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Final Binding Offer List of Redacted items

VIEWS: 19 PAGES: 217

									Final Binding Offer
List of Redacted items
Certain information has been redacted from this copy of the Final Binding Offer. The
redacted information is exempt from public disclosure under the Freedom of Information
Act as commercial or financial information which is proprietary, privileged, or confidential
and disclosure would cause competitive harm (5 ILCS 140/7(1)(g)).

The following information has been redacted:

2.5 ONLINE GAMES
Figures showing a product development and needs assessment tools.

2.6 INSTANTS
Information describing game development and game design processes.

2.7 LOTTERY RETAILERS
Information describing retailer and sales team assessment mechanisms.

2.8 E-COMMERCE
Information depicting and describing website development processes.

2.9 MARKETING
Information describing marketing strategies.

2.11. OPERATIONS
Figures showing business and technology integration and platforms.

APPENDICES
Surveys and reports containing confidential market information.

The information generally described above is proprietary, privileged, or confidential
commercial and financial information used by Camelot Illinois, LLC, or its affiliates, in the
conduct of its business in the U.S. and elsewhere. Disclosure of this information would
cause competitive harm to Camelot Illinois, LLC and/or it affiliates.




                        Camelot Illinois Response to Step 2 of the RFP Illinois Lottery Private Manager   i
Table of Contents
Appendices   Appendices A1-A11
             Appendix A1           San Francisco LSR Pilot Survey Example
             Appendix A2           References and Letters of Intent
             Appendix A3           Loyalty Program
             Appendix A4           Recruitment Document Pack
             Appendix A5           GBGC Interactive Lottery Report
             Appendix A6           Rabin Player Focus Group
             Appendix A7           Rabin Player Focus Group
             Appendix A8           Rabin Non-Player Focus Group
             Appendix A9           Rabin Non-Player Survey
             Appendix A10          Experian Simmons Player Participation and Profiles
             Appendix A11          Material from UK Perfect In-Store Execution (PIE) program




                     Camelot Illinois Response to Step 2 of the RFP Illinois Lottery Private Manager   1
    Table of Contents
    This page intentionally left blank




2   Camelot Illinois Response to Step 2 of the RFP Illinois Lottery Private Manager
Appendix A1

Appendix A1 has been redacted as it contains confidential information.




                      Camelot Illinois Response to Step 2 of the RFP Illinois Lottery Private Manager
Arthur L. Gleason, Jr., WLA President
c/o Kentucky Lottery Corporation
1011 West Main Street
Louisville, KY 40202
502-560-1551; arch.gleason@kylottery.com
                                                                                  July 16, 2010
Mr. Thomas Morsch, Managing Director
Scott Balice Strategies
20 North Wacker Drive, Suite 2200
Chicago, IL 60606

Dear Mr. Morsh:

In my role as the President of the World Lottery Association, I have had the pleasure to work closely with Camelot and its
outstanding management team over the last five years.

Camelot has been a pioneer within the lottery industry in providing consumers with convenient and innovative access to
products (e.g. through the Internet, mobile phone, or on web TV) in a socially responsible way – proving that they can
maximize returns of funds for good causes and the government, while at the same time protecting the vulnerable.

Responsible Gaming and Corporate Social Responsibility (CSR) is one of the most important areas for the WLA and its
importance is increasing with the liberalization of markets around the globe and the need to protect the vulnerable.
Camelot’s lead in a number of working groups and projects has proven to be invaluable to the WLA and the lottery industry
as a whole.

Camelot has a longstanding track record in embracing and embedding CSR within their organization and operational
processes. It has long been recognized as a leading operator in this field, not only in the lottery world, but also across the
entire gaming industry.

Camelot has played a pivotal and leading role through its President’s chairing and currently co-chairing of the WLA CSR
Committee in the development and integration of the WLA Responsible Gaming Framework, an independent Framework
which certifies the maturity of responsible gaming programs in organizations.

Camelot’s leadership was again apparent by their ability to, not only achieve the highest level certification in the WLA
Responsible Gaming Framework (Level 4), but also its encouragement of other lotteries to follow their example and to gain
certification. As a result, more than 100 lotteries worldwide have achieved at least a Level 1 certification, five lotteries have
achieved Level 2 certification, three lotteries have achieved Level 3 certification, and 15 lotteries have achieved Level 4
certification.

In addition, Camelot has demonstrated excellence and early recognition of the issues that lotteries face in the area of
responsible gaming and how to respond to them. The WLA and our members have benefitted greatly from Camelot’s
thought leadership in the area of security and probity of operations through its chairmanship of the WLA Security Committee
and the establishment of the WLA Security Standards (ISO27001). These standards have been well established for a
number of years and without Camelot’s initiative and drive, the lottery sector would not be as advanced in this area as it is
now.

I have every confidence that Camelot is a highly qualified candidate to operate the Illinois State Lottery, not only with the
highest standards of integrity, probity, and social responsibility, but also as a candidate with exceptional commercial and
consumer understanding, with the ability to maximize funds for good causes and government public benefit purposes.

Please feel free to contact me should you wish any further details. I can be reached through my Kentucky Lottery
Corporation office at 502-560-1551 and by email at arch.gleason@kylottery.com.

Sincerely yours,




I:\WLA\camelot_illinos.docx
Developing a successful Loyalty program for
           with Camelot Illinois
Executive Summary

   Camelot will launch a best in class Loyalty Program in Illinois supported by emnos,
   the worldwide gaming and loyalty experts.

   The Player Club will:
   – Allow us to capture detailed play data, to manage players as individuals and 'protect'
     those who need it
   – Be multi-channel
   – Be based on best practice U.S. and UK retail, lottery and gaming loyalty programs.


   The loyalty club will deliver incremental sales to the Lottery via:
   – Responsibly increasing player frequency
   – Targeting: being able to treat individual players differently
   – Cross selling new games / different products

     Player benefits:
   – The more frequently you play the better the rewards




emnos                                                                                         • 2
Executive Summary
The scheme is easy to follow for the customer and retailer



   1       FREE SIGN UP               2                               3                            4

                                                                                                   1 wk play = 1 point
                                                                          Start earning
                                                                                                   Rewards determined
  Register on the Internet             Play in store or on                  rewards!
                                                                                                      by frequency
                                       the Internet weekly




                    5                                6                                7

                                                                 ..



                                                                                       Responsibly grow
                     Benefits for customer           Maintain account on            customer base and sales
                    on the internet & instore            the Internet                with targeted rewards




emnos                                                                                                              • 3
Agenda




         1   Overview of Loyalty proposal


         2   Current situation & opportunity for Camelot


         3   Future trends


         4   Loyalty initiative – detailed proposal


         5   Summary of recommendation




emnos                                                      • 4
The Camelot and emnos partnership



• Camelot have commissioned emnos to analyse the Illinois market and propose a
  loyalty club for Illinois Lottery players.

• This work was commissioned based on the successful relationship that Camelot
  enjoy with emnos in the UK, having

•   worked together on player loyalty for the National Lottery for several years.

• Camelot enjoys a player retention (loyalty) rate of 78% in the UK

• emnos work with leading retailers (e.g. Kroger) globally as well as a wide range of
  gaming clients




emnos                                                                               • 5
emnos is a consulting & services specialist – by focussing on customers
& loyalty , we drive step-changes in bottom line growth for businesses.

 1                                                     emnos Gaming clients 2010
                •   Founded 2001
      emnos     •   140+employees
     overview   •   5 European offices
                •   US office (New York)


 2
                •   Customer insights / segmentation
                •   Loyalty strategy & programs
     Service
     offering   •   Digital & multi channel strategy
                                                             Retail clients
                •   Category management, pricing &
                    promotions strategy

 3
               • Gaming & leisure centre of
Differentiated   expertise in UK
     skills    • ~40 SAS data analysts
               • Integrated analysis/research offer



emnos                                                                              • 6
emnos brings extensive customer loyalty and retail loyalty card
experience – both consulting & running programs
            Kroger USA
                                                            WH Smith, UK

                                   Alliance Boots, UK



             Tesco UK                                       Air Miles, UK



                               John Lewis Partnership, UK


        PAYBACK Germany                                     Homebase, UK



                                 Carrefour France, Spain

        Woolworths Australia                                 Nectar, UK




emnos                                                                       • 7
OVERVIEW : Camelot and emnos’s vision is to introduce an award-winning
Player Club, operating initially on the Internet & extending into retail via a
'Playercard', which allows us to understand & service players better &
leverages our key strategic goals
                                      •   4.7million Illinois residents currently play the Lottery
                                          – Within them are many types of players, with different incomes,
                                             backgrounds and outlooks*

                                      •   Currently the Lottery does not provide 'rewards' or any benefits to its
                                          players
                                          – Something that US consumers have come to expect via retailer , bank
                                             and airline programs, as well as broader gaming benchmarks **

                                      •   Our vision is to introduce an award-winning loyalty program, backed
                                          by a retail Player Club that:
                                          – Engages players with the Lottery, especially with the Common School
                                             Fund
                                          – Allows us to capture detailed play data, to manage players as
                                             individuals and 'protect' those who need it
                                          – Is platform agnostic
 PLAYER CARD                                 - The customer identifier could be deliver via a plastic card, or mobile
  MR S SMITH   Membership no. 76555
                                                 phone app or key fob, or other route
                                          – Is based on UK & European 'success' benchmarks



emnos                                                                                                                                 • 8
                                                                        SOURCES; * US TGI Profiling (Alex Fong) ** Appendix I to IV
Summary of proposed Illinois Lottery Player Club



        1   Simple, points program based on frequency of play


            Launched initially via the Internet in Year 1 with the ability for
        2   limited retail player benefits (eg. manual entry for Second chance)

            Retail scheme: ''Player Card" to allow tracking of play behaviour to
        3   launch in Year 3

            Together these initiatives will allow us to manage players '1 to 1'
        4   and to responsibly promote Lottery and ensure Player protection

            Internet portal used to manage account with future in store
        5   'screens' to give retail access

            Innovative benefits range, based on local Illinois & leading brand
        6   partnerships



emnos                                                                              • 9
Delivering targeted rewards



                                      • This program will deliver targeted rewards and benefits to
                                        players and will be free to apply for



                                      • Unique bar code for players will be delivered via multiple
                                        devices – phone app, key fob, plastic card etc



                                      • Online and retail sales will be rewarded. The program will
                                        be cost effectively administered via a player account via
                                        the proposed new website
 PLAYER CARD
  MR S SMITH   Membership no. 76555




emnos                                                                                            • 10
VISION: The Player Card & Loyalty Program work together to enable a
1 to 1 customer understanding and multi-channel engagement:


        Becoming player centric will enable Camelot Illinois to lock in and
          responsibly grow player value through deeper engagement


                                               Insight 'enabler'
        Capture of player-level data to create deeper actionable insight into player, product and retailer

                             Delivering benefits for our key stakeholders:


                 Player                             Product                         Illinois lottery
         Relevant personalised                                                     More cost efficient
                                           Existing and new products
          comms and service                                                     operations & marketing;
                                             aligned to key players
         benefits that improve                                                   able to target specific
                                           driving incremental value
        player engagement with                                                     player types and
                                                  and stickiness
               the Lottery                                                      responsibly grow spend




emnos                                                                                                        • 11
Our program will enable us to 'manage' players through the lottery
lifecycle and to introduce 'Player Protection' at relevant points

                                                      Need for/ relevance of Player Protection



                                                          Player Protection


                                                                                f   Reward
                                                                                    Loyalty

                                                                 e   Drive Cross-
                                                                         sell                     Evaluation
                                                   d Encourage                                         and
                                                                                                 refinement of
                                                      Up-sell
                                                                                                   activity to
                                   c Encourage                                                      improve
                                    Early Visits                                                 effectiveness
                                                                                                 and efficiency
                    b Obtain 1st                                                                      (RoI)
                        Play

        a Acquire
         Players
         Improved targeting as we learn more about players through their customer journey
emnos                                                                                                       • 12
Benefits to all three main stakeholders:

                           We will be able to treat different players, with different needs and
        Players


                               different backgrounds & profiles, in a targeted manner
                              Never miss a win                Easy & fast             Rewards my loyalty



                           Increased frequency of visit / footfall > incremental sales
        Retailers




                           • Faster route for loyal customers to transact (no lottery play slips to
                           complete)
                           • Incremental sales uplift – and attracting new players / customers
                           • More ‘insight’ on their shoppers (provided via the Lottery operator)


                           Overall, significant shift in the level of consumer insight,
                           enabling more effective marketing, game development and
                           retail partnerships
        Illinois Lottery




                           • Incremental revenues
                                  • Mainly via increased frequency / Less missed plays
                           • Targeting specific player types (infrequents or under-represented
                           segments)
                           • Increased player insight – driving capability for
                                  • Responsible growth of player revenues
                                  • Targeting of clusters of players
                                  • More successful & efficient new product/game development
emnos                                                                                                      • 13
Agenda




         1   Overview of Loyalty proposal


         2   Current situation


         3   Future trends


         4   Loyalty initiative – detailed proposal


         5   Summary of recommendation




emnos                                                 • 14
The Illinois consumer is very promotionally 'savvy' and are rewarded
for their loyalty, across most of their main shopping brands:


              • Cardholders receive discounts on selected items (savings are automatically
                deducted at the checkout)

              • Exclusive promotions are available to cardholders

     Card     • Manufacturer discounts can be passed on to cardholders
   features     – Manufacturer coupons are doubled for cardholders
   include:
              • e-coupons can be applied to the card and these are automatically redeemed at the
                checkout

              • Guarantees on purchase prices (the difference is automatically credited)




   Stores:




emnos                                                                                              • 15
Consumers have also come to expect 'rewards' within the Gaming
sector, driven by the casinos

                          The two largest players clubs are:

                          • Harrah's Total Rewards
                            – 40 million members across US
                              - The largest and most widely accepted loyalty
                                  scheme
                            – The Idea: 'The more you play in our casino's the
                              more freebies you get in ANY of our casino's'
                            – 4 tier rewards system, Gold, Platinum, Diamond,
                              Seven Stars
                            – See Appendix 3.0 for full case study

                          • MGM Mirage's Players Club
                            – Copycat program – not as cutting edge in use
                              of targeting / ;live' player data
                            – accepted in a dozen casino's worldwide



emnos                                                                            • 16
Agenda




         1   Overview of Loyalty proposal & Financials


         2   Current situation & opportunity for Camelot


         3   Future trends


         4   Loyalty initiative – detailed proposal


         5   Summary of recommendation




emnos                                                      • 17
FUTURE TRENDS: both 'push' and 'pull' factors back up our proposal
around delivering '1 to 1' service and a targeted marketing capability:

              PUSH                                               PULL
• Consumer expectations of multi-channel • Since mid 1990's , proven success model
  'service'                                 for 'growth' retailing businesses
  – 'Always on' service as norm             – Tesco leading UK 'case'
  – Driven by web innovators – and growth   – Other e.g's Kroger USA, Amazon
     in broadband penetration
                                          • Camelot UK & other European lotteries
• Fragmenting media landscape and new       has proven incremental revenues from
  channels means that 'broadcast' is        multi-channel customers & 1 to 1
  becoming less cost effective              'management'
  – Growth of digital                       – Online & retail players worth double retail
                                                only (Quant research, Oct '08)
• Data captured via 1 to 1 is a valuable
  business asset                          • Illinois need to continue profit growth &
                                            become more efficient operator
  – Technology enablers- including data
     management - are coming down in cost   – Invest in a 'future' efficient marketing
                                                model
• Lottery product is 'competitive' with
                                          • Requirement to extend 'player protection'
  other Gaming & leisure spend – and thus   across all play channels
  needs to compete with those offerings
emnos                                                                                • 18
  Future technology: - our program will be 'device neutral', so that we
  can adapt to mainstream technology trends & consumer take-up in the
  future if appropriate:


   1    Playercard via mobile phone

  • Integration of a contactless chip into a mobile phone                      • Rollout dependant on retailer take-up of a contactless
  • Lottery purchases could be made by touching device onto compatible         solution and availability of compatible mobiles
  reader in retail. The ticket would then print on the standard EPOS printer   • Likely 'mass' take-up: 2-3 years


   2    Contactless payment card

                                                                               • Rollout would be dependant on retailer rollout of a
  • Contactless micro payment card with games saved directly on card
                                                                               contact less solution in retail
  • Payment is made via the Micro-payment e-wallet
                                                                               •Likely take-up: 3 – 5 years

   3     Electronic paper / dedicated TNL device
   • Dedicated device similar to an RSA token but with a more advanced         • Would expect cost to be low enough in the next 3 - 5
   display that is capable of displaying reliably scannable barcodes.          years to allow mass production
   • Device could also have integrated contactless chip                        • Likely 5+ year timeframe for retailer adoption

   4    Biometrics / Fingerprint recognition
  • Using Biometrics both as a method to positively identify a player and as   • Would require a major Bank or Retailer to move to
  a payment mechanism                                                          Biometrics to gain any traction
  • Could allow rollout of previously age restricted services                  • Likely take-up: c.10 years future



emnos                                                                                                                                     • 19
Agenda




         1   Overview of Loyalty proposal


         2   Current situation


         3   Future trends


         4   Loyalty initiative – detailed proposal


         5   Summary of recommendation




emnos                                                 • 20
PROPOSED OBJECTIVES: to create a world class Player club & loyalty
program, that sets a benchmark within US State lotteries
  We have assessed goals for the loyalty initiative across the 3 main stakeholders:

        Camelot / Illinois              Players                         Retailers

     To deliver               • Increase ease of play &         • Increase ease of
     incremental sales to       offer targeted 'rewards'          operation / higher
     the Lottery via:           & offers for loyal                lottery earnings
   – Responsibly improving      players.                          – less queues
     player frequency (less                                       – faster transactions
                              • Desired feedback:
     missed plays)              – 'I never miss a winning         – better player insight
   – Targeting: being able        ticket- as it's safe in my
                                  account even if I lose my     • Desired feedback
     to treat individual          ticket‘
     players differently                                         – 'With my Playercard, I can
                                                                   go through the checkout
   – Cross selling new          – 'The Lottery gives me            really quickly – and can
                                  offers & small rewards like      also play on the internet to
     games / different            the grocery stores'              make sure I don't miss a
     products                                                      play'
                                – 'Every few months I get an
                                  update in the mail on the
                                  good causes we help'


emnos                                                                                        • 21
Key learnings from the US Lottery Loyalty programs


Á All schemes are administered online by the player
Á Minimal online transactional functionality across the States
Á Only physical Playerclub card is in California
Á No evidence of sophisticated targeting or player tracking of their best players
Á programs predominantly include 'second chance to win' promotions
Á Rewards based programs are run in joint partnership with third parties for prizes
   (eg. Michigan Pistons, Pennsylvania 'Reeses promotion')

Á c10% have mobile capability for receiving results, joining the loyalty program via
   text and/or receiving rewards via mobile.
   Á eg. Oklahoma and Florida lottery


emnos                                                                                 • 22
Loyalty initiative: we have structured and assessed our proposal from
four main viewpoints

 1                 Players                                          Retail partners               2
 • Operations – how rewards are earned               • Benefits for retail
   – Instore & online
                                                     • In-store operations
 • Redeeming rewards & account management
                                                     • Redeeming benefits in-store (eg. snacks,
 • Key benefits                                        instants)



                                   Illinois player loyalty program


 • Responsible promotion of play                     • Incremental revenue projections

 • Raising awareness of Common School Fund           • Assumptions
                                                     • Evidence from research & international
 • Player Protection                                   benchmarks



 3      Illinois State / Good causes                     Operator financials (Camelot)            4
emnos                                                                                             • 23
PLAYER OPERATIONS: How does the program work ?


