) in 2018. As one industry friend puts it: “Like Buffet, Gates, Jobs, and Cher, you only need to use one part of her name – “Rebecca” – for everyone to know who you mean and to appreciate the woman who has done as much for our industry as anyone, helping to raise billions of dollars for education and other good causes.” Thirty-seven years: reflections on partnerships, progress and learning from each other Rebecca Paul President & CEO, Tennessee Education Lottery Corporation President, World Lottery Association (WLA) Chair & Founder, Women’s Initiative in Lottery Leadership (WILL) Above: Illinois Gov. James Thompson and Rebecca are all smiles following her 1985 appointment as director of the state’s lottery. Below: Rebecca was quickly recognized for using her coaching skills to build a strong “dream team” at the Illinois Lottery.

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14 PUBLIC GAMING INTERNATIONAL • SEPTEMBER/OCTOBER 2022 address industry-specific issues will be invaluable. So, too, will be the vital time spent visiting with our technology partners to learn about products and solutions that will be changing the world in the future. And finally, the WLS offers the chance to meet colleagues from all around the globe and forge business relationships and friendships that last forever. Truly, this experience is a life-changing event. One of the most valuable assets of lottery is security and integrity. We have seen how brand value based on integrity takes decades to build and can be undermined in a moment. Lottery truly is the gold standard, certainly in the games-ofchance sector but even among all business sectors. The WLA standards and certification processes are an essential tool to keep it that way. How are they evolving? R. Paul: The needs of our membership change over time. The foundations that have been built over the years enable growth and evolution. For instance, twenty years ago, sports betting was not a part of government lottery in most places like it is for many today. So, the WLA developed the WLA Betting Integrity on Sports and Horse Racing Committee (BISHR) to support our ability to uphold the highest ethical principles. It aims to further the collective interests of WLA Members and contribute towards safeguarding their reputations by combating the manipulation of sporting and horse racing events on which bets and wagers are taken. Over the past two years, this committee has developed informative materials including: • The Macolin Convention Brief Guide on the Council of Europe Convention on the Manipulation of Sports Competitions and why it is important for the lottery and sports betting sector. • The Sports Betting Marketing Best Practices guide, which focuses on the marketing communications of sports betting products. This best practice guide offers guidance on marketing sports betting products competitively, yet responsibly, to maintain an upper-hand on the countless illegal betting operations around the globe. BISHR is currently drafting a brochure that will examine the different types of horse betting offerings and provide models to ensure they are responsible. Other work underway includes drafting a best practice guide for detecting fraud specifically aimed at money laundering. This guide is being developed in collaboration with Loterie Romande and Pari Mutuel Urbain, and will address the issue of illegal operators and the illegal use of Intellectual Property rights. And finally, the committee organized a webinar on Digitalization 3. Rebecca was poised for her position as president and CEO of the Georgia Lottery. 4. Rebecca was again recruited to launch a new lottery, this time in the Peach State in 1993. Gov. Zell Miller and Rebecca have fun showcasing the ever-popular dancing draw balls. 5. Public Gaming magazine was proud to feature a 1996 cover story on Rebecca and the success of the Georgia Lottery. 6. As shown here at the Georgia Lottery, Rebecca is adept at mentoring a team of successful leaders. 7. Georgia welcomed its new lottery and Rebecca as she unveiled its first instant games. 1. Following Gov. Bob Martinez’s appointment of Rebecca as the first secretary of the Florida Lottery who led its start-up in 1987, she wasted no time playing “show and tell” with the first instant game. 2. Leading a lottery requires wearing many hats, from executive meetings to endless interviews at non-stop events such as the one here at the Florida Lottery. 1 2 4 7 5 6 3

16 PUBLIC GAMING INTERNATIONAL • SEPTEMBER/OCTOBER 2022 and Horse Race Betting last November, during which global experts discussed recent developments and challenges of the digitalization of horse race betting. What initiatives are really global in nature, calling for a united global approach? R. Paul: What we can do at the global level is protect the security and integrity of everything we do. We depend on each other to protect the integrity of the brand. And that means implementing the highest standards of security because a breach in even one jurisdiction impacts all of us. That’s why the WLA developed the standards of security and certification process. We also have certification processes that help everyone learn how to implement the highest standards of Responsible Gaming and Corporate Social Responsibility. An interesting part of the certification process is the role of mentorship. The WLA can help connect mentoring lotteries with those working toward the next level of certification or recertification. Lotteries are