BIG DATA. Big Data: Insight and impact. No. 39 Winter 2013 / 2014

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1 No. 39 Winter 2013 / 2014 BIG DATA Big Data: Insight and impact The use of Big Data, the technical term for the vast amounts of transactional data that flood the information superhighway, was once the luxury of giants such as Google or Amazon. As technology develops, new methods and tools are becoming available to afford lotteries the possibility of making maximum use of the transactional data that they have at their disposal through gaming systems and customer databases. In this issue we look at three WLA member lotteries that are pioneers in the implementation of Big Data and how they have used it to improve their marketing capabilities and to better serve their customers.

2 Step up to the dream

3 Contents 4 6 Interview with the President 7 11 Association business Selected news from the WLA, its members, and the regional associations Lotteries and Big Data Big Data is making big changes to the way lotteries market their products. The WLA looks at three lotteries pioneering the use of Big Data U.S. lotteries in 2013 A close look at four major trends emerging in the U.S. lottery market New gtlds are on the way The Internet Domain Name System is changing. How will this affect the lottery industry? The relaunch of America s Mega Millions The U.S. block game Mega Millions has been energized with a matrix change, a revamped prize structure, a new annuity schedule, and an enhanced Megaplier Camelot and corporate social responsibility Camelot s leadership in corporate social responsibility has brought it not only international respect, but has also enabled a growth in their lottery sales Responsible Gaming at BCLC The British Colombia Lottery Corporation has been recertified to the WLA-RGF at level 4. The WLA relates how they have remained on a path of continuous improvement and what they have learned along the way The ISO revamped A brief introduction to the new version of ISO 27001, the international information security management system standard and basis for the WLA-SCS: The Singaporean punter The colorful culture of betting in ethnically diverse Singapore Corporate news News from members of the WLA Contributors Program and other WLA Associate Members. Marketing is dead serious for all lotteries Just as with any business, marketing is essential for the long-term survival of a lottery. Without players, a lottery is destined to fail in its mission to raise money for good causes. A lottery needs to communicate to its players that it has entertaining and exciting games for sale. For instance, a mega-jackpot up for grabs is part of the essence that makes the lottery business so exciting, but it is only a sensation to the degree that the public is aware of it. At the same time the public needs to be made aware of the vital role that lotteries play in improving the quality of life in the communities in which they operate. Internationally, the amount of money raised by state lotteries to support good causes annually is estimated at more than one hundred billion Euros. And those spending their hard earned cash on lottery products need to know that their money has gone to support worthy causes. But a lottery s right to market its products should not be taken for granted. In parts of the world it is still forbidden by law to advertise the sale of gaming products. Anti-gambling advocates who view the lottery as a passive form of gambling are always at work to counter the efforts of lotteries despite the benefits that lotteries provide to society. In 2007 a state treaty banning Internet gambling and most lottery advertising was signed into law in Germany. The law became effective in 2008 and lasted until it was overturned in The German state-lotteries ability to promote their products was greatly impinged upon by this four-year ban. In a world where illegal off-shore gambling sites are competing for a player s discretionary money, society s welfare is not promoted by ill-conceived legislation that hinders our efforts to market our products. It is therefore vital that lawmakers around the globe are made aware of our efforts to raise money for good causes. The WLA, as well as the regional lottery associations, exist in part to enlighten the world as to the mission and vision of the state lotteries. As 2013 comes to an end, I would like to thank each WLA member around the world for their support and cooperation in making the WLA the global organization that it is. The membership is the life blood of the association and the reason for our existence. The many seminars that we have held this year around the world in cooperation with our regional partners have been a great success owing in large part to your participation. Our two certification standards, the WLA Security Control Standard (WLA-SCS) and the WLA Responsible Gaming Framework (WLA-RGF), continue to grow with 54 lotteries and nine suppliers certified at present to the WLA-SCS and 60 lotteries currently certified to the WLA-RGF at level 2 or higher. As you might know the WLA will be holding its biennial convention and trade show in cooperation with Lottomatica in Rome, Italy from November 2 5, I look forward to greeting you there once again. I wish you all the best for the holiday season The learning curve News from the WLA training and education program. Jean Jorgensen, WLA Executive Director WLA magazine No. 39 Winter 2013 /

4 NTERVIEW WITH PRESIDENT Interview with THE PRESIDENT I Marketing for lotteries promoting entertaining games of chance in a socially responsible way From boosting sales through to increasing the public s understanding of the role played by lotteries in sustaining the social good, marketing is crucial to lotteries. In recognition of this, for the past ten years the WLA, in cooperation with the European Lotteries, has held a marketing seminar at the beginning of each calendar year. The seminar is traditionally held in London, a world center of marketing, advertising, and finance. In this issue, we talk with WLA President Jean-Luc Moner-Banet about the importance of marketing for lotteries, and what the future holds for lottery marketing, particularly in the advent of online gaming and Big Data collection. What do you consider the three most important aspects of successful lottery marketing? It is important that a lottery gets the following three messages across to its public. First, your public needs to be clear on your lottery s role in raising money for good causes. Second, your public should have absolute trust in the integrity of your operations, both with respect to social responsibility and the fairness of your games. Third, your customers should understand that by playing the lottery, they have a chance at fulfilling a dream of wealth and happiness. Each of these components are equally important and should be a part of any lottery marketing strategy. Between marketing lottery products, marketing lottery winners, and marketing good causes, where would you put the most emphasis? You need to maintain a balance between all three marketing aspects. Certainly you want to have exciting and entertaining games. At the same time, selling the dream of instant wealth is important, as it is one of the strongest motivating factors for playing the lottery. And what better way is there to sell this dream than by showing the winners, people that are actually living the dream because they invested a few Euros on a lottery ticket? Finally, you have to keep your players informed as to where the money spent on lottery products goes. This is important for your brand and for the image of your organization as a whole. It is what distinguishes us from the private gambling businesses. Do you feel that marketing is an analytical process or a creative process? Both. Market research is a key element in building an effective marketing mix. The classic components of the marketing mix are the four P s : product, price, place, and promotion. To these one could add a fifth P : people or public. Market research efforts, which are typically analytically driven, should focus on identifying the people who purchase our product in this instance, our players and understanding their needs. Advertising, which is a key channel for promoting our products, requires creativity to engage people in a fun yet effective way, to get them to understand our products, and why they should purchase them and support our business. Big Data collection as a tool in developing marketing strategies is catching on. Do you foresee a time when software will dictate our marketing decisions? Not in the foreseeable future. Data collection is merely a tool, albeit a valuable one. It can assist you greatly in your market research, for example in gathering information about the four P s, like the 4 WLA magazine No. 39 Winter 2013 / 2014

