Public Gaming Magazine May/June 2024 MAY/JUNE 2024 MULTI-PRONG APPROACH TO THE MOST TIME-EFFICIENT IMPLEMENTATION OF AN ONLINE SELLING CHANNEL Ionut-Valeriu Andrei General Manager, Loteria Română Lotteries in Europe: A Seminal Colloquium Leveraging the Power of Brand Lottery L to R: Bret Toyne, Jay Finks, Norm Lingle, Stephen Durrell, David Barden Data-driven Customer Management Zsófia Bánhegyi, Chief Commercial Officer, Szerencejáték Zrt.

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4 PUBLIC GAMING INTERNATIONAL • MAY/JUNE 2024 Publisher & Chief Executive Officer Paul Jason President Susan Jason Brand and Design Dan Eggers Design Honored Founders Doris & Duane Burke Subscriptions United States: $145 USD Canada & Mexico: $160 USD All other countries: $225 USD For email address changes, subscription requests and requests to be placed on our e-Newsletter distribution list, e-mail Susan Jason at Contact Information PGRI, Inc. 1769 Flagstone Terrace, The Villages, FL 32162 T: +425.449.3000 F: +206.374.2600 Public Gaming International Magazine Published six times a year and distributed to readers all around the world. Electronic version is e-mailed and is also available on our news website: May/June 2024 Volume 53, Issue 3 ©2023 all rights reserved. Public Gaming Research Institute cISSN: 1042-1912 10 MULTI-PRONG APPROACH TO THE MOST TIME-EFFICIENT IMPLEMENTATION OF AN ONLINE SELLING CHANNEL Ionut-Valeriu Andrei General Manager and member of the board of the Loteria Română (Romanian Lottery) 16 TRANSITIONING FROM TV ADVERTISING TO THE NEW WORLD OF MORE EFFECTIVE AND MORE RESPONSIBLE DIGITAL CONNECTION Ross Sergeant Global Head of Media, Allwyn Entertainment 14 DATA-DRIVEN CUSTOMER MANAGEMENT IS THE FUTURE OF NATIONAL LOTTERY COMPANIES Zsófia Bánhegyi Chief Commercial Officer, Szerencejáték Zrt., Hungary CONTENTS M AY / J U N E 2 0 2 4 FE ATURED I NT ERV I EWS & AR T I CL ES

6 PUBLIC GAMING INTERNATIONAL • MAY/JUNE 2024 Visit Our Family Of Websites industry news & information videos of conference presentations PGRI conference information magazine archive of past issues listing of lotteries and vendors Showcase of industry honorees recognized by the Lottery Industry Hall of Fame PGRI Lifetime Achievement Award Sharp Award for Good Causes Lottery Industry Statesman and Stateswoman Award Rebecca Paul Mentorship Award Collaboration Award Subscribe To Our Free Digital Newsletters Receive our daily newsletters at no charge, published 5 times a week to bring you the latest breaking news in the global lottery industry. Send an e-mail to: with “add to Daily Digest list” in the subject line. FE ATURED I NT ERV I EWS & AR T I CL ES 8 FROM THE PUBLISHER Paul Jason 18 LOTTERIES IN EUROPE: A CULTURAL CORNERSTONE, SOCIAL CONTRIBUTOR, AND ECONOMIC ENTITY, A SYNOPSIS OF SEMINAL COLLOQUIUM HELD IN BRUSSELS 22 IS LOTTERY’S BATTLE TO REMAIN TOP-OF-MIND AMONG AMERICANS ONLY JUST BEGINNING? Simon Jaworski, Founder & CEO, Lotto Research 42 SCENES FROM THE EL/WLA MARKETING SEMINAR, LONDON: Photo Collage 44 SCENES FROM THE ICE TOTALLY GAMING SHOW, LONDON: Photo Collage 46 PULSE OF THE INDUSTRY: Synopsis of recent gaming industry news D E PA R T M E N T S 20 LEVERAGING THE POWER OF BRAND LOTTERY: ARTICLE IS BASED ON A PANEL DISCUSSION OF FIVE MUSL DIRECTORS David Barden, CEO of the New Mexico Lottery and President of MUSL Stephen Durrell, Executive Director, Kansas Lottery Jay Finks, Executive Director, Oklahoma Lottery Norm Lingle, Executive Director, South Dakota Lottery Bret Toyne, Executive Director, MUSL 23 THE FUTURE OF ILOTTERY: PREDICTIONS FOR 2030 NEOGAMES 25 LEADING WITH GRATITUDE: ARTICLE BASED ON A PANEL DISCUSSION HELD AT THE PGRI SMART-TECH CONFERENCE IN FORT LAUDERDALE, FL. 26 REVOLUTIONIZING LOTTERY WITH SCIENCE: AN INSIDE LOOK AT THE TOOLS THAT POWER PROFITS SCIENTIFIC GAMES 30 MAXIMIZING PERFORMANCE OF LVMS: TURNING LOTTERY VENDING MACHINES INTO MVPS IGT 42 18 44