typically in different stages of development, and we do not compete with each other. Instead, we truly benefit individually when our peers around the world do well, and we can learn from them. Another area that is best served by a global approach is the effort to stop illegal gambling, especially illegal online gaming. To that end, the WLA formed its Illegal Lotteries and Betting Committee (ILBC) to combat illegal lottery operations. Where possible, we provide materials, tools and advice to our members on how to best fight unauthorized lotteries within the regulatory framework of their respective jurisdictions. One of the activities from the past couple of years includes the development of the Overview of Illegal Lottery and Betting Operations database. This database provides country fact sheets on legislative, judicial and commercial situations regarding bet-on lotteries and courier services in each country. This data is available to WLA members. ILBC held its first webinar in March on Unauthorized Lottery and Sports Betting Operations. That webinar included presentations from international experts that addressed: • Bet-on lotteries and courier services • The state of sports betting • Payment methods and associated risks • Blockchain and cryptocurrency technologies and how they impact the lottery sector The ILBC also produced an informative brochure on Combatting Illegal Betting to Protect the Integrity of Sports. The brochure was developed with one of the working groups of the WLA Betting Integrity on Sports and Horse Racing Committee (BISHR). It reviews the trends and technologies that have contributed to the global expansion of illegal betting operators and the impact that such operators have on the legal lottery and sports betting sector. This document also examines the WLA’s global effort to protect sports integrity through collaboration with organizations such as The Global Lottery Monitoring System (GLMS), the Council of Europe, Interpol, and numerous national and international sports federations. The nature of illegal betting is complex given the differing rules, regulations and levels of enforcement in different jurisdictions. ILBC closely monitors its members 8 9 10 8. Go team! Rebecca is flanked by a Tennessee Lottery board member and representatives from the University of Tennessee in 2018 to raise awareness about the everincreasing funds raised for education. 9. Rebecca gives tips to Tennessee Gov. Phil Bredesen and State Rep. Chris Newton on the first day of ticket sales on Jan. 20, 2004. 10. Rebecca and Sharon Sharp, a long-time industry colleague and friend, join forces to mark the Tennessee Lottery’s first day of sales in 2004. 11. Always at-the-ready to share milestones to the public, Tennessee’s President and CEO provided pertinent news to a reporter about the $2.4 billion raised for education by the time 2012 rolled in. 12. Rebecca leads a costumed crew and adds fun to a Tennessee Lottery Sales Meeting. 13. Who wouldn’t want a call from Rebecca? Here she makes notification calls to winners of a series of secondchance “Play It Again!” drawings. 11 12 13 Continued on page 62

18 PUBLIC GAMING INTERNATIONAL • SEPTEMBER/OCTOBER 2022 Secretary General, Legal and Regulatory Affairs Management at Belgium National Lottery; Executive Chair, EL Legal & Regulatory Work-Group One of the most important discussions currently taking place in several European countries concerns advertising and gambling. From a public policy perspective, advertising and gambling have always been a sensitive issue. On the one hand, regulating a gambling market should be about protecting the players from excessive gambling and gambling addiction. On the other hand, communication and advertising around the legal offer of games-ofchance and lotteries is a necessity in order to channel players towards the legal offer, and away from illegal operators who are not accountable to proper standards of integrity and responsible gaming. There is a certain tension there, and a balance must be found between attracting players to the legal offer and stimulating the players to play more. But where is the balance? For instance, if you advertise the jackpot of a draw game ... Is that channeling the players to the legal offer, or stimulating the players to play more? One line of defense often invoked by illegal gambling providers facing criminal proceedings is to claim that the gambling policy of an EU Member State is contrary to the EU Treaty because that gambling policy is not aimed at protecting players in a coherent and systematic way. They say: “look at how much advertising is done by the monopoly holder. That advertising is intended to maximize revenue for the state and certainly not to protect players”. These criminal proceedings then lead to preliminary questions for the European Court of Justice. In this way, the European Court of Justice has made a lot of rulings in recent years, trying to provide guidelines on how Member States should structure their gambling policies to be in line with the EU Treaty. In recent years, often under pressure from illegal gambling providers, several Member States have opened their gambling markets in one way or another to an increasing variety of gambling categories, with most being operated by private enterprise. In other words, the gambling market is divided between the monopoly holder on the one hand, and other gambling providers on the other hand. As a result of this opening of the markets, the non-monopoly