5 NTERVIEW WITH PRESIDENT Interview with THE PRESIDENT places your customers buy your products through the retail network or online. But, someone must interpret that data, and decide how to respond to the trends uncovered through its analysis. While it could very well be that we will increasingly depend on software to make our decisions in the future, the ultimate responsibility for marketing decisions will continue to rest with us as lottery professionals for the time being. How does one effectively market lottery products in a socially responsible way? It is the responsibility of lotteries to ensure that the natural demand for games of chance is primarily channelled through legal, supervised lottery retail and online networks. To fulfill this mission, lotteries must use a variety of media and other means to market their products with dignity and integrity. First and foremost, this means following marketing regulations relating to the advertising and sale of gaming products in your jurisdiction. Second, the WLA has long offered a set of marketing guidelines to its members. The WLA Marketing Guidelines discuss how lottery products can be promoted and marketed in a socially responsible way. The guidelines discuss general marketing principles that should be adhered to, appropriate tone for advertisements, corporate social responsibility aspects, and so forth. By following both local regulations, and the WLA Marketing Guidelines, the producers and marketers of lottery products can encourage responsible decision making regarding play by adults, while simultaneously discourage abuse of their products. What is the best way for a lottery s brand to increase the demand for the products that it sells? In the long term, the best way to increase demand is to retain existing players while attracting new players, such as the crucial years old demographic. In the short term we have also seen that the excitement that higher jackpots stir up, as with Mega Millions and Powerball in the U.S. and Euro Millions in Europe, can bring quite a spike in sales. The trend toward block games and mega-jackpots is gaining momentum. How can public awareness programs strengthen a lottery s brand? By having your lottery staff get out in the community and actively support good causes you put a human face on your brand. This gives credence to the mission and vision of your organization. Your support for good causes is no longer just a number on a piece of paper. Direct contact with your public will go a long way towards earning their trust and in so doing, making your brand one to remember. How important is social media presence in maintaining a lottery s brand? Social media is a relatively new phenomenon and the jury is still out on its ultimate importance. Nonetheless, it is good to be where the people currently are. At the moment, a large segment of the population spends a good portion of their time using using social media. It is popular now but ten years down the road people may find other ways to spend their time. But, why not use it as a platform now to promote your brand? What kind of information can one glean from players social networks that would help a lottery market products specifically to them? Social media offers a wealth of information on an individual s likes and dislikes, their political leanings, their sense of humor, and how they spend their free time. Theoretically, this information could be used to create custom-designed products for various segments of the population. For instance, scratch cards that feature the trendiest rock stars could appeal to the younger player, whereas scratch cards revolving around game shows tailored to family viewers could be aimed at a slightly older demographic. Transparency and trust will always remain essential in winning a player s loyalty. How could social media be used to deliver on these player expectations? Social media has augmented traditional news media platforms. It is in some ways more flexible and dynamic than traditional mainstream media formats, but is arguably less authoritative. The upshot is that nowadays, many people use Facebook or Twitter as their main source of news. In any case, social media should be used in much the same way that traditional media has been used to communicate with the public. A lottery s social engage ment programs or their contribution to good causes can be easily portrayed through these platforms. Social media is a reality and should be an integral part of any lottery s communication strategy. Has government regulation hindered effective marketing of lottery products in some jurisdictions? Indeed it has. For instance, from 2008 until the middle of 2012, a treaty was enacted in Germany that banned the sale of products over the Internet, forbid the marketing of gaming products on television and the Internet, and required the forms of marketing that were allowable be purely informational in nature explicitly motivating the customer in the permitted forms of advertising was prohibited. In July 2012, a new treaty was negotiated. The new treaty once again permits the sale of products over the Internet, allows advertising on television and the Internet, and permits lotteries offering not more than two draws a week to advertise their products in an attractive way. The earlier treaty had a devastating effect on the ability of lotteries in Germany to market their products, and a consequent knock-on WLA magazine No. 39 Winter 2013 /

6 NTERVIEW WITH PRESIDENT Interview with THE PRESIDENT I It is important that the state lotteries get the message across that the vast majority of their revenue goes to support good causes. It is important that we highlight this fact and make it a big part of our marketing strategies. Jean-Luc Moner-Banet, WLA President effect on sales. Sales decreased from circa million Euros per year on average in the eight years prior to 2008, to circa million Euros per year on average in the five years from 2008 onwards. What advice can you give to lotteries that operate in jurisdictions where restrictions on the marketing of lottery products are in place? Appeal to your governments. It is essential that your government leaders understand the mission of your lottery and the role that it plays in financing and promoting social causes within your respective countries. Government leaders need to recognize that marketing is vitally important for your operation. As in the German case, impinging upon your lottery s right to advertise will have an adverse affect on your ability to contribute to society. Who is directly competing with the lotteries for consumer group loyalty? Probably, the biggest threat comes from the private for-profit gambling industry. They offer the players the thrill of winning, but the money that private gambling operators take in is solely for their own benefit. That is why it is important that the state lotteries get the message across that the vast majority of their revenue goes to support good causes. This is the one of the main distinguishing factors that holds us above the private operators. It is important that we highlight this fact and make it a big part of our marketing strategies. How do the general behaviors and preferences of the online player differ from those of players at the point of sale? At the point of sale, a lottery purchase is often spontaneous. Customers come to the point of sale with other intended purchases and buy a lottery ticket or a scratch card on a whim. That is why strong point-of-sale marketing is important. The online player is more dedicated. The online player goes directly to your website with the intention of playing the lottery. Do you find retail marketing and Internet marketing at odds with one another or do you feel they complement each other well? When online sales were new there was a general fear that they would cannibalize the retail channels. What has been reported at WLA marketing seminars is quite the opposite. In many cases Internet marketing has enhanced retail sales. Many lotteries have further augmented this by establishing marketing programs that create interaction between the Internet and retailer channels. Working between the two channels the marketing potential is enormous. In what areas can the sharing of knowledge between lotteries improve the marketing of lottery products around the world? One of the main goals of the WLA, through its educational program, is to bring lottery professionals from around the globe together, to share their knowledge with their international peers. We see marketing as an important educational topic. Each lottery is faced with different challenges and operates in a cultural environment different than our own. How they approach marketing is unique to their jurisdictions. It is important that we share our experiences, both the successes and the failures, because in so doing we can learn a great deal from each other. The WLA is here to ensure that the community of world lotteries grows together as one spirit as we all share the same mission and vision. Advertisement 6 WLA magazine No. 39 Winter 2013 / 2014

