Innovation does not always require strokes of visionary genius. In fact, this story illustrates how innovation is driven by an intelligent application of fundamental business practices. Like, we could ask ourselves how might we add value to our relationship with our retailers. To my mind, the key to what the Virginia Lottery did was to first ask that question without regard to how the answers will help us sell more lottery tickets. Then we circle back around to how to shape the answers to that question into win-win-win propositions that serve the Consumer, the Retailer, and the Lottery. The answer to that question in this case was that 7-Eleven wants to sell more food items. That answer led to a cross-promotional collaboration that benefits everyone. I know I should resist the impulse towards hyperbole, but I would submit that this Virginia Lottery initiative represents a major breakthrough; and points the way towards incredible opportunities to forge creative collaborations that could reshape the Lottery-Retailer relationship.
Slot machines have a challenge similar to Lottery. Young people brought up on highly engaging video games want something equally as fun and stimulating when they move into the games-of-chance world. By the middle of next year, we will begin to see a new generation of slot machines that combines elements of chance with skill. Regulations for new game-styles are being developed now. Marcus Prater, the Executive Director of the Association of Gaming Equipment Manufacturers, states "I truly believe this is the dawn of a new era for games on the casino floor".
The ongoing saga of legislators introducing bills that federalize the regulation of gambling continues. The stories in this Morning Report are self-explanatory. Let’s just hope that state governors and attorneys general will take action to prevent this usurpation of states’ rights. It is hard to imagine how these shamelessly brazen attempts to manipulate federal regulatory policy to the advantage of special interest groups (and to the detriment of charitable causes supported by Lottery) could get any traction. But miscarriage of justice has happened before, it is happening now in Europe, and so it could happen in the U.S. if nobody stands up to stop it.
It is surprising the degree to which disinformation permeates the whole dialogue about internet gambling. A few weeks ago, there was a story about how the Senior Vice President of NACS (National Association of Convenience Stores) Government Relations Lyle Beckwith asserted that there is virtually no such thing as “intrastate gambling,” as it has become simple for anyone, anywhere – and any age – to play state lottery games. He writes, in part: “States looking to put their lotteries online, for example, want to pretend that this constitutes purely intrastate gambling activity, but they’re wrong. Unlike brick and mortar casinos and convenience stores that sell lottery tickets, the Internet is accessible any time, by anyone, from anywhere. Herein lies the real states’ rights problem. Say I’m in Hawaii, a state that does not allow any gambling. But all of a sudden, I can get online — apparently no matter how old I am — and play another state’s lottery from anywhere and everywhere within Hawaii. That means the state of Hawaii has lost its ability to control what gambling goes on within its borders and its citizens can gamble from home, work, the car and even church using their choice of computer, tablet or mobile phone. The rights of Hawaii and every other state in the country to limit the gambling that can be done within its borders are completely undermined by a single state offering online lottery sales.” It is shocking that such ignorance of the facts actually sees the light of day, much less becomes position statements for an organization like NACS. Nice touch, though, trying to scare people into thinking that i-gambling is about to invade the inside of our church. The trick of it is to state your position with such certitude. Gotta respect a student of that venerable Music Man, Professor Harold Hill.
The reality is literally the opposite of the scenario portrayed by Mr. Beckwith. “Prohibition” is actually just a lack of regulation. The story It’s A Fact: Online Gambling Regulation Shuts Out Offshore Sites explains why regulated jurisdictions do a much more effective job at preventing illegality than do unregulated markets where i-gambling is theoretically “prohibited”. It’s a little paradoxical, but illegal off-shore i-gambling websites target U.S. states that “prohibit” internet gambling, and they vacate regulated markets. Illegal gambling websites that were active in Delaware, Nevada, and New Jersey, for instance, left those markets once these states implemented a structure to monitor and regulate the i-gambling industry. But they haven’t left the markets where i-gambling is “prohibited”. These illegal i-gambling operators are not deterred by “prohibition”, but they voluntarily leave jurisdictions where the industry is regulated. “Offshore sites have already shown a willingness to respectfully bow out of regulated states. It is time for new jurisdictions to take them up on that offer.”
