27 PUBLIC GAMING INTERNATIONAL • JANUARY/FEBRUARY 2024 our great games, technology and digital solutions, as well as data and predictive analytics and services, and licensed brands. We’ve deliberately focused on developing building blocks of applications that can be combined, or stand alone, to manage all game categories across retail and digital in an integrated fashion. Our omni-channel ecosystem includes transaction processing engines along with value-add applications, tools and analytics to manage performance. We’re delivering the full ecosystem with combined building blocks, or subsets, depending on the lottery’s needs. Adding game portfolios and services allows our customers to seamlessly engage with their players for maximum results. An example is our Scientific Games Enhanced Partnership program which is a subset of the ecosystem. SGEP combines great instant games and portfolio management, value-add applications such as predictive ordering and digital engagement tools, analytics and other services to maximize lottery sales and proceeds. Our turnkey iLottery programs are the digital equivalent of SGEP. A cornerstone of our systems architecture is interoperability, reducing the time and cost of integrating third-party products, game content, technology solutions, or even platforms to support an entire category like iLottery or sports betting. Can you share an example of a multiplesupplier approach? P. McHugh: Absolutely. SGEP can be integrated into the Scientific Games’ ecosystem, or with third-party suppliers. Another example is our new SG Content Hub and Partner Program which offers one-stop, frictionless access to multiple iLottery game studios from around the world. It integrates seamlessly with a lottery’s existing gaming systems and iLottery technology. This enables us to partner with lotteries on iLottery game portfolio planning and management, game studio contract negotiations, studio integrations and billing – all streamlining the entire digital content management process. It’s like the Netflix of iLottery because it gives lotteries maximum access to the best content worldwide. Is the company’s portfolio of amazing iLottery games attributable to being bought by Brookfield? P. McHugh: Yes. Our transition to a privately held lottery products company accelerated investment. We have invested heavily in SG Studios, our digital game studio, as well as in areas like data analytics and digital technology. Our resources are no longer divided between lottery and commercial casino customers. We are 100% focused on producing the best content, delivering the best service, and driving the best results for our lottery customers. How can lotteries construct RFPs with the flexibility to add future technology when the cost isn’t known at the time of contract negotiation? P. McHugh: The best way to ensure success is to focus the RFP’s objective and evaluation on generating the highest growth and profits for the lottery by incenting supplier investment at launch and over the contract term. Then, have a contract mechanism for all contract modifications for incremental investment in innovations that will further increase lottery proceeds. This is often challenging because state procurement policies are highly focused on setting a low-bar commodity cost comparison, instead of benefits and return on investment. You can’t put a specific price on products or services that don’t yet exist. There are, however, ways to position the lottery with the flexibility to evolve and acquire future solutions that become available. The state lottery is a market-driven enterprise that produces hundreds of millions or even multiple billions of dollars in revenues. A high percentage of those revenues go to the state’s good causes and beneficiary programs. The difference between good performance and great performance adds up to millions of dollars in net funding. The procurement process and the way the RFP is constructed set the foundation for the results. An effective contract drives alignment between the lottery and its technology partner so that everyone is working toward the same goal. Just as important is including a mechanism to assess and procure new technologies, products and services as they become available in the future. Central systems contracts can be as long as 10 years. The flexibility to add new products and solutions throughout the contract term is vital to the lottery’s ongoing success. Should the RFP be a one-and-done procurement that concludes with the delivery of a product? P. McHugh: More than ever, the ability of the technology partner to support rapid and cost-effective migration to new technologies and the integration of new products and services is the difference between good performance and great performance. And that adds up to multi-millions of dollars. Lotteries need a central system and IT infrastructure partner capable of supporting growth in a rapidly changing and technology-driven marketplace. The right partner has already invested in the tools and capabilities that will drive growth five and 10 years from now. RFPs and contracts should include provisions that require these capabilities. Does state procurement understand that lottery is a market-driven business with the highest profit margins and ROI of any company in the world? P. McHugh: Not often. It can be challenging for procurement and government stakeholders who are accustomed to commodity purchases designed to save money and maximize administrative efficiencies. The focus should be on investing in growth to increase net funds for good causes. Apart from their state lottery, governments are not in the business of investing in and managing huge market-driven businesses that generate hundreds of millions of dollars in profit. Continued on page 39 More than ever, the ability of the technology partner to support rapid and cost-effective migration to new technologies and the integration of new products and services is the difference between good performance and great performance. And that adds up to multimillions of dollars.
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