7 ASSOCIATION ASSOCIATION BUSINESS Theo Gossner appointed to WLA Executive Committee Mr. Theo Gossner, managing director of Westdeutsche Lotterie GmbH & Co. OHG, was appointed to the WLA Executive Committee in September, Mr. Gossner replaces outgoing WLA Executive Committee member Dr. Rolf Stypmann, who is retiring. The WLA President, on behalf of the entire Executive Committee, thanks Dr. Stypmann for his great service to the WLA, and for his service to the lottery community at large over many years. Theo Gossner was born in After studying macroeconomics and politics in Munich, Mr. Gossner held several portfolios in the Westdeutsche Landesbank (WestLB) and the NRW.BANK, including positions as key account manager for public customers and managing director for the financing of medium-sized companies and infrastructure projects. In 2010, Mr. Gossner joined Westdeutsche Lotterie GmbH & Co. OHG as deputy managing director. He became managing director of Westdeutsche Lotterie GmbH & Co. OHG at the beginning of A member of the foundation board of the Nordrhein-Westfalen Foundation and the board of trustees of the foundation, Mr. Gossner is married with two adult children. José Miguel Martínez Martínez steps down from the WLA Executive Committee Mr. José Miguel Martínez Martínez, formerly Chief Executive Officer at Sociedad Estatal de Loterías y Apuestas (SELAE), Spain, has resigned from the WLA Executive Committee. Mr Martínez Martínez stepped down from the Executive Committee on the occasion of his resignation as CEO of SELAE in August, 2013 for health reasons. The WLA thanks Mr. Martínez Martínez for the commitment and support he showed to the WLA throughout his tenure on the Executive Committee. In order to maintain the balance of regional members on the Executive Committee, a representative from a European lottery will be privileged to replace Mr. Martínez Martínez. The appointment of the new Executive Committee member was still pending as this magazine went to press; the vacancy will be filled at the next WLA Executive Committee meeting in Versailles, France, in December WLA magazine No. 39 Winter 2013 /

8 ASSOCIATION ASSOCIATION BUSINESS New WLA Members At the last meeting of the WLA Executive Committee in Marrakech on September 26, 2013, the WLA provisionally accepted two new members into the association, subject to ratification by the membership at the next WLA General Meeting in Rome, WLA members are organizations licensed or authorized to conduct lotteries and/ or sports betting operations by a jurisdiction domiciled in a state recognized by the United Nations. Sales of games of chance and/or skill must account for the majority of the organization s total annual gross revenues, and the majority of the organization s net revenues must be dedicated to the public good. Applications for WLA membership must be approved by the WLA Executive Committee, at which point applicants are provisionally accepted into the association. Membership of the organization is provisional until it is ratified by the membership at the following WLA General Meeting. The new members provisionally accepted by the WLA into the association are: Development Lotteries Board, Sri Lanka. The Development Lotteries Board of Sri Lanka, one of the two state-authorized Sri Lankan lotteries, began selling lottery games to the public in Incorporated by parliamentary act in 1997, and reporting to the Ministry of Finance and Planning, the lottery is licensed to sell instant and number games to the public through retail points of sale. One hundred percent of the lottery s net profits are returned to society through contributions to the President s Fund and the Mahapola Higher Educational Trust Fund. The President s Fund contributes to various social welfare activities such as health (including serious medical surgeries), education, sports, and culture, while the Mahapola Higher Education Trust Fund assists university students in need in continuing their education. Liberia National Lotteries Corporation, Liberia. The Liberian National Lotteries Corporation is the state-authorized lottery of Liberia. Founded in 1993, the lottery is one of five gaming concerns currently operating in the jurisdiction. The lottery operates under the auspices of the Office of the Vice President of the Republic of Liberia, and offers traditional lotto games to the Liberian public through retail points of sale. Part of the lottery s net profit is returned to society, with the beneficiaries including charitable organizations, and scientific, cultural, and educational projects. Advertisement Unleash the world s greatest gaming experience Building on six decades of engaging, entertaining and innovative gaming, Aristocrat has a wealth of unique, popular games delivering across diverse global gaming segments. Coupled with our range of proven video lottery hardware and systems solutions, players can enjoy the very best gaming experience in a format and style most appropriate to their needs and environment. To discover how Aristocrat can bring greater benefit to your gaming operation, call today on +46 (0) Aristocrat Technologies Australia Pty Limited. Aristocrat and the Aristocrat logo 8are trademarks or registered trademarks of Aristocrat Technologies Australia Pty Limited. WLA magazine No. 39 Winter 2013 / 2014