              'Reward benefits'                               Intrinsic play benefits

   – The more frequently you play the                   – Easier play: Faster through the
     better the rewards                                   checkout
   For example:                                           - No need to fill out numbers on play
                                                            slip
   – 10 points (or 10 weeks of play) will get you a
     free can of Pepsi or bag of Doritos's              – Never lose a winning ticket
   – 50 points (50 weeks of play) will get entry into
                                                          - Your card / online account records
     a Holiday cruise competition                           your transaction

   – Able to donate value of benefits to chosen         – No missed plays
     Illinois lottery ‘Good Causes’. Eg. $2 to
     Education appeal                                     - Set up continuous play on the
                                                            internet (eg pay monthly)
   – Quarterly newsletter updating on latest
     Lottery donations, good causes and event
     (via mail or email tbc)                            – 'Acknowledgement'
     - Build awareness & lottery profile                  - a little thank you for playing the
                                                             Lottery -
emnos                                                                                            • 24
PLAYER BENEFITS: we propose an innovative approach, bringing in
local State partnerships and broader household brands to make the
rewards motivating

                       TWO LEVELS - INSTANT REDEMPTIONS & MONTHLY DRAWS TO WIN!!
    Redeem in retail




                         Free can of Pepsi or Doritos        Free instant ticket        Movie/ theatre tickets
                                 10 points                      10 points                    50 points
    Chance to win




                             Sports Merchandise                                       Holiday cruise in Florida
                              (10,000 to be won)        $50 cash back (5 to be won)
                                                                                           (100 to be won)
                                  30 points                      25 points                   50 points




emnos                                                                                                             • 25
PLAYER OPERATIONS: we envisage a Player card (plastic with bar
code), but also more innovative devices for customers

                      Device agnostic – our aim is to have a unique
                      identifier with the customer, via a barcode
                    • Join via mobile, Text 'join' to 86445

                    • Check your points balance via email

                    • Rewards voucher codes sent directly to your email

                    • Send out quarterly newsletters via text


                                    Tesco's have recently launched an
                                    iPhone application where you can
                                       use your Clubcard via mobile.
                                     We envisage this down the track
                                     (Yr 3-5) in Illinois Lottery program



emnos                                                                       • 26
Retail Operations: how does the Playerclub work in an Illinois store?


    A customer purchases a lottery ticket instore & presents their
        playercard on transaction, 1 ticket per week = 1 point

    The shop assistant swipes the card & the customers account
                    details come up on screen


    Screen prompts – 'would you like to cash your points in now?



            Keep saving                     Cash-in points
  Larger rewards are redeemed        A till receipt prints out the
  online (instant cash draws,        reward (eg. free can of Pepsi,
  movie tickets, sports              Doritos, free instant
  merchandise)                       OR to go in the draw for larger
                                     rewards go online (instant
                                     cash draws, movie tickets,
                                     sports merchandise)
emnos                                                                   • 27
UK National lottery research with retailers indicated multiple benefits
from a 'card' program:

        Represent 42%
                        Potential benefits to retailers from 1 to 1 'card':
          TNL value




                                                Source : emnos store interviews, 2009
                                                50 different UK locations
emnos                                                                                   • 28
Player protection and responsible promotion of play



   By collecting play data, the Club and retail card enables the Lottery to play a
   bigger role in helping customers play responsibly and within their means. There
   are 3-4 potential initiatives in this area:

• Defining of and tracking of 'problem' play behaviours
  – Flagging via a monthly report to the Board
  – Volumes of players and actions taken

• Responsible development of play – by targeting new player groups or higher
  income demographics
  – By better knowing our CURRENT players but also new demographics, we can
     responsibly manage up play (vs other leisure or gaming spend), as in the UK
     Lottery

• Setting voluntary play 'ceilings', administered via the Club


emnos                                                                                • 29
U.S PEERS: Michigan scheme is a rewards-driven 'Playerclub' with a
'second chance' lottery draw for players to win points and prizes


• Players register free for the club
on the website
    – Online administrated

• Players enter the ticket code of
their non winning lottery ticket and
are credited a number of points

• Points can be redeemed towards
further games or using the reward
catalog ($1 ticket = 1 point)

• Prizes include cash draws, hotel
packages, sports merchandise

• No retail card
   – retail tickets have to be
      entered on site manually

emnos                                                                • 30
US PEERS: Oklahoma offer a well developed Player Club, combining
rewards, information & a more community driven approach


• Register free on the website

• Information based
  – Mobile and email alerts for winning
     numbers, news and game updates

• Points & Rewards
  – Second chance draws for members

• Community
  – Sense of website community presence
    e.g. watching videos, fun stuff

• Other promotions
  – Additional special promotional offers
    for members

emnos                                                              • 31
Players Club benchmarks : New South Wales, Australia
A paid for scheme with 1, 3 and 5 year membership options




emnos                                                       • 32
Agenda




         1   Overview of Loyalty proposal


         2   Current situation & opportunity for Camelot


         3   Future trends


         4   Loyalty initiative – detailed proposal


         5   Summary of recommendation




emnos                                                      • 33
IN SUMMARY: our recommendation for a staged investment:


 1                      2                    3                      4
  Today: no loyalty           Player Club      Player Club          Playercard launched
     program                launched (web)   Mobile app. launch       across retailers

 • Limited online       • Online Loyalty     • Join via mobile,     • Playercard used
   promotions             program              eg. Text 'join' to     to track sales –
   – e.g. "Turn up        – collect points     86445                  potentially both
     the Pink"              and redeem                                of Lottery and
     Breast Cancer          for rewards      • Check your             FMCG products
     campaign                                  points balance
                          – based on           via email            • Mirrors the
   – "Millionaire           frequency of                              unique customer
     raffle"                play             • Rewards                bar code
                                               voucher codes
 • No clear view on     • Online 'hub' for     sent directly to
   retention metrics      account              your email
   or which players       management
   are 'valuable' for                        • Send out
   the Lottery                                 quarterly
                                               newsletter via
                                               email



emnos                                                                                     • 34
Executive Summary

   Camelot will launch a best in class Loyalty Program in Illinois supported by emnos,
   the worldwide gaming and loyalty experts.

   The Player Club will:
   – Allow us to capture detailed play data, to manage players as individuals and 'protect'
     those who need it
   – Be multi-channel
   – Be based on best practice U.S. and UK retail, lottery and gaming loyalty programs.


   The loyalty club will deliver incremental sales to the Lottery via:
   – Responsibly increasing player frequency
   – Targeting: being able to treat individual players differently
   – Cross selling new games / different products

     Player benefits:
   – The more frequently you play the better the rewards




emnos                                                                                         • 35
Appendix A4

Appendix A4 has been redacted as it contains confidential information.




                      Camelot Illinois Response to Step 2 of the RFP Illinois Lottery Private Manager   1
Appendix A5

Appendix A5 has been redacted as it contains confidential information.




                      Camelot Illinois Response to Step 2 of the RFP Illinois Lottery Private Manager
   Illinois Lottery
Player & Game Opportunity
   Research & Analysis
        Summary Report


         Prepared for




               by



          July 27, 2010
           RRC 5204
                           Table of Contents

                                               Page

Objectives                                       2

Methodology                                      3

`Executive Summary & Implications                5

Detailed Findings

General Findings                                16

Draw-Based Games                                28

Scratch-Offs                                    48

Internet                                        59

Social Responsibility                           72




                                    1
                              Objectives

z Undertake research into the Illinois Lottery market and develop an
  understanding of the existing player base to identify trends and insights to
  improve player understanding and sales performance.




                                       2
                          Methodology

z Focus groups were conducted in 3 locations in the Chicago, IL metro area:
  downtown Chicago, Oak Park, and Oakbrook.
z For each group, 10 people were recruited. In most groups, 8 people
  participated. For some groups there was a poorer show-rate.
z Groups lasted just under 2 hours each and were held in the afternoons and
  evenings.
z The table on the following page outlines the group number and composition.




                                     3
                            Methodology (cont’d)

                           Draw-based Games                           Number of Groups
Weekly players                                                               2
Occasional players                                                           2
Lapsed/reduced players who are younger with income under $50k                1
Lapsed/reduced players who are older with income under $50k                  1
Lapsed/reduced players with income of $50k+                                  1
Mostly play pick 3 or pick 4 occasional                                      1
Mostly play pick 3 or pick 4 weekly                                          1
                       Instant/Scratch-Off Games
Weekly players who spend $1-3/week                                           1
Weekly players who spend $5+/week                                            1
Occasional players                                                           2
                             Internet players
Mid-heavy players, mixed games, use the internet regularly and have
                                                                             1
   made a purchase online
           Total                                                            14



                                                4
Executive Summary
         &
   Implications




        5
                                   Executive Summary

General Findings                                                        z   Playing is public, winning is private. While this was
z Current advertising is unbalanced and appears to be                       more of a sentiment among DBG players, it also
   effective for big jackpot games only.                                    seemed to be prevalent among scratch players as
     z    Building awareness of the products is as important as             well.
          any product attribute or benefit.                                  z    There is excitement in being part of a big jackpot
                                                                                  drawing. However, people prefer to be alone to absorb
z   There is no recall of any current brand identity.                             the outcome.
    “You’ve got to be in it to win it,” a slogan that has                    z    An important exception is office pools, when being part
    not been advertised for many years, was really the                            of a group/crowd is part of the draw.
    only thing they recalled.                                           z   The simplicity of playing DBGs is a driver to some.
z   Distribution points are not a perfect fit with all current              Any games (scratch included) that are too
    or potential player lifestyles.                                         complicated are a turn-off.
     z    Pay-at-the-pump and less frequent visits to other             z   “Throw me a bone” is a common sentiment across
          convenience stores (C-stores) suggests that the current
          strategy may need re-thinking.                                    all types of games. Even from small winnings, a
                                                                            portion is reinvested.
z   Video Lottery Terminals (VLTs) are not an automatic
    win with concerns about poor security and a less                    Draw-Based Games (DBGs)
    attractive social setting.
                                                                        z Raffles are seen as a great value and a great
z   In all game types, multipliers are attractive. This is                 chance to win, but awareness appears to be quite
    consistent with some players’ love of bonus rounds                     low.
    in casino slots.
                                                                        z DBGs strike a chord of democracy, because
z   Second chance drawings seem to add value for                           everyone feels that they have an equal chance to
    some; a few feel they are inconvenient.                                win regardless of who they are or where they live.
z   Lapsed players are turned off because they keep                     z $100M jackpots get attention but if players don’t win
    playing but do not win. Although money prizes are                      something, even a small prize periodically, they burn
    preferred, they may be incentivized to play with non-                  out.
    monetary rewards.
                                                                        z People recognize that Lotto includes people in
                                                                           Illinois only, and that is a plus.
                                                                    6
                         Executive Summary (cont’d)

Draw-Based Games (cont’d)                                                z   Pick 3 and Pick 4 players, when playing those
z Those who play Little Lotto do so because they feel                        games, are unlike other Lottery players in terms of
   the odds are better than other games.                                     play style and preference for picking specific,
                                                                             meaningful numbers and their disciplined playing
z Fantasies of winning are motivated by specific                             regularity.
   purposes.                                                                   z   When playing other games (scratch or DBG), they mimic
     z   People play to satisfy both rational (e.g., practical and                 other player types (such as a preference for quick pick).
         altruism) and irrational (e.g., quit work and travel)
         motivations.
z   Many players give and receive tickets as gifts.                      Scratch-Offs
z   A significant segment of players have a deep and                     z Top criteria for playing include type of game/play
    long emotional involvement with their games,                             style, top prize/price of ticket, and odds of winning.
    particularly Pick 3 and Pick 4.                                            z   Theme, card design, images, color, etc. are further down
     z   Game playing is associated with a pleasant time in their                  on the list.
         lives or is passed from one generation to the next.                   z   For many, the initial winning experience serves as at
                                                                                   least a short-term template for how and what they will
z   Mega Millions and Powerball are not clearly                                    play.
    distinguished from one another. This was a                           z   The licensing of recognizable brands from pop
    universal finding.                                                       culture seems to increase players’ comfort with
z   Players want to hear about winners who are “like                         selecting a game.
    them” and live or work nearby. This motivates them                   z   Playing process is used as a quick fix and winning,
    to play more.                                                            even small amounts, generates an “inside joy”.
z   Office pools have a multiplier effect on participation               z   Annuity-type prizes are very attractive such as Win
    and generate a broad range of motivations for                            for Life which is hugely popular.
    playing (e.g. fun, social, share a common dream,
    etc.).                                                               z   There is value in extended play games. They
                                                                             provide a higher level of satisfaction among those
z   Players feel that DBGs are more honest than scratch                      who play them.
    cards because the draw is public.




                                                                     7
                        Executive Summary (cont’d)

Scratch-Offs (cont’d)                                             Internet
                                                                  z   Internet Lottery smashes the barrier of actual and
z A name or theme that in any way denigrates                          perceived inaccessibility.
  the player or decision-making process will
                                                                  z   Experience with other online shopping creates an
  have limited appeal.                                                expectation that online Lottery playing will be more
      z Games that are designed around specific                       convenient, engaging (dynamic multi-media
        segments’ wants/needs should be well-                         experience), relevant, and could include targeted
        received.                                                     promotions.
z Some players feel that better odds can be                       z   There is broad concern about security. The security
  found by buying in specific outlets and                             concerns include hackers, scammers, and tracking
  playing new games.                                                  of personal information.
z   People don’t like the mess associated with Scratch-           z   Players want complete control over all their online
    Offs.                                                             Lottery activities.
z   There is satisfaction with winning prizes at any level.       z   Social media represents a major untapped
    The threshold for making people feel like they’ve                 opportunity for the Lottery, particularly among
    won something good (the “broad smile threshold”) is               younger players.
    $50.                                                          z   Without retailer presence, players lose the ability to
                                                                      ask for assistance on how and what to play and a
                                                                      point-person to resolve issues.




                                                              8
                           Executive Summary (cont’d)
Social Responsibility
z Virtually no one had a clear understanding of how
    the Lottery proceeds are allocated.
     z   Their desires suggest that the percentage currently
         being allocated is right on.
     z   People want complete transparency.
z   Because Lottery is seen as a faceless agency,
    players are confused about who runs the Lottery.
    Many believe that politicians run it.




                                                               9
                                                  Implications
Marketing Communications                                                    Marketing Communications (cont’d)
z A strategically-focused integrated marketing                              z Due to the highly desirable nature of raffles, it is
   communications plan is required to build the Lottery                        essential that the Lottery increase awareness of such
   brand and create demand for products which are                              games.
   clearly differentiated within the Lottery portfolio.                     z There is significant revenue opportunity in promoting
     z   Some existing Lottery equities (e.g. lottery balls) appear to         specific Illinois-only jackpot games (e.g. Lotto and Little
         have the potential to be exploited.                                   Lotto). Media should be used (TV and radio) to drive
                                                                               sales of specific games and Instant tickets.
z   Given the impulsive nature of most Lottery purchases,
                                                                            z Promoting tickets as gifts can be used to bring new
    effective integrated communications must include                           players into the franchise.
    clear, behaviorally-focused strategies and attention-
                                                                            z A message that recognizes the emotional involvement
    getting executions for specific products.                                  of Pick 3 and Pick 4 players would likely bring more
     z   Additionally, a more player-engaging approach to POP                  people into these games and appeal to those who
         communications could maximize sales opportunities when                started and continue to play for these reasons.
         lines are long.
                                                                            z There seems to be an opportunity for big/small jackpot/
z   Reasons to play individual games must go beyond size                       payoff product bundling – e.g., Mega & Lotto;
    of the jackpot.                                                            Powerball & Pick 3 or Pick 4 - due to players’ desire to
                                                                               “cover all their bases.”
     z   With proper strategic segmentation, current individual
         game attributes could well be distinct enough to provide the       z It’s important to promote a diverse group of winners so
         basis of differentiation on both attributes (play style, jackpot      that Lottery players can see themselves among the
         size, odds) and benefits.                                             winner pool.
                                                                                  z   Televised drawings and shows featuring winners can play
z   Because big jackpot signage is intrusive, there is an                             a productive role in an integrated marketing
    opportunity to use this communication as a platform to                            communications strategy.
                                                                                        z   Attention must be paid to all elements including on-screen
    cross-promote other games.                                                              talent and positive impressions.
                                                                                  z   Additionally, Lottery should create channels to maximize
z   Messaging that emphasizes the democratic nature and                               viewer involvement in the Lottery drawings.
    simple-to-play attributes of DBGs could be very                               z   Lottery should encourage its media partners to continually
                                                                                      publicize the Lottery drawings on TV.
    effective.




                                                                       10
                                                 Implications
Marketing Communications (cont’d)                                       Distribution
z   The Lottery should leverage the credibility of non-                 z A holistic retailer plan with easy-to-understand POP,
                                                                             more appealing ticket display and Instant Ticket
    paid media in getting across its side of any story.                      Vending Machines (ITVMs), kiosks in untraditional
     z    This could include initiatives related to social                   locations, and better retailer sales and issues-related
          responsibility, winner news, etc. – anything to which              training will yield big returns.
          players are sensitive.                                              z   Potentially the retailer plan should be modified to
                                                                                  accommodate various types of retailers. For example,
                                                                                  C-stores with gas may require vending machines or
                                                                                  intrusive signage at the pump.
Player Segmentation                                                           z   More intrusive, quick-to-read, “How to Play” materials
                                                                                  should generate incremental trial of unfamiliar games
z   Players (particularly those playing the big jackpot                           and Instant tickets.
    games), appear to follow a “Lottery playership                            z   These materials may provide welcome information (and
                                                                                  capitalize on cross-sell opportunities) particularly in
    lifecycle” with specific phases associated with                               those cases where lines are long.
    distinct attitudes and playing behavior -- from initial             z   VLTs may represent an opportunity for incremental
    trial through ongoing participation to exhaustion and                   revenue but their introduction will require careful
    burnout (for lapsed players).                                           management. Some cannibalization of Instants
     z    Achieving a deeper and more definite understanding of             should be expected.
          this model may provide significant benefits in product        z   Every time a player enters a retail establishment
          development, distribution strategy, and marketing                 they should see a display of winners and winning
          communications.                                                   tickets.
                                                                              z   This display should be consistent from retailer to retailer
                                                                                  and easy to understand to help players quickly make
                                                                                  sense of this information.




                                                                   11
                                           Implications (cont’d)

Product Development                                                       Product Development (cont’d)
z The development of multipliers, second chance, and                      z Since giving and receiving tickets as gifts is so
    other bonus-type games and promotions should be                           common, it makes sense to develop a series of gift
    approached aggressively and systematically as they                        tickets (scratch-off and DBGs) for holidays and
    are highly likely to increase sales.                                      birthdays.
     z   It is possible that immediately identifiable Second              z For scratch-offs and raffles, the Lottery should have
         Chance or bonus play creative elements (e.g., logos,
         “branding”) might aid in maximizing awareness of these               an on-going process to anticipate and identify
         games and promotions over time.                                      winning licensing opportunities from pop culture.
     z   Entering second-chance drawings should be made as                z Although they may be eye-catching, the Lottery
         quick and hassle-free as possible.
     z   Pick 3/Pick 4 players in particular are likely to be more            should be vigilant to avoid using insulting or
         engaged, motivated, and excited by increased                         denigrating game names as this could have a
         awareness of bonus promotions.                                       negative effect beyond game sales.
z   Due to the highly desirable product attributes of                     z Games that attack barriers head-on may lower price-
    raffles, we recommend further development of these                        and convenience-related obstacles and can present
    types of games.                                                           Lottery as a solution to players’ concerns.
                                                                               z   For example, with higher gas prices leaving less change
z   Over time, there may be opportunity to develop other                           in their pockets, a game that rewards players with free
    Illinois-only games due to the highly effective appeal                         gas, appears to have tremendous appeal.
    resulting from limiting the pool of players.
                                                                          z   Additionally, it would be wise to develop games that
z   A portfolio or suite of purpose-designed games (e.g.                      are designed around themes that are appealing to a
    pay your mortgage, and annuity games like Win for                         specific segment’s wants/needs.
    Life) should have appeal to Instant players. These                         z   Younger players have a somewhat negative perception
    games speak to players’ irrational and rational                                of the Lottery. It makes sense and is desirable to build
    desires.                                                                       games and prizes around themes and prizes that people
     z   Special promotions along these same lines (e.g. Beat                      in their cohort enjoy. Some starter ideas include:
         the Tuition Blues) for DBGs could have similar appeal.                      z   Prizes: iPods, concert tickets
                                                                                     z   Games: tie-ins with Pitchfork, Facebook, etc.
z   The Lottery should investigate methods of refreshing                             z   Themes: around important and topical sporting events
                                                                                         such as NCAA March Madness; big music events like
    and building the inventory of extended play games                                    Lollapalooza; and, around the success and excitement
    like Bingo as a way to keep this specific segment of                                 of winning local teams, like the Chicago Blackhawks
    players’ attention and interest.


