LA FLEUR'S 9TH ANNUAL SYMPOSIUM by zhangyun

VIEWS: 23 PAGES: 6

									LA FLEUR’S 9TH ANNUAL SYMPOSIUM
L
 BY TARA AMANN
        a Fleur’s 9th Annual Lottery phasized paying attention to the
        World Symposium, held April partnering organization’s objectives.
        4-7, 2004, at the J.W. Marriott     Barbara Lang, president and CEO,
                                                                                       that the appeal to play has to be more
                                                                                       than the dream of winning money.
                                                                                       There has to be strong element of ex-
                                                                                                                                    l




                                                                                                                                        FEATURE
in Washington, D.C., featured topics D.C. Chamber of Commerce (DCCC),                  citement and challenge associated
such as corporate partnerships, bloc andcontinued the partnership theme.               with lottery play. Many consumers
lotto changes, advertising strategies, Lang explained how the DCCC ap-                 have grown accustomed to e-com-
IT changes and human resources proached a partnership with the D.C.                    merce and will also prefer to seek their
issues. The cohost of the symposium Lottery. First and foremost, the cham-             entertainment electronically.
was the D.C. Lottery and Charitable ber promoted the lottery as a business                 Roland Mas, junior product man-
Games Control Board.                     entity and created visibility by spon-        ager, La Française des Jeux, and Jo
    Jeanette Michael, executive direc- soring lottery events. The chamber              Kenrick, director, marketing commu-
tor, D.C. Lottery & Charitable Games also informed the business commu-                 nications, Camelot Group, both dis-
Board led the program with an over- nity and tourists about the D.C. Lot-              cussed the recent formation of Euro
view of joint sector partnerships. The tery as well as hosted networking               Millions. The multistate lottery is
purpose of such partnerships is to in- events to increase awareness. Specific          available in France, Spain and the
crease marketing reach and effective- services the DCCC offered to the D.C.            United Kingdom, which are three of
ness by developing associations that Lottery included a link to the DCCC               the five largest lotteries in Europe. The
strengthen the lottery’s position in the website, use of its e-newsletter, corpo-      game’s first draw was held on Febru-
marketplace. The D.C. Lottery has rate logo exposure at chamber events,                ary 13, 2004, and marked the world’s
found success partnering with a wide visibility on its chamber television              widest reaching lottery game in terms
variety of organizations, including show, and marketing and other exper-               of potential players. The purpose of
business organizations, associations, tise through chamber seminars. Lang              Euro Millions was to develop a new
media outlets, sports organizations, said that partnerships such as this one           game offering big jackpots and a game
and nonprofit/community based or- positively impact the entire business                that could potentially be rolled out in
ganizations. Much of the lottery’s ef- community by expanding the local                most western European countries.
fectiveness in partnering with all of economy, attracting and retaining                Mas described the history behind the
these organizations revolves around workers, improving education and re-               game’s creation, highlighting the le-
the focus on partnering with other ducing crime. She urges other lotter-               gal and currency challenges. Because
organizations that offer some element ies to approach their chambers of com-           of these differences Euro Millions is
of entertainment. Michael advises merce to develop partnerships for                    actually three different games, unique
that to establish partnerships, lotter- mutual benefits.                               to each jurisdiction. Each partner lot-
ies should define their objective, de-                                                 tery is responsible for gathering the
termine the “win-win” element, and EUROPEAN CONCERNS                                   stakes and paying for prizes. An inde-
identify both long and short-term        Jussi Isotalo, executive vice president,      pendent corporation, Services aux
goals. Most importantly, Michael em-     Oy Veikkaus, shared Finland’s e-mar-          Loteries en Europe (SLE), is responsible
                                                        keting initiatives (see full   for supplying services to the partner
                                                        article on page 19). Dis-      lotteries and drawings and prize cal-
                                                        pelling a commonly held        culations. Fund transfers are through
                                                        myth, Isotalo insists that     a British Trust to guarantee the high-
                                                        younger generations are        est level of security. The game’s cur-
                             Barbara                    indeed interested in           rency is the Euro, and in the U.K,
               Jeanette      Lang
               Michael                                  playing lottery games.         Camelot manages exchange fluctua-
                                                        However, he cautions           tions between the euro and pound. The
                                                                                       next step in developing Euro Millions
                                                                                       is to integrate new partners. The plan
                                                                                       is to integrate small clusters of coun-
                                                                                       tries. In 2004, lotteries in Ireland, Aus-
                                                                                       tria, Portugal and Switzerland are ex-
                                                                                       pected to join Euro Millions. The game
     Jussi                    Roland                                                   structure includes choosing five num-
     Isotalo                                               Jo                          bers out of 50 and then two numbers
                              Mas
                                                           Kenrick                     out of nine. Weekly draws are on Fri-