9 ASSOCIATION ASSOCIATION BUSINESS New WLA Associate Members At the last meeting of the WLA Executive Committee in Marrakech on September 26, 2013, the WLA approved and accepted two organizations as new associate members. Associate membership of the WLA is open to any supplier or prospective supplier of goods or services to state-controlled lottery or sports-betting operators whose business practices are compatible with the aims and objectives of the association. Applications for associate membership must be endorsed by at least two WLA member lottery or sports-betting operators and receive final approval from the WLA Executive Committee. The two organizations accepted by the WLA as new associate members are: Inspired Gaming Group, United Kingdom. Inspired Gaming Group (Inspired) is a leading supplier of VLTs and virtual sports to state lotteries and private operators around the world. World leaders in server-based gaming technology, the company has over 35,000 endpoints on its Open Core SBG/VLT platform. Its virtual sports products are live in over 20,000 venues, spread across 22 countries around the globe. Employing over 1,000 people in ten offices worldwide, its customers include Sisal, Lottomatica, NSLAC, OPAP, William Hill, Ladbrokes, Betfred, Paddy Power, and Bet365. Beijing Zhongcai Printing Co. Ltd., China. Established in 1993, Beijing Zhongcai Printing Co. Ltd. is the most advanced instant lottery ticket printing enterprise in China. Offering high-quality and high-security printed products including instant scratch-off lottery tickets, packaging printing, and direct mail products, the company is jointly invested and incorporated by China Welfare Lottery, International Des Jeux of France, and Berjaya of Malaysia. ISO9000, ISO14001, and ISO27001 certified, Beijing Zhongcai Printing Co. Ltd. currently prints over 250 million instant lottery tickets per month for clients in Asia, Africa, and Europe. Luis Gama elected president of CIBELAE The XIV CIBELAE Congress, which took place from October, 2013 in Panama City, Panama, witnessed the appointment of a new board of directors of CIBELAE for the period , as well as the approval of new statutes and regulations. The officers of the new board comprise Luis Gama, Director of Dirección Nacional de Loterías y Quinielas, Uruguay, who was appointed president; Sergio González Ruiz, General Director of Lotería Nacional De Beneficencia, Panama, who was appointed first vice president; and José Francisco Peña, Administrador General of Lotería Nacional Dominicana, Dominican Republic, who was appointed second vice president. The outgoing president of CIBELAE, Fabio Cleto, vice president of government funds at Caixa Econômica Federal, Brazil, remains on the CIBELAE board. The new president of CIBELAE, Mr. Gama, comes to the presidency with a background in public administration and a special interest in international humanitarian aid. A public servant by profession, he has worked for the Uruguayan public service since April Over this time, he has held a variety of positions in the area of finance and budgets. He was involved in the International Public Budget Seminar in San Juan, Puerto Rico, in 1998, and the Latin American Programs in Municipal Financial Training held in Madrid in 2000 and In 2007 and 2008 he worked as advisor to the State Administration of Sanitary Works, being the Director of the Financial Accounting and a member of various working committees. In 2008, he served as a member of a monitoring humanitarian mission that traveled to Peru and Venezuela. In October of the same year, he was appointed as advisor to the general director of State Casinos under the aegis of the Ministry of Economy and Finance. He served as director ad interim in the absence of the incumbent director and in April 2010 was appointed commercial manager. On February 6, 2013, Mr. Gama was appointed as the Director of Dirección Nacional de Loterías y Quinielas by the president of the Republic of Uruguay, José Mujica. At the same time, he was elevated to the board of CIBELAE. Following his appointment as president of CIBELAE in October, 2013, Mr. Gama said, The road ahead will be a continuation of the presidency of Fabio Cleto. Our challenge is to promote greater integration, participation, and exchange because we have common problems. We should work together as a team on the road ahead of us. One of the new statutes approved at the XIV CIBELAE Congress marked a milestone for ALEA, the Asociación de Loterías, Quinielas y Casinos Estatales de Argentina. The new statute creates a branch of CIBELAE in Latin America that will be based at the offices of ALEA in Buenos Aires, under the direction of ALEA Executive Director Dr. Nestor Cotignola. In creating a common office, CIBELAE and ALEA hope that together, they will bring their experience, contacts, and knowledge to enhance the common scope of both entities and contribute to the growth of members of both organizations. WLA magazine No. 39 Winter 2013 /

10 ASSOCIATION ASSOCIATION BUSINESS Looking forward to WLS 2014 The World Lottery Summit 2014 (WLS 2014) is to take place in the Eternal City, Rome, in the heart of old Europe. We asked the standard bearers of the WLA Executive Committee WLA President Jean-Luc Moner-Banet, WLA Senior Vice President Rebecca Paul Hargrove, and WLA Vice President June Roache for their views on what WLA members can expect from the upcoming summit, and what they personally are looking forward to at the convention. Jean-Luc Moner-Banet, WLA President and Director General of Loterie Romande, Switzerland, said that delegates at the summit could look forward to a world-class business program, featuring keynote addresses from renowned thought leaders, together with the lottery industry s largest trade show, showcasing the very latest in technological innovation, as well as a social program offering unrivalled opportunities for socializing and networking, all set in the historic and majestic confines of the Eternal City, Rome. Mr. Moner-Banet continued, For me, a personal highlight of any World Lottery Summit is the pleasure of meeting the people we serve the WLA Mem bers, WLA Asso ciate Mem bers, the WLA Con trib utors, members of the regional associations, and other lottery professionals over four highly enjoyable days of business, networking, and social activities. This represents a real opportunity for giving something back, at a personal level, to those who support the vision and the mission of the WLA. Rebecca Paul Hargrove, Senior WLA Vice President and President and CEO of the Tennessee Education Lottery Corporation, U.S.A., remarked that for attendees, the summit was a locus for the exchange of information and ideas. One of the primary ways our industry continues to evolve and flourish is by our collectively sharing ideas and information, experiences, and insights, she said. Ms. Hargove continued, The biennial World Lottery Summit offers a premier opportunity to bring us together from all corners of the world to do just that: interact with one another, hear from the innovators in the industry, promote best practices, and generally learn of new and successful strategies to improve operations and further the good causes our efforts help fund. Ms. Hargrove affirmed that for her personally, the exposure to new ideas, insights, and information was a highlight. Though I ve been in the business some 28 years, I always look forward to this incredible event, which I consider to be one of the most valuable professional development opportunities of every other year. It s a gathering of the world s best and brightest lottery professionals and I always walk away with new ideas, she said. June Roache, WLA Vice President and Chief Executive Officer of SA Lotteries, Australia, echoed Ms. Har grove s sentiments, say ing The World Lot tery As so ci a tion s biennial convention is al ways an event that ensures our thinking is challenged by the knowledge that we gain from attending. Ms. Roache went on to encourage lottery professionals to attend the summit. She said, It will be two years since we gathered in Montreal, Canada for the World Lottery Sum mit 2012, which provided such excellent and thought-provoking speakers, extended networking opportunities, and a wealth of exciting growth possibilities presented by global supporters and suppliers. At WLS 2014, WLA members can once again expect an outstanding business program with world-class keynote speakers and presenters addressing strategically relevant issues for our global industry. Ms. Roache continued, The WLA Executive Committee is currently finalizing the program that will enable each of our organizations to benefit from the experience of attendance at the peak global lottery industry event that will also showcase the latest in products, distribution and technologies. 10 WLA magazine No. 39 Winter 2013 / 2014

