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its stakeholders, and huge income for the
businesses attached to its production. The
Super Bowl is once a year. Since it is so suc-
cessful, why don’t they try to reconfigure
the whole football schedule of competi-
tions so that you have two or three Super
Bowls a year? It could be done, but you
can see why it wouldn’t work. The whole
media frenzy and consumer excitement
that happens once a year could not be rep-
licated that way. There are regular season
football games the consumer loves and that
generate income for the shareholders of the
businesses that support the whole football
industry. Likewise, Powerball and Mega
Millions games produce the lottery “Su-
per Bowls” when the jackpot runs up to a
new record. And we have our big portfolio
of games to complement our Super Bowl
games of Powerball and Mega Millions.
Capping the jackpot size may produce
some positive benefits to the long-term
health of the game, but we do not know
that it would. We do know that the residual
impacts would be both positive and nega-
tive and not entirely predictable.
Further to this analogy … is there a
point at which the excitement over the
Super Bowl gets to be so high that con-
sumer expectations recalibrate such that
it might be hard to replicate the follow-
ing year? Perhaps. But, would you think
you should manage expectations or cap the
level of enthusiasm for the Super Bowl?
The big Powerball and Mega Millions
jackpots are like the Super Bowl. They are
special events with a life and character all
their own. The whole dynamic of how ris-
ing jackpots affect the marketplace involve
complex issues with a multitude of inter-
acting parts. We just want to be cautious
in how we manage that.
The media coverage also brought in new con-
sumer groups.
R. Hargrove:
Once this record run hit
the stratosphere of $528 million, then
$948 million, then $1.58 billion, we be-
gan to see a whole new level of consumer
impact. As media coverage reached new
heights, the impact on non-players also
reached new heights. It is estimated that
the record jackpot run attracted 10 mil-
lion new players to the lottery. That is ab-
solutely amazing. Think about it. That’s
10 million consumers who have never re-
ally paid attention to the lottery before,
who paid attention for the first time be-
cause of the massive media coverage, and
now they will notice those billboards and
commercials and in-store POS like they
never did before.
I am not saying we shouldn’t be con-
cerned about rising consumer expecta-
tions. I am just pointing out that the
positive residual impact of jackpot fever
is huge, and it is complex and multi-
faceted. That is why we need to be very
thoughtful about trying to “manage” it.
How does all the attention given to Powerball
during a jackpot fever run impact sales of the
other lottery products?
R. Hargrove:
One of the things that
happened with this jackpot run, at least
in Tennessee and I know in many other
states as well, is that people who had
never bought a ticket before got excited
about the lottery. They went into the
stores and saw how easy it is to buy a
ticket. And while they were there, some
of them bought an instant ticket and
discovered how fun that was, as well.
Many lotteries posted record sales across
the entire portfolio of lottery products.
Tennessee’s highest instant ticket sales in
history were in January, the same month
as the record Powerball jackpot. Our sec-
ond highest instant ticket sales in history
were in March; our third highest were in
February. So we saw a spike in all of our
games because we had new players in the
game. Now that may not be the case ev-
erywhere, or in a state where the lottery
has been there for 40 years. In Tennessee
and many other states, the record jackpot
created a level of excitement and engage-
ment that is having a powerful residual
impact on our entire business.
The question of how much is too much comes
up almost every time there is a record jackpot.
R. Hargrove:
It came up 25 years ago
when Florida’s in-state game reached
$100 million for the first time in the U.S.
I was the director and there were some
legislators who protested that the jackpot
should be capped, that no single player
needed to win a $100 million. I point-
ed out that no one is forced to play that
particular game. There are lots of lottery
games with better odds to win a smaller
jackpot. There are games to appeal to
practically every price-point, every play
style, and every value proposition. Why
not let the consumer decide?
The community of lottery directors has been
exploring the possibility of launching a new
national premium game. There are lots of
regional games, games that are played across
multiple jurisdictions. The benefits of a re-
gional game model is that it does not require
the consensus of all 44 lotteries and it can
scale up as it proves to be successful. Plus the
cost of terminating it if it is not successful is
contained. Which leaves the question: What
are the benefits of a national game over re-
gional games?
R. Hargrove:
The more general issue is
the way in which the community of lot-
tery directors should explore and think
about the best ways to evolve the portfo-
lio of multi-state games. Regional games
are an important part of the portfolio. Be-
fore cross-sell started in 2010, Powerball
and Mega Millions were regional games.
There will always be room for regional
games. Regional games are terrific. In
fact, if a game works well on a regional
basis, that’s how it should be done.
However, there are some specific objec-
tives that can be best achieved only with
large-scale national games. For instance, the
liquidity delivered with the maximum pop-
ulation base is what drives those large jack-
pots of Powerball and Mega Millions. The
benefit of a new national premium game
is the possibility for new price-points and
a wider variety of value propositions to be
applied to draw-based games. The growth
of instant games over the past 20 years is
largely attributed to the simple process of
Rebecca Hargrove Interview
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