13 / LA FLEUR’S MAGAZINE / MAY 2004
l         day nights and the cost of a ticket is 2
          euros (1.5 pounds). The odds are the
          same for all players and based on a
          parimutuel design, the stakes from all
          three countries are summed. The prize
          payout is 50% with one single draw
                                                     can not be purchased). Retailers can
                                                     profit from co-branding and more
                                                     store traffic—not likely to be
                                                     disintermediated. The technology ex-
                                                     ists to overcome the challenges and
                                                     ensure controlled access and secure
                                                                                                  came a key component of the process
                                                                                                  improvement changes. A focus on in-
                                                                                                  tegrity was Pushor’s second primary
                                                                                                  focus as a new director. The concern
                                                                                                  for integrity was examined from the
                                                                                                  perspective of lottery players, vendors
FEATURE




          and prize calculation for all countries.   play.”                                       and employees. Using the Colorado
          The rationale behind the prize struc-          The guest HR speaker, Gregory            Lottery audit, the Arizona Lottery de-
          ture was to motivate players with huge     Perkins, principal, prmConsulting, fo-       veloped a plan to set the tone of in-
          prize amounts and build loyalty with       cused on four key roles of human re-         tegrity. Finally, Pushor would like to
          frequent and significant smaller           sources: identifying and developing          see the industry take a more unified
          prizes. The jackpot rolls from one         organizational leaders, future-step-         approach to public relations among all
          week to the next until there is a win-     ping/HR planning, talent acquisition         lotteries. Her goal centered around
          ner. Both Mas and Kenrick concluded        and management system, and creating          being able to respond to and clarify the
          their remarks with highlights about        and enabling a result-oriented culture.      inquiries often put forth by media and
          how both FDJ and Camelot ap-               Advising lottery organizations about         politicians from a collective stand-
          proached launching and marketing           how to maximize their effectiveness,         point that helps to represent each lot-
          the game.                                  Perkins offers several strategies. First,    tery jurisdiction.
                                                     plan strategically and make target in-
          INTERNET TRENDS                            vestments. Second, ensure stakeholder        ADVERTISING STRATEGIES
          Michael O’Donnell, president and CEO       input in developing policies and pro-        Joseph Sullivan, executive director, and
          of Interstate Lotto, the sponsor of        cedures. Third, educate managers and         Jim Acton, chief of staff, both of the Mas-
          Monday’s luncheon, presented Lottery       employees so they understand how             sachusetts Lottery, shared their experi-
          Industry Research on Internet and Wire-    their role contributes to making the or-     ence with the relaunch of advertising
          less: Trends, Opportunities and Chal-      ganization successful. Fourth, stream-       in the state. For the last seven years,
          lenges. O’Donnell identified five major    line and improve administrative prac-        the Massachusetts Lottery has had a
          technical challenges: user authentica-     tices. Fifth, build transparency and         very minimal ad budget. However, for
          tion/privacy, jurisdiction/geographic      accountability into the system. Last,        fiscal 2004, the lottery has secured $5
          controls, electronic tickets/validation,   change the culture if needed.                million from the Massachusetts legis-
          data communications and retailer co-           Katie Pushor, executive director, Ari-   lature. The lottery then contracted
          branding and commissions. In sum-          zona Lottery, offered a perspective on       with Boston ad firm Hill Holliday in
          mary, “Internet access is ubiquitous and   the industry as a new director who pre-      October. The firm helped the lottery
          probably inevitable for lottery play,”     viously spent 25 years in the public ac-     launch a successful holiday campaign.
          said O’Donnell. “Mobile phones are         counting and technology industries.          The lottery also hired a top research
          ubiquitous and lottery is a ‘killer’ ap-   Pushor’s first focus was on process          firm to help set up a strategic plan to
          plication. The web and mobile phones       improvement in terms of improving in-        direct their advertising dollars. The
          are great channels for game information    terdepartmental and cross-depart-            research uncovered that the online
          and new player features (even if tickets   mental coordination. Her strategy was        game segment could be grown signifi-
                                                                  to take individual jobs and     cantly and other surveys focused on
                                                                  break them into functions       finding out who are Massachusetts
                                                                  and tasks and then align        Lottery players. One key discovery
                                                                  them to the processes to        was that heavy players ($2,730/year
                                                                  which they contribute.          average) made up a relatively small
           MIchael                                                Teams were formed based         portion of players (11%) and were re-
                                                      Gregory
           O’Donnell                                              on individuals who all          sponsible for more than two-thirds of
                                                      Perkins
                                                                  contribute to the same          revenue. Medium players ($442/year
                                                                  task. Measurement be-           average.) made up 22% of total play-
                                                                                                  ers and 23% of total revenue. Light
                                                                                                  players ($73/year average) made up
                                                                                                  67% of total players and 9% of total
                                                                                                  revenues. Based on the three different
                                                                                                  groups and the in-depth research on
                                                                       Jim                        the demographics of each group, the
                                        Joe                                                       lottery created its first advertising
           Katie                                                       Acton
                                        Sullivan
           Pushor                                                                                 campaign based around Mega Mil-