|Texas Congressman (Republican) Joe Barton introduced a bill, HR 2888, also known as the Internet Poker Freedom Act, that if passed could regulate online poker throughout the country and allow each state the ability to decide whether or not they wish to allow the activity within its borders. This isn't the first time Barton has introduced a bill in hopes of regulating online poker. Barton introduced a bill, HR 2366, the Online Poker Act of 2011, in June 2011 cosponsored by 11 Representatives across party lines. Two years later, in July 2013, Congressman Barton tried again with the HR 2666 theInternet Poker Freedom Act of 2013.|
|Gaming regulators and slot makers are now working to change the way we see gambling, it's an idea they hope attracts more people to try their luck. Marcus Prater is the Executive Director of the Association of Gaming Equipment Manufacturers and they're all for this change. "I truly believe this is the dawn of a new era for games on the casino floor," Prater said.|
|The offshores offering sports betting in the U.S. market are not deterred in most states, but voluntarily left regulated ones, even though there is little doubt about the legality of the business. This speaks volumes about the effectiveness of regulating online gaming at the state level. The solution is simple States that have yet to regulate online gaming have two options. One is to ignore the fact that residents have access to offshore sites. This allows unlicensed sites to operate with impunity and total disregard to responsible gambling. Problem gamblers and minors are free to play at these sites. These offshore sites pay no taxes to local jurisdictions, nor do they create any jobs. The other option is to regulate the activity and deter unlicensed sites from operating in the state, while at the same time offering financial and responsible gambling protections.|
|This week, presidential candidate and Senator Lindsey Graham introduced S.1688 – a bill with a name and policy pitch that rely on a false history of U.S. gaming legislation. The bill would expand the Wire Act’s scope, which currently includes only sports betting, to include all forms of gaming. In doing so, the bill would also reverse those portions of the Unlawful Internet Gambling Enforcement Act of 2006 that permitted states to license and regulate online poker and other limited forms of online gaming on an intra-state basis. Thus, with this bill, Senator Graham and other legislators seek to deprive states of the ability to establish regulated gaming and compact with other like-minded states. The bill is identical to legislation introduced by House Oversight Committee chairman Jason Chaffetz in February of this year, and to a bill introduced in the Senate a year ago.|
|“Sweepstakes” coffeehouses computerized games played for cash winnings are unlawful. The so-called sweepstakes games, played by customers who buy time on cafe computers equipped with gaming software, are just another form of casino-style slot machines that are outlawed in California.|
|The bill would restore an interpretation of federal law that prohibited Internet gambling in the U.S. until 2011, when the U.S. Department of Justice clarified that the UIGEA does not take away the rights of individual states to regulate i-gamingn (other than sports-betting). This new bill does not contain a grandfather clause that would allow states that regulate and tax i-gaming to continue legally. The legislation from Graham, who is running for president, would carry out the goals of Sheldon Adelson, the billionaire casino owner who has put big money behind a campaign against online gambling. “It is unfortunate that Sen. Graham and Sen. Rubio and several colleagues have chosen to carry Adelson’s water in the U.S. Senate,” said Kristen Hawn, a spokeswoman for the Coalition for Consumer and Online Protection, a pro-Web gaming group funded by MGM Resorts International and Caesars Entertainment Corp.|
|“As the eyes of the nation are focused on South Carolina following the recent tragic event, I think I speak for most Americans when I express profound disappointment in Senator Graham for choosing this time to advance a bill for the sole benefit of a billionaire political donor,” said John Pappas, executive director of the PPA. “Congress made the decision to adjourn early so they could attend services on Friday in Senator Graham’s home-state. Unfortunately, Senator Graham has not reset his priorities and picked a very unfortunate time to engage in the Internet gaming debate.”|
|RAWA represents a massive expansion of federal power over the states and establishes a one-size-fits-all policy for 50 diverse states, each possessing a citizenry with its own wants and needs.|
|J. Gary Pretlow who chairs the Racing and Wagering Committee of the New York State Assembly wrote, “RAWA’s attempt at a federal prohibition of online gambling could directly and negatively impact New York by foreclosing the future potential of the New York lottery to use the Internet for sales. It will also preclude the legislature from new tax revenue and to create economic and employment opportunities. “It would also prevent New York from pursuing the regulatory approach to Internet poker which has been under review by the legislature and which several states have already successfully implemented...|