8 PUBLIC GAMING INTERNATIONAL • MAY/JUNE 2024 From the Publisher So, tell me what you really think … Legislators were elected to represent the interests of the people, not the sports betting and casinos who contribute to their campaigns. Selling their legislative votes to the highest bidder is not what they were elected to do. Which brings us to observe an interesting confluence of events. First, it has gotten to the point where sports betting operators no longer need to even pretend to respect the normal protocols and operations of the state governments tasked with regulating their activities. See page 50 for the short story of how none of the operators even showed up for a meeting called by the Massachusetts Gaming Commission (MGC). This roundtable was called for the purpose of talking about “how, when and why they set betting limits on some patrons”. The sports betting operators literally refused to attend. Why should they bother when they (i.e. sports betting operators) know that legislators will protect their interests no matter how flagrantly they disrespect the state agencies responsible for regulating sports betting? Accordingly, and as a direct result of the rampant corruption during the process of legalizing casino gambling, Louisiana did the sensible thing of making it illegal for state legislators to accept campaign contributions from gambling interests. But that was 30 years ago. Now, at the behest of an attorney for Penn Entertainment (a major gambling company with five riverboat casinos in Louisiana), a bill was just approved by the state senate finance committee to reverse that prohibition and allow campaign donations from commercial gambling interests. Further evidence (along with the dearth of new states approving iLottery) that we are going in the wrong direction. I do not understand how a legislature can approve sports betting, online sports betting, casino gambling, or online casino-style gambling, and not approve iLottery, which is what has happened in many states. This is so clearly contrary to common-sense and to the interests of the people that legislators are elected to serve, and so blatantly aligned with campaign contributions that are buying legislative support. Is there really nothing that can be done about this? Much of the content of this issue comes directly from the fabulous EL/WLA Marketing Seminar held every year in London in the first week of February. That date has been moved to the week of Jan. 21 to 24 in 2025 to coincide with the ICE Gaming Show. And both are moving to Barcelona. It is a wonderful week as so many industry leaders come together for these events. See photo collages pages 42-44. Our feature interview is with IonutValeriu Andrei whose presentation at the Marketing Seminar galvanized the audience to raise their expectations for how much can be accomplished in a short window of time to launch and build out an online lottery program. As Ionut explains, it involves launching multiple initiatives simultaneously, and taking on a small extra measure of risk to achieve outsized results in record time. All the presentations at the Seminar were fabulous. Featured also in this issue are articles based on two more of the best. We know that success at applying the tools and skill-sets of data-driven management is already separating the winners from the also-rans. Some of us just aren’t clear on the concrete steps involved in taking data analytics and execution to the next level. Zsófia Bánhegyi’s Seminar presentation and article on page 24 connects the dots, showing how data-science has become mission-critical to the goals of enhancing customer experience, enterprise profitability, and effective customer retention. Ross Sergeant tackles the confounding question of how marketing communications is being turned upside down by the changing media landscape. TV in particular, with impact declining and costs increasing in dramatic fashion. The solutions involve creative new approaches to drive multi-media synergies and elevating digital as the tail that wags the dog in the overall media mix. Lotteries in Europe: A Cultural Cornerstone, Social Contributor, and Economic Entity describes another very special EL event, a colloquium held in Brussels that helps us appreciate the serious societal role performed by government lottery. I ask our media partners IGT, Scientific Games, and NeoGames for genuinely insightful, research and evidence-based articles and they deliver. Thank you for sharing the benefit of the resources applied to analyze big-picture consumerbehaviour, retailing, and market-place trends and how they impact our own lottery-specific interests. We depend on you and appreciate your service to support lottery and good causes. We also include articles on the cuttingedge issues affecting the U.S. market. Keeping Brand-Lottery top-of-mind, for the consumer in general but the gamesof-chance player who is faced with more and more options in particular, is the topic of Simon Jaworski (our resident research genius) and the MUSL panel discussion held at our own PGRI SmartTech conference in March. Leading with Gratitude is another article based on a very special session also held at Smart-Tech. Susan and I are looking forward to seeing you all soon!!! Paul Jason, Publisher Public Gaming International Magazine