11 ASSOCIATION ASSOCIATION BUSINESS WLS 2014 Provisional business program The WLA Executive Committee is currently finalizing the business program for WLS To whet the appetite for 2014 s premier lottery event, we provide an overview of the provisional business program for the summit below. Friday, October 31 Time Activity 00:01 08:00 08:00 24:00 Decorator preparations Exhibitor build Trade show (for Contributors only) 19:30 22:30 Volunteers welcome reception Saturday, November 1 08:00 24:00 Exhibitor build Trade show 08:00 10:00 Volunteers briefing 13:00 16:00 Discover Rome tour (Delegates / Partners) 13:00 18:00 Networking activity for Executive Committees and Contributors (by invitation only) 14:00 17:00 Registration desk open Evening Evening free Sunday, November 2 09:00 12:30 Discover Rome tour (Delegates / Partners) (Repetition of Saturday s tour) 10:30 13:00 WLA Executive Committee Meeting 15:00 18:00 Registration desk open 17:30 18:30 Welcome addresses Keynote 1 18:45 20:00 Trade show opening and cocktails 20:00 24:00 Opening dinner Monday, November 3 08:00 16:30 Registration desk open 09:00 12:30 Accompanying persons program 09:00 10:00 Official opening WLS 2014 Marco Sala, President and CEO of Lottomatica Jean-Luc Moner-Banet, WLA President 10:00 11:00 Keynote 2 11:00 11:30 Coffee break 11:30 13:00 Keynote 3 13:00 14:30 Trade show and lunch 14:30 15:30 Parallel Session 1 Social media and best practice 15:30 16:00 Coffee break 16:00 17:00 Parallel Session 4 Driving sustainable advertising 17:00 18:30 Trade show and cocktails Evening Contributors event Parallel Session 2 Towards global convergence of regulation or not? Parallel Session 5 Lottery apps for smartphones and tablets Parallel Session 3 Internet Parallel Session 6 Electronic gaming machines Tuesday, November 4 Time Activity 09:00 12:30 Accompanying persons program 09:00 10:00 Keynote 4 10:00 11:00 Panel: Preserving the integrity of sports. Global status. 11:00 11:30 Coffee break 11:30 13:00 Platinum Contributor session 13:00 16:00 Trade show lunch and afternoon 16:00 17:00 Parallel Session 7 Draw based games: How to make them grow? Parallel Session 8 Sustainability of instant tickets in an online world Parallel Session 9 Debate of the day: Lottery sports betting monopolies make more profit than lotteries operating in a competitive environment. Evening Evening free Wednesday, November 5 09:00 10:00 Keynote 5 10:00 10:45 WLA Advertising Awards Interactive awards sessions 10:45 11:15 Coffee break 11:15 12:30 Lotteries Summit and Pep-talk 12:30 14:00 Trade show activity, lunch, and official closing of trade show 14: Break and document handout for the WLA General Meeting 14: WLA General Meeting Including Regional Associations reports and Responsible Gaming Award 17:30 18:00 New WLA Executive Committee meeting 19:30 02:00 Closing dinner, Best of the Best Award, and party Thursday, November 6 8:30 17:00 Optional networking day Please note that at the time of writing, the overview shown is provisional and may be subject to change. For the latest edition of the business program, and for further information related to WLS 2014, including practicalities about accommodation, transportation, and things to see and do in Rome, please see the WLS 2014 website at WLA magazine No. 39 Winter 2013 /

12 Let s do the numbers: Big Data and the lottery industry Lotteries around the world have access to enormous amounts of data through their gaming systems and for those with loyalty programs through their customer databases. With the advent of Big Data, new tools and methods are now available to delve into this mine of information and extract new insights about player preferences and behaviors. Photobank - Fotolia.com BIG DATA 12 WLA magazine No. 39 Winter 2013 / 2014

13 Companies and operators in almost every sector are producing growing volumes of transactional data, capturing trillions of bytes of information about their customers, suppliers, and operations. Social media sites, smartphones, and other consumer devices are contributing to the amount of data, both structured and unstructured, that is available. Added to that, in a hyperconnected world, systems and devices can communicate automatically with each other, generating even more data that can be cross-cued, compared, and correlated to extract potentially usable information. The ability to turn these masses of information into actionable intelligence has enormous potential for marketers but also for planners and policy makers in almost every walk of life. For many people, this systematic collection of information and number-crunching by armies of machines outside their control is little more than an invasion of privacy and a threat to their personal freedoms. Even so, the McKinsey Global Institute argues, Big Data can play a significant economic role to the benefit not only of private commerce but also of national economies and their citizens. What is Big Data? According to the McKinsey Global Institute, Big Data refers to datasets whose size is beyond the ability of typical database software tools to capture, store, manage, and analyze. As technology advances over time, the size of datasets that qualify as Big Data will also increase, but in many sectors today the volumes of data involved will range from a few dozen terabytes (thousands of gigabytes) to multiple petabytes (thousands of terabytes). Data is not information, information is not knowledge, knowledge is not understanding, understanding is not wisdom. The right stuff In many sectors, the Big Data revolution is about to change the economic landscape as pioneering companies and even governments harness Big Data to new technologies to create value for their stakeholders. But considerable challenges lie ahead. For example, there is a significant shortage of the analytical and managerial talent necessary to make the most of Big Data. The right infrastructure also needs to be available, and the benefits to users and organizations must be fully understood. Importantly, safeguards need to be in place to address public concerns about privacy and personal freedoms. A game-changer for lotteries? We asked three early adopters of Big Data in the lottery industry Tatts Lotteries in Australia, Veikkaus Oy in Finland, and HKJC Lotteries Ltd. in Hong Kong how they got started in the world of Big Data, how the approach has impacted their organizations, and where the risks and opportunities lie. Tatts Lotteries: Actionable intelligence Player card registration and loyalty programs have been a part of lotteries in Australia since at least the 1990s. By interrogating its data through reporting, analytics, and modeling, Tatts Lotteries has developed a deep understanding of its business and of the nature of its customer segments over an extended period of time. Of real value to Tatts Lotteries in using data is the ability to predict future customer behavior. By anticipating what might happen next, what the customer may do next, or what the customer might want next, Tatts is able to tailor its communications and offers to best appeal to the customer. The outcome of leveraging Big Data is that Tatts Lotteries has been able to provide better services, better products, more relevant offers, and more personalized marketing to drive increased revenue for the business. Integration of the lottery system and customer database A key strategic asset of Tatts Group is the TattsTech gaming system, which was developed in-house and tailored to meet the needs of the business. The integration of the lottery system and customer database means Tatts has a single customer view and an intimate Clifford Stoll, American astronomer and author understanding of customers and their purchases made through each sales channel. Tatts Lotteries has also developed a behavioral segmentation model using the transactional data collected by TattsTech. This involved utilizing modeling techniques to group like customers together into a homogenous group of relatively like behaviors. Targeting players according to their behavior The dual objectives behind the modeling work conducted have been, first, to move to a more real-time and deeper understanding of customers, and second, to provide the ability to target communications at players according to their behavior, whether that is specifically by business issue or more broadly by behavioral segments. A player will only receive communications that have been determined as relevant to them through output of the data analysis. For example, if they are a regular Saturday lotto player, and also play Powerball when it jackpots above AUD 20 million, the communications they receive will be about activities related to those behavior preferences. The key to the effectiveness of these models lies in how actionable they are for marketing activities. Do they describe or do they direct the activity? The behavioral segmentation model, for example, describes a segment of players what they like, how they play, what their favorite games are, how long they have been members. What this does not provide is information on when we should contact players because their behavior has changed. Time-sensitive targeting This is where the predictive models provide very effective output. The output of these models can be specific and timely in the case of Tatts Lotteries they are designed to measure each player independently and provide output on when to contact each player and what they should be offered. In this sense, the nature of these models is one of actionable insight. They have campaigning built into their output. WLA magazine No. 39 Winter 2013 /