                                                                                                  LA FLEUR’S MAGAZINE / MAY 2004 / 14
lions to target light, non-players.
The campaign utilized TV, print,
and radio mediums, and tried to
speak to each player segment
through a “You Have to Play”
tagline. Massachusetts usually         Penny
                                       Kyle
                                                       Buddy
                                                       Roogow
                                                                                                                                 l




                                                                                                                                     FEATURE
comprises 3.5% of Mega Mil-                                               Wayne                                   Libby
lions total sales, but since the ad-                                      Lemons                                  White
vertising began, the lottery has
increased its sales to 4.3% of total Award was envisioned as a standard              relationships, earnings and public
Mega Millions sales.                        of excellence that would help U.S. or-   image.
    Buddy Roogow, executive director, ganizations achieve world-class qual-              Libby White, deputy director, mar-
Maryland Lottery, and Penelope Kyle, ity. Created in 1987, the Baldrige              keting, West Virginia Lottery, discussed
executive director, Virginia Lottery, Award is given by the President of the         West Virginia’s experience in trying to
discussed the joint jackpot advertising United States to businesses, manufac-        establish a state gaming division. In
effort between the two lotteries which turing and service, small and large,          February 2003, the West Virginia Sen-
dates back to 1999. Virginia and Mary- that apply and are judged to be out-          ate introduced a bill that would create
land were both members of what was standing in seven areas: leadership,              a Division of Gaming under the Depart-
called the Big Game and both adver- strategic planning, customer and mar-            ment of Tax and Revenue. Such a divi-
tised minimally in the Washington, ket focus, information and analysis,              sion would have encompassed all of the
D.C. market, as it represents one of the human resource focus, process man-          state’s legal gaming activities. The cre-
most expensive media markets in the agement, and business results. Mod-              ation of the West Virginia Gaming Com-
country. Starting small, the lotteries eled after the Baldrige Award, the            mission faced several obstacles such as
combined efforts to share the cost of Delaware Quality Award was estab-              the lack of a model for incorporating
running joint ads in The Washington lishing in the late 1990s so that Dela-          racing into such a group. This includes
Post. As the Big Game transitioned to ware organizations can take advan-             secondary issues with veterinarians
Mega Millions, the two lotteries de- tage of its proven approaches. The              and other animal husbandry issues.
cided to expand the program with purpose of the award is to support the              White predicts that as lotteries ex-
joint TV and radio ads. The agreement development of and recognize the               pand their product lines and obtain
today has several facets. The newspa- achievement of organizational excel-           additional regulatory duties, consoli-
per ads run on an annual basis, allow- lence in Delaware. Application for the        dation of state gaming will become
ing both lotteries to receive a substan- Delaware Quality Award offers an op-        more attractive. Yet, she cautions that
tial discount from The Washington Post. portunity for critical internal exami-       there are drawbacks to such consoli-
Radio ads come into the mix when nation of an organization to identify               dation. The nature of the work reflects
jackpots exceed $45-$50 million. TV strengths and opportunities to im-               the nature of the product line. The in-
ads are launched when the jackpot prove. The process also allows for an              centives for consolidating gaming
reach $75-$100 million. Overall, the outside perspective because an out-             under one commission include reduc-
joint effort has greatly extended the side team of examiners reviews the             ing staff. Such a consolidation would
reach and frequency of advertising application, conducts site visits, and            efficiently use human resources be-
messages for both lotteries. Maryland presents feedback with a thorough              cause field auditors and field investi-
and Virginia have also partnered for written assessment of strengths and             gators can cover multiple outlets and
other joint advertising opportunities, weaknesses and opportunities for im-          the licensing and accounting processes
including a promotion tied into the provement. Lemons shared his past                could be combined. White predicted
Washington Redskins and an instant experience with quality initiatives and           that as lotteries expand their product
ticket. The Maryland and Virginia lot- his experience with the Delaware              lines and obtain additional regulatory
teries forsee many opportunities to Lottery’s own quest for quality recog-           duties, consolidation of state gaming
combine efforts and resources in the nition. In May 2001, the lottery sub-           will become more attractive. Yet, she
D.C. media market with their daily mitted its first application and re-              cautions that there are drawbacks. The
games and additional instant games. ceived the Merit Award for                       nature of the work reflects the nature
                                            Performance Excellence for its 2002      of the product line.
NEW STATE INITIATIVES                       application. Throughout the Dela-            The guest PR speaker, Tracy Schario,
Wayne Lemons, director, Delaware ware Lottery’s quality initiatives, it              vice president, Strategic Communica-
Lottery, reported on seven Baldrige has noticed the impact on every as-              tions Group, Inc. and secretary, PRSA,
categories for performance excellence. pect of its operations. Positive im-          discussed best practices in relation-
Lemons explained that the Baldrige provements have resulted in the ar-               ship management. Schario shared five
                                            eas of customer, vendor, and employee    tips, beginning with getting to know
15 / LA FLEUR’S MAGAZINE / MAY 2004
l          Tracy Schario                 Foster
                                                                   product manager, New
                                                                   Jersey Lottery, reported on
                                                                   its new CyberSlingo®
                                                                   launch. Over a year ago,
                                                                   the New Jersey Lottery
                                                                   began to create a strategy
                                                                                                  least one previous hand, and your win-
                                                                                                  nings grow rapidly when you win con-
                                                                                                  secutive hands. Donahue stressed that
                                                                                                  education is the key when launching
                                                                                                  progressive tickets. Instructions were
                                                                                                  included as inserts with the tickets for
FEATURE