                                                                     12
                                             Implications (cont’d)

Product Development                                                            Internet
z Lottery should test the impact of a cleaner way to                           z An integrated plan needs to be developed that
    reveal numbers on scratch tickets such as pull tabs.                            includes multi-media dimensions (e.g. music, video,
    This should be a lower priority and may be evaluated                            and interactive games), the products to be offered
    for the long-run.                                                               (people expect the same but more), the
z Lottery should consider the development and                                       communications strategy, potential link exchange
    advertising of “tax free” jackpots, as this concept                             with other trusted sites, significant security
    appears to be attractive to many players.
     z   Despite the fact that players understand that this would                   components, a help desk (including live contact),
         actually be an after-tax number.                                           online subscriptions, user-generated content, age
                                                                                    verification, levels of player control, tie-ins with social
Prizes
                                                                                    media especially Facebook (including game
z   Creating a prize structure for some games that offers                           development), and online office pools.
    more and lower level prizes will impact adoption,                          z Players want the site to be limited to Illinois
    lapsed player reclamation, long-term loyalty, and                               residents.
    bottom line results.                                                       z A similar approach should be taken to develop a
     z   Although we need quantitative data to verify this, if the
                                                                                    mobile offering particularly for younger audiences,
         Lottery wants to increase word-of-mouth advertising,
                                                                                     z    Requirements include: speed, low RAM consumption,
         they should increase the number of prizes awarded                                and minimal opportunity for data error.
         between $200-$5,000.
           z   We expect that a a model segmented by prize level and           Office Pools
               player type can be developed and used to maximize the           z Office Pools represent a big opportunity. The Lottery
               different degrees of buzz opportunities.
           z   For the big jackpots, since prize pools under $50M                   should develop initiatives to maximize the marketing
               seem to be less stimulating, it may not be worthwhile to             efficiency (due to the potential viral impact) and
               pour money into advertising when prizes fall below that              revenue of office pools both online and offline.
               level.




                                                                          13
                                              Implications (cont’d)
Social Responsibility                                                        Social Responsibility (cont’d)
z   Total budget transparency is essential, including                        z Due to a poor track-record of privatization in Illinois
    promotion of public audits from trusted firms.                               (and specifically the city of Chicago), players are
z   The Lottery must seek ways to aggressively                                   very cautious about transferring control of the Lottery
    communicate with the public to build awareness that                          to a private corporation.
    the Lottery is fulfilling its mission of contributing                          z   A proven track-record record will be essential in selling
    significant funds to Illinois schools.                                             privatization of the Lottery to the people of Illinois.
      z   It must separate itself from the (political) body that is
          spending the money.
z   Seeing tangible results of Lottery proceeds creates
    credibility.
      z   Lottery should develop a communications plan, with an
          emphasis on P.R. and place-based media (like events,
          plaques, etc.) to show how the proceeds are being used
          in local neighborhoods.
z   Players do not perceive responsible gaming as a
    Lottery priority. And, it lies with the players to play
    responsibly.
      z   Instead of “call for help” as a responsible gaming tagline,
          it may be more effective to say something along the
          lines of “responsible gaming is everyone’s
          responsibility”, along with displaying the 1-800 help line.
z   As part of expressing the Lottery’s interest in helping
    players make good decisions with big winnings, it
    should consider providing recommendations (and/or
    lists without endorsement) for financial planning and
    assistance resources.




                                                                        14
Detailed Findings




        15
General Findings




       16
   Current advertising is unbalanced and
    only effective for big jackpot games
z Almost all respondents perceive that all of the advertising (including
  billboards, TV and radio commercials, POP, etc.) is devoted exclusively to
  the big jackpot games (Powerball and Mega Millions).
   z These messages are most noticeable when those jackpots are large.
     Respondents believe that the most money is spent on this type of advertising,
     especially when the pots get extremely large. But there was always a desire for
     more advertising of large jackpots.
   z To most respondents, the other games (DBG and instants) do not seem to be
     advertised at all.
       z This has a negative impact on high potential games like raffles and Lotto.
       z These other games seem to fulfill some important players’ desires, which are: higher
         odds, local winners, perceived as more/smaller prizes and easy to play.
z Building awareness of the products is as important as any product attribute
  or benefit.
   z In the past, games/tickets that were featured in TV or radio advertising, sold at
     higher levels than those that were not featured.
z An integrated marketing communications plan will be essential to building a
  strong and diverse product portfolio and profitable business.


                                              17
      The Illinois Lottery image is a mess

z When asked about what words or images they associate with the Illinois
  State Lottery, there was virtually no playback about the Illinois Lottery brand.
    z “You’ve got to be in it to win it,” an old slogan from many years ago, was the only
      as tagline played back on an unaided basis in every group.
z Respondents played back low level product/game attributes (e.g. big
  jackpots), emotions related to winning or not winning a big pot (“it’s about
  the dream”) and images of corruption (see Social Responsibility).
    z There was no consistent brand identity or key idea played back.
z Some of the Lottery’s equities are strong and can be recalled by different
  types of players. For example, even younger, occasional players recall the
  plastic Lottery balls.
    z These equities can be leveraged if handled in a contemporary way.
z U.S. marketing success stories indicate that creating a robust brand entity
  can have a dramatically positive impact on revenue and business stability.
  (Strong examples in the U.S. include Nike, Apple, and Coca-Cola.)
    z Currently , the Illinois State Lottery does not appear to have any clearly
      perceivable brand identity.


                                           18
       “You’ve Got To Be In It To Win It”

z This line was repeated, unprompted, in every group.
   z It appears to have become a player’s mantra.
z Seemingly it represents:
   z Hope and optimism
   z Not wanting to “miss the boat”
   z Large return for small investment




                                         19
   Distribution points are not a perfect fit
           with all player lifestyles
z For many occasional players the Lottery ticket is an add-on purchase. It’s a
  secondary consideration when going into current C-stores (with or without
  gas).
z For younger players and those who have C-stores in their office complexes,
  visiting these outlets is not a problem. It’s a regular part of their lives.
   z But this is not true for everyone.
z Gas station C-stores have become somewhat of a dinosaur with the move
  toward pay-at-the-pump.
   z Most people prefer to pay for their gas at the pump due to speed and
     convenience and are, therefore, not going into the stores as often as before. This
     has led to reduced spending on Lottery.
z The idea of a Lottery vending machine at the pump was highly desirable.
   z An added advantage to this strategy is that it divorces Lottery ticket purchase
     from the “spare change” dynamic.




                                          20
      A holistic retailer plan could yield a
           significant boost in sales
z In some cases, the retailer has an important impact on players. For these the retailer
  can be a trusted resource.
    z Some people trust local retailers to recommend and help them pick their games.
    z The retailer often offers proof that someone has won. People ask which games have been
      winning.
    z Players like to see the tickets on display, although for the most part, players indicate that
      ticket displays rate only 5 on a scale of 1 – 10.
z There is an opportunity for retailers to provide education to players so that they may
  present game choices in a simplified way.
    z This would require better POP materials outlining the games and easy ways for players to
      consider odds and payouts.
    z It also would require some level of retailer training.
z Long lines at the counters can be a deterrent to playing.
    z This is why vending machines for scratch tickets are growing in popularity.
         z However the machines are not especially inviting. More can be done with them to engage players.
           They also do not give change, and this is an issue for some.
    z Lines can also be a stimulant. They can remind people to play. It may also indicate that the
      jackpot maybe growing for the big games.
z Some respondents expressed the desire to have access to kiosks/vending machines
  in non-traditional retail locations.
    z One such example was adding vending machines in malls.



                                                     21
Video Lottery Terminals (VLTs) are not an
          automatic winning fit
z They are “not quite the Lottery.” Many people perceive that VLTs are more like casino
  slot machines than standard Lottery products.
    z Casinos are the 2nd most popular type of gaming with the slot machines as the primary focus.
      Although they are popular they not frequented as often as playing the Lottery.
z In that VLTs are planned to be located where people go to drink alcohol and socialize,
  it is seen as potentially disruptive and dangerous.
    z This is different from casinos because people go to casinos with the primary purpose of
      gambling; drinking is secondary. They may make more sense at racetracks or OTB.
    z Issues surround:
        z Security with people who have been drinking and may be unhappy with losing
             z “It’s not like Vegas” where they have trained security personnel to deal with these types of patrons.
        z Over-spending because of drinking.
z Lottery may be seen as “horning in” on existing illegal enterprises.
    z Many say that the currently installed base of “for entertainment only” video poker machines
      are actually used for gambling with under-the-table payouts by bar owners.
    z Some believe that many bar owners would not want VLTs, as the current “take” may be
      higher than that from Lottery VLTs.
z VLTs may represent an opportunity for incremental revenue, but their introduction
  may need careful management.
    z It requires a positive tie-in with current Lottery portfolio of games.
    z These funds are seen to potentially cannibalize Instant tickets or other gambling forms.

                                                              22
The simplicity of playing DBGs is a driver
                 to some
z When games start getting too complicated, people get discouraged.
   z The simpler the game, the better, for inexperienced players.
   z This suggests that an entire suite of games could be developed for the
     inexperienced player.
       z These games should be simple to learn, simple to play, and easier to win.
z Some people like playing the DBGs because “you don’t have to figure it out.”
  Some of the scratch-off games can be seen as fairly complicated if “you’re
  not familiar with them”.
z We found that, particularly with younger players, the DBGs were seen as a
  step up from what they played when they were younger (scratch-offs).




                                             23
                   Multipliers are attractive

z There is a desire to play games that have the opportunity to multiply
  winnings.
    z When respondents talked about their favorite slot machines at casinos, most of
      the top games included a bonus round that involved the potential for a multiplier.
    z This idea extended into their top scratch card game picks. Among the top
      favorites were:
        z Triple Winning
        z Double Red-Hot 7s
        z Triple Your Luck
z This is also true for the DBGs.
    z Awareness of the opportunity for a multiplier effect was higher for Powerball than
      Mega.
        z Most of those who were familiar with the phrase Power Play, were not sure how it
          worked.
    z Nevertheless, the concept of a multiplier was appealing for the DBGs as well.




                                              24
     Second chance drawings add value

z Awareness of these opportunities is inconsistent.
z When they learned of these promotions, they were surprised and many were
  excited.
   z This is true for some of the DBGs games and scratch-offs.
   z There were many who said that they would play more if they knew that they
     would have a second chance because it was free of charge – “why not?”
z There were a few nay-sayers among those who do not or would not
  participate:
   z “It’s a hassle to go online and enter all your numbers.”
   z They don’t want to save their tickets.
   z It infringes on their privacy and anonymity.




                                          25
 Lapsed players appear to be more active
       and have diverse interests
z When asked what they do for fun, many mentioned the outdoors and participatory
  sports.
    z Their focus was not on gambling (unlike core players).
z Their play style is less systematic and less planned.
z They are concerned about becoming addicted to gambling and this restricts their
  expenditure and frequency of play.
    z They are more likely to have a fixed gambling budget.
z They are more likely to play a game for short period of time and then move on to
  another game or quit.
    z Even if they win immediately, they may not stay.
z Some do engage in other gambling activities but do it more for the social interaction
  than for the gambling “fix”.
z In order to stay in the game, they need more frequent rewards and more substantial
  rewards.
    z Recouping at least their investment was important to some.
z They want to be incentivized to play and it doesn’t have to be money.
    z They don’t want another Lottery ticket but they’ll be happy with other kinds of rewards.




                                                26
      Playing is public; winning is private

z Standing in line to buy a ticket or walking down the street with a big jackpot
  ticket in-hand as the jackpot grows is part of the excitement of playing.
  There’s some degree of pride involved.
    z This is why office pools are attractive as well. It makes people feel like they are
      part of something big.
    z In fact, office pools are another reason why some people started playing. They
      don’t want to feel left out.
z Except for the office pools and scratch-offs that they do right at the counter,
  the winning is generally private.
    z They want to get the news when they are alone (not in a big group).
    z Potentially they can better deal with their disappointment in private. Or, if they
      have won, it gives them time to figure out what to do next.




                                            27
Draw-Based Games (DBGs)




           28
      DBGs strike a chord of democracy

z “Anyone can win, it’s a democratic game.” This type of comment was heard
  over and over.
z It makes people feel that they have an equal chance of winning regardless
  of race, socio-economic status, where they live, etc.
   z It may be their only opportunity to dig their way out or make a difference in their
     lives.
   z The thought of someone down on their luck winning the jackpot was extremely
     positive. It also reinforced their feeling that “anyone could win, even me”.
z Messaging that has this type of appeal could be very effective.




                                          29
    People play to satisfy the rational and
              irrational desires

                  Rational                                       Irrational




                                                                               Fantasy
                                                        Work
      Practical                Altruism                                           &
                                                       related
                                                                               Freedom




                                                        Never
                                                                                       Buy the big
Pay off      Pay for   Help family   Charitable          have          Travel
                                                                                       Ticket items
 loans       college    friends        giving          To work       (Fiji, Tahiti)
                                                                                      (house, boat)
                                                        again




                                                  30
   People have specific purposes for the
    money in mind when they dream of
                 winning
z Many respondents play with a specific purpose in mind.
    z Many of the dreams related to the large pots included paying off loans (e.g.
      mortgages, car loans, student loans, etc.)
        z Games designed around specific purposes seem to be appealing.
        z Games could be created around paying off a number of loan-types.
    z A lot of people mentioned the dream of travel.
        z Games that would reward people with tickets or other types of trips are also a desirable
          twist on the prizes offered. It doesn’t always have to be cash.
z Also, people are realistic about the jackpot sizes and pre-calculate what their
  winnings would be after paying taxes if they won.
    z A few people mentioned that it would be nice to have the Lottery pay their taxes
      for them and just promote the after-tax prize.
    z Or they could just position it as though the Lottery is paying their taxes for them.
        z This is commonly done at retail for purchases like cars and furniture or other high ticket
          items.




                                                31
                      Dreams and fantasies

z The big jackpot games give them the license to fantasize.
z Why do they keep playing?
   z   They want to be able to brag.
   z   It’s an inexpensive way to chase a dream.
   z   It’s life-changing. They want to change their lives.
   z   To some it’s their only hope.
   z   Financial security
        z Many wanted the freedom to help their friends and family.




                                              32
         However, burn-out is a real concern
                                                                                    A ticket before the
Stimulated to play                                      Now it’s their turn to      drawing is filled with
(seeing billboards,        Buy ticket. Put in           dream (their ticket is      potential. (Like Willy
news, signage about        pocket.                      their license to            Wonka’s Golden
big jackpots)                                           dream).                     Ticket)



People can start                                        Each time someone           Without support or
relaxing because           This happens each            else wins the big           incentives, there are
they’ve got their          time the pot hits            one, players crash.         only so many “crashes”
ticket. There’s            $100M+.                      It’s effectively a roller   a player can sustain
nothing more they                                       coaster ride when           before they will give up,
can do then but wait                                    the bottom falls out.       stop playing, or start
and watch.                                                                          playing another game.

  z Without rewards, the only way for players to continue playing the big jackpot games over the long-
    run is to be in “denial.”
  z It takes a lot of will-power to keep saying “some day, some day.” People have to be strong and
    stubborn.
  z If people are not at least rewarded for their determination, they are likely to give up.
  z It doesn’t mean that they will never come back. There are certain trigger points that might cause
    them to return regardless of them not winning. But, NOT losing them in the first place should be a
    priority.

                                                   33
 $100M jackpots get their attention, but if
 they don’t win some prize occasionally,
              they burn out
z “Throw me a bone!!” More, smaller prizes keep people playing; it keeps
  them in the game.
    z Conversely, not winning anything over a long period of time drains them and
      causes them to move on to another game.
z Smaller prizes going to more people seem to be desired.
    z They don’t need to win big to keep playing, they just need to win something.
    z If they win, it not only makes them want to stay in the game, but it often
      incentivizes them to play more often.
        z Most people put at least some of their winnings back into the game by buying more
          tickets.
z The big jackpots still draw them in, particularly when they hit around $100
  million+. Most players (core and occasional) notice the signs in-store and
  the big billboards on highways.
    z When the jackpot hits this level, a buzz begins. People start talking about the
      jackpot. The really big jackpots are heavily promoted by the media and retailers.
      People want to become part of it and feel badly if they are not, so they are
      motivated to buy a ticket.
z Because the jackpot signage is noticed and draws them in, there is an
  opportunity to cross-promote other games.
                                              34
      Smaller jackpots have a potentially
        important place in prize pool
z A few indicated that $50 million is worth playing, but there was little interest
  below that point for PB and Mega.
    z For other DBGs , the smaller jackpots and perceived better odds have appeal.
    z While this may or may not be true, it is a key driver to people playing Lotto and
      Little.
z Among occasional players, there is some perception that “I might as well
  NOT win for the chance at a bigger jackpot.”
    z “For a buck, I might as well play for the biggest return.”
    z This leads one to the conclusion that there is a real risk in the smaller pot games
      being cannibalized by the big games.




                                           35
       DBGs appear to be more “honest”
         because the draw is public
z The drawing of the balls is a public process that everyone can watch but no
  one can “fix” (i.e., cheat to pre-arrange winners).
    z It gives players a sense of democracy/every person has an equal chance of
      winning and reflects positively on the Lottery.
z It makes the Lottery appear to be honest. With the scratch-offs, it feels more
  like there may be something going on behind the black curtain that players
  cannot see. Transparency adds to credibility.
    z Some liked the game more if they had a positive connection with the person
      drawing the balls (e.g. attractiveness, likeability).
z There were some creative ideas offered about what would make these types
  of games more fun. One concept that respondents seemed to like was
  changing up the winning number selection that would be fun to watch on
  television.
    z Draw cards out of a deck.
    z Throw darts at a dartboard
z People loved the idea of having players submit their names into a pool to
  somehow participate in the television drawing.
    z They liked the idea of seeing the drawings on TV during prime-time.

                                          36
       I like to hear about winners “in my
                     backyard”
z People are more apt to believe that the dream is possible and will keep
  playing when they hear about winners who work or live in…
   z   Illinois
   z   Their city or town
   z   Their office building
   z   Etc.
z They also like to see people who are in their age range – especially among
  the younger players.
   z Many do not believe that young people ever win the big pots.
   z Hearing about people their age winning the big pots helps them believe that
     “someone like me can win!”
z Women (especially female heads-of-households) and minorities do not recall
  seeing “themselves” among the winners.
   z It is essential that the winners be heavily promoted, demonstrating the diversity in
     the winner pool.



                                          37
    The big jackpot game perceptions are
                  blurring
z Mega Millions and Powerball are not clearly distinguished from one another.
z Everyone knows that they that both cost $1, both include a drawing and have the
  largest jackpots, but beyond that, there is little awareness about their differentiation.
    z Some believe that the number and specific states included in each game are different, but are
      not sure of the exact details.
z Because of this confusion, some people play both games just to make sure they are
  covered on the largest jackpots; however, not everyone is doing this.
    z Some play “whichever jackpot is higher” but are not particularly loyal to either of the game.
z There is a potential opportunity to leverage the confusion and promote playing both
  games to make sure they don’t miss out on a big pot.
    z The risk to doing this is accelerated burn-out on the games if they do not win.
z Another way players are “covering their bases” is by combining a smaller jackpot
  game (that has better odds) with one of the big games (PB or Mega). Lotto and Mega
  are commonly played together.
    z There is an opportunity to bundle games and promote them in this way.




                                                 38
“I play because my mother played” suggests an
  emotional attraction to the game beyond the
                      prize
z Passing the Lottery on to the next generation is a common occurrence. This
  was much more common with the daily games than any other DBGs.
    z Many people started playing because they saw their parents or older relatives
      play.
        z Those people are generally important parts of their lives. Playing the same games
          makes them feel close to those people and/or brings back memories.
    z People are pulled into the game by relatives in multiple ways. As a child, they
      remember being given an assignment as a treat (scratch off my numbers).
      Sometimes they are invited to pick a game or a number. They are given a role in
      the process.
z While this may be perceived negatively by some, a message that takes this
  insight and turns it into a positive would be likely to bring new people into the
  game and appeal to those who started to play/continue to play for this
  reason.