gambling providers were granted the right to advertise in a legal manner. Since every provider wants to gain as much market share as possible and as quickly as possible, when a gambling market opens up, the so-called ‘small gambling start-ups’ begin to advertise in a massive way. They are omnipresent in time and space. If they are criticized for saturating the market with so much publicity, they typically point the finger at the state lottery operator and claim that the monopolist is the real problem. Unfortunately, some politicians go along with that story, advocating for new and strict rules for the monopoly holder without imposing the same rules on the newly legal gambling providers. It appears that the rationale for this inequity is that the monopoly holder should be held to a higher standard and set the good example, that the newborn legal gambling providers Report from the EL (European Lotteries Association) Legal and Regulatory Work-Group on Advertising by Piet Van Baeveghem

need more flexibility to fight against the illegal gambling providers, and that restricting their ability to advertise will only favour the illegal gambling providers. But the Court of Justice is not blind or naïve and they do see what is happening, issuing an interesting ruling last year: EU Court of Justice C-920/19: Advertising The advertising policy of a monopoly holder should not be assessed in an isolated way, but by taking into consideration the whole context of the gambling market and, in particular, the advertising practices of other legal or illegal gambling providers on the market. Any advertising content has not, in itself, an incentive effect on excessive expenditure in relation to advertising. It must therefore be examined whether the extent of advertising is strictly limited to what is necessary to channel consumers into the controlled gambling networks which implies an analysis of the proportionality of the commercial strategy of the monopoly holder in the light of all the relevant circumstances, and not an isolated analysis of an individual advertisement. (§47) The advertising practices of the monopoly holder, being part of its commercial policy, and the state control of the activities of the monopoly holder are only some of the elements that must be taken into consideration in its overall dynamic assessment of the existence of a state policy to encourage participation in the games of chance covered by the monopoly. (§49) Among the elements relevant for assessing the coherence of the dual system of organisation of the market, other than the commercial strategy of the monopoly holder and the state control of the latter's activities, include the increase in the commercial activities of the monopoly holder as well as the advertising practices of potential private operators (such as aggressive advertising practices by private advertisers in favour of illegal activities or the use by them of new media such as the Internet.) (§50 - §52) Article 56 TFEU must be interpreted as not precluding a dual system of organisation of the market of games of chance solely on the ground that the advertising practices of the lottery and casino monopoly holder are aimed at encouraging active participation in gambling, for example by making gambling trivial, by giving it a positive image through the use of the revenues for activities in the public interest, or increasing its attractiveness through eye-catching advertising messages that promise large winnings. (§53) It is encouraging to see the Court of Justice assuming the defense of the monopoly holder and saying, for example, that a national court must not focus its assessment on the specific advertising message of a monopoly holder, but that such an assessment includes an analysis of the proportionality of the commercial Digital Partner for Lotteries Shortlisted! EGR B2B Lottery Supplier of the Year

20 PUBLIC GAMING INTERNATIONAL • SEPTEMBER/OCTOBER 2022 strategy of the monopoly holder in the light of all the relevant circumstances. While the advertising practices of the monopoly holder will continue to be taken into consideration, the state policy which manages the overall dynamic assessment of the games-of-chance operator must analyze the wide variety of factors that impinge on the issue of channeling play and protecting the consumer. Among the elements relevant for assessing the coherence of the dual system of the organisation of the market, which include the increase in the commercial activities of the monopoly holder but also the advertising practices of other operators (such as aggressive advertising practices by private advertisers in favour of illegal activities, or the use by them of new media such as the internet). So therefore, advertising practices of the lottery monopoly holder that are aimed at encouraging active participation in gambling, for example by making gambling trivial, by giving it a positive image through the use of the revenues for activities in the public interest, or by increasing its attractiveness through eye-catching advertising messages, do not in themselves constitute a violation of the EU treaty. You will remember that during the last EL congress held in Antwerp, a resolution was adopted which stressed the importance of subjecting more risky games of chance to stricter rules in terms of advertising. Perhaps it would be useful to work on an update of this resolution in light of this jurisprudence, emphasizing that the regulation of advertising requires a