Based on actual OOS data from SCiQ from CY22-23. OOS lost sales are calculated using a run rate on the last product in a given bin and the store's normal open hours. SCiQ® is a registered trademark of Scienti c Games. © 2024. All Rights Reserved. Scienti Science Inside THIS IS THE Out-of-stock conditions result in signi cant lost revenue for lotteries. Through our SCiQ retail ecosystem, we were able to identify nearly $200M in additional revenue that could be captured by proactive sales representatives and retailers over a one-year period. Just one example of how the science inside our retail technology is making a di erence. In Revenue Opportunity

10 PUBLIC GAMING INTERNATIONAL • MAY/JUNE 2024 Multi-Prong Approach to the Most Time-Efficient Implementation of an Online Selling Channel Ionut-Valeriu Andrei General Manager and member of the board of the Loteria Română (Romanian Lottery) PGRI INTERVIEWS Paul Jason: The Romanian Lottery dove into the process of digitalizing its lottery products and channel mix with a bold 2-way approach, which included both developing its own in-house platform, as well as engaging in partnerships with 3rd-party apps. Describe the process of deciding how to approach the goal of building an online sales presence from scratch? Ionuț Valeriu Andrei: It is true, we made a bold decision regarding the method of going online. What we might point out is that right from the beginning we took it from scratch which provided a lot of latitude and flexibility for developing our own unique strategy. Two years ago when I took the challenge of running the Romanian Lottery, the company was stuck in an old paradigm in which consumer access to classical lottery games was mainly the same for as long as the history remembers. And the Romanian Lottery has, indeed, a great history behind, a legacy of which we are very proud. For more than 117 years, the company has been present in the lives of Romanians as one of the most trusted public-owned companies. But, in terms of approaching the latest trends of the market, the company had very little experience. And here is where our team decided to tackle hard. We chose a pathway of switching the entire paradigm. We worked for several months on developing a comprehensive marketing and sales strategy, which took into account all the aspects involved in creating a new image of the Romanian Lottery on the market. We decided to use our objective of building an online platform as a catalyst to transform our whole approach to the business. In 2023 we went through a comprehensive rebranding process, in which we combined our tradition with modern and minimalistic elements, aiming to address, in terms of visual identity, a wider range PGRI Introduction: Loteria Română wanted to implement the online selling channel quickly and cost-effectively, and then nurture its growth over time. The initial goal was to reach 5% of total sales by the end of the first year of implementation. Ambitious but do-able. Then grow online sales steadily. As the process unfolded, though, Ionut-Valeriu Andrei discovered creative ways to drive sales at an increased rate. The result is that the initial target of 5% of total sales was reached in just three weeks. But that is not the interesting part of this story. Projections were adjusted accordingly, increased to 10% of sales over the next ten weeks. They blew past that goal in seven weeks. Projections increased again and again. Online sales continued to increase at a breakneck pace to the point of exceeding 20% in a grand total of thirty weeks time. Last time we checked, they were at 26% of total sales. This interview is based on a presentation made by Ionut-Valeriu Andrei at the EL/WLA Marketing Seminar in London in February. Mr. Andrei was recently appointed to the Executive Committee of EL (European Lotteries Association).