                                              39
   People recognize that Lotto includes
  people in Illinois only and this is a plus
z Awareness is fairly good that Lotto includes Illinois-only players among Lotto
  players but not as high among non-players.
    z This is an appealing aspect of the game – and a reason why some people do not
      play the big jackpot games.
        z This plays into the desire for winners to be “in my backyard.” “Someone’s going to win
          and it could be me” because there is a restricted geographic area where it’s being played.
    z Promoting this aspect of the game should improve awareness and, therefore,
      increase Lotto playing.
z The jackpot is bigger with Lotto and that is also a reason to play Lotto over
  Little Lotto for the same bet.




                                               40
    Little Lotto’s odds are a key driver to
                    playing
z The good odds of winning and fewer numbers in the choice set are among
  the top reasons why people play this game.
z They recognize that the prizes are smaller but feel it’s worth the trade-off.
  “You can’t be too greedy.”
z They have worked out the odds, it’s a reasonable jackpot, and it’s a regularly
  won jackpot.




                                        41
Daily game players are different than other
              DBG players
z Pick 3 and Pick 4 players are unlike many other DBG players.
z Most have not varied the numbers they play and the playing patterns in
  many years. They are very disciplined.
z Some don’t have any knowledge that there are different ways of playing.
   z Some view themselves as smart players because they are knowledgeable about
     the methods and ways of playing (e.g. straight, boxed, combo, etc).
   z Yet, when learning about these alternatives, many who had been unaware felt
     that they would change their playing pattern.
z When these players win, it’s as much about skill as it is about luck.
z They don’t want to hear negative things about the Lottery winners because it
  destroys their fantasies about winning.
z There was limited awareness of the Green Ball promotion, but a high degree
  of interest in it once it was explained.
z The main reason why they play one game over the other is due to the 3-digit
  or 4-digit number they play which has meaning to them (and is easier to
  remember than numbers for larger jackpot games).
z Those who play Pick 3, feel that it’s a smarter game to play because the
  odds are better. However, for those who favor Pick 4, they feel the trade-off
  in picking the 4th number is worth it for 10X the prize.
                                       42
                  More on Daily Games…

z When asked about playing more than once a day, a few were concerned
  about over-spending and possibly becoming addicted.
   z The evening draw was more popular than the midday.
   z The midday draw seemed to be more negative because the evening draw was
     where it all began.
       z Some saw it as “emotional blackmail” since they would feel badly if their numbers came
         up when they were not playing.
   z Others were excited to learn about multiple drawings per day and expressed an
     interest in them.
z There is the potential for incremental revenue by educating players who are
  unaware of additional ways of playing (e.g. straight, boxed, combination)
  and the differences between Pick 3 and Pick 4.
z Even though they see themselves as different from other players, many still
  play the big jackpots. The big draws are unifying games across players.




                                             43
 Individual methods of picking numbers
are based on highly personal symbology
z Particularly for the Pick 3 and Pick 4, the chosen numbers are highly
  personal and meaningful:
   z “I play my address”
   z “I play my birthday month and day”
   z “I play the years my children were born”
z They also place a lot of weight on numbers that appear in dreams and those
  they encounter in random places.
   z A number(s) that they see multiple times in a day is a “sign”.
   z Many of these people appear to be highly superstitious.
z For these games, they would never use quick pick.
   z Beyond 3 or 4 numbers, most people do not have a system or have meaningful
     numbers. For numbers beyond 4 digits, they pick random numbers or pull a quick
     pick.




                                          44
 Raffles are currently significantly under-
                 leveraged
z Awareness of raffles appears to be quite low, yet those who play them love
  them.
    z They all indicated that they would want more of them despite the higher ticket
      price ($20).
z Players are so connected with this type of game that they recall the holidays
  when they ran, the characters in them, and the game themes.
    z This is true for both occasional and core players who have played them in the
      past.
z The passion for this type of game seems to be due to the controlled odds
  (unique number – only one person can win), ease of play, relatively high
  number of known winners, and the known number of prize levels/payouts.
z Overall it was seen as a good value for the money and a good chance to win
  a valued prize.




                                          45
    Gift-giving is a way to grow business

z Many people got started playing because they received a ticket as a gift for
  a birthday, at a holiday party, or for a holiday gift.
    z Some people said that this was how they started playing. It got them hooked.
z Many players also give tickets as gifts.
    z They are commonly given as stocking stuffers, for birthdays, etc.
z Promoting tickets as gifts brings new people into the franchise.
    z It’s especially effective if the person wins something on the first play.
    z For this type of ticket, it would be ideal if the ticket had a high probability of
      winning.
    z It also reminds core players about giving Lottery tickets as gifts.
z People talked mostly about giving Lotto tickets and scratch cards as gifts
  over the big jackpot games.
    z Some pair them together and give both (a suite).
z There may be an opportunity for a suite of “happy birthday” Lottery products.



                                              46
                  Office pools are a win-win

z Office pools appeal to a variety of interests:
     z   They are a point of entry for many people
     z   They are a fun, social activity
     z   They bring together those who share a common dream; they’re all in it together
     z   They provide a point of bonding and conversation
z   People in office pools mostly play the big DBGs.
z   There is some perception that the big groups always win.
z   There is a multiplier effect. One person’s excitement can be contagious.
z   It was described as “a mob mentality.”
     z When everyone else is playing, it makes those not playing feel left out
z Although they feel connected to their co-workers, it doesn’t stop them from
  playing other games “behind their backs.”
z The office pool, drives playing without the win.
     z The group loss is less disappointing because they are having a good time while
       playing
z There is a big opportunity for office pools online.


                                            47
Scratch-Offs




     48
 Scratch-off game purchase criteria place
 physical card characteristics low on the
                   list
z Overall, without quantitative data, selection criteria includes (potentially in
  this order):
    z   Top prize/price of ticket
    z   The type of game/play style
    z   Odds of winning
    z   Theme
    z   Card design/images/colors/size
         z “Gold is always good”
         z “Big sized tickets imply big wins”
         z “Lucky” symbols are attractors to certain players
z It is important to remember that none of these factors are considered
  isolation.
z When they see the ticket display, players must quickly make sense of the
  games to make their choices. To some, it’s overwhelming and confusing.
  Some suggested that it might be a barrier.
    z The big font/type that calls attention to the top criteria tend to get the votes for
      random or new purchases.
z There is a perception that the more instant ticket games available, the lower
  the odds of winning, overall.
z For many, the initial winning experience serves as at least a short-term
  template for how and what they will play.

                                                49
 Licensing recognizable brands from pop
        culture seems to resonate
z Casino slots such as Wheel of FortuneTM, MonopolyTM (there was also
  strong recall of the McDonald’s MonopolyTM promotion), Deal or No DealTM,
  Double Red-Hot 7s, etc. are among their favorites.
   z Part of the draw to these games is that players have some knowledge or
     awareness about how these games are played. This familiarity gives them
     confidence that the scratch card will provide them with the same experience.
       z That is why respondents were especially excited when presented with the UK scratch
         tickets with these themes.
   z There is a strong association of casino properties with certain instant tickets,
     particularly when a player has had a winning experience with that licensed ticket
     identity.
z While they liked some of the Illinois games, when forced to choose favorites
  from the cards displayed, respondents seemed to demonstrate a preference
  for the UK games overall.
   z They evaluated each on its face value and what the game meant to them.
   z There was no evidence that a card being from the UK had a negative impact on
     their choices.
       z Nor did a card being from Illinois have a positive impact on their choices.




                                               50
  “It’s a quick fix” is a motivator to some

z Many people prefer to play the scratch-offs because they know immediately
  if they have won or lost.
    z A lot of people do not like to wait for the drawings.
z It gives some people a “quick fix.”
    z They like to and need to play. It’s become a habit. So, the scratch-offs give them
      a quick way to play and fill that need.
    z It gives them instant gratification.
z Winning the smaller prize amounts is an “inside joy.” They don’t shout it from
  the roof-tops or tell all their friends, but their own satisfaction is what
  matters.
    z Conversely, on lower-priced tickets, they are only a little broken-hearted each
      time they lose.




                                            51
     “Throw me a bone” is a common
  sentiment among these players as well
z More prizes, even small ones, are positively perceived and keep people in
  the game.
    z Even winning another ticket keeps scratch card players going.
    z Many players also reinvest their winnings in additional tickets if they win cash.
        z So, this strategy can be a win-win.
z Experiencing a win on one of the first tickets is crucial to captivating their
  loyalties.




                                                52
       Annuity-type prizes are among the
                   favorites
z Win for Life is a hugely popular game. Players like this game because the
  concept of an annuity prize fulfills a particular dream.
    z “What could be better? I could get money for the rest of my life.”
        z To some this could mean not working as hard as they currently work.
        z It implies financial security and no worries.
z This type of prize is especially believable because the prize itself is part of
  the name.
    z The name is also very memorable because the prize resonates so well with
      consumers.
z More games like this should do very well.




                                              53
   There is value in extended-play games

z In general, it seems that players tend to pick and stick with a specific type or
  set of games.
    z For example, some like extended play games and prefer games like Bingo,
      Crossword, etc. and will buy these games first.
        z Once they have satisfied this preference, they will allow themselves to purchase other
          types of games.
z Those who play this type of game have a slightly different motivation than
  other scratch-off players.
    z The extension of the game suspense through the reveal process, multiple ways to
      win, gives them the feeling that they are not an instant loser.
    z They want to kill time and in some ways it is a pastime. Some play when they are
      bored, while commuting, when watching TV, etc.
z For some, it’s associated with a sense of accomplishment and skill.
    z It can feel like they are doing two things at once – engaging in an intellectual
      activity as well as playing the Lottery.
    z At the end, if they win, it increases their satisfaction and sense of
      accomplishment.
z It extends their enjoyment and because it does this, it adds value to their
  purchase.



                                               54
   Insulting names are rejected; targeted
             themes are desired
z A game name or theme that implies that they are dumb or are making a bad
  decision is often rejected. One example of this is was Chimp Change. This
  name was plain insulting.
z Attacking a barrier head-on lowers the obstacle and can present Lottery as a
  solution to players’ concerns.
   z For example, with higher gas prices leaving less change in their pockets, a game
     that rewards players with free gas has tremendous appeal.
z Additionally, a game that is designed around themes that are appealing to a
  specific segment’s wants/needs is likely to be well-received.
   z Younger players have a somewhat negative perception of the Lottery to begin
     with – “it’s a game for older people.” “It’s not a cool thing to play.”
   z However, it makes sense and is desirable to build games around themes and
     prizes that people in their cohort enjoy. Games can be built around the following:
       z Prizes: iPods, concert tickets, apparel
       z Games: tie-ins with Pitchfork, Facebook, etc.
       z Themes: around important sporting events such as NCAA March Madness, the
         Superbowl, Fantasy Baseball, etc; big music events like Lollapalooza; and around the
         success and excitement of winning local teams like the Chicago Blackhawks.



                                             55
  A mythology exists around where odds
               are better
z We found that many Lottery players are very superstitious.
z People believe that newly introduced games have a higher probability of
  winning.
    z We heard this mostly from scratch-off players.
    z Both occasional and core players shared this sentiment.
    z At least in part, this explains the popularity of seasonal games.
z Players often ask the retailer about new games.
z There should be 2 distinct communications programs for new vs. established
  games – particularly with scratch-offs.
z There are a variety of beliefs about where there are better odds related to
  ticket numbering, new rolls of tickets, rolls of tickets from which many or no
  winners have been generated, etc.
    z Doing anything to recognize or promote this mythology could carry significant risk.
z They also believe that there are “lucky locations” – where winning tickets
  have been purchased before.



                                           56
                          Inconveniences

z We frequently heard that people do not like the mess created from scratch
  cards. Despite the mess, they love scratching. A cleaner way of doing this,
  such as pull tabs, could overcome this inconvenience.
   z This is a potential appeal for online scratch cards.
z Although not heard often, we did hear that there are no cards designed for
  left-handed scratchers.




                                          57
                        Prize Satisfaction

z “Smile” prizes ranged from $50 to just under $200
z “Tell a friend” prizes ranged from $300 to under $1,000
z “Create a buzz” prizes ranged from under $1,000 to under $5,000


z This demonstrates that for instants players there is still value – particularly
  “buzz” or viral potential in the lower prize amounts




                                        58
Internet




   59
   Internet Lottery smashes the barrier of
     actual and perceived inaccessibility
z Across all segments, convenience came up as a reason why they play (it’s
  on my way home, it’s in my building at work, etc.); but inconvenience (it’s out
  of my way, I don’t have time, etc.) also came up as a key barrier or a reason
  why they stopped playing.
    z If they have access to the internet, everyone can play.
    z Many said that they would expect to play more games.
z However, due to the relationships they have built at retail and their
  established current playing habits, they also want to be able to purchase
  tickets at retail.
    z They do not necessarily care about retailer commission. It’s more about their
      habits and control (i.e. they want the flexibility to buy where and whenever they
      want).
    z At first, the internet would be viewed as a complementary channel for purchase
      and playing. Some said that they would “test it.”




                                           60
 Experience with other shopping online
influences expectations of online Lottery
                playing
z Based on prior experiences online, players believe that playing will be:
    z   More convenient
    z   More engaging
    z   More relevant
    z   And include targeted promotions
z They believe that the experience online will involve full multi-media
  capabilities, and be dynamic and engaging. They expect it to feel more “like
  Vegas.”
    z They want music, video, interactive games, 3-D action, broader variety (maybe
      different than what is currently offered in-store) – all the bells and whistles.
    z The expect to find virtual scratch-offs, slot-style games, etc. and video bonus
      rounds. They expect the site to include all the current games and even more.
z Another advantage is that online purchasing eliminates all undesirable
  experiences they have at retail. For example, they can take their time
  selecting games, picking numbers, etc.
    z There are no lines and no one behind them putting pressure on them to make
      their transaction faster. This is especially relevant for the occasional players.



                                            61
  Online games lend themselves to quick
   product and promotion development
z Their expectation is that there is more opportunity to make the games more
  topical and timely.
   z For example, during the Stanley Cup Playoffs, the Lottery could quickly introduce
     a new game based on the winning team, round by round.
   z Players and coaches could promote the game online without much effort.




                                         62
Online subscriptions have huge potential

z Few people knew about subscription playing or how it worked.
    z Once educated, interest piqued.
z Even if internet Lottery ends up not being feasible, online subscription has
  an enormous amount of potential.
z However, they want no upfront fees for participation and no on-going fees
  for playing.
z When respondents talked about missing a drawing, many of them showed a
  lot of emotion and almost fear.
    z The idea of a drawing without their participation and their numbers being pulled
      created panic in the room. “If I miss it, I pray that my numbers don’t come in” or
      they don’t watch the draw or check their numbers. They go into complete denial.
        z Of course, they are relieved when they learn that their numbers were not pulled.
    z “You never have to miss a drawing” should be the lead to attract more players to
      this means of playing.
z There was some interest in designing subscriptions for specific purposes.
  For example, there was interest in a vacation subscription, a hospital visit
  subscription, etc. -- anything that takes people out of commission for a
  period of time.
z It seems likely that they would also be interested in buying subscriptions as
  gifts.

                                               63
  There is potential to leverage the user-
     generated nature of the internet
z With the popularity of user-generated products, services, communications,
  etc., the Lottery could hop on the bandwagon.
   z User-generated games and scratch-card themes, etc. could be very engaging,
     improve perceptions of the Lottery, encourage new participation, and make the
     people of Illinois feel that they are “owners.”




                                        64
Concern about hackers and security must
         be addressed head-on
z When asked about playing the Lottery online, some expressed concerns
  about security – particularly because of the rampant Illinois corruption.
    z Anything that can be done to demonstrate the security measures used would help
      alleviate these concerns.
    z They would also like to know that their money is secure. Money-back guarantees
      might be necessary.
    z They want protection and assurances against external events like system
      crashes. “How would I prove that I had the winning number without a physical
      ticket?”
z Although there are some concerns related to Illinois, they still trust the Illinois
  State Lottery site more than any other 3rd party site for buying their tickets.
    z Amazon.com is a trusted site and perceived as user-friendly. This site should be
      investigated as a process model for the ISL site.
z If anything does go wrong, they want to be able to speak to a human being.
z There is a concern regarding hackers: e.g., people creating fake/bogus
  winning tickets, winning the Lottery without actually playing, hacking into
  their account and person details, etc.
                                          65
                  More security concerns

z They want to be rewarded for winning and losing but they do not want their
  playing tracked.
    z They want privacy, period. They want it from the Lottery and from family
      members who may be snooping around. Multiple levels of security will be
      necessary.
z One of the benefits of playing online is that they like the convenience of
  being able to print out their own tickets and the security of knowing that if
  they lose it, they can print it again.




                                         66
   As with other online activities, players
   want complete control over all Lottery
                engagement
z People who are active online are used to being able to control and design
  what they do online.
z This control extends into…
    z How often they receive emails/reminders/notifications
         z They want notifications that their bet has been accepted.
    z   How often they play
    z   How long they play (when they start and when they end their engagement)
    z   What games they play
    z   How much money they play
         z Spending more than they should or have budgeted was a concern to many across all
           groups. Playing online would give them up-to-the-minute information about their account
           and budget.
         z Some recognized that lack of control over spending could lead to gambling addictions.
z If all of these qualifications are covered, respondents indicated that overall,
  they would play more often and spend more money.
    z They might also play more game types
z They expect that determining their winnings will become more seamless and
  accessible and would like to be able to redeem their tickets online.


                                                67
 Leveraging social media is essential in
building a strong support among younger
                 players
z Most players use Facebook as their primary social medium.
z Building a friend base on Facebook would raise awareness, build loyalty,
  and, potentially, boost playership.
    z However, “friends” would need incentives to initiate the friendship and more
      incentives to remain friends.
    z Examples of desirable incentives included: free Lottery tickets, promotions like
      buy 10 get 1 free, etc.
z Facebook lends itself to organizing and initiating other types of friend pools
    z There were many young players who said that it would be a lot of fun to do and
      play Lottery pools.
    z It was mentioned that Facebook is rolling out its own currency system which
      would allow Lottery to use a trusted payment system while leveraging the social
      aspect of the network.
    z Some would like a game offered only on Facebook (restricted to Facebook
      members).
z Simply by having an online offering the Lottery image is contemporized.
    z However, having the right kind of presence will draw in younger, more hip players
      and make it a game for them.


                                           68
Without a retailer present, players lose the
       ability to ask for assistance
z Online, there essentially is no retailer to ask for help. There is no
  “consultant’ available, which is something many players value.
    z The “journey” or playing/buying experience is also very enjoyable to some people.
      Eliminating this type of interaction could be seen as a negative.
        z Replacing this interaction could be important. Social media lends itself well to this.
z The opportunity is to offer different game pickers who players could choose
  based on some criteria and decide for themselves if they like the game
  pickers’ choices. This would replace the retailer as consultant.




                                                69
      They want it to be limited to Illinois
                    players
z They don’t want people out-of-town being able to play Lotto or any other
  DBGs online.
   z This controls the odds, could increase participation in-state (“it’s our game”), and
     they believe it increases their chances of winning.
z There’s even more concern online about underage playing.
   z “How would this be controlled?”
z For both of these issues, they want assurances.




                                           70
  Mobile implications could be enormous

z There seems to be some appetite for playing on their mobile phones.
   z The appeal is particularly evident for jackpots and younger players.
z Major concerns:
   z It’s got to be fast
   z It can’t take a lot of machine memory because it could drain their batteries
       z When they play other types of games they have to limit their game time.
   z They don’t want playing to involve text messaging due to concerns about typos.
z They would want to download a mobile app or have access to “a mobile-
  friendly site.”
   z Creating an app for ISL seems inevitable to the younger, more mobile segment.
       z To some extent, it seems “late.”