|“We’re very excited to work with GTECH Indiana to provide the sales team with the latest technology to help them achieve great results”, said Adam Perlow, Hudson Alley’s Chief Executive Officer.|
|In the midst of a historic slump in Macau’s gaming industry, the first of the Cotai Strip’s new megaresorts opened last month. A collective $20 billion in new development is slated for the Cotai region. Since mid-2014, Macau’s gaming industry has declined by 39 percent due to a crackdown on corruption by the mainland China government; in February, the most recent month on record, year-on-year revenue fell a record 49 percent. Even so, Macau still generates three to four times more gaming revenue than Las Vegas, and continues to rank as the world’s No. 1 gaming jurisdiction.|
|“We are delighted to be working with Grupo Televisa on this project and look forward to delivering an exceptional user experience through our retail offering to PlayCity Casino customers. We look at Grupo Televisa as a future market leader in Mexico and could not be more pleased that Kambi’s first customer in the region aligns very well with our strategy of focusing on licensed Tier 1 operators around the world. We hope that this will be the first step toward a long and successful partnership.” said Kristian Nylen, CEO of Kambi Group plc.|
|The Iowa Lottery is seeing big benefits from a special scratch ticket it launched to commemorate the organization’s 30th anniversary. The ticket called “30 Somethings” hit $3.1 million in sales its first 5 months. Iowa Lottery CEO Terry Rich, says that’s the hottest start ever for a new scratch ticket. “It’s been a great year, this 30 Somethings ticket has really gone over big time. Part that is the design — its on an eco scratch ticket — and part of that I think is because gas prices are low and people have more discretionary dollars,” Rich says.|
Panel Discussion and Presentation topics at PGRI Lottery Expo Miami:
Breakthrough Marketing/Promotional Ideas for Lottery’s Corporate Accounts
We know what we want from our retail partners: more focus on the mission to sell Lottery products! How do we engage big corporate accounts to embrace that mission like we want them to? Lottery’s brand equity, connection to countless millions of shoppers, and ability to drive store traffic are under-utilized assets that can deliver value to our retail partners and in turn engage them in our mission. It is starting to happen in a big way. Panelists will discuss successful initiatives to collaborate with corporate account retail partners on cross-sell-promotions and new product design. Panelists will also build on these successes to explore fresh new ideas for how Lottery can develop a stronger, more productive, relationship with its corporate accounts.
Building out the multi-state platform for Big-Box Corporate Account Retailers
Logistical back-office hurdles have stymied Lottery’s ability to develop the full potential of multi-state retail operations. Now, substantial progress is being made to meet the needs of these multi-state retailers. What has been accomplished; how can we lock-in the progress that has been made; what are the current issues that are being addressed; what are the most do-able, actionable things that Team Lottery should do to blow open the doors to successful expansion of Lottery in the multi-state big-box retail channel?
Bricks & Clicks: The merging of Interactive and Land-Based Retail
Retail and Lottery both recognize that “Interactive” is about is much more about creating the optimal consumer experience than it is about selling products online. How are progressive lotteries leading the charge into an “Internet of Things” future that integrates digital technologies into the fabric of all we do? How are Retailers doing the same thing, and how can we join together to forge the most productive and mutually beneficial pathways to integrate Interactive and Land-Based initiatives?
Behavioral Economics Applied to Lottery
There is much talk about “convergence” in the industry. The easy access to all forms of gaming is contributing to experimentation by the consumers. As consumers migrate from one game category to another, the need to identify and focus on the attributes that make Lottery most appealing to the consumer is greater than ever. How can Lottery clarify its messaging, its brand, its products and promotions to differentiate itself in this competitive market-place, and carve out its own unique connection to the consumer?
Betting on Interactive
Everyone is online, connecting with merchants, with information resources, and with each other. Lotteries’ huge brand awareness is already driving huge website traffic. How are successful lotteries leveraging this online connection to drive consumer engagement, drive sales, and disseminate information? How are lotteries integrating interactive strategies into every aspect of the business to position themselves for successful long-term sustainable growth?