Winning Moment

12 PUBLIC GAMING INTERNATIONAL • MAY/JUNE 2024 Continued on page 41 of of consumers, play-styles, and demographic profiles. We launched several projects, some of them already being successfully implemented, for the digitalization of internal processes, and to be able to manage ourselves more efficiently. We now have nearly 1,000 of our own points of sales, spread all over the country. We also expanded our network of partners, going also towards the providers of self-service terminals. The products of the Romanian Lottery are now accessible in more than 38,000 points of sales. And now reaching to the essence of your question, it came time for us to identify the most time-efficient way of implementing the Online Selling Channel. Time was essential, as the pressure from the market was growing. So, from the comprehensive analyses we had already performed, three approaches emerged – one in which we could have launched a public tender to contract a software provider to develop an online platform; another one in which we develop in-house our own platform; and another one which involved partnerships with app owners that already had a big pool of clients, to integrate our products. We went forward to analyse the last two options because the first one was less time efficient to implement. Seeing the strong points and weak points of each project we concluded that the benefits of the projects can be overlapped, so we made the decision to give the green light to both of the projects. We would build our own app and also partner with already-existing app owners. In terms of business, going towards already established apps to integrate our games has proven to have some extremly strong points. We identified apps on the market which already had a large pool of clients, which allowed us to have a quick entry into the market – around 6 months. That enabled us to capitalize on the already existing app features, which enabled us to offer a comprehensive and competitive gaming experience. The possibility of selling lotto tickets through multiple channels gave us a huge boost and connected us with consumer groups which we may not have otherwise reached. We were able to create and implement additional promotions for the products and in less than one year we managed to exceed our target benchmark of 26% of our sales coming from the online channels exclusively. Additionally, we gathered data from the market through our app partners and we were able to work on developing our own in-house online selling platform, that we just launched in March. We see it as a new step towards digitization, transparency, and accessibility, which were our main objectives right from the beginning. It is a promise respected by our players and retailers alike, to be as close as possible to the Romanian consumer and to further strengthen the trust with which we have been invested by the players, in the tradition of over 117 years of history of the Romanian Lottery. What is an example of a 3rd party app partner? Ionuț Valeriu Andrei: is a parking payment solution that provides the ability to pay the parking fee on your smartphone. Through the AmParcat app, users are now able to purchase lotto tickets and participate in the draws organized by the Romanian Lottery. AmParcat has over 1 million users, a huge customer base that is now being presented with the option of playing the Romanian Lottery. Some lotteries may suffer from "paralysis from analysis" and the pressure to spend more and more time and money testing and researching in order to further reduce risk. You describe coming to a point where you had not eliminated risk, you were not sure what the outcome would be, but you met a threshold of confidence in the outcome, and had gamed out the war-room scenarios so that you had an action plan and contingency plans for the different ways that things might unfold. In hindsight, how do you look upon this approach now? Ionuț Valeriu Andrei: It is true, we had to dive in! Of course we had a strong analysis behind every step we took, but I chose to take decisions as a manager, not as a technician. Technicians tend to wait for a project to be 100% failproof in order to take it to GO LIVE. As a manager, I see the things quite a bit differently. Rather than wait twelve months for a project to be 100% failproof, I prefer to launch it after three months when it is at 98% and do another two months of live fine tuning. In the end you have the same project implemented in half the time. Testing and implementing the preliminary results of each stage put us in the position of being flexible and able to modify or even pivot based on the real-time feedback. Time is sensitive in a dynamic market like gaming and we decided to keep up the pace with our engines at maximum speed. But we did not go blindly ahead as we are constantly monitoring results and bringing new features, new opportunities, and new games on the table. We've observed healthy competition among partners who are driving increased sales, and we continuously assess how the diversity in user experiences benefits our strategic objectives. Did you say that part of your approach included plans for pivoting if you fell short of the target, or if some part of the plan did not perform as well? Like dropping either the in-house app or the third-party app partnerships if one out-performed the other by a big enough margin? Ionuț Valeriu Andrei: We are always analysing and adjusting, as mentioned before. Of course every approach has it`s own risks, and we are well prepared for multiple scenarios. The partnerships with the 3rd party app providers are going well and the results have been much higher than our initial expectations. Also, with our own platform we are looking towards building on the momentum and we want to gain as much visibility as possible. So that foundational aspect of our strategy is not likely to change. However, we are not looking solely at these steps and processes from a sales Online sales continued to increase at a breakneck pace to the point of exceeding 20% in a grand total of thirty weeks time. Last time we checked, they were at 26% of total sales.