                                             71
Social Responsibility




          72
         Virtually no one had an accurate
         understanding of how the Lottery
              proceeds are allocated
z When respondents were asked to estimate what percent of revenues went to the
  Lottery prize pay-out, administration, and good causes (i.e. the Common School
  Fund), the current perceptions were vastly different from reality. On average, it was
  perceived to be:
                                      Payout                Administration              Causes
           Perceptions                  39%                      39%                     22%
             Reality                    65%                      5%                      30%
             Desired                    51%                      16%                     33%

    z The Lottery has been ineffective in their efforts to communicate the reality of their
      contribution to Illinois schools. This lack of awareness is even true among core players.
         z There is an opportunity to do a better job of communicating this critical information but cannot be
           through “media as usual”.

z When asked what they would like the allocation to be, the percentage allocated to
  the schools was approximately the same as what is actually being allocated. What
  they want, they are currently getting, but they don’t see it.
z When told about the current allocation, many found it hard to believe.
    z This was driven primarily by the fact that the schools are suffering dramatically right now.
      So, if a lot of money is being put into the Common School Fund, where is it going?


                                                       73
       Tangible results create credibility

z Public relations and other communications showing how the money is being
  used in local neighborhoods will significantly change perceptions.
   z The tone of this type of communication must be serious in order for it to be
     believable.
z This message must be delivered via an “unbiased” and trusted source.
   z Players often cite “the news” as their primary source for opinion-forming
     information about the Lottery.




                                          74
    More transparency about where the
   money goes could boost Lottery sales
z While concerns over where the money is going are not top-of-mind, when addressed
  head on, they do surface.
    z Some people became very emotional about this when sharing stories about friends and family
      losing teaching jobs due to short-falls in the school budget.
         z The depth of feeling encountered in this area indicates some risk of these types of stories going viral if
           the issue of Lottery proceeds allocation is not addressed in a way that generates positive awareness.
    z With the frequent headlines in the news about the school budget short-fall, this was a big
      concern.
z More transparency about where the money goes…
    z Would reduce concerns about the misuse of funds.
    z Gives players a reason to buy beside their own self-interest. It makes people feel better about
      playing and losing.
    z Separates the Lottery from the rest of Illinois politics and corruption.
    z Clearly identifies and clarifies the good that’s being done with the money in the Common
      School Fund.
z Transparency would make it feel less like there is less of a conspiracy and build
  confidence.
z They want accountability as well. They want to know who is taking responsibility. A
  public and well-respected auditor would also be essential to building believability.




                                                        75
The Lottery is seen as a “faceless agency”

z There was some confusion about who runs the Lottery.
   z At the end of the day, they were fairly sure that Illinois politicians control the
     Lottery and the persons who run it. As a consequence, they perceive that it is not
     run as well as it should be.
   z And, that the Lottery is run for the benefit of those politicians and not the players
     or the kids. “It’s lining someone’s pockets.” They do not believe that much more
     (or the promised percentage) is going to the kids.




                                           76
 Responsible gaming does not appear to
   be a priority for the Illinois Lottery
z Many recall the “play responsibly” tagline that is in the advertising.
z Most believe that the majority of the responsibility lies with the player – it’s
  up to the player to control their spending.
z Next is the retailer – they expect retailers to stop underage play. But to
  some, there is a conflict of interest; stopping people from playing would be
  like “cutting off their nose to spite their face.”
    z There is some additional concern that unattended vending machines cannot verify
      age.
z They don’t want to have play regulated by an outside entity. It’s not the
  Lottery’s (or government’s) job.
z Essentially, responsible play means “playing within your means.” It means
  not playing the Lottery when you have to put food on your family’s table.
    z They believe that players should control their own behavior.
z Some see part of the Lottery’s responsibility as advising big jackpot winners
  on how to go about finding qualified independent financial advice

                                          77
A proven track-record will be essential in
   selling privatization of the Lottery
z While many could understand the potential benefits of privatizing the Lottery,
  City of Chicago’s recent privatization of parking meters and toll-ways raised
  concern among respondents.
    z The news media has reported these steps as a bad deal for the people of
      Chicago.
    z Many have also found higher prices and inconveniences as a result of these
      moves. This leads them to believe that “someone is making a profit off me.”
    z They also perceive that the organizations running these services are heartless
      and mercenary. Many of the things about the city that were so desirable and
      accessible no longer exist. This has left a bad taste in many people’s mouths.
z Any organization that is awarded this opportunity to privatize the Lottery will
  have a significant sales job ahead of them.
    z A proven track-record, outside endorsements by trusted parties, and total
      transparency about where the money is going, are mandatory.
z Many mentioned that Lottery started out as a noble cause, but was diverted
  over time. Due to recent prior experiences, they are concerned about a “drift
  toward evil”.
    z Positioning could take players back to the roots of the Lottery, which for those
      who remember, should be a plus.

                                           78
                 More on privatization…

z Some occasional DBG players said that “they don’t care who runs the
  Lottery so long as they run it honestly and fairly.”
z It MUST also produce jobs for Illinois residents regardless of who is
  managing it.
z Among those who are skeptical regarding privatization, there is an
  opportunity to convince them of the benefits and value of such a course.




                                       79
   Illinois Lottery
Player & Game Opportunity
   Research & Analysis
           Appendix


         Prepared for




               by




          July 19, 2010
                            In-Group Exercises

 Type of Gambling Participated in Last 12 Months                Most Important Characteristic in
(Base)                         (59)       (59)                  Choosing a Game -- Ranked #1
                                 #         %           (Base)                       (23)           (23)
Casino                          41         70                                         #             %
Racetrack                       17         29          Top Prize                      10            44
Internet Gaming                 13         22          Odds of Winning                 6            26
Other (unspecified)             13         22          Play Style                      5            22
Off-Track                       10         17          Type of Game                    2             8

  Type of Gambling Participates in Most Often                   Most Important Characteristic in
(Base)                        (59)      (59)                  Choosing a Game -- Ranked #1/#2
                                #        %             (Base)                       (23)         (23)
Lottery                        31        53                                           #           %
Casino                         13        22            Top Prize                      16          70
Scratch-Off                      9       15            Play Style                     14          61
Cards                            7       12            Odds of Winning                 9          39
Sports Betting                   3         5           Type of Game                    7          30
Racetrack                        2         3



                                                                                                    (cont'd)

                                                   1
                      In-Group Exercises (cont'd)

      Amount of Prize Winning Needed to...               % of $10 Spend Allocation by Cost of Ticket
                     Median      Middle 3rd                                  Total      IL       UK
(Base)                 (21)         (21)               (Base)                 (8)      (8)       (8)
Make You Smile        $50.00      $25-100                                     %        %         %
Tell a Friend        $500.00    $100-1,000             $5 Tickets             44        38        6
Create a Buzz       $5,000.00 $2,500-10,000            $2 Tickets             38        33        5
                                                       $1 Tickets             18        14        4
Perceived/Desired Allocation of Lottery Proceeds
                                Admini-                   % of $5 Spend Allocation by Cost of Ticket
                     Payout stration Causes                                  Total      IL       UK
(Base)                (59)       (59)      (59)        (Base)                 (8)      (8)       (8)
                       %          %         %                                  %        %         %
Perceptions             39        39        22         $5 Tickets             63        19        44
Desired                 51        16        33         $2 Tickets             20        20         0
                                                       $1 Tickets             20        18         2




                                                                                                (cont'd)

                                                   2
                       In-Group Exercises (cont'd)
          IL/UK Favorite Game -- Top 4                    IL/UK Favorite Game -- Top 4 (cont'd)
(Base)                                   (23)       (Base)                                   (23)
                                           #                                                   #
Win for Life (IL)                         11        Fabulous Fortune (IL)                       2
Monopoly (UK)                               7       Gold Rush Jackpot (IL)                      2
Double Red Hot 7's (UK)                     7       Jumbo Bucks (IL)                            2
Rich for Life (UK)                          6       Crossword (IL)                              2
Go for Gold (UK)                            6       Ticket for the Cure (IL)                    2
Money Mania Millions (IL)                   4       Super Cash (IL)                             1
7-11-21 (IL)                                4       $75,000 Crossword (IL)                      1
Deal or No Deal (UK)                        4       Groovy 8's (IL)                             1
Triple Winning (UK)                         4       Scrabble (IL)                               1
$3,000,000 Cash Jackpot (IL)                3       Triple Your Money (IL)                      1
Slots of Money (IL)                         3       Double Your Luck (IL)                       1
Bingo (IL)                                  3       Time Out Tripler (IL)                       1
Merry Millions (UK)                         3       Chimp Change (IL)                           1
Cars and Cash (UK)                          3       James Bond-Quantum of Solace (UK)           1
Triple Your Luck (UK)                       3       Indiana Jones (UK)                          1
Get Lucky (UK)                              3       Triple Payout (UK)                          1
                                                    Connect 4 (UK)                              1

                                                                                              (cont'd)

                                                3
In-Group Exercises (cont'd)

           Illinois Favorite Game -- Top
  (Base)                                   (22)
                                             #
  Win for Life                                6
  Slots of Money                              3
  $75,000 Crossword                           2
  Bingo                                       2
  7-11-21                                     2
  $3,000,000 Cash Jackpot                     1
  Money Mania Millions                        1
  Gold Rush Jackpot                           1
  Crossword                                   1
  Scrabble                                    1
  Triple Your Money                           1
  Time Out Tripler                            1




                                                  (cont'd)

                        4
                      In-Group Exercises (cont'd)

         Illinois Favorite Game -- Top 4                    Illinois Favorite Game -- Top 4 (cont'd)
(Base)                                     (24)       (Base)                                    (24)
                                             #                                                    #
Win for Life                                10        Jumbo Bucks                                  2
Bingo                                       10        Groovy 8's                                   2
7-11-21                                     10        Domino Doubler                               2
Triple Your Money                             6       Chimp Change                                 2
Slots of Money                                5       Fabulous Fortune                             1
Pot of Gold Bingo                             5       Super Cash                                   1
Crossword                                     5       Gold Rush Jackpot                            1
Scrabble                                      5       Float Me the Money                           1
$3,000,000 Cash Jackpot                       4       Pet Talk                                     1
Money Mania Millions                          4       Numerous 9's                                 1
Double Your Luck                              4
Hot Tamales                                   4
Ticket for the Cure                           4
$75,000 Crossword                             3
Time Out Tripler                              3



                                                                                                  (cont'd)

                                                  5
                       In-Group Exercises (cont'd)

        Illinois Favorite Game -- Bottom 4              Illinois Favorite Game -- Bottom 4 (cont'd)
(Base)                                   (24)       (Base)                                   (24)
                                           #                                                   #
Crossword                                   9       Bingo                                       3
Scrabble                                    8       Time Out Tripler                            3
Fabulous Fortune                            7       Super Cash                                  2
Chimp Change                                7       $75,000 Crossword                           2
$3,000,000 Cash Jackpot                     6       Win for Life                                2
Money Mania Millions                        6       Ticket for the Cure                         2
Gold Rush Jackpot                           5       Slots of Money                              1
Pet Talk                                    5       Jumbo Bucks                                 1
7-11-21                                     5       Pot of Gold Bingo                           1
Domino Doubler                              5       Double Your Luck                            1
Numerous 9's                                5       Float Me the Money                          1
Groovy 8's                                  4
Hot Tamales                                 4




                                                                                                (cont'd)

                                                6
                     In-Group Exercises (cont'd)

           UK Favorite Game -- Top                       UK Favorite Game -- Top 4
(Base)                               (22)       (Base)                               (22)
                                       #                                               #
Monopoly                                5       Monopoly                              11
Rich for Life                           4       Triple Winning                        10
Deal or No Deal                         3       Rich for Life                           9
Go for Gold                             2       Go for Gold                             9
Triple Winning                          2       Double Red Hot 7's                      9
Indiana Jones                           1       Merry Millions                          8
Cars and Cash                           1       Deal or No Deal                         7
Triple Your Luck                        1       Triple Your Luck                        6
Triple Payout                           1       Get Lucky                               5
Get Lucky                               1       Indiana Jones                           4
Double Red Hot 7's                      1       Cars and Cash                           4
Connect 4                               1       Triple Payout                           4
                                                James Bond -- Quantum of Solace         3
                                                Connect 4                               3
                                                Honey Money                             2
                                                $250,000 Red                            1
                                                Mystic Dog                              1

                                                                                      (cont'd)

                                            7
                    In-Group Exercises (cont'd)

         Frequency of Internet Usage                      Hours Per Week Spent Online
(Base)                                 (8)       (Base)                                 (8)
                                        #                                                #
Everyday                                8        0-5                                      6
Many times a week                        -       6+                                       2
Few times a week                         -         Average (in hours)                  5.44
Few times a month                        -
Rarely                                   -                  Whether of Not Conducts
                                                           Personal Business at Work
          Internet Access Location               (Base)                                 (7)
(Base)                                 (8)                                               #
                                        #        Yes                                      2
Home                                     5       No                                       5
Work                                     4




                                             8
     Illinois Lottery
   Non-Player Opportunity
Qualitative Research & Analysis
           Summary Report


            Prepared for




                 by



            August 9, 2010
              RRC 5210
                             Table of Contents

                                                                  Page

Objectives                                                          2

Methodology                                                         3

Executive Summary & Implications                                    4

Detailed Findings                                                  12

  Barriers                                                         13

  Awareness, Attitudes & Behavior                                  17

  Attitudes Toward the Illinois Lottery & Social Responsibility    23

  What Would Change Their Minds?                                   29

Appendix                                                           34




                                                   1
                             Objectives

z Undertake research into the Illinois Lottery market and develop an
  understanding of the non-player segment to identify ways of attracting new
  players.




                                      2
                             Methodology

z Two focus groups were conducted in downtown Chicago, IL
z In each group, 10 people were recruited. Eight people participated in one
  group and nine participated in the other.
z Groups lasted about 2 hours and were held in the evening so both working
  and non-working men and women could participate.
z Respondents were adults, ages 18+ who:
   z have never played the Illinois Lottery
   z have played only once or twice in the past 2 years, or
   z have played longer ago than in the past 2 years.
z They also could not be opposed to gambling/playing the Lottery.




                                          3
Executive Summary
         &
   Implications




        4
          Executive Summary & Implications
                   Executive Summary                                                  Implications
Barriers
Some people stopped playing because they did not win           It is essential that as many people win as possible, even if
enough and felt that nothing would change even if they kept the prizes are smaller. Getting winning tickets into people's
playing.                                                       hands early on keeps them coming back. Prizes can be as
                                                               little as a free ticket -- but $50-$100 is a good prize.
People perceive that the odds of winning the lottery are       It is not easy to understand the odds of each game. Any
quite high. The odds are perceived as worse playing the        marketing materials that can be put into people's hands
lottery than with other forms of gambling (like casino games would help inform potential players, reduce anxiety, and
and horse-racing).                                             make it easy to compare across games. The materials
                                                               should also show the odds of winning the lottery vs. other
                                                               forms of gambling to help people understand how they
                                                               compare.
People think there is no skill involved in playing the lottery In the player groups, some people talked about the systems
as with other types of gaming and this is a turn-off.          they use to pick their numbers. Some of the systems are
                                                               very complex. While this may not seem like a skill, it may
                                                               make people feel like they are more engaged in the games
                                                               than they currently feel. It would be similar to the way they
                                                               feel when doing research on picking numbers at the race-
                                                               track or when playing poker.
Some people are not good with numbers, period. Those           Those who are afraid of numbers said that they would like
who tend to be "afraid of numbers" have a hard time            games that involve matching symbols. For example, one
comparing the odds of winning across games.                    person suggested having something along the lines of a
                                                               Three Stooges game where you have to match 3 faces of
                                                               one of the Stooges.

                                                                                                                      (cont'd)

                                                             5
  Executive Summary & Implications (cont'd)
                   Executive Summary                                                       Implications
Barriers (cont'd)
Some don't like the mess associated with scratch tickets.          Pull tabs might alleviate this problem.
Some people don't know how to play the games and feel              Instructions on how to play various games should be on
somewhat intimidated.                                              display in stores. It might also be helpful to encourage
                                                                   "buddy" play. That way friends can help their buddies learn
                                                                   how to play the game. This could be encouraged by
                                                                   promotions like "buy one and get one free" or the second
                                                                   ticket is half off.
The long lines in stores are a turn-off in a couple ways: 1)       Self-service machines for all games would alleviate this
people who don't know how to play are worried about                problem. "Help" screens on the machine, as they have on
holding up the lines even more, and 2) long lines turn             slot machines, would also be a plus.
people away who don't want to wait.
Other types of gaming like casino games and horse-racing           While it is unlikely that playing the lottery will completely
are perceived as more glamorous, fun, and entertaining --          replace the social benefits that players get at a casino or at
providing more than just a chance to win.                          the race-track, it is possible to further promote the fun that
                                                                   people have while playing. It would also be helpful to
                                                                   encourage people to host parties built around jackpot
                                                                   drawings or other big lottery events.
When playing the sample scratch cards in the groups,               It's important to make the scratch cards as easy to
some people were turned off by games that were too                 understand as possible and stream-line the play.
complex. While the extended play games were desirable to
a few, most were too impatient, wanting to know
immediately if they had won or lost.


                                                                                                                            (cont'd)

                                                               6
  Executive Summary & Implications (cont'd)
                  Executive Summary                                                     Implications
Barriers (cont'd)
Some people play more when they are working in an office        Continuing to encourage people to participate in pools with
environment where other people in the office are playing.       friends outside of their offices. It would help people realize
They tend to join and get involved in all sorts of sports       that they don't need an office environment to play the
pools. When they leave the company they tend to reduce          lottery. They can organize a pool themselves.
their participation.
It's somewhat inconvenient to always have cash on hand to       Respondents seemed to like the idea of buying an Illinois
play since one cannot pay with credit cards.                    Lottery debit card that they can easily swipe to play. This
                                                                could not only eliminate the "cash" barrier but also speed
                                                                up the lines.




                                                                                                                         (cont'd)

                                                            7
  Executive Summary & Implications (cont'd)
                    Executive Summary                                                  Implications
Awareness, Attitudes, and Behavior
While all knew about the lottery, awareness of specific         It would be wise to better understand what media non-
games was fairly limited to name only. Only a couple            players consume so that the Illinois Lottery can more
people across groups knew details about the games, how          effectively communicate with them. Since some of their
they are played, what the odds are, and were confident          issues relate to low awareness, raising awareness could
about the prizes.                                               really pay off.
There was vague recall of the lottery advertising, most
saying that they thought they remember seeing something
on TV. However, no one could recall the "Have a Ball"
tagline.
In general, the amount of money these people are spending
on gaming activities is down. Only a few said that they are
spending about the same amount or more. This is due to a
variety of circumstances -- only one of whom said it was
due to a job loss.
While the overall attitudes are not negative to playing, some
people have barriers that need to be overcome. A few
people have essentially positive attitudes, but need to have
some concerns addressed.
Games or TV shows that have good awareness would be             While many of these games currently exist, it appears that
enticing to some people. The familiarity helps them feel        not everyone knows about them. More promotion around
confident that they can easily figure out how to play the       these licenses should yield good returns.
game and will enjoy playing as much as they enjoyed their
engagement with the board game or TV show.

                                                                                                                      (cont'd)

                                                            8
  Executive Summary & Implications (cont'd)
                   Executive Summary                                                Implications
Awareness, Attitudes, and Behavior (cont'd)
Other pop culture icons were also desirable subject matter   Quite a few people liked the idea of building a game around
for games.                                                   a pop star. For example, have a game associated with
                                                             Lady Gaga and make the grand prize be a trip to a big
                                                             concert of hers. The top prize doesn't have to be money.
A few people talked about how involved they were with and It seems that this sort of game may have similar value for
enjoyed playing the Monopoly game from McDonald's. One the Illinois Lottery. Collecting things over time builds
of the exciting parts of playing the game included having to tremendous loyalty.
collect the pieces over time. It gave them something to
work for and a reason to keep returning to McDonald's.
There were a number of comments about playing the lottery Anything that could be done to raise the stature of the
that indicated that people did not perceive that playing     lottery in people's minds would be helpful. Showing
would be viewed positively by other people. They called it educated, higher class people as players and winners
an "idiot tax."                                              would definitely help.