                                                                   to introduce an Internet       the first 30% run of the game. Retail-
                                         Krupa                     lottery game. Before tack-     ers were asked to hand one educa-
                                                                   ling a web-based game,         tional piece out to each player pur-
                                                                   the lottery planned the in-    chasing a ticket. Additional education
                                                                   troduction of a popular        included a tear pad designed to be dis-
                                                                   game that has its roots on     played at retail. Players were able to
                                                                   the web, Slingo®. Because      get information about the game prior
                                                                   of Slingo’s AOL familiar-      to purchase. The purpose of the tear
                                                                   ity and proven success as      pad was to allow players to learn
                                        Ken
                    Peter               Brickman                   an instant ticket in several   without commitment or intimidation.
                    Donahue                                        states, Krupa said, “it had    The lottery also provided an educa-
                                                                   the potential to be devel-     tional piece to retailers so they could
          the individual. Describing the way          oped and carry us to the ultimate           understand the game mechanics and
          some Asian cultures do business, she        Internet lottery game—CyberSlingo.          field questions from players. On the
          painted a picture of a slower pace of       The path leading to CyberSlingo in-         back of each ticket an example play
          doing business. She described the pro-      cluded several key initiatives. The first   card is presented. The major focus of
          cess of getting to know people on a         was a Lottery Bonus Zone that offered       this launch was making sure players
          personal level, which will help to ac-      players the opportunity to enter sec-       understood the game, as evidenced by
          complish a more trusted and valued          ond chance drawings via the U.S. Mail       the emphasis on education. The lot-
          business relationship. Second, build        or through the lottery’s web-based          tery also created consistent advertis-
          relationships throughout the organi-        VIP club. The VIP Club has enabled the      ing and product support. Radio spots
          zation. Start by knowing the official       lottery to build relationships with         featured a character just for progres-
          channels of the organization and            their players and provided a commu-         sive games. The purpose is to promote
          move to understanding the informal,         nication channel to core players. Both      continuity and branding of this unique
          political decision-making channels.         the VIP Club and the Lottery Bonus          play style/game type. While the lot-
          Schario advises finding respected           Zone have prepared players for new          tery was pleased from the results of
          champions and trusted decision mak-         Internet opportunities. The decision to     their $20 and $5 progressive games, the
          ers with which to align programs.           introduce an Internet game came in          $10 game did not do as well.
          Third, ask for feedback. The premise        2003 and with it came legal reviews             Kenneth Brickman, executive vice
          of this step is building relationships on   of the idea, various approvals, and re-     president and COO, Iowa Lottery Au-
          shared expectations. Being open to          search to refine and position the game.     thority, discussed a new dimension in
          constructive criticism and demon-           Upon approval and acquisition of re-        vending, called monitor vending ma-
          strating collaboration will enhance         tailer support, CyberSlingo was ready       chines. After three years of testing, in-
          the results. Fourth, provide counsel. In    to launch. Emails were sent to the VIP      cluding one year of field testing, the
          this role, the person with the informa-     Club, comprising 50,000 members.            Iowa Lottery is rolling out monitor
          tion, resources or expertise must act       There were links to the game on the         vending machines (MVMs) that offer
          in several capacities to continue the       New Jersey Lottery homepage, at             lottery products with an interactive
          relationship building process. In a         SLINGO.com and nj.com. The game             feel. Because the lottery wanted to
          counseling capacity, one must adapt,        began in February 2004, and as of the       enhance its presence in age-controlled
          advise, anticipate, and analyze for the     end of March, sales were reaching over      locations and pulltabs were the most
          various constituents who seek coun-         $500,000 weekly.                            successful product in bars, the idea
          seling. Finally, Shario says to celebrate       Pete Donahue, games manager,            was to investigate ways to develop the
          the big moments. Take time to say           Connecticut Lottery Corp., shared the       pulltab category. After gathering law-
          thank you to the employees, supervi-        concept of progressive games with the       makers’ input and getting legislation
          sors or the people served by the orga-      audience. You know you’re playing a         passed, market testing began in May
          nization.                                   progressive game if you know the            2003. The machines accept money and
                                                      prize you’re playing for before you         return a ticket, but the experience is
          NEW GAMING INITIATIVES                      scratch, your potential prize for any       augmented with video and sound en-
          Foster Krupa, marketing and instant         hand depends on the outcome of at           hancements to create an interactive