14 It is this timeliness the ability to identify in real time when player behavior is changing that delivers better outcomes in attempts to re-engage players through an offer or communication. So the models developed by Tatts are delivering to the core of what direct marketing and Customer Relationship Management (CRM) is about the right offer to the right player at the right time. Maintaining a deep understanding of players is seen as integral to Tatts Lotteries overall marketing approach. Accessing meaningful data and leveraging this data to deliver on-target marketing campaigns is an ongoing quest. Whilst Tatts Lotteries has been at the forefront of engaging in player card programs, loyalty programs, and direct marketing in the lottery industry, it continues to focus on further development and continual improvement in this area, because the process of turning data into under standing and wisdom comes through on going analysis of the data and the application of what has been learned for future benefit. It is through this constant feedback loop, where in data is transformed into information upon which activity is enacted and measured, that organizations can transform data into wisdom. Veikkaus: The 360 customer view Back in 1996, the Finnish lottery Veikkaus was the first lottery organization in the world to adopt a systematic approach to large-scale data analytics. Today, the majority of the lottery s sales come from identified gaming, and a Big Data approach has become one of the pillars of the strategic vision of Veikkaus. When Veikkaus first got involved in largescale data analysis, the tools and methods weren t nearly as sophisticated as they are now indeed the term Big Data had not even been coined. But even then, the Finnish lottery had a large proportion of customers playing online, so it was a logical candidate to be an early adopter. Veikkaus had to build its first Big Data platform itself, and at a certain stage the system became obsolete and had to go through massive renewals. Of course, the same aging process would have happened in any case at some point, even with a more modern product. And in the early days, when user numbers were lower than they are today, the analytics team at Veikkaus had more time to practice and scale up operations progressively, which helped to reduce costs and one-time investments. All in all, the learning process was most instructive for Veikkaus, and today the lottery is happy to share its experience with others. Systematic data capture Veikkaus captures basic personal and demographic data on customers during the registration process. Then, all the gaming data of registered customers is recorded as is the transaction data of non-registered custom- fotoliaxrender - Fotolia.com 14 WLA magazine No. 39 Winter 2013 / 2014

15 Getting technical A relational (or SQL) database organizes data as a collection of tables, all of which are formally described and organized according to a database schema. The schema, which is highly structured, helps guarantee the integrity of the data in the database. The relational database model, which originated in the 1970s, was never designed to handle the very large volumes of data produced by today s web technologies. It turns out that, as data volumes expand, the highly structured nature of the database schema actually constrains a relational database in its transaction processing, to the point where new technologies are needed to help process the volume of data in question. The advent of web technologies and Big Data led to the development of new technologies for storing and manipulating data. Among the best known of these technologies are NoSQL (Not Only SQL) databases, which eliminate database schemas at the expense of relaxing data integrity principles. New distributed file system technologies, such as the Hadoop open-source software framework, are also coming to the fore. One feature Hadoop provides is the ability to work with data that is unstructured, that is, data that is not organized in a pre-defined manner. The ability to work with unstructured data offers tremendous advantages to business, because, according to a rule of thumb due to Merrill Lynch, somewhere around 80 90% of all potentially usable business information may originate in unstructured form. Techniques such as data mining can be used to find patterns in unstructured data, allowing data that cannot easily be captured under the traditional relational database model to be turned into actionable insights. ers. In addition, every action taken in the web store (where customers browse and purchase lottery products) is recorded, and contact and response information for all CRM campaigns is carefully captured and analyzed. All this information is stored daily in the Veikkaus data warehouse, the organization s central repository of data. The data warehouse is divided into data marts for improved performance and ease of use within a given area. The Veikkaus customer data mart, for example, includes extensive information on customers, which may be viewed from various angles. For instance, it is possible to generate a complete 360-degree customer view, or, at enterprise level, a view of behavioral gambling data that is as accurate as possible. Veikkaus is constantly enriching its customer data mart by developing new variables and fetching the necessary variables from the data warehouse. Veikkaus uses software tools developed by SAS Institute Inc., a U.S. software house specializing in advanced analytics, to make the results both understandable for internal use within the company and easier for the analysts to analyze. This requires basic knowledge of data analysis techniques and an in-depth knowledge of the software. The extraction, transformation, and cleaning processes from the data warehouse to the customer data mart are also done with SAS software. Segments of one Several different customer segmentation models are used. One is traditional and based on demographics (such as age and sex). But accurate segmentation is a top priority for Veikkaus, not only to avoid sending non-relevant messages to customers, but also to personalize the experience on the website based on player types and individual customer reactions to messages (through clicks, opens, and other actions). Inside a particular segment or category, especially in sports betting, individual gaming history is used to achieve even greater granularity. Ultimately Veikkaus marketers and data analysts are aiming for segments of one to fine tune their analysis of customer preferences and behaviors and to meet each player s needs and expectations as closely as possible. More and more often, the team uses trigger-based CRM, wherein a customer s behavior launches a trigger. The trigger thus constitutes the primary reason for contact, and a well-structured contact policy is in place to set the rules for making contacts. In the Veikkaus web store, personalization is based on customer behavior and models are refined continuously to help achieve the main objectives, which include serving customers well, making lottery services easy to access and use, and expanding cross-selling opportunities when appropriate. Measurable results Thanks to effective data analysis, the added value and click rates of CRM operations have steadily risen and, at the same time, the number of s sent has decreased as marketers have learned to target messages more effectively. This has meant that customers benefit from improved customer service and from offers that are better targeted to meet individual needs. Like many other lottery organizations, Veikkaus has reallocated large amounts of its marketing spend from traditional advertising to online media and social networks. As the skills needed in the marketing department have changed, the lottery has invested heavily in its people to develop their competencies and to stay abreast of new requirements. Every analyst at Veikkaus is coming to understand the complexity of customer behavior. Every customer is different, even if they might seem similar from one angle, and even if they might seem to belong to a homogenous group of people. The Big Data approach offers enormous opportunities for developing a more rounded view of players and their behaviors, and for serving customers in more relevant, more appro priate ways. A strategic enabler The new Veikkaus strategy is based completely on utilizing Big Data to optimize the customer base, serve customers better, and reach optimal growth through up-selling and cross-selling and churn minimization. In addition, the lottery has developed a preventive model to detect signs that might lead to problem gambling. Problem gamblers are excluded from all CRM marketing and personalization projects as part of the lottery s commitment to responsible gaming and responsible business growth. These strategies seems to be working. Over the past few years, practically all the lottery s growth has come from its existing customer base. WLA magazine No. 39 Winter 2013 /