                                                                                                                   (cont'd)

                                                             9
  Executive Summary & Implications (cont'd)
                    Executive Summary                                                 Implications
Attitudes Toward the Lottery and Social Responsibility
Most are unsure about who runs the lottery but they know      Promoting the low percentage that goes to administration
that it has something to do with the State. Without           would help build confidence with the body running the
prompting, they did not make negative linkages back to        lottery. It would also help very much to keep separate the
corruption.                                                   State of Illinois from the administration of the Lottery given
                                                              all of the corruption perceptions.
They were not particularly aware of where the money goes      In order to encourage non-players to get involved in the
and had higher than actual estimates for administration --    game, it is essential that the 30% going to good causes be
and lower than actual estimates for payouts and good          promoted on a regular basis.
causes.
The actual percentages were VERY appealing and
potentially motivating.
Knowing that a lot of the money goes to good causes           Given the interest in charitable giving, it might be
changed their attitudes toward the lottery. They wanted to    meaningful to promote something along the lines of
know more and said that playing for good causes made it       "Everyone wins when you play the lottery. Even if you lose
feel less like gambling and more like giving to a charity.    the game, you win."
Seeing tangible examples of how the money is being used       P.R. around how the money is being used in local
aids in boosting believability.                               communities will build good will. It also makes sense to
                                                              consider building games around specific projects as well as
                                                              causes. For example, a few people talked about naming
                                                              games that talk about the recipients, e.g. Computers for
                                                              Kids or Send a Kid to School. Or, on the ticket it could
                                                              indicate what neighbor is benefiting from that game.


                                                                                                                        (cont'd)

                                                             10
  Executive Summary & Implications (cont'd)
                     Executive Summary                                                   Implications
Attitudes Toward the Lottery and Social Responsibility
(cont'd)
There was some recall that years ago when the lottery           While the money may be going into the Common School
started that the money was to go to paying for toll roads.      Fund, the schools are still suffering. This is no fault of the
Just as with the schools, if the money was supposed to go       Illinois Lottery and this should be promoted.
to toll roads, they didn't understand why they still have to
pay tolls.
Outlet Awareness
Most knew where lottery tickets were sold and what the
closest location was to their home or work.
Most do not go into gas station c-stores since they prefer to   Promoting the lottery at the pumps may drive more people
pay at the pump.                                                into the stores. Also, a vending machine outside near the
                                                                pumps could encourage playing.
In addition to convenience, some people simply do not           The idea mentioned before about having a debit card to
have cash and want to pay by credit card. If they are           swipe would address this problem as well.
paying that way, they might as well pay at the pump. But,
some don't want to be tempted by other purchases in the
store. Some don't like getting stuck behind people who are
in line buying lottery tickets.




                                                            11
Detailed Findings




        12
Barriers




   13
“I never win” is among the top reasons for
     not playing among prior players
z Those who had played in the past talked about how they bought multiple
  tickets and most never won anything.
    z At that point they felt like they were throwing good money after bad. They believed
      that they were "not lucky" and would not win, regardless of how often they played.
z Poor odds was another frequently mentioned reason for not playing.
    z When asked about how they know what the odds are, some said that they read the
      back of the cards.
    z Others just have a sense of the games having poor odds due to the high number of
      people who play them (for DBGs).
    z They mostly talked about the bad odds related to the big jackpots and almost never
      mentioned any of the smaller prizes that they could win.
    z They also don’t often hear about people winning or know people who won. So they
      don't believe people actually win.
z Some people referred to the lottery as the “idiot tax” because players are just
  giving the government their money.
    z “The likelihood of winning is lower than getting struck by lightning!”
z Because they believe that they are not going to win and there is virtually no
  skill involved, it doesn’t appeal to some people’s needs or interests.
    z One respondent expressed it another way -- in general, “winning is about being right
      and/or talented. The money is just a way of keeping score.”
                                            14
                       Other objections…

z Some disliked the mess made from the scratch tickets. It got all over the
  table and their clothes.
   z While a negative, it didn’t seem to be a true barrier.
z Another objection was that some people are not good with numbers and
  cannot compare the odds vs. winnings across games. Because of this they
  don’t know how to choose a game.
   z Some feel very challenged by this and, therefore, do not play.




                                           15
     Some people feel very intimidated or
        confused about how to play
z Some see the long lines (which they say are a turn-off and strongly disliked)
  and worry that if they don’t know how to play the games, they will hold up
  the line even more.
z A few said that they would feel “silly” if they tried to buy a ticket for any game
  because they don’t know what to ask for.
z They suggested that this “fear” could be overcome in a few ways:
    z Provide simple, easy-to-use, step-by-step instructions in a visible location.
    z At POP, provide easy to use odds vs. winnings charts across games.
    z Allow them to buy all types of tickets from a self-service machine with some sort
      of screen or sign that could give them instructions.




                                           16
Awareness, Attitudes & Behavior




              17
While not doing a lot of gambling, casinos and
 horse-racing are considered more fun and
                 entertaining
z They recognize that other types of gambling can be more glamorous,
  provide more extensive entertainment and give them an opportunity to
  socialize -- in addition to providing them with a chance to win money.
    z Even if they don’t win, they feel like they have received some value for their
      money because of the other benefits.
    z Playing the lottery gives them none of these things. After they have spent their
      money, their entertainment essentially ends. Once they have checked their
      numbers or scratched their cards they are done. To add insult to injury, they feel
      like they never win anything.
z There is also the perception that the odds of winning are better at the casino
  or racetrack than with the lottery.
    z This is, in part, due to the fact that at some point they have won in casinos or at
      the track; they have never won playing lottery.




                                            18
In general, the total amount of money they
    are spending on gambling is down
z Reasons for spending less on gambling include:
   z Got married and have to account for the money to someone else.
   z Have played in the past but didn’t win anything. Since he didn’t win he felt he
     must not be very good at it so he stopped playing.
   z Have changed jobs and the people at the new job are not into gambling the way
     they were at the prior job.
   z Have less disposable income (lost job).
z One person said that the amount of money she’s gambling has gone up as
  her income has increased.
z A few said that the amount of money they are gambling is the same as it
  was before. They gamble occasionally and it’s usually event-based like
  during March Madness or the Super Bowl.




                                         19
There is some awareness of lottery games
        -- but mostly in name only
z Non-players can recall some of the lottery game names, especially the big
  jackpot games like PowerBall and MegaMillions, which were recalled by
  about 4 in 10 on an unaided basis.
   z Little Lotto, Pick 3, and Pick 4 were recalled on an unaided basis by about 3 in
     10.
   z Even though some know some of the names, they have virtually no
     understanding of the games.
       z A few had a slightly better understanding because they had been players before, worked
         in a store that sold tickets, or had a parent who played.
z In terms of understanding the games, the big drawing games seem pretty
  self-explanatory in terms of the jackpot size just from hearing the names.
   z Most said that the names sound like there have BIG jackpots. And a few think
     that they are multi-state.
   z The scratch cards sound like they are fun, easy to win, but not a lot of money in
     prizes.




                                             20
    There is some ad awareness but not
    enough to drive interest or purchase
z Many vaguely recall seeing advertising – especially on the big billboards
  along the expressways. But they also recall some…
    z   TV advertising/sponsorships (highest unaided recall)
    z   The drawing shows in the evenings (woman drawing balls)
    z   In-store displays (c-stores)
    z   Some radio advertising
    z   Some newpapers/magazines
z Virtually no one knew the “Have a Ball” tagline.
z In general, ad awareness is extremely low.




                                         21
          A few saw the glass as half-full

z We heard this a few times: “Somebody’s got to win! Why can’t it be me?”
z Another woman said that she likes to think positively. “What if I won?”
    z It seems that she is a non-player not because she thinks she won’t like playing
      but because she lacks an understanding of the games and has concerns about
      feeling silly holding up the lines.
z A few mentioned that playing gives people hope, and this is a positive.




                                          22
Attitudes Toward the Illinois Lottery
                &
       Social Responsibility




                 23
Perceptions of Illinois Lottery are not clear
z Most are unsure about where the money goes or who runs it. They make
  the link back to the state but it pretty much ends there.
z A few were skeptical about the money management due to wide-spread
  corruption in Illinois. But, without prompting, they did not immediately
  make a negative linkage between Illinois corruption and the lottery.
z Many were interested in more transparency and said that they would play
  more if they were sure that the money was going where it’s supposed to
  go.
   z Full transparency and promotion of all the facts could definitely improve perceptions and
     potentially boost participation among non-players.
z When asked to estimate how the lottery proceeds are allocated (to
  administration, payouts, and good causes), very few knew the actual
  proportions and allocated more to administration and less to payouts and
  good causes than in reality.

       Administration                      Payouts                       Good causes
              33%                             44%                             23%
z They never hear about winners, so it was hard for them to believe how
  much went to payouts.
                                               24
   Knowing that the money is going to good
causes was especially appealing and potentially
                  motivating
z When told that 30% of the funds from the lottery go to the Common School
  Fund, most were shocked.
    z Either they had not heard about it at all or had forgotten about it.
    z Some of the shock was related to the fact that Illinois schools are in trouble.
        z “If they are getting the money, why are the schools still suffering?”
z They liked the concept of the money going to schools because “once I buy a
  ticket, even if I lose, somebody wins.”
    z To some it feels like a donation rather than gambling.
z Ideas were generated that relate to giving money to charities:
    z “When I buy a ticket, I could choose a charity/cause of my choice.”
    z “They could have special games/tickets that are sold for a specific cause, like
      breast cancer.”




                                                25
   Seeing their money at work in tangible
    ways makes it even more believable
z In addition to complete transparency, they would like to see how their money
  is being used in concrete ways.
   z For example, they would like to see real improvements that are being made and
     how much money has been allocated to each improvement, e.g., School Y
     received new playground equipment which cost $X.




                                        26
Some recalled that the lottery money was
       intended to fix toll roads
z Not many non-players knew about the money being tagged to go to the
  Common School Fund.
z One person thought that it was supposed to pay for toll roads.
   z They asked: “If the money was supposed to go to fix toll roads, why do we still
     have to pay tolls?”
   z This question raised even more skepticism about the use of funds.




                                         27
   Most know where to buy lottery tickets
          and have outlets nearby
z They recalled that lottery tickets could be purchased at c-stores, gas
  stations, grocery stores, liquor stores, drug stores, etc.
    z And most said that the nearest retailer was no more than 2-3 blocks away.
z Many go into traditional grocery stores for their food purchases. Far fewer
  go into gas stations or c-stores on a regular basis.
    z They don’t go into c-stores very often because the merchandise is usually more
      expensive than at regular grocery stores.
    z They would go into 0-5 times more often if they needed something late at night,
      didn’t have a regular grocery store nearby, or if the prices were lower.
z Most don’t go into gas stations to pay for their gas, but prefer to pay at the
  pump (2:1 pay at the pump vs. go inside).
    z Besides simply being more convenient (“I’m lazy,” “I’m usually in a rush,” etc.),
      some other reasons include:
        z “I usually don’t have cash and want to pay by credit card, so why not just pay at the
          pump?”
        z “If I go into the store, I usually buy things I don’t need.”
        z “If I go in, I always get stuck behind people buying lottery tickets!”




                                                28
What Would Change their Minds?




              29
They enjoyed playing the sample scratch-
  cards but it wasn’t enough to convert
                  them
z Most of the games they played were fun and most said that they were
  excited to see if they won.
   z A few of the games were too challenging or confusing – like Match & Win. The
     numbers they had to match were all scrambled and not easy to match (not
     organized).
   z Some liked the longer-play games because they extended the play time.
       z Others were frustrated with how long they took to play and wanted to know immediately if
         they had won or lost.
z There were very few winning tickets in the groups. And, although, there
  were a few winners, because there were so few, most were not enthusiastic
  about playing again afterward.
   z By not winning in the group, it just reinforced their perceptions that they “never
     win.”
   z Some who came close to winning (1 number off), felt very let down when they did
     not get the last match they needed. This was a turn-off.
z One person suggested that with a $2 ticket, players should always win at
  least a free ticket.
z A few talked about how much they would need to win to keep them in the
  game.
   z Essentially winning at least as much as their bet would keep them playing. But
     $50-$100 seemed like a good prize.

                                             30
    Board Games or TV shows that are
 familiar to them are somewhat appealing
       as scratch card game themes
z Some people mentioned liking games like Bingo or Monopoly – and said
  that, in the past, those were the types of games they were attracted to.
    z The McDonald’s Monopoly game was fun to play because they would accumulate
      pieces over time. It kept them coming back to the McDonald's just to collect more
      game pieces.
z Other frequently mentioned games that they enjoy include backgammon,
  poker, and word games like Scrabble.
z Quite a few get involved in betting pools at work or at parties.
    z For example NCAA March Madness is popular. It’s fun for them because they
      watch the games and keep track of who is winning over time. “Everyone is
      consumed with it!”
    z Getting involved in those types of pools makes them feel part of something
      bigger.
z The Super Bowl is another pool that many people get involved in.




                                          31
 What else would make them play more?

z Make it easier to do. Give them a way to play that doesn’t involve cash.
   z Let people buy a debit card that they could just swipe in order to play.
z Give them a way to win free tickets with other types of purchases.
   z A few people liked the idea of including scratch cards with pizza delivery.
z Raise their awareness level.
   z Some of their reasons for not playing related to low awareness. “I just don’t think
     about it.”
       z This, in part, could be due to them not frequently visiting outlets where tickets are sold.
   z “I will think about it more often now that I’m familiar with the games.”
z Raise the stature of the game.
   z Some feel that people who play are less educated.
   z Promoting winners and providing brief background information on them might
     make them feel more comfortable with their decision to play.
z Increase the number of people winning – even if it means lowering the
  jackpot sizes.
   z The highest prizes seem unattainable. Allowing them to win something (and
     more often) will keep them coming back.
                                                32
To attract new players, non-players would
promote the good causes, the “fun,” and
        make some improvements
z Tell them that 30% goes to charitable causes and schools and a small
  percentage goes to administration.
   z Just knowing about this changed the minds of at ¼ to ½ of the people in the
     groups.
   z Being totally transparent about where the money will be essential.
z Promote that “even if you lose, you win. We all win.”
z Talk about that “it’s fun to play.”
z Make specific game names that talk about the recipients of the money. For
  example, “Computers for Kids,” “Send a Kid to School,” etc.
z Tie games to other licenses they enjoy like Monopoly or a TV show.
z Create games that are tied to pop culture icons – like Lady Gaga.
   z The grand prize could be tickets to her concert.
z Create games where players match something other than numbers – like the
  Three Stooges -- "get 3 Moe faces and you win."
   z This would appeal to people who are not comfortable with numbers.
z Promote how the odds of winning compares with other gambling games
  (assuming that it’s comparable or better).

                                        33
Appendix




   34
Perception of Lottery Dollar Allocation


            Category               Average %

      Number of Respondents          (17)

          Administration              33

             Payouts                  44

          Good causes                 23




                              35
Unaided Awareness of Games

              Game                                        #
   Number of Respondents                                (17)
           Power Ball                                     7
         Mega Millions                                    7
               Lotto                                      2
           Little Lotto                                   4
              Pick 3                                      5
              Pick 4                                      6
              Pick 5                                      1
         Illinois Lottery                                 3
          Instant Lotto                                   1


Note: These games were not pre-listed. Respondents wrote in the names of the
games that they knew.




                                     36
                                                                                                      Job 5209




                                      Illinois Lottery Non-Player Quantitative Study
                                                        July 14, 2010

BACKGROUND/OBJECTIVES

     ‰ Prior to this study, Camelot Global conducted extensive qualitative research on the
          Illinois Lottery player market. The purpose was to develop an understanding of the
          existing player base and to identify trends and insights to improve player understanding
          and sales performance.

     ‰ This study was conducted to develop an understanding of the non-player base, what the
          barriers are to playing, and to help inform the development of questions for a possible
          follow-up qualitative study.



TOPLINE RESULTS

     ‰ Among the 16 reasons tested, In total, the top reason why people do not play the Lottery
          is their concern over the poor odds of winning. The top 5 reasons include the following:


                                         Top 5 Reasons for Not Pla ying Lottery



  Odds against winning are too
             high

    Work too hard for money to
       lose playing Lottery


      Never think about playing


                     Never win


  Do not have enough money to
              play

                                  0        10     20     30    40      50    60        70   80   90     100

                                                                       %




     ‰ Odds against winning are a significant issue across all demographic groups.
                                                             2



TOPLINE RESULTS (CONT'D)

       ‰ Among those who said they have played the Lottery before, "I never win" is
         significantly more of an issue for past players vs. the total.

       ‰ A top barrier for “never” players (48% of total) is that they “never think of it” (47%)
         vs. the total (39%).

       ‰ For those not married (41%) and those with lower incomes (under $50K) (46%),
         lack of money is higher on the list of barriers.

       ‰ The least often selected reasons, in total, are:

                                 Least Often Selected Reasons for Not Playing Lottery


      Do not hear about people
              w inning

         Not convenient to play


   Have to buy tickets in public

     See long lines/don't like to
                w ait
       Concerned about w hat
      family, friends...w ill think       *
        Have gambling problem


                                      0       10   20   30       40   50   60    70     80   90   100

                                                                      %



METHODOLOGY

       ‰ 300 interviews were conducted among people in Illinois who: 1) have never
         played the Illinois Lottery; 2) have played only once or twice in the past 2 years;
         or 3) have played longer ago than in the past 2 years.

       ‰ The sample included a mix of people in the Chicago metro and non-metro areas
         of Illinois. We included a variety of ages, genders, ethnicities, marital statuses,
         those with and without children, and income groups.

       ‰ The study was conducted online using an e-panel.