                                                                                                  LA FLEUR’S MAGAZINE / MAY 2004 / 16
play experience. Seconds after the
ticket is dispensed, the machines video
monitor displays the results while an
electronic tune signals whether the
ticket is a winner or loser. There is no
internal randomization of the play
                                            tional prize category tested very well.
                                            The lotteries listened to its constituents.
                                            The new and improved C$2 Lotto 6/
                                            49 will go on sale in June 2004.
                                                David Barrett, director, marketing
                                            and product development/retail, At-
                                                                                          forward. The partnership focuses on the
                                                                                          Scratch & Win and Sports Action prod-
                                                                                          ucts for a three to five year duration. The
                                                                                          deal consists of C$400,000 for broad-
                                                                                          cast, signage, and promotion, a ticket
                                                                                          prizing allowance costing C$250,000,
                                                                                                                                        l




                                                                                                                                            FEATURE
action. The number and order of win-        lantic Lottery Corp. (ALC), expanded          and marketing licensing fees. The
ning and non-winning tickets has been       on the repositioning of Lotto 6/49 and        Canucks will share in 15% of scratch
predetermined by processes external         Super 7. The lottery’s objectives are to      tickets sales and 15% of Sports Action
to the electronic pack and preprinted       grow the big lotto category sales in fis-     sales over C$11 million. The total
roll versions of the machines. The plan     cal 2005, give big lotto players a com-       value for the Canucks is estimated at
is for amusement operators to pur-          pelling reason to play both Lotto 6/          C$1.25-C$2 million. The lottery’s goals
chase, distribute, and service MVMs.        49 and Super 7 during every draw re-          were to align themselves with “hot”
All manufacturers, distributors, ma-        gardless of the jackpot size, and in-         properties and strong brands, prepare
chines, prizes, and games must be cer-      crease emotional connection to both           their marketplace for more third
tified by the lottery. Play costs $1 and    brands, resulting in higher brand loy-        party cause-related tickets, and ap-
top prizes range from $100 to $600.         alty and equity. The Lotto 6/49 brand         peal to new players and bring lapsed
                                            will be strengthened through brand            players back. The ticket featured eight
CANADIAN MARKETPLACE                        positioning, whereas Super 7 is being         actual Canuck players on the C$10
Ken Schulzke, vice president, market-       positioned to achieve longer-term objec-      ticket. The top prize was $100,000
ing, Western Canada Lottery Corp.           tives. Positioning for Lotto 6/49 focuses     with a 50% payout, odds of one in
(WCLC), described the WCLC’s reju-          on both “Dream” and “non-Dream”               three, and C$2.2 million in total cash
venation of the national Lotto 6/49         options. The “Dream” track capitalizes        prizes. There were 400,000 tickets
game. Lotto 6/49 has been the flagship      on what people dream they would do            printed, which sold out in two weeks.
brand for Canadian lotteries for over       with their winnings and the “non-             There were often frenzies at retail lo-
20 years. The game is played by 75%         Dream” track looks at such things as          cations because players were anxious
of the adult population. However, in        entertainment value, luck, belonging-         to collect tickets. A reorder of tickets
the mid-1990s, Lotto 6/49 began to          ness and convenience. The lottery’s in        sold out in three weeks. The partner-
show signs of decline. Competition          depth research came up with a posi-           ship represented the first time BCLC
