37
September/October 2014 • Public Gaming International
customers benefit by our merger with IGT.
For instance, lottery operators have created
players’ clubs, loyalty programs, and sec-
ond-chance draws to great effect. Double-
Down’s resources have the potential to take
these initiatives to a whole new level.
Of course, it is the lottery operator who
understands what works best in their mar-
ket. We respect that fact and are pleased to
work in concert with our customers to bring
to bear our resources in whatever ways the
operator deems best or appropriate.
GTECH can deliver many different prod-
ucts and pathways to appeal to new demo-
graphics while staying within the regulatory
constraints. Integrating the experience and
know-how of the leaders of the two largest
gaming sectors will provide the fertile foun-
dation for doing just that. Staying aligned
with our customers will always be our first
priority, and the key to our success.
I would think there will be tremendous
synergies from the merger.
J. Patel:
The real benefit is the enhanced
player experience. Customers who operate in
multiple channels will benefit from having
an easy pathway to deliver a player experi-
ence that appeals to the modern consumer,
who wants to migrate from retailer to gaming
machines on the casino floor, to self-service
or VLT console, to home computer, smart-
phone, or other Interactive devices. Conver-
gence may not seem to be happening in all ju-
risdictions right now, but we think that is the
direction in which the world of recreational
gaming is headed. The merger of IGT’s
strength in the casino space and GTECH’s
strength in the government-gaming space
creates synergies that will benefit all of our
customers, including lottery operators.
Won’t the cross-pollinating of resources
and market intelligence across all the dif-
ferent gaming categories drive faster in-
novation and more forward-looking game
development?
J. Patel:
That’s the plan. I can tell you
that we see tremendous growth potential in
government-gaming and traditional lottery.
The challenge is that the markets are chang-
ing rapidly all around the world. That is a
positive thing for those who are positioned
to evolve with the consumer. Traditional state
lotteries have a monopoly and so have not al-
ways thought in terms of “competitive land-
scape.” But even traditional lotteries need to
take a strategic approach toward engaging the
casual social-gaming market, toward game
development and distribution that retains
their customer base, and toward capturing the
attention of the consumer who is participat-
ing in a variety of gaming categories.
How does diversification enhance your
ability to support and drive performance in
the traditional lotteries that do not antici-
pate expanding into new game categories
and distribution channels?
J. Patel:
Integrating capabilities from all
game categories provides operational effi-
ciencies, cross-pollinates game development,
and opens other avenues for innovation.
For example: In order to appeal to the
young adult player, lotteries understand the
need to evolve to games that appeal to the
consumer who was raised with visually ex-
citing computer games that provide a multi-
player and/or a social gaming context. The
casino industry has been struggling with the
same challenge. Traditional slot machines are
not attracting the younger adult in the same
numbers as they did a generation ago. The so-
lutions that help IGT solve this challenge for
its casino operators will inform the problem-
solving process for lottery, and vice-versa.
DoubleDown has an active player base of
millions who are playing non-money social
and casino-style games. It is a model that
is not entirely different from Zynga-style
games, only they are game styles that are
more closely linked to games of chance.
This is called a “freemium” model, in which
players can pay for an enhanced player ex-
perience, or they can choose to play without
wagering or paying for anything.
What about lottery operators who might
ask why it is relevant to them that you provide
products and services for market segments
that they never expect to be involved in?
J. Patel:
Two things about that. First,
the world is changing, and we want to be in
a position to support our customers as the
demands on their businesses change and as
opportunities arise for them to expand and
grow into new games and channels. Govern-
ment-gaming operators are already expand-
ing into new products, channels, and market
segments, and we expect that trend to con-
tinue, or even accelerate. Our diverse prod-
uct offering supports that growth in the way
that best fits the objectives and constraints of
our customers.
Second, the distinction between products,
services, and market segments is narrowing.
Consumers are migrating from one gaming
category to another, and operators are adapt-
ing to this trend.
Insights into the behavior of players in all
gaming categories inform our understanding
of games in each individual category. Our
global footprint as both supplier and op-
erator gives us important insights into what
works and what doesn’t work, what new in-
novations are creating positive impact, and
what innovations may not be ready for pri-
metime. The business of land-based retail is
changing, for instance, and we are keen on
capturing and analyzing the results so that
we can share that with our customers.
With IGT’s input, consumer behavior in
the broader space that includes casino-style
gaming will provide additional context for a
database of information to better understand
this behavior and how we can adapt our
products and solutions to enable our cus-
tomers to grow their business in each sector,
including traditional lottery. The operator is
free to use and apply this knowledge as they
see fit, integrating it with their own under-
standing of their own markets and their own
gaming and social culture.
There is also tremendous synergy be-
tween the understanding of mathematics
and game logic in the lottery and casino
worlds. Marrying the resources and experi-
ence of GTECH and IGT should be a cata-
lyst for some exciting and innovative ideas
in game development. GTECH’s traditional
strengths in technology, operational excel-
lence, and customer service will now be
augmented by the deepest bench in creative
game development and innovation.
How can your assets/skill-sets in the lot-
tery sector be applied to enhance value to
the IGT casino side of the business?
J. Patel:
Delivering a good consumer ex-
perience ultimately comes down to under-
standing consumer behavior. Lottery must
appeal on many different levels to attract
consumer attention. That has given lottery
a unique perspective on consumer behavior.
The business of marketing lottery games is
quite different from casino games, and the
casino player is obviously different from the
lottery player. But that doesn’t mean that the
insights gained by experience in the lottery
world could not be applied with positive ef-
fect to the casino industry. There is an over-
lap in so many of these areas of gaming.
Interactive has been a big topic for years.
But the lottery business all around the world
is still driven by land-based retail, especially