16 Business case: One trend that HKJC would not have spotted without Big Data Via data mining, we identified a group of high-value customers with a specific absenteeism pattern for race meetings held on Wednesdays. After delving into the root cause, we discovered they needed to travel overseas regularly during weekdays which is very common for Hong Kong business people. Hence, they found it very inconvenient to access Hong Kong racing information. We then addressed their specific needs with tailor-made services, such as access to overseas information, to ensure they could follow our racing sports. Without the use of Big Data, it would have been difficult to identify such an opportunity. HKJC: The power of machines, the insights of humans HKJC Lotteries Ltd. (HKJC Lotteries) was one of the first lotteries in the world to work with Big Data. Today the organization has a database of over two million account customers and has built up its expertise in data mining and analy sis to develop effective customer seg men tation and CRM as part of its commit ment to responsible marketing and customer care. Being an early adopter of new technology is always difficult. Apart from the technology cost, there is a need to manage the change in processes, to develop new technical skills in the workforce and, in some cases, to undergo an organizational transformation. However, being focused on the long-term value of sustainable customer relationships, HKJC has always recognized the importance of building such relationships early. The organization was quick to realize that new technology would allow it to achieve these goals better and faster, and was therefore prepared to embrace Big Data before its use was widespread in the lottery industry. Transforming data into actions At HKJC, it is not the volume of data that matters. It is about how you go from data to insights to actions that drive total customer satisfaction continuously in a socially responsible manner, says Richard Cheung, executive director, customer and marketing at HKJC. carloscastilla - Fotolia.com 16 WLA magazine No. 39 Winter 2013 / 2014

17 HKJC validates and captures data on age and demographics to create a mosaic profile of each customer at account opening. As well, they build up real-time betting patterns across all wagering entertainments (horse racing, football betting, lottery) and account betting platforms. Data is also captured on other dynamic wagering metrics like spend pattern, product preference, activity time, and even subchannel usage (for instance, regularity of play from a mobile device) to form a complete view on each customer in the wagering world. To systematically transform the captured data into information, HKJC has invested in a purpose-built enterprise data warehouse to support efficient data mining and customer segmentation. Targeted communications The organization s customer base is divided into segments to perform segment-specific CRM. Each segment is managed by a dedicated segment team, with expert analysts translating segment-specific data into insights and determining how information, services, and programs can be targeted at the right customers in the right tone and manner, in the right place and at the right time. Big Data and responsible gaming: risks and opportunities Information is power, said Keith Whyte, executive director of the National Council on Problem Gambling back in April 2007 at a WLA best practices seminar on responsible gaming. The head of America s oldest and most impartial organization on problem gambling issues spoke of the importance of tracking player behaviors, particularly through loyalty programs but also by polling consumers and retailers and analyzing sales data. He called on the industry to use its data to devise new metrics that could provide a basis for social norms and help to identify patterns of problem gambling. And he spoke of the power of the predictive data models that could be developed and their potential to stop problem gambling in its tracks. Fast forward to the U.S. Senate hearings in July 2013 on consumer protection and the expansion of Internet gambling, when Mr. Whyte submitted testimony describing some of the free games played on Facebook and other social networks. These games are aggressively monetized and marketed yet completely unregulated, the executive director wrote. There is little consumer protection or disclosure in general in this space. While Keith Whyte s submission was aimed at regulators and legislators, his concerns over consumer protection, the prevention of problem gaming, and the possible abuse of online data resonate with lottery operators too. As Mr. Whyte pointed out in the session An opportunity to benefit from corporate governance & CSR at the World Lottery Summit in Montreal in 2012, online gaming operators have total control over the environment, and the scope to intervene to prevent or predict problem gambling behaviors is therefore unlimited. Lottery operators that have embraced Big Data and advanced analytics techniques therefore have a head start in making their commitment to responsible gaming a reality in the online space. Digital communications, for example, have expanded significantly, with the share of HKJC s media spend on digital increasing from 10% three years ago to 40% today. New skills for marketing personnel Although HKJC has built a team of experts in data analytics, the organization s philosophy is that each member of the marketing team needs to learn how to interpret and apply Big Data, rather than just relying on data scientists. Marketing personnel need to be well trained to apply marketing sense when interpreting Big Data. They can refer to analytics experts whenever they need to differentiate correlation from causation for example and findings are also validated with front-line customer relationship officers based on their customer interactions. HKJC has invested heavily to develop its Big Data infrastructure, but at the end of the day the organization is well aware that it is people, not machines, who drive and derive insights from Big Data. Cross-selling when appropriate In some ways, HKJC uses Big Data in the same way as Amazon or Facebook. For example, they share the same vision of a one customer view, trying therefore to collect data from multiple transaction touch points. Big Data analytics allows HKJC to understand their customers more holistically, to assess both cross-product engagement (horse racing, football betting, and lottery products) and cross-channel engagement (on-premise, telephone, online, and mobile wagering). This deeper understanding of customers improves product and channel cross-selling opportunities as well as helping the organization to personalize its services and informa tion according to the specific needs of each customer for better customer retention. However, lotteries are not the same as other retailers or media channels. Online retailers like Amazon, for example, will also capture data that may not be directly related to their business. HKJC deliberately confines the scope of the data captured to only the information needed for driving customer segmentation and total customer satisfaction in the wagering world. This is part of the organization s commitment to the highest standards of responsible marketing. Indeed, Big Data potentially offers lotteries new opportunities to detect early signs of problem gambling behaviors and to take steps to avoid promoting certain sorts of entertainment to certain player profiles. Overall, the use of Big Data techniques has enabled HKJC to better understand its player base, improve segmentation, and enhance the ability of HKJC to meet the specific needs of each segment. The organization is convinced that its experience as an early adopter of Big Data has been instrumental in driving record-breaking turnover for five consecutive years. This record-breaking turnover has translated into maximized returns to the community, which reached an impressive USD 2.7 billion last year. WLA magazine No. 39 Winter 2013 /