from the other lottery products             tioning statement for Lotto 6/49:             has been allowed to have a licensing
seemed to impact the game’s success.        “Lotto 6/49 is the lottery that gives         deal where a third party shares in the
Lotto 6/49 was also too successful for      you the chance to dream of sharing a          success. The deal positively impacted
the field size. Base draws were won         better life with the people you care          the lottery’s image and leveraged the
two-thirds of the time, resulting in        about most.” On the other hand, Su-           relationship with the Canucks for
fewer mega jackpots. The brand has          per 7 is now positioned as “the lottery       winner awareness and publicity. The
simply not kept up with inflation; the      that lets you dream of a more exciting        lottery experienced very little nega-
base prize would be C$3.6 million if        and adventurous life.” The key to the         tive PR and had positive feedback
kept on pace. Stagnant jackpots and the     repositioning effort was to combine           from players.
fact that all jackpots now require guar-    Lotto 6/49, Atlantic 6/49, and Super 7            Peter Roy, deputy chief technology
anteed funding are also impacting           to focus on the concept of dreaming.          officer for the D.C. government, dis-
player behavior. However, players do            Margaret Watson, category manager,        cussed the latest communications
not detect a reduction in play despite      offline products, British Columbia Lot-       technology trends in government or-
the data showing that sales are down        tery Corp. (BCLC), discussed BCLC’s           ganizations. He stressed the need for
and the average price per ticket has re-    partnership with the NHL’s Canucks.           better intergovernmental coordina-
mained stable. Research uncovered           BCLC has had a long-standing relation-        tion of resources and access to new
strategies to rejuvenate Lotto 6/49, and    ship with the Canucks, but this latest        technology. Internet protocol now
the bottom line appeared to be creating     partnership marks a significant step          opens multiple channels and people
larger jackpots, more often. The bloc re-
searched new matrices, new play me-
chanics, additional draw days and a
new price. Consumers responded that
they would not be open to drastic
                                               Ken
changes. But moving to a C$2 price                                            David
                                                                            David
                                               Schulzke                     Margaret Watson                  Margaret
point and focusing additional prize                                           Barrett
                                                                            Barrett                          Watson
funding on the jackpot and an addi-

17 / LA FLEUR’S MAGAZINE / MAY 2004
l         are entering the Internet from various
          points. For example, people are gain-
          ing access through mobile phones,
          cable access and WIFI cards. There are
          a lot of state and local governments
          that are implementing private net-
                                                       create successful lottery-sports radio
                                                       ad messages. Infinity helps each lot-
                                                       tery tie in with sports teams at an ef-
                                                       ficient cost. Local promotions are also
                                                       a specialty, either on air or off air, to
                                                       build traffic into retail locations. For
                                                                                                   games. Fiscal year 2003 was a signifi-
                                                                                                   cant year as scratch sales topped $1.13
                                                                                                   billion. The first $10 instant game was
                                                                                                   launched, players won $742 million in
                                                                                                   prizes, retailers increased commis-
                                                                                                   sions 52%, and new product facings
FEATURE




