41 / 60
November/December 2015 // PUBLIC GAMING INTERNATIONAL //
41
are fortunate our brand new Aurora plat-
form is the most technologically advanced
and is explicitly designed to make the inte-
gration process far more streamlined and ef-
ficient to reduce the cost and time of modi-
fying software to make it interoperable and
integrate third-party solutions.
Consumers are expanding their adoption of
cashless payment methods and this trend is
expected to explode in the coming years. How
can Lottery and its retailers make these op-
tions available to the consumer?
J. Gendron:
There is an explosion of
innovation in the cashless payments space.
The consumer is quick to adopt cashless
payment methods. Our industry has long
been a purely cash-based business. We
believe, though, that lotteries would see
incremental sales from expanding the pay-
ment options. Cashless is particularly im-
portant as lotteries strive to be relevant to
the next generation of lottery players. Very
few of them carry any cash. In addition to
traditional cashless payment vehicles, like
debit and credit cards, IGT is working to
integrate the latest in cashless methods
such as Apple Pay, Google Wallet, and oth-
ers that will be hitting the market soon.
The evidence is in—expanding the variety
of payment choices almost always leads to
an increase in lottery sales.
The low hanging fruit is found in the
checkout line. Some lotteries have initi-
ated marketing campaigns to educate
retailers that cashless options lead to an
increase in sales. Self-service is ready for
cashless but there remains some questions
around the business model. Retailers and
lotteries are concerned about the banking
fees associated with accepting credit and
debit cards. These fees would take a cut of
either the retailer commissions or the net
funds that lotteries are able to return to
good causes.
Lotteries perform a whole variety of business
functions. Some lotteries operate with a super-
lean staff and outsource most of those business
functions. And others opt to do more things
themselves. How might lotteries go about the
business of assessing the pros and cons of these
various outsourcing options?
J. Gendron:
First, there’s no single ‘best
model’ for operating a lottery. We have
strong partnerships with both high-out-
sourcing and low-outsourcing clients, and
everything in between. It is really the deci-
sion of governments and lotteries as to how
they elect to develop their operating model
to optimize performance. Among the most
important factors for success is the qual-
ity of the business partnership between the
lottery and its key suppliers. That includes
the systems provider, the instant ticket
printing companies, advertising firms, and
internal and external business execution
teams. Many U.S. lotteries struggle with
insufficient funding for new game innova-
tion, for advertising, and for just keeping
pace with the diverse skill sets needed in
the changing marketing landscape. More
strategic outsourcing can be an effective
tool to resolve some of these issues as long
as all parties are aligned and incentivized
around a common business goal. And that
last part is of particular importance.
The alignment, trust, collaboration,
and commitment are what really make
the difference in the business performance
and outcomes produced by the diverse
stakeholders that support lottery opera-
tions. Without this level of alignment,
outsourcing cannot succeed and simply
adds more complexity by slowing down
decision-making and suppressing the agil-
ity and flexibility a modern lottery needs
to sustain growth.
So the guidance that we have for lotter-
ies that are evaluating the various insourc-
ing and outsourcing approaches is pretty
simple. Based on the legislative, regulatory,
and market conditions in any state, how
can we bring together the most focused and
productive team of experts to all pull in the
same direction to create fun games and
maximize revenues for good causes? There
is no black and white answer to the ques-
tion. There’s only the common attributes,
which create an effective high-performing
lottery team.
Tribal and commercial casino gambling in-
terests spend big money on lobbyists to pro-
mote their interests in the political domain.
Their agenda is to shape regulatory and taxa-
tion policy in ways that are usually not favor-
able to Lottery. Lottery can’t hire lobbyists to
promote its agenda with political stakehold-
ers. So, what can Lottery do to defend itself
and the interests of its stakeholders, like the
good causes supported by Lottery?
J. Gendron:
For decades, state lotteries
have proactively engaged all stakeholders
to deliver their message regardless of the
strategy and tactics of their adversaries.
The success that lotteries have enjoyed in
the U.S. has not come because those lot-
teries have viewed politics through a prism
that creates good guys and bad guys. State
lotteries are fully aware that they sit at the
intersection of government and gaming
and they know that avoiding politics is
not an option. They need to engage and
they do.
IGT is very excited and optimistic
about the future of government-gaming
operators, the traditional lottery prod-
uct, and the health of brick and mortar
retail. There will be change, even disrup-
tion, in the marketplace, but the lottery
industry enjoys many advantages such as
exceptional brand awareness, a massive
consumer base, and a secure proprietary
retail network. It will be a matter of le-
veraging those assets, innovating to keep
pace with the modern consumer, enhanc-
ing the retail consumer experience and,
above all, flawless execution, focus, and
follow-through. IGT is privileged to lead
the charge working closely with our cus-
tomers to ensure a sustainable future for
the global lottery industry.
■