* Less than 1%
                                                     3



APPENDIX


                                Among Total Respondents
                                          Reasons                                                    %
                                                             Odds against winning are too high           63
                                          Work too hard for money to lose it playing the Lottery         43
                                                                      I never think about playing        39
                                                                 Never win/do not win very often         39
                                                 Do not have enough money to play the Lottery            32
                                                                 Do not enjoy playing the Lottery        22
 The money just goes to the administration and does not go to good causes or to pay out to the           12
                                                                                          players
                     Do not know how to play/not familiar enough with the games to play them             11
                                                Overwhelming/too many games to choose from               11
                                                                      Think the game is "rigged"          8
                         Do not hear about people winning the Lottery/don't believe people win            5
     Not convenient to play because there is no place to buy Lottery tickets near home or work            3
                                      I have to buy tickets out in public/no place private to play        2
                                                     Always see long lines and don't like to wait         1
                       Concerned about what my family, friends, or colleagues will think of me            1
                                               Have a gambling problem and cannot play at all             *
* Less than 1%
                  Camelot
Deep dive profiles of lottery players in Illinois
             16th of July 2010
General lottery player




                         2
    General Lottery Player Demographics & lottery participation
    More likely than average to be Middle Youth, Low Income

      Key facts (Last 12M):
      Of the adult population:
      49% or 4.7m have played the lottery
      ¾ 9% are regularly players
      ¾ 39% are occasional/infrequent players
      Of those that have played any game:
      ¾ 27% have played daily online game
      ¾ 55% have played instant game
      ¾ 69% have played weekly online game      Demographics                                                  %       Index

                                                             Gender Male                                      53%      114
       • Majority of players have played an                           Female                                  47%       88
         instant or weekly game in last 12M                      Age 35-54                                    43%      123
       • More likely to be aged 35-54                  Marital status Married                                 59%      109
                                                                          Graduated high
       • Majority are married, have a good                 Education                                          67%      108
                                                                          school/attended college
         education and are employed full               Employment Employed full time                          60%      115
         time                                                   SEL* Level 2/3                                51%      113
                                                      Children in HH None                                     60%      104
       • They have children and 3 or more
                                                No of people in HH 2                                          34%      110
         people in a household
                                                                          3 or more                           54%       96

Source: USA NCS/NHCS 2009 doublebase            *SEL (Socio Economic Level) consists of 4 levels based on education
                                                and ownership of durables where 1 is the highest and 4 lowest             3
Base: Illinois n=3,145; Total Player=n1,413
       Attitudes            (Any agree: top 20 sorted by index)


                                                                                                                  %     Index
                               My friends often ask for my advice before buying electronic equipment              22%   119
          HI-TECH              I’m always the first among my friends to have the latest in electronic equipment   14%   116
                               I love to buy new gadgets and appliances                                           34%   113


                               I often notice the ads in the lobbies of movie theatres                            38%   115
                               I read the financial pages of my newspaper                                         31%   113
           MEDIA
                               I like to look for new and interesting websites                                    35%   113
                               I cannot resist buying magazines                                                   12%   112


                               Fast food fits my busy lifestyle                                                   28%   114
                               I am good at fixing mechanical things                                              45%   114
      LIFESTYLE &
                               Because of my busy lifestyle, I don’t take care of myself as well as I should      49%   113
     PERSONALITY
                               I am good at fixing things                                                         58%   112
                               My friends are more important to me than my family                                 10%   111


                               I often go for a drive by myself to gain a sense of freedom                        31%   121
                               I like to get a new car every two or three years                                   18%   119
                               American car companies set the standard in automotive engineering                  25%   119
     AUTOMOBILES               A Sport Utility Vehicle (SUV) matches my active lifestyle                          27%   118
                               I like to drive faster than normal traffic                                         40%   117
                               I keep up on the latest advances in automobile technology                          24%   114
                               I am possessive about my car                                                       43%   113
                               I often go on long car trips for vacations                                         39%   112


Source: USA NCS/NHCS 2009 doublebase
                                                                                                                                4
Base: Illinois n=3,145; Total Player=n1,413
       Media


Media Quintiles                                    Index above 120                          TV

                                                                                            Cable channels (Lwk)                      %      Index
    Quintiles             1         2          3        4      5
                                                                                            Starz                                   15%      160
                                                                                            Spike                                   18%      145
        TV              27%       21%         19%      16%    16%                           American Movie Classics                 22%      138
                                                                                            SCI-FI Channel                          24%      134
                                                                                            Showtime                                16%      134
     Internet           15%       16%         14%      18%    13%
                                                                                            VH1                                     15%      133
                                                                                            Oxygen                                  12%      133
      Radio             30%       21%         22%      15%    12%                           FX                                      17%      132
                                                                                            WGN America                             19%      131
                                                                                            TBS                                     35%      123
    Outdoor             19%       19%         26%      19%    16%

                                                                                            Cable programmes(Lwk)                     %      Index

                   Films                                                                    King of the hill                        11%      167
                                                                                            The Simpsons                            13%      153
                  Genre saw in theatre                   %    Index                         CBS Evening News                        10%      145
                  Action/Adventure                      37%   115                           House (FOX)                             23%      138
                  Drama                                 22%   114                           Extreme Makeover:Home(ABC               11%      136
                  Sci-Fi                                21%   113                           NBC Nightly News                        11%      135
                  Thriller                              18%   113                           CSI: Miami (CBS)                        23%      133
                  Comedy                                33%   107                           ABC World News                          16%      132
                  Animation                             19%   101                           Jeopardy!                               10%      130
                  Family                                21%    94                           Dateline (NBC)                          10%      130


Source: USA NCS/NHCS 2009 doublebase                            MNQ: Media Neutral Quintiles split the consumers of each medium into 5 equal-
                                                                sized groups based on their level of consumption of the medium. Quintile 1 refers    5
Base: Illinois n=3,145; Total Player=n1,413
                                                                to the heaviest consumers and 5 the lightest consumers
       Media 2


                Internet                                         Print
                Activities (p30d)                  %     Index   Newspaper Titles (AIR)          %     Index

                                                                 USA Today                       9%    119
                Download movies                     8%   140
                                                                 New York Times                  3%    110
                Real estate listings               13%   138
                                                                 Wall Street Journal             4%    108
                Auto shopping/comparing            12%   137
                                                                 Wall Street Journal(sun/wknd)   4%    103
                Send electronic cards               9%   134
                                                                 New York Times (sun/wknd)       3%     91
                Listen to radio stations online     9%   133
                Employment search                  16%   132
                Medical services & info            17%   125
                                                                 Newspaper Sections              %     Index
                Auctions                           14%   123
                                                                 Classifieds                     22%   140
                Air/Car/Hotel info /reservations   28%   121
                                                                 Sports                          23%   118
                Financial info/Stock Trading       12%   120
                                                                 Movie listings & reviews        13%   117
                                                                 Entertainment                   19%   115
                Sites (p30d)                       %     Index   General News                    34%   111
                Careerbuilder.com                  12%   149
                Cnn.com                            12%   145     Magazine Titles (AIR)           %     Index

                Hotmail.com                        13%   134     The National Enquirer            6%   148
                Bestbuy.com                        18%   133     O, The Oprah Magazine            7%   137
                Abc.com                            11%   133     Woman's World                    5%   136
                Itunes.com                         17%   129     Star                             6%   133
                Ebay.com                           26%   128     Consumer Reports                9%    127
                Weather.com                        19%   124     Good Housekeeping                9%   121
                Msn.com                            14%   121     People                          16%   119
                Att.com (AT&T)                     12%   121     AARP, The Magazine              15%   109


Source: USA NCS/NHCS 2009 doublebase
                                                                                                               6
Base: Illinois n=3,145; Total Player=n1,413
       Retail



  Supermarkets (L4wks)                         Convenience stores (L4wks)     Clothing & accessories (L3M)

 Schnucks Markets               14%      143   Quick Trip          9%   171   Kmart                19% 136

 IGA Markets                     6%      135   Circle K            7%   148   Meijer               6%   130

                                               Speedway
 Meijer                         15%      116                       9%   145   Wal-Mart             50% 123
                                               SuperAmerica

 Trader Joe's                   10%      114   BP Connect         11%   133   JCPenney             26% 121

 Dominick's Finer Foods         26%      112   White Hen Pantry    8%   130   Target               30% 120

 Cub Foods                       5%      109   7-Eleven           25%   124   Sam's club           10% 119

 Wal-Mart super center          61%      107   CITGO Quick Mart    8%   123   Sears                11% 118

 Kroger                         14%      104                                  Kohl's               30% 116

 Jewel-Osco                     51%      102                                  Carson Pirie Scott   12% 112

 Save-A-Lot                     12%      94                                   Macy's               13% 108



Source: USA NCS/NHCS 2009 doublebase
                                                                                                              7
Base: Illinois n=3,145; Total Player=n1,413
       Sports/ leisure activities


                                                          Top leisure activities/hobbies (L12M) (by index)




                                                                                Read gaming                     Go to bars/pubs
                                                                                  magazines                       30% 118
                                                              Tailgating          7% 135          Play bingo
                                                               8% 138                             8% 134
                                                          Top sports activities (participated L12M) (by index)
   Attended in L12M

   Comedy club                                15%   120

   Concerts                                   34%   112

   Dance performances                         11%   112

   Live theatre                               27%   106                         Billiards/pool                     Softball
                                                                                 26% 127                          10% 122
                                                          Fresh water fishing                    Motorcycling
   Theme parks                                24%   117
                                                              23% 133                             8% 123


Source: USA NCS/NHCS 2009 doublebase
                                                                                                                              8
Base: Illinois n=3,145; Total Player=n1,413
       Eating out



   Restaurants (most often) (by index)                         Fast food (most often) (by index)

                          Chuck E. Cheese's          6% 140                   Taco Bell            21% 123

                          Red Lobster                14% 131                  White Castle         9% 119

                          Golden Corral              5% 129                   Dairy Queen          10% 115

                         Lone Star Steakhouse &
                                                     5% 127                   KFC                  16% 114
                         Saloon
                         IHOP (International House
                                                     11% 125                  McDonald's           60% 112
                         Of Pancakes)

                          Denny's                    12% 119                  Panera Bread         9% 111

                          Chili's Grill & Bar        12% 116                  Little Caesar‘s      5% 111

                          The Cheescake Factory      5% 113                   Wendy‘s              16% 109

                          Applebee's                 18% 111                  Chipotle             5% 107

                          TGI Friday's               11% 111                  Subway               22% 106



Source: USA NCS/NHCS 2009 doublebase
                                                                                                             9
Base: Illinois n=3,145; Total Player=n1,413
Daily Online Game Lottery Players




                                    10
    Daily Online Player Demographics & lottery participation
    More likely than average to be Middle Aged, Low Income


      Key facts (L12M):

      Of the adult population:
      13% or 1.3m have played the lottery
      Of those that have played daily draw:
      ¾ 60% (227) have also played instant game
      ¾ 63% (190) have also played weekly online game
                                                  Demographics                                                  %       Index

                                                              Gender Male                                       54%      114
       • Tend to be older                                         Age 45-54                                     30%      164
       • Majority are male, married and                 Marital status Never married                            31%      116
                                                                       Married                                  54%       99
         have children
                                                                       Graduated high
                                                           Education                                            73%      118
       • Over half are employed but are in                             school/attended college
         SEL level 4                                     Employment Employed full time                          59%      113
                                                                       Temporarily unemployed                   16%      191
       • Daily draw players are more likely                      SEL* Level 4                                   52%      113
         to have played other games as                 Children in HH Yes                                       47%      112
         well in the L12M                         No of people in HH 3 or more                                  64%      114


Source: USA NCS/NHCS 2009 doublebase              *SEL (Socio Economic Level) consists of 4 levels based on education
                                                  and ownership of durables where 1 is the highest and 4 lowest             11
Base: Illinois n=3,145; Daily Draw Player n=342
       Attitudes            (Any agree: top 20 sorted by index)


                                                                                                                     %     Index
                              I choose a car mainly on the basis of looks                                            35%   147
                              I like to make a unique fashion statement                                              29%   144
          IMAGE               Almost every season I buy new clothes in order to keep up with the latest fashions     18%   141
                              A designer label improves a person’s image                                             17%   137

                               I am willing to spend more than I can really afford, to get the clothes that I want   27%   205
                               On several occasions I have surprised myself by buying clothing brands that I
        SPENDING                                                                                                     43%   150
                               normally don’t
                               I spend a lot of money on toiletries and cosmetics for personal use                   30%   140

                              I like to experiment with new clothing styles                                          38%   142
        NEWNESS               I am usually the first among my friends to try new food products                       26%   138
                              I am usually the first among my friends to try new clothing styles                     15%   136
                               I like to get a new car every two or three years                                      27%   184
                               American car companies set the standard in automotive engineering                     37%   180
                               I keep up on the latest advances in automobile technology                             35%   167
     AUTOMOBILES
                               Friends and family always ask my advice on what car they should buy                   20%   155
                               Having a vehicle that can handle rough terrain is very important to me                40%   143
                               I often go for a drive by myself to gain a sense of freedom                           37%   142

                               Money is the best measure of success                                                  32%   142
        AMBITION
                               I would like to set up my own business one day                                        53%   139

                               I prefer driving a luxury vehicle                                                     47%   146
         QUALITY
                               Most everything I wear is of the highest quality                                      34%   137



Source: USA NCS/NHCS 2009 doublebase
                                                                                                                                   12
Base: Illinois n=3,145; Daily Draw Player n=342
       Media


Media Quintiles                                   Index above 120                          TV
                                                                                           Cable channels (Lwk)                      %      Index
    Quintiles             1         2         3        4      5
                                                                                           Starz                                   19%      211
                                                                                           BET                                     21%      172
        TV              20%       21%       28%       17%    14%                           Bravo                                   18%      170
                                                                                           WGN America                             24%      169
                                                                                           HBO                                     34%      160
     Internet           14%       13%       14%       20%    17%
                                                                                           CNN(cable news network)                 33%      139
                                                                                           TBS                                     39%      135
      Radio             29%       22%       23%       15%    12%                           Fox news channel                        31%      135
                                                                                           USA network                             31%      128
                                                                                           TNT                                     31%      124
    Outdoor             16%       17%       26%       17%    23%

                                                                                           Cable programmes(Lwk)                     %      Index

                  Films                                                                    Tyler Perry's House of Payne 15%                 310
                                                                                           CBS Evening News - Sunday    15%                 285
                  Genre saw in theatre                  %    Index                         CBS Evening News - Saturday 19%                  274
                  Thriller                             24%   152                           Fox News Sunday              16%                 268
                  Sci-Fi                               26%   141                           America This Morning (ABC)   21%                 265
                  Action/adventure                     42%   130                           Extreme Makeover:Home(ABC)   20%                 236
                  Drama                                23%   116                           ABC World News Tonight       27%                 191
                  Animation                            20%   104                           20/20 (ABC)                  28%                 187
                  Comedy                               30%    99                           60 Minutes (CBS)             26%                 158
                  Family                               17%    78                           CSI: Miami (CBS)             27%                 152


Source: USA NCS/NHCS 2009 doublebase                           MNQ: Media Neutral Quintiles split the consumers of each medium into 5 equal-
                                                               sized groups based on their level of consumption of the medium. Quintile 1 refers    13
Base: Illinois n=3,145; Daily Draw Player n=342
                                                               to the heaviest consumers and 5 the lightest consumers
       Media 2


                Internet                                        Print
                Activities (p30d)                 %     Index   Newspaper Titles (AIR)          %     Index

                                                                New York Times                  7%    230
                Online gambling                   10%   378
                                                                USA Today                       12%   170
                Listen to sattelite radio          6%   183
                                                                New York Times (sun/wknd)       4%    122
                Employment search                 19%   160
                                                                Wall Street Journal(sun/wknd)   4%    111
                Video game info online             9%   150
                                                                Wall Street Journal              3%    98
                Download movies                    7%   137
                Play/download online games        16%   126
                Digital imaging/photos online     16%   125
                                                                Newspaper Sections               %    Index
                Sports                            17%   120
                                                                Classifieds                     27%   174
                Medical services and info         16%   117
                                                                Fashion                          9%   162
                Instant messaging                 14%   108
                                                                Movie listings & reviews        17%   150
                                                                Sports                          28%   145
                Sites (p30d)                      %     Index   Business/Finance                21%   132
                Hotjobs.com                       10%   279
                Nfl.com                           11%   209     Magazine Titles (AIR)            %    Index

                Careerbuilder.com                 15%   179     Hot Rod                          8%   345
                Foxnews.com                        8%   167     O, The Oprah Magazine           11%   218
                Abc.com                           13%   159     The National Enquirer            9%   208
                Espn.com                          12%   149     Jet                             14%   202
                Webmd.com                          8%   135     Ebony                           12%   196
                Msn.com                           15%   132     Good Housekeeping               10%   142
                Ask.com                            9%   128     People                          18%   137
                Dell.com                           7%   127     Time                            13%   124


Source: USA NCS/NHCS 2009 doublebase
                                                                                                              14
Base: Illinois n=3,145; Daily Draw Player n=342
       Retail



 Supermarkets (L4wks)                             Convenience stores (L4wks)     Clothing & accessories (L3M)
                                                  Speedway
 IGA Markets                     5%     125                          12% 208     Carson Pirie Scott   17% 164
                                                  SuperAmerica

 Cub Foods                       5%     118       BP Connect         13% 152     Kmart                23% 163

 Jewel-Osco                     58% 116           CITGO Quick Mart    9%   141   Costco               5%    140

 Wal-Mart Super Center          64% 112           Circle K            6%   137   Wal-Mart             45% 113

 Meijer                         14% 110           7-Eleven           26% 132     Sam's Club           9%    113

 Save-A-Lot                     13% 107           Quick Trip          5%   101   JCPenney             23% 109

 Trader Joe's                    9%     104       White Hen Pantry    6%   98    Sears                10% 102

 Dominick's Finer Foods         22%      93                                      Target               25% 100

 Whole Foods                     5%      81                                      Kohl's               20%   78

 Schnucks Markets                6%      62                                      Macy's               9%    74



Source: USA NCS/NHCS 2009 doublebase
                                                                                                                  15
Base: Illinois n=3,145; Daily Draw Player n=342
       Sports/ leisure activities


                                                         Top leisure activities/hobbies (L12M) (by index)




                                                                          Visit state fairs                 Visit an aquarium
                                                                            10% 154                             15% 132
                                                            Go carting                        Go to bars/pubs
                                                             7% 204                             36% 139
                                                         Top sports activities (participated L12M) (by index)
   Attended in L12M

   Comedy club                               13%   104

   Concerts                                  26%    85

   Dance performances                         8%    84
                                                                         Salt water fishing                     Volleyball
   Live theatre                              24%    95
                                                                             7% 184                             18% 169
                                                             Softball                            Baseball
   Theme parks                               24%   114
                                                            18% 209                             26% 179


Source: USA NCS/NHCS 2009 doublebase
                                                                                                                             16
Base: Illinois n=3,145; Daily Draw Player n=342
       Eating out



   Restaurants (most often) (by index)                         Fast food (most often) (by index)

                         Chuck E. Cheese‘s           9% 234                   White Castle         14% 193

                         IHOP (International House
                                                     16% 172                  Popeyes              15% 175
                         Of Pancakes)

                         Denny‘s                     17% 172                  Chipotle             6% 137

                         TGI Friday‘s                13% 136                  Subway               28% 133

                         Old Country Buffet          9% 131                   Long John Silver‘s   5% 133

                         Red Lobster                 14% 130                  Little Caesar's      6% 124

                         Outback Steakhouse          7% 122                   McDonald's           61% 114

                         Olive Garden                13% 109                  Dairy Queen          9% 114

                         Applebee‘s                  17% 107                  Steak 'N Shake       9% 106

                         Cracker Barrel              6%   76                  Wendy‘s              15% 104



Source: USA NCS/NHCS 2009 doublebase
                                                                                                             17
Base: Illinois n=3,145; Daily Draw Player n=342
Instant Game Lottery Players




                               18
   Instant player Demographics & lottery participation
   More likely than average to be Middle Youth, Moderate Income


     Key facts (L12M):

     Of the adult population:
     27% or 2.6m have played the lottery
     Of those that have played instant game:
     ¾ 29% have also played daily online game
     ¾ 54% have also played weekly online game
                                                    Demographics                                                  %       Index

                                                                 Gender Male                                      49%      103
      • Tend to be middle-older ages and                                  Female                                  51%       97
        have completed high school                                   Age 35-54                                    46%      133
        education                                          Marital status Married                                 54%      100
      • Majority are employed full time,                       Education Graduated high school                    51%      126
        married, have children and have                    Employment Employed full time                          58%      112
        fairly large households of 3                                SEL* Level 3                                  36%      139
        people or more                                    Children in HH None                                     58%      100
                                                    No of people in HH 2                                          36%      116
      • Majority have also played weekly
        draw in L12M                                                          3 or more                           54%       96

Source: USA NCS/NHCS 2009 doublebase                *SEL (Socio Economic Level) consists of 4 levels based on education
Base: Illinois n=3,145; Instant Game Player n=731   and ownership of durables where 1 is the highest and 4 lowest             19
      Attitudes            (Any agree: top 20 sorted by index)


                                                                                                              %     Index
                             My friends are more important to me than my family                               13%   146
                             I am more likely to buy products from companies that sponsor sports teams and
     PERSONALITY                                                                                              16%   121
                             sports events
                             I like to have control over people and resources                                 27%   119

                              A Sport Utility Vehicle (SUV) matches my active lifestyle                       31%   131
                              I like to get a new car every two or three years                                19%   127
    AUTOMOBILES
                              I often go for a drive by myself to gain a sense of freedom                     32%   126
                              I often go on long car trips for vacations                                      41%   117

                              I’ll try any new diet                                                           15%   123
       HEALTH &
                              Because of my busy lifestyle, I don’t take care of myself as well as I should   52%   120
       LIFESTYLE
                              I’m usually the first to try a new health food                                  19%   117

                              I cannot resist buying magazines                                                14%   130
                              I often notice the ads in the lobbies of movie theatres                         42%   125
          MEDIA               Advertising helps me choose products to buy for my children                     28%   124
                              The Internet has become a primary source of entertainment for my family         22%   122
                              I spend less time sleeping because of the Internet                              12%   119

                              I tend to spend money without thinking                                          26%   122
       SPENDING               I spend a lot of money on toiletries and cosmetics for personal use             25%   120
                              I prefer to shop with my friends                                                32%   119

                              I often eat frozen dinners                                                      25%   120
          FOOD
                              Often I can be swayed by coupons to try new food products                       48%   119

Source: USA NCS/NHCS 2009 doublebase
Base: Illinois n=3,145; Instant Game Player n=731                                                                           20
      Media


