Are MEGA games saving or killing Lotto

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					     Are MEGA Games
Saving or Killing Lotto?
  California’s MEGA Millions Experience


       Presented by Linh Nguyen
               California Lottery
The Decision to Join
MEGA Millions
 Draw game sales becoming stale and
 playership was declining
 No new draw games in 7 years
 SuperLOTTO Plus began declining in sales
Marketing Strategy
 California became the 12th member of MEGA
 Millions on June 22, 2005.
 Primary marketing objective: minimize sales
 cannibalization to SuperLOTTO Plus.
 Marketing strategy: focus on the additional
 Jackpot opportunities with two big Jackpot
 games (MEGA Millions & SuperLOTTO Plus).
Marketing Strategy (cont.)
 “More of what you like; more jackpots more
 often.”
 All signage advertised the jackpots for both
 games – side by side.
 Cross-promoted the games: buy 7 MEGA
 Millions plays, and get 1 free SuperLOTTO
 play.
 Basic theme: play both games; they are not in
 competition.
Sales Implications
 After joining MEGA Millions, SuperLOTTO
 Plus and MEGA Millions had combined sales
 in excess of the previous year, when
 SuperLOTTO was the only big jackpot game.
 In the second year, combined sales for the
 two lotto-style games came in lower than
 SuperLOTTO before MEGA Millions.
 MEGA Millions definitely cannibalized sales
 from SuperLOTTO Plus.
        Combined Game Sales in
        California, Year 1 and Year 2
                           $1,200
Annual Sales in Millions




                           $1,000

                            $800

                            $600

                            $400

                            $200

                              $0
                                    FY 04-05          FY 05-06           FY 06-07

                                               SLP Sales   M EGA Sales
SuperLOTTO Plus and MEGA
Millions Sales Trends
 California MEGA Millions sales have been
 stable over time.

 In contrast, SuperLOTTO Plus sales have
 been declining.
  California MEGA Millions:
  Sales are Holding Up
   Sequence Sales in Millions

                                $50
     MEGA Millions Total




                                $40


                                $30


                                $20


                                $10


                                $0
                                      0   1   2     3    4       5   6     7   8    9   10   11     12 Roll


Sequence Start Date:                              27 July 2005           4-Aug-06       10-Jul-07
SuperLOTTO Plus Sales
Softening over Time
                              $100
 Sequence Sales in Millions



                               $90           Cumulative sales for three
  SuperLOTTO Plus Total




                               $80           13-roll sequences at
                                             different time periods
                               $70

                               $60

                               $50

                               $40

                               $30

                               $20

                               $10

                               $0
                                     0   1     2    3   4      5   6      7       8   9     10   11   12   13   Roll


Sequence Start Date:                               10-Aug-05           8-Jul-06           9-Jun-07
 Effect of MEGA Millions on
     SuperLOTTO Plus
Some effects are plain to see:
Since sales are now divided among two
games, SuperLOTTO Plus is now a smaller
game that behaves differently: slower
Jackpot build, less board coverage.

Before MEGA Millions, SuperLOTTO Plus
never went beyond 11 rolls. After, it has
rolled to 20, 23 and 24 (separate occasions).
                                              Jackpot in Millions
                6/
                     25
                          /2




                                                   $100
                                                          $150
                                                                 $200
                                                                        $250
                                                                               $300
                                                                                      $350
                                                                                             $400




                                        $0
                                             $50
                               00
                8/
                     25             5
                          /2
               10            0     05
                    /2
                         5/
                              20
               12                  05
                  /2
                     5    /2
                         00
                2/
                   25 5
                      /2
                4/ 006
                   25
                      /2
                         00
                6/
                   25 6
                      /2
                         00
                8/
                   25 6
                      /2




SLP Jackpot
               10        00
                 /2          6
                                                                                                    Due to MEGA Millions




                     5/
                        20
               12          06
                  /2
                     5/
                        20
                2/         0
                   25 6
                      /2
                4/ 007

MEGA Jackpot
                   25
                      /2
                                                                                                    SuperLOTTO Plus Jackpot is




                         00
                6/
                   25 7
                      /2
                         00
                8/
                   25 7
                      /2
                         00
                             7
                                                                                                    second-best about 75% of the time
MEGA Millions Observations

 Accelerates jackpot fatigue
 Legal challenge, negative press, low jackpots in
 06/07
 Negative perceptions: Money leaves California;
 odds are much worse; there are more winners from
 out of state
 Creates unpredictable news and sales
 Creates jackpot buzz
 Could be extending the life of the lotto category
Concluding Comments
SuperLOTTO Plus is suffering from the
competition with MEGA Millions with
excessive roll cycles and relatively poor
player responses to increasing jackpots.
Need to keep players playing at lower levels.
What’s next?
  Multi-Jurisdiction
  California

				
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