18 U.S. lotteries in 2013: The state of play A truly informative lottery map of the United States would need many colors. In addition to the usual need to show where one jurisdiction ends and another one begins, such a map ought to convey how the range of lottery products changes as state lines are crossed. The map is being re-colored as you read, and the palette required is growing. In the U.S., 43 of the 50 states now have state lotteries. State lotteries began in the northeast and spread gradually across the country. The most recent additions have been in the south (Arkansas) and west (Wyoming). The biggest variety of lottery products is sold in the northeast, where the product mix has long included both instant games and traditional draw games sold just within the state. After many states had established their own lotto games, some states began to cooperate to offer lotto games in bigger versions. Two multi-state block games Powerball and Mega Millions developed. In sparselypopulated Wyoming, where a lottery was first instituted in 2013, only the block games are on offer. Several state lotteries also have Video Lottery Terminals (VLTs) as part of their product mix. In some states these are concentrated in gambling destinations like racetracks or casinos, while in others they can be found in convenience stores. Until very recently, no U.S. state lottery offered any product for sale over the World Wide Web ( the web ). This began to change in 2012, after U.S. Federal Government regulations were reinterpreted. Sports betting in general has largely been avoided by U.S. lotteries. Currently there are four major trends to watch in U.S. lotteries. First and probably most significant is the exploration of web commerce and even sports betting by some lotteries. Second is the continued development of multi-state lotto games. Third, the instant game business based on paper tickets has recovered from the financial crisis of Fourth, state governments have continued to make management agreements with private contractors about the outsourcing of lottery operations. We consider each of these developments in turn. Exploring the web The individual states have been exploring territory that was opened up by the reinterpretation, at the end of 2011, of the Federal Government s Wire Act of For many years, this law was interpreted as forbidding, for most kinds of wagering, the use of any electronic communications that cross state lines. Since the paths taken by data packets in our world of modern web-based communications very often cross state lines, the sale of lottery products through web-based commerce was believed to be prohibited. Under the 2011 interpretation, however, the Wire Act is understood to be limited in its scope to sporting events, races, and the like. Thus, on current understanding, no federal law prevents lotteries from selling their products over the web. The question of whether to pursue development of lottery commerce on the web is therefore now up to the individual state lotteries. Delaware is the early leader in this field, having launched the first state-authorized web gaming systems in the country in October New Jersey passed legislation permitting similar systems in 2013 and is currently working to implement them. 18 WLA magazine No. 39 Winter 2013 / 2014

19 Some other states are moving in the direction of web sales of more traditional lottery products. However, there is significant political opposition even to this trend. Convenience stores as a category (including those whose major sales volume is in motor fuels) account for more than 60% of lottery sales in the U.S., and the National Association of Convenience Stores has lobbied vigorously against web sales of lottery games. Other legal gaming operators, including some of the federally-recognized Native American tribes, have voiced opposition. In general, web commerce in lottery tickets is seen by many who oppose gaming as a significant expansion of gambling. The balance among these interests varies from state to state. Now that the uniform federal prohibition is lifted, there is reason to expect diversity in practice across the various jurisdictions. Delaware is also taking an early lead in legitimizing the involvement of state lotteries in betting on sports. Sports betting across state lines is still understood to be prohibited by the Wire Act, so Delaware has taken care to keep its communications strictly within the state. As with gambling on the web, there is significant social opposition to government involvement in sports betting. Block games produce record jackpots The past few years in the U.S. have seen significant developments in two lotto-type games, Powerball and Mega Millions, that are intended to produce extremely large jackpots. These games are able to promote large jackpots because they are offered not to a single state, but to blocks of states whose populations collectively total in the hundreds of millions, and have top prize odds that support long jackpot progressions. Up until January 2010, most U.S. lotteries offered either Powerball or Mega Millions, with no state offering both. However since January 2010, nearly all the participating jurisdictions have offered both games. The combined population base of each game has consequently expanded. Since the advent of cross-selling, the governing bodies of the games have closely monitored the performance of the games. Initially, players showed a striking degree of brand loyalty toward the game more familiar to them. Consequently, cross-selling did not instantly expand the player base. However with time and increasing participation, the effective player base has expanded, prompting the governing bodies to modify game rules in order to preserve the likelihood of long jackpot progressions. In the case of Powerball, the price of a single wager was doubled (to USD 2) in January 2012, and the starting jackpot was set at USD 40 million. The value of the second-tier prize was increased to USD 1 million. Other changes to the structure of the game were relatively minor. By the end of FY13, these changes were generally regarded as a great success. The number of wagers placed at low jackpots (that is, less than USD 200 million!) declined shortly after the price was doubled, but the net effect was an increase in dollars wagered even at low jackpots, and a decreased likelihood of drawing a winner. Of course, jackpots can still be won even when no one has bet on most of the possible combinations, and this in fact happened several times immediately after the price change. Nonetheless, within 18 months, the game produced jackpots of over USD 200 million seven times. Jackpots of this size have been accompanied by much attention in the popular media and an associated spike in wagers. The spikes have been exciting for the players and profitable for the lotteries. The highest Powerball jackpot, with an advertised value of USD 600 million, was won on May 18, moonlight31- Fotolia.com, istock.com / zentilia Les Cunliffe - Fotolia.com WLA magazine No. 39 Winter 2013 /

20 Les Cunliffe - Fotolia.com The Mega Millions game actually produced a bigger jackpot, with no change in its basic structure, during the first few months after the Powerball price change. However in the 17 months after its record USD 656 million jackpot of March 31, 2012, Mega Millions did not produce any jackpots over USD 200 million. Meanwhile, the player loyalty that was so apparent right after cross-selling started seemed to decline, to Mega Millions disadvantage. The governing body of the game changed the game matrix in October 2013, maintaining a USD 1 per wager price while increasing the size of the game matrix to decrease coverage, and making the second-tier prize USD 1 million. For further details about these recent changes to the Mega Millions games, see the article America s Mega Millions relaunches, looking for more mega jackpots on pages In a period as short as a single fiscal year, results from either one of these big jackpot games can depart significantly from longterm expectation. There is a substantial advantage in year-to-year stability in having two such games, operating independently. The participating lotteries earn the same net win from each game. Keeping both games healthy is a management priority of the participating lotteries. Instant game business rebounds from the recession Many state lotteries had record sales of printed instant games in fiscal year 2013 (FY13), which ended for most U.S. lotteries on June 30, Significantly, this is the WLA Holiday Ad 2013.ai Friday, 8 November, 2013, 10:09 AM REV:04 Advertisement Dazzling FX, Dazzling Results! Shine at retail with Pollard Banknote s exclusive Scratch FX Proven industry success: Over 275 Scratch FX games have been launched by 39 lotteries worldwide Scratch FX games have generated over $3.8 billion in retail sales Contact us today! or visit for information on how to add Scratch FX to your instant ticket lineup! 20 WLA magazine No. 39 Winter 2013 / 2014

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