differentiated approach and that, in addition to the risk level of games of chance, numerous other aspects must also be taken into account, such as • market organization, 100% monopoly or a dual organization, • the existence of illegal gaming providers and the effectiveness of regulators to fight against it, • the marketing policy of a gambling provider, • the rules on responsible gambling that are applied, • are there any playing limits used or not, etc. The Legal & Regulatory WG would like to explore this in the coming months with the Marketing and Communication working group and the CSR and responsible gaming working group. The Risks involved with building a sustainable business model on Apple's & Google's ecosystems This topic of advertising brings me to a second topic that I would like to address. To the extent that public advertising via paid media for lottery games would become heavily restricted, owned media or direct communication with players becomes all the more important. One of the means of doing so is communication via apps. Many lotteries have invested in this type of communication in recent years, as has the National Lottery of Belgium. Timeline of Google Play Store • 2008: Launch of Google Play Store • 2012: Belgium Lottery launches its lottery app. • 2016: Google opens access for gambling in its play store, but it is limited to four countries. • 2021: Google opens access for gambling apps in the play store in an additional 15 countries, including Belgium. From then on, the difficulties arise, because Google imposes a number of conditions. Google Gambling policy requirements: • Approved gambling application form • App target audience is 18+ • App downloadable and usable in region/country covered by licence • An Adult Only content rating (PEGI 18) should be used. Therefor there is a Google Age verification. The Google Age Verification process functions like a black box. It's not clear how it works and/or if it's treatment of the app users is consistent and systematic, or random and arbitrary. Some users are confronted with questions or requirements that others are not. But for those who are confronted with it, the age verification process is an inconvenient journey. There are in fact two ways of doing it. The first possibility is to use a credit card. In that case, the user must provide the number of his credit card with CVC code and expiry date, after which Google will check the correctness of these data by performing a small transaction. For many users, this is not a comfortable feeling. Certainly not in a time of fishing and other forms of digital fraud. But there is a second possibility: ID verification. In this case, the user must take a picture of his ID card that clearly shows the date of birth. The ID card will then be analysed by Google verification services against fraud and abuse. What happens to the user's data afterwards is not clear. Also this process does not give a comfortable feeling in the light of strict privacy rules. In other words, there is a real chance that this will have a huge impact on the willingness of users to continue using the Google app. And all this while lotteries are already subject to strict rules in our own countries regarding age verification. Why should tech platforms impose their own control process and insert themselves into the position of our regulators and governments who oblige us to use more effective and accurate systems of age verification? The importance of a well-functioning app is profound, especially in the light of stricter advertising restrictions. Today the Belgian Lottery app represents 500,000 monthly app users on 9 million 18+ inhabitants, with 14% of retail draw sales (Lotto & EuroMillions) being scanned for results via the app. There is no play-in app yet. We are studying the efficacy of launching a play-in app, but it is very hard to make profound economic and strategic tradeoffs knowing that tech platforms can decide to change the rules overnight without us having a say in it. It is quite difficult to enter into dialogue with them and it seems that their requirements are very formalistic.

21 PUBLIC GAMING INTERNATIONAL • SEPTEMBER/OCTOBER 2022 This brings us to the conclusion that lotteries are more and more regulated in their business by tech platforms, not just by governments and regulators. And that should make us concerned. This is why it is important for EL not only to follow the work of the European Commission or the European Parliament, or the rulings of the Court of Justice, but also to follow the policies of these tech platforms. It would be good to gather more information about the practices of tech platforms by asking other lotteries about their experiences. The Legal Working Group suggested the creation of a specific task force to follow up on this issue, which should be extended to include, for example, marketing experts. If you want your lottery to be part of this, do not hesitate to contact us. Finally, it would be good to join forces at the EL level, but also at the WLA level, to enter into discussions with Google and Apple about this issue. And of course, we are counting on the support of our technology partners, because they too can have an important impact in this debate with tech platforms to enable the sustainable growth of lotteries. The age verification for a user is an inconvenient journey. It might impact the conversion rate of the download page and the active userbase. Building a sustainable business model on Apple's & Google's ecosystems has risks. Tech platforms can decide to change the rules overnight without us having a say in it. As a lottery we face a fait accomplis. It is very difficult to enter into dialogue with tech platfoms and it seems that their requirements are very formalistic. • What's your experience with the age verification done by tech platforms? • What's the impact on your KPI's? (downloads, conversion rate, active users). Do you notice a drop off or other impacts due to sudden new and strict processes that are imposed by tech platforms? • Do you receive questions from players who have problems with verifying the google account or accounts of other tech platforms? Do you have a system to assist them? Conclusion: Lotteries are more and more ‘regulated’ by tech platforms. Let’s work together and join forces with the objective to open up a dialogue on the EL / WLA level with Google & Apple. First, take an inventory of the experiences of lotteries all around the globe to clarify the nature and scale of the problem. An ad hoc task force could be convened to investigate and try to measure the impacts on the lottery business. Second, connect with social media platform providers to encourage the development of solutions that will benefit both them and us. n Piet Van Baeveghem Secretary General, Legal and Regulatory Affairs Management at Belgium National Lottery; Executive Chair, EL Legal & Regulatory Work-Group Automated Campaign Management Omni-Channel Lottery Tools Real Time Data & Extensive APIs Lottery • Casino Sports • Bingo Poker Personalized Experience for Retail Web & Mobile Digital Partner for Lotteries Management 360o Player Account

22 PUBLIC GAMING INTERNATIONAL • SEPTEMBER/OCTOBER 2022 Most “insiders” know that the lottery industry outsells movie theaters, music sales and other forms of entertainment. Lottery annual sales for 2021 were higher than Starbucks, 7-Eleven, Apple iTunes, and all movie theatre revenues combined! While lottery is certainly the envy of many other consumer product and service companies, there is one area where others in the consumer products sector lead lottery – customer relationship management (CRM) and how to use the vast data collected through CRM programs. CVS ExtraCare, Starbucks Rewards, 7REWARDS, Caesar’s Rewards – some of these leading rewards programs provide boundless offers and purchase-spurring contact to their customers. The gap has narrowed between lottery and other industries over recent years, thanks to the strengthening of the relationship between vendor partners’ analytics groups and lotteries’ sales and marketing teams. Progress has been made, with CRM experts working diligently to create engaging platforms and programs which provide useful data to lotteries. A forensic-like dive was undertaken by a group of industry experts who are tackling these topics daily. The panel was led by Gretchen Corbin, President and CEO of the Georgia Lottery. Gretchen was joined by: Drew Svitko, Executive Director, Pennsylvania Lottery Stefano Monterosso, Senior Vice President Global Lottery Product and Sales Development, IGT Marcus Glasper, Executive Director, Washington Lottery Merv Huber, Senior Director Growth Marketing, Scientific Games Gretchen opened the panel by pointing out the ubiquitous nature of so many loyalty programs in the broader consumer products industry. Based on your choices when registering, they know where you are, what you might want based on past purchases and online search activity, and the location of their nearest retail locations. “I’ve been in New York a short time and already Chick-filA has alerted me to their location in Times Square and Starbucks has told me they have a store in my hotel,” she said. “As a customer, I appreciate my favorite retailers reaching out to me with suggestions that might make my life a little easier. That is what we in the lottery industry need to be doing, using our CRM capabilities to reach customers, whether it is for retail, online or both.” Gretchen tossed the discussion to the panel by asking “how can we continue to work together to harmonize our efforts, our many different players clubs, loyalty programs and digital initiatives, to strengthen CRM?” Merv, who directs digital growth marketing for Scientific Games’ clients, said it is important that lotteries understand that they must LEAD with CRM, not just make it part of the data analytics solution. “Think of your technology offerings as the ‘body’ with CRM as the ‘brain,’” he said. “Look at the best practices of leading companies in other industries. They are sending customers offers that are informed by strong, accurate data. They are using input from CRM segmentation to inform their communication and help retain their customers. This is what lotteries need to be doing. CRM goes far beyond just player messaging. CRM is the overarching strategy that needs to be integrated into all parts of your technology that touches customers – web site, mobile app, loyalty program, notifications, bonusing for iLottery. Lotteries want customers to know that they appreciate their business and want CUSTOMER RELATIONSHIP MANAGEMENT (CRM) IN THE SPOTLIGHT P A N E L D I S C U S S I O N E X E CU T I V E SUMMARY O F PANE L D I SCUS S I ON F ROM PGR I L OT T E RY E XPO 2 0 2 2 NYC CON F E R ENC E CRM is the overarching strategy that needs to be integrated into all parts of your technology that touches customers – web site, mobile app, loyalty program, notifications, bonusing for iLottery.