          works. Roy foresees a great deal of op-      the D.C. Lottery, Infinity created 10-      increased 21%. Gaddy explained that
          portunity for cooperation between lot-       second spots in the Washington              the greatest opportunities going for-
          teries and their local governments           Redskins broadcasts every time there        ward are finding new uses for prod-
          when these private networks are uti-         was a score. The format was a sum-          ucts (like gifting), using new distribu-
          lized. As the wireless technologies          mary of the play and then a quick 10-       tion channels, and providing better
          market grows larger, the price point         second spot for the D.C. Lottery. Infin-    in-store merchandise.
          to get onto the network will drop            ity also works with the Maryland and            Kara Sparks, instant product man-
          lower, creating a higher throughput to       Virginia lotteries for their joint Mega     ager, Pennsylvania Lottery, reported
          enter the networks. Roy urges lotter-        Millions radio ads. Additionally, the       on the profitability of increasing in-
          ies to think outside of their usual para-    Maryland Lottery has worked with            stant game payouts. Sparks discussed
          digm of communications networks              Infinity in conjunction with the Balti-     how past research about all of the
          and reach out to state highway and           more Ravens pre-game show. For the          Pennsylvania Lottery’s products
          public safety departments. Riding on         Virginia Lottery, Infinity runs separate    showed a need to increase ad budgets,
          other networks can be a secure way           spots on each of 30 networks through-       retailer penetration rates and prize
          to team up with newer, faster technol-       out the Commonwealth.                       payouts. With online sales increasing
          ogy and share in the cost. Roy de-                                                       conservatively and instant sales grow-
          scribed the DCNET, which covers the          INSTANT SUCCESS STORIES                     ing dramatically (up 116% since 1999),
          entire city of D.C. and connects to over     Walter Gaddy, instant product man-          the lottery decided to focus on “where
          300 locations. The network transports        ager, Florida Lottery, shared how the       the fish are.” Instant games received
          both data and voice and is highly reli-      Florida Lottery has dramatically in-        more advertising support plus a 5%
          able and engineered with the latest          creased its scratch ticket sales. It has    increase in aggregate payout. As a re-
          technology. The main point commu-            been 21 months since the Florida leg-       sult of more instant prizes being paid
          nicated by Roy is that lotteries can po-     islature approved higher prize              out, players perceived winning expe-
          tentially get all of their needs satisfied   payouts for scratch games with the          rience up by 63%. The lottery has also
          on existing government networks at           stipulation that sales also increases.      seen an upward shift in price point
          less costs than traditional carriers.        This meant that key product changes         spending with the $10 price point see-
          Other growth technologies that apply         and brand extension strategies were         ing a sales jump of 130%. About 53%
          to lotteries include natural language        necessary to keep scratch sales grow-       of sales now come from $5 and higher
          speech recognition that may aid in           ing to meet legislative expectations.       price point products. All of these ef-
          accessibility challenges. Mobile phone       The lottery created several key prod-       forts have resulted in a 22% jump
          ticket purchase can be considered as         uct changes including establishing          overall in year to date fiscal 2004 in-
          just another terminal. Roy predicts          core guidelines for each product, in-       stant sales, with a third quarter in-
          that over the next year, mobile phones       creasing total games sold, increasing       crease of 30%. For the big picture, net
          will be able to do everything that a         $5 and $10 games, shortening the            revenue is up 12% as a result of these
          laptop computer can do.                      product shelf-life, increasing the          instant product efforts and the lottery
              Stephen Johnson, director of sports      payouts and percentage of mid-tier          expects to deliver a $30 million in-
          sales, Infinity Broadcasting Corpora-        prizes, using line extensions to build      crease in net revenue. But by law, the
          tion, focused on radio sports market-        a Family of Games, increasing ad and        lottery must returns 30% of its total
          ing in the Washington-Baltimore mar-         promotional support, and adding             sales for program funding. The con-
          ket. Infinity works with the Maryland,       more money- and gaming-themed               cern is that player spending is shift-
          Virginia and D.C. lotteries helping to                                                   ing dramatically toward higher price
                                                                                                   point, lower margin games. “Diversi-
                                                                                                   fication is the key to healthy liability
                                                                                                   numbers,” said Sparks. The lottery’s
                                                                                                   instant initiatives will include reset-
                                                                                                   ting payouts, R&D toward strength-
                                                                                        Kara       ening the $1, $2 and $3 price point
                            Peter        Walter
                            Roy                                                         Sparks     instant games and installing new 24-
                                         Gaddy
                                                                                                   bin ITVMs.

                                                                                                   LA FLEUR’S MAGAZINE / MAY 2004 / 18

								
To top