Media Quintiles                                  Index above 120                          TV

                                                                                          Cable channels (Lwk)                      %      Index
   Quintiles            1          2         3        4      5
                                                                                          Starz                                   17%      189
                                                                                          ABC Family                              25%      157
       TV             30%        21%       17%       14%    18%                           SCI-FI Channel                          27%      156
                                                                                          TBS                                     41%      143
                                                                                          USA Network                             34%      141
    Internet          13%        16%       13%       19%    11%
                                                                                          TLC                                     27%      136
                                                                                          Food Network                            26%      135
     Radio            34%        18%       20%       14%    13%                           HBO                                     28%      133
                                                                                          A&E                                     30%      131
                                                                                          ESPN                                    24%      127
   Outdoor            15%        20%       28%       21%    15%

                                                                                          Cable programmes(Lwk)                     %      Index

                 Films                                                                    King of the Hill                        17%      241
                                                                                          Hell's Kitchen (Fox)                    12%      199
                 Genre saw in theatre                  %    Index                         The Simpsons                            16%      188
                 Sci-Fi                               21%   114                           The Biggest Loser (NBC)                 15%      185
                 Action/adventure                     36%   112                           George Lopez (Weekend)                  16%      173
                 Thriller                             18%   112                           CSI: Miami (CBS)                        29%      165
                 Comedy                               34%   111                           House (Fox)                             26%      157
                 Drama                                21%   107                           American Idol (Fox)                     17%      153
                 Family                               23%   106                           Law & Order: SVU(NBC)                   21%      147
                 Animation                            20%   104                           CSI: Crime Scene Inv. (CBS)             24%      130


Source: USA NCS/NHCS 2009 doublebase                          MNQ: Media Neutral Quintiles split the consumers of each medium into 5 equal-
Base: Illinois n=3,145; Instant Game Player n=731             sized groups based on their level of consumption of the medium. Quintile 1 refers    21
                                                              to the heaviest consumers and 5 the lightest consumers
      Media 2


               Internet                                           Print
               Activities (p30d)                    %     Index   Newspaper Titles (AIR)          %     Index

                                                                  USA Today                       8%    111
               Download movies                      11%   197
                                                                  New York Times                  3%    100
               Listen to satellite radio             6%   182
                                                                  Wall Street Journal(sun/wknd)   3%     84
               Send electronic greeting cards       10%   154
                                                                  New York Times (sun/wknd)       3%     75
               Real estate listings                 14%   151
                                                                  Wall Street Journal             2%     61
               Play/download online games           19%   147
               Download music files                 25%   132
               Auctions                             15%   132
                                                                  Newspaper Sections              %     Index
               Employment search                    15%   128
                                                                  Classifieds                     23%   151
               Auto shopping/comparing              11%   125
                                                                  Home/Furnishings/Gardening       9%   118
               Banking                              41%   124
                                                                  Movie Listings & Reviews        13%   117
                                                                  Comics                          17%   116
               Sites (p30d)                         %     Index   TV or Radio listings            10%   111
               Hotjobs.com                           8%   223
               Gamespot.com                          8%   192     Magazine Titles (AIR)           %     Index

               Dell.com                             11%   184     The National Enquirer           10%   228
               Netflix.com                           8%   172     Essence                          8%   179
               Careerbuilder.com                    14%   162     Woman‘s World                    7%   178
               Myspace.com                          22%   131     Ebony                           10%   166
               Abc.com                              11%   130     JET                             11%   153
               Yellowpages.com                      11%   127     Good Housekeeping               11%   144
               Ebay.com                             25%   124     Consumer Reports                9%    129
               Paypal.com                            9%   120     Family Circle                   8%    122


Source: USA NCS/NHCS 2009 doublebase
Base: Illinois n=3,145; Instant Game Player n=731                                                               22
      Retail



 Supermarkets (L4wks)                               Convenience stores (L4wks)     Clothing & accessories (L3M)

 Schnucks Markets              17% 179              Circle K           10% 213     Kmart                22% 158

 IGA Markets                    7%     173          Quick Trip         11% 208     Sam's Club           13% 158

                                                    Speedway
 Cub Foods                      6%     144                             11% 186     Meijer               7%    153
                                                    SuperAmerica

 Save-A-Lot                    17% 139              CITGO Quick Mart    9%   141   Wal-Mart             60% 148

 Kroger                        18% 131              Bp Connect         12% 140     JCPenney             27% 127

 Meijer                        15% 115              White Hen Pantry    8%   131   Target               30% 118

 Wal-Mart Super Center         64% 111              7-Eleven           25% 125     Kohl's               29% 115

 Jewel-Osco                    48%     95                                          Sears                11% 112

 Whole Foods                    6%     93                                          Carson Pirie Scott   11% 104

 Dominick's Finer Foods        20%     83                                          Macy's               11%   91



Source: USA NCS/NHCS 2009 doublebase
Base: Illinois n=3,145; Instant Game Player n=731                                                                   23
      Sports/ leisure activities


                                                          Top leisure activities/hobbies (L12M) (by index)




                                                                          Paint,draw,sculpt                   Card games
                                                                             17% 128                          53% 125
                                                             Play bingo                       Board games
                                                             11% 169                           40% 127
                                                          Top sports activities (participated L12M) (by index)
  Attended in L12M

  Comedy club                               16%     123

  Concerts                                  33%     108

  Dance performances                        11%     113
                                                                          Target shooting                      Softball
  Live theatre                              24%      95
                                                                              8% 149                          12% 143
                                                               Karate                   Fresh water fishing
  Theme parks                               27%     131
                                                              7% 162                           25% 146


Source: USA NCS/NHCS 2009 doublebase
Base: Illinois n=3,145; Instant Game Player n=731                                                                          24
      Eating out



  Restaurants (most often) (by index)                         Fast food (most often) (by index)

                        Hometown Buffet             5% 161                   Taco Bell            24% 141

                        Chuck E. Cheese‘s           6% 161                   White Castle         10% 132

                        Red Lobster                 16% 156                  Little Caesar‘s      6% 131

                        IHOP (International House
                                                    13% 141                  Arby‘s               11% 119
                        Of Pancakes)

                        Denny‘s                     13% 135                  Hardee‘s             5% 118

                        TGI Friday‘s                12% 126                  Dairy Queen          9% 113

                        Ruby Tuesday                5% 125                   McDonald's           59% 111

                        Applebee‘s                  20% 124                  KFC                  15% 109

                        Chili's Grill & Bar         12% 123                  Steak 'N Shake       8% 102

                        Golden Corral               5% 119                   Burger King          23%   95



Source: USA NCS/NHCS 2009 doublebase
Base: Illinois n=3,145; Instant Game Player n=731                                                            25
Weekly Online Game Lottery Players




                                     26
    Weekly Online Player Demographics & lottery participation
    More likely than average to be Married Males, Middle Income


      Key facts (Last 12M):

      Of the adult population:
      27% or 2.6m have played the lottery
      Of those that have played weekly draw:
      ¾ 24% have also played daily online game
      ¾ 43% have also played instant game

                                                    Demographics                                                  %       Index

                                                                   Gender Male                                    60%      126
       • Typically male, well educated,
                                                                       Age 35-54                                  46%      132
         employed and in SEL 2
                                                           Marital status Married                                 66%      121
       • Tend to be aged between 35 & 54
                                                               Education Attended college                         26%      121
       • Majority have children                             Employment Employed full time                         67%      129
       • More likely to also have played                              SEL* Level 2                                26%      134
         daily draw and instant games in                  Children in HH None                                     61%      105
         L12M                                       No of people in HH 2                                          36%      116
                                                                              3 or more                           49%       88

Source: USA NCS/NHCS 2009 doublebase                *SEL (Socio Economic Level) consists of 4 levels based on education
Base: Illinois n=3,145; Weekly Draw Players n=960   and ownership of durables where 1 is the highest and 4 lowest             27
       Attitudes            (Any agree: top 20 sorted by index)


                                                                                                              %     Index
                              I am good at fixing mechanical things                                           50%   130
        TECHNICAL             My friends often ask for my advice before buying electronic equipment           22%   119
                              I am good at fixing things                                                      61%   118

                              Money is the best measure of success                                            26%   115
         AMBITION
                              I look at the work I do as a career rather than just as a job                   47%   114

                              I keep up on the latest advances in automobile technology                       26%   122
                              I like to drive faster than normal traffic                                      41%   121
                              A Sport Utility Vehicle (SUV) matches my active lifestyle                       28%   121
      AUTOMOBILES             I often go on long car trips for vacations                                      41%   118
                              I often go for a drive by myself to gain a sense of freedom                     30%   118
                              Friends and family always ask my advice on what car they should buy             15%   117
                              I am possessive about my car                                                    44%   115

                              I read the financial pages of my newspaper                                      34%   124
                              The Internet has changed the way I shop for products/ services                  41%   119
                              The Internet has changed the way I work                                         35%   118
           MEDIA
                              It is safe to make purchases online                                             49%   117
                              Often I can be swayed by coupons to try new food products                       46%   116
                              I get more and more of my news from the Internet                                42%   114

                              Because of my busy lifestyle, I don’t take care of myself as well as I should   51%   118
      HEALTH & DIET
                              Fast food fits my busy lifestyle                                                28%   116



Source: USA NCS/NHCS 2009 doublebase
Base: Illinois n=3,145; Weekly Draw Players n=960                                                                           28
       Media


Media Quintiles                                  Index above 120                          TV

                                                                                          Cable channels (Lwk)                      %      Index
    Quintiles            1         2         3        4      5
                                                                                          Spike                                   17%      140
                                                                                          American Movie Classics                 22%      139
        TV             28%       22%       18%       14%    18%                           WGN America                             19%      133
                                                                                          FX                                      17%      131
                                                                                          HLN                                     14%      130
     Internet          18%       16%       12%       18%    14%
                                                                                          Starz                                   12%      130
                                                                                          TCM                                     14%      128
      Radio            31%       20%       24%       14%    11%                           History                                 32%      126
                                                                                          SCI-FI Channel                          22%      124
                                                                                          Comedy Central                          21%      121
    Outdoor            22%       21%       26%       16%    16%

                                                                                          Cable programmes(Lwk)                     %      Index

                                                                                          Hell‘s Kitchen (FOX)                    10%      163
                  Films                                                                   CBS Evening News – Sat                  11%      160
                                                                                          Dateline (NBC)                          12%      157
                  Genre saw in theatre                 %    Index
                                                                                          House (FOX)                             23%      140
                  Drama                               24%   119
                                                                                          Two and a half men                      18%      138
                  Action/adventure                    37%   115
                                                                                          Law & Order: SVU (NBC)                  19%      137
                  Sci-Fi                              20%   111
                                                                                          American Idol (FOX)                     15%      134
                  Thriller                            17%   108
                                                                                          CSI: Miami (CBS)                        23%      133
                  Animation                           20%   106
                                                                                          Law & Order: Criminal Intent            15%      132
                  Comedy                              32%   103
                                                                                          Without a Trace (CBS)                   16%      130
                  Family                              20%    92

Source: USA NCS/NHCS 2009 doublebase                          MNQ: Media Neutral Quintiles split the consumers of each medium into 5 equal-
Base: Illinois n=3,145; Weekly Draw Players n=960             sized groups based on their level of consumption of the medium. Quintile 1 refers    29
                                                              to the heaviest consumers and 5 the lightest consumers
       Media 2


                Internet                                          Print
                Activities (p30d)                   %     Index   Newspaper Titles (AIR)          %     Index

                                                                  Wall Street Journal             4%    131
                Listen to radio online              11%   154
                                                                  USA Today                       8%    118
                Real estate listings                14%   152
                                                                  Wall Street Journal(sun/wknd)   4%    117
                Send cards online                   10%   151
                                                                  New York Times (sun/wknd)       3%     94
                Medical services & info             20%   143
                                                                  New York Times                  3%     92
                Auto shopping/comparing             13%   143
                Financial info/Stock trading        14%   140
                Banking                             44%   133
                                                                  Newspaper sections              %     Index
                Employment search                   16%   132
                                                                  Classified                      22%   144
                Download/listen to podcasts         10%   131
                                                                  Front page                      41%   118
                Air/Car/Hotel info/reservations     30%   130
                                                                  General news                    36%   117
                                                                  Sports                          22%   117
                Sites (p30d)                        %     Index   Editorial                       19%   117
                Cnn.com                             14%   177
                Bestbuy.com                         22%   156     Magazine Titles (AIR)           %     Index

                Hotmail.com                         14%   150     Consumer Reports                9%    133
                Itunes.com                          19%   143     People                          17%   124
                Msn.com                             16%   139     TV Guide                         8%   123
                Ebay.com                            27%   136     O, The Oprah Magazine            6%   121
                Weather.com                         21%   135     National Geographic              8%   115
                Craigslist.org                      16%   131     Time                            11%   109
                Mapquest.com                        32%   127     AARP, The Magazine              14%   106
                Yahoo.com                           45%   121     Reader's Digest                  9%   104


Source: USA NCS/NHCS 2009 doublebase
Base: Illinois n=3,145; Weekly Draw Players n=960                                                               30
       Retail



  Supermarkets (L4wks)                              Convenience stores (L4wks)     Clothing & accessories (L3M)

  IGA Markets                   6%     155          Quick trip         10% 205     Nordstrom           5%   150

  Schnucks Markets             15% 153              BP Connect         11% 134     Target              33% 131

  Trader Joe's                 11% 128              White Hen Pantry    8%   131   Meijer              6%   127

                                                    Speedway
  Meijer                       16% 124                                  8%   130   Kohl's              32% 125
                                                    SuperAmerica

  Dominick's Finer Foods       26% 111              7-Eleven           25% 126     Wal-Mart            50% 123

  Wal-Mart Super Center         59% 103             Circle K            6%   120   JCPenney            26% 123

  Whole Foods                   6%      99          CITGO Quick Mart    7%   111   Sears               12% 121

  Jewel-Osco                   49%      98                                         Macy's              13% 115

  Kroger                        13%     96                                         Sam's Club          9%   113

  Save-A-Lot                   11%      85                                         Kmart               15% 108



Source: USA NCS/NHCS 2009 doublebase
Base: Illinois n=3,145; Weekly Draw Players n=960                                                                 31
       Sports/ leisure activities


                                                          Top leisure activities/hobbies (L12M) (by index)




                                                                                 Woodwork                     Visit a zoo
                                                                                 11% 148                      34% 121
                                                              Tailgating                         Gardening
                                                              10% 179                            33% 121
                                                          Top sports activities (participated L12M) (by index)
   Attended in L12M

   Comedy club                              16%     129

   Concerts                                 36%     117

   Dance performances                       12%     116
                                                                                Billiards/pool               Motorcycling
   Live theatre                             29%     115
                                                                                 26% 129                      8% 126
                                                          Fresh water fishing                      Golf
   Theme parks                              22%     106
                                                              28% 160                            20% 129


Source: USA NCS/NHCS 2009 doublebase
Base: Illinois n=3,145; Weekly Draw Players n=960                                                                           32
       Eating out



   Restaurants (most often) (by index)                         Fast food (most often) (by index)

                         Red Lobster                15% 143                   Taco Bell            23% 138

                        Lone Star Steakhouse &
                                                    5% 141                    Dairy Queen          11% 136
                        Saloon

                         Golden Corral              6% 139                    Arby‘s               11% 122

                        IHOP (International House
                                                    12% 129                   KFC                  16% 119
                        Of Pancakes)

                         Chili's Grill & Bar        12% 122                   Wendy‘s              17% 116

                         Olive Garden               14% 116                   Starbucks            11% 116

                         Outback Steakhouse         7% 116                    Panera Bread         9% 116

                         Applebee‘s                 19% 114                   McDonald's           59% 111

                         Denny‘s                    10%   99                  Burger King          26% 106

                         Old Country Buffet         7%    94                  Little Caesar‘s      5% 105



Source: USA NCS/NHCS 2009 doublebase
Base: Illinois n=3,145; Weekly Draw Players n=960                                                            33
                                                                             FY 2012        FY 2013       FY 2014       FY 2015      FY 2016

REVENUES                                                                 $       2,658 $       3,062 $       3,392 $       3,718 $      3,891
 Ticket Sales                                                            $       2,619 $       3,017 $       3,342 $       3,664 $      3,835
   Bricks & Mortar                                                               2,612         2,986         3,285         3,581        3,736
     Instant Games                                                               1,430         1,699         1,897         2,031        2,115
     On-line Games                                                               1,182         1,288         1,388         1,550        1,621
       State games                                                                 706           781           859           922          990
       Multi-state games                                                           476           506           528           628          631
   Internet Pilot Program                                                            7            31            57            83           99
 Other Operating Revenues                                                           39            45            50            54           56
   Unclaimed prizes                                                                 33            37            41            45           47
   Other revenues                                                                    6             8             9             9            9


EXPENSES                                                                 $       1,897 $       2,180 $       2,410 $       2,628 $      2,745   EXPENSE TYPE                              NOTES
 Direct Expenses                                                         $       1,727 $       2,001 $       2,220 $       2,427 $      2,538
  Prizes                                                                 $       1,595 $       1,850 $       2,054 $       2,246 $      2,349     VARIABLE     % of ticket sales
    Bricks & Mortar                                                              1,591         1,834         2,025         2,203        2,297     VARIABLE     % of ticket sales
      Instant Games                                                                984         1,172         1,311         1,406        1,464     VARIABLE     % of ticket sales
      On-line Games                                                                608           662           714           797          833     VARIABLE     % of ticket sales
        State games                                                                367           406           447           480          515     VARIABLE     % of ticket sales
        Multi-state games                                                          241           256           267           317          318     VARIABLE     % of ticket sales
    Internet Pilot Program                                                           3            16            29            43           52     VARIABLE     % of ticket sales
  Retailer Commissions and Fees                                                    132           151           166           181          189     VARIABLE     % of ticket sales
 Operating Expenses                                                                171           179           190           201          207
  Management Fee                                                                    36            37            37            37           37     VARIABLE     Incl headcount and capital support overhead charge
  Lottery Expenses                                                           $     134   $       142   $       153   $       164   $      171
    Marketing and Branding                                                          31            36            40            43           45     VARIABLE     % of ticket sales
    Customer Loyalty / Engagement Programs and Other Customer Insights               4             5             3             3            3       FIXED      Operating leases with maintenance expenses grown at 2.5%
    Game Development / R&D                                                           5           -             -             -            -         FIXED      Grown at 2.5% from FY09 levels
    Gaming Platforms                                                                35            29            33            36           38     VARIABLE     % of gross margins
    Other IT and Infrastructure / Technology                                        11            17            18            19           20      MIXED       Grown at 2.5% from FY09 levels/ % of internet ticket sales
    Telecommunications                                                               7             8             9             9            9     VARIABLE     Number of retailers and fee amounts, fees grown at 2.5%
    Logistics                                                                        6             8             9             9            9     VARIABLE     % of ticket sales
    EUA Salaries and Other EUA Employment Costs                                     15            15            16            16           16      FIXED       Grown at 2.5% from FY09 levels
    Other                                                                           20            25            27            29           29
      Instants printing and disposal costs, commodities                             12            14            16            17           18     VARIABLE     % of instant ticket sales, $0.4m fixed cost
      Leased in-store equipment                                                      1             3             4             4            4     VARIABLE     Number of retailers and PPOS costs
      Corporate social responsibility                                                1             1             1             1            1       FIXED      Grown at 2.5%
      Contractual services-other, professional services                              2             2             2             2            2       FIXED      Grown at 2.5% from FY09 levels
      Depreciation                                                                   1             2             2             2            2       FIXED      Straight line depreciation expense of assets
      Other (SME Costs, Shared Services, Automotive Equipment)                       2             2             2             2            2       FIXED      Grown at 2.5% from FY09 levels
      Foundation expense                                                             1             1             1             1            1       FIXED      Grown at 2.5%

NET OPERATING INCOME                                                     $        761   $       882   $       982   $      1,090 $      1,146
                            FY 2012    FY 2013    FY 2014     FY 2015    FY 2016

Net Income Target

Net Income Targets will be submitted in a sealed envelope in accordance with the
guidance letter of 25th August 2010

								
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