14 PUBLIC GAMING INTERNATIONAL • MAY/JUNE 2024 Data-driven customer management is the future of national lottery companies Zsófia Bánhegyi, Chief Commercial Officer Szerencejáték Zrt., Hungary National lottery companies face numerous challenges due to rapid changes in industry trends and shifts in the market environment. The acceleration of digitization has led to altered player pathways, also endangering the sustainable growth of retail networks with a shift towards digital sales. The gaming preferences of the young adult generation are changing, favoring fast and exclusive gaming experiences. Similar to other industries, customer experience and personalized service take precedence, requiring significant development for lottery companies with millions of players. With the rapid spread of artificial intelligence and predictive marketing, the sector also needs to keep pace by formulating an appropriate corporate strategy. According to Accenture’s Personalization Pulse Check, 91% of consumers are more likely to shop with brands who recognize, remember, and provide relevant offers and recommendations. Similar global processes influence the future of the Hungarian National Lottery company as well. The 34-year-old Szerencsejáték Zrt. has achieved an average compound annual turnover growth rate (CAGR) of 15% over the past 12 years and currently demonstrates over 30% YoY growth due to robust digital expansion. The company boasts Hungary's largest sales network, comprising 7,500 points of sale, visited by 5 million unique players annually, with 1.3 million digital players on its online platforms. Besides draw-based and instant games, its broad portfolio includes significant segments of sports betting and virtual betting. However, sustainable growth is influenced by numerous factors that the Hungarian National Lottery must address in the long term within its commercial operations: • The Hungarian online sports betting market opened on January 1, 2023, ending the company’s monopoly position in this segment and intensifying competition. • A retail renaissance is observed post-Covid, with players returning to land-based networks. • Despite millions visiting lottery shops annually, the company lacked data on these players, rendering them an anonymous mass for decades. • A significant amount of Hungarian players now engage in omnichannel play, switching channels throughout their gaming journey, expecting a seamless customer experience at every touchpoint. Market dynamics and technological trends necessitate significant changes in Szerencsejáték Zrt.'s operations, requiring a substantial transformation of its commercial and marketing approaches and toolsets to maintain competitiveness. One of the most significant steps in this transformation was the launch of a four-year program in 2023, named the Optimus Program. Its primary goal is to enhance customer experience, profitability, and customer retention among identified players, utilizing data-driven tools in a partially competitive market. The name Optimus Program was chosen to signify the development of a robust, AI-driven system that reformulates the company's approach and develops the tools of modern integrated customer management. Continued on page 24

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16 PUBLIC GAMING INTERNATIONAL • MAY/JUNE 2024 Advertising has undergone a transformation over the past few decades, shifting from the heyday of newspaper and "Mad Men"-style TV advertising to today's digital-led landscape. This new world, dominated by streaming platforms and other digital outlets, has eroded the position of traditional television. According to BARB data from the UK, traditional TV minutes among all adults are falling at a rate of 17 minutes per year. While the COVID-19 pandemic temporarily increased traditional TV viewership, the long-term downward trend resumed once restrictions lifted. This decline is not the only challenge traditional television faces. The costs of advertising through traditional TV channels have increased significantly. Network cost-per-thousand (CPT) has risen by 107% over the last eight years, causing advertisers to rethink the value proposition of traditional TV advertising as returns diminish and costs climb. Against this backdrop, streaming platforms and other digital channels have emerged, capturing viewers, and challenging the status quo. The digital age has brought new opportunities as well as fresh challenges. With streaming platforms, social media, and mobile devices at their fingertips, advertisers can reach more consumers in more personalized ways. However, these benefits come with a caveat. The increased precision in targeting has also made over-targeting and underrepresenting certain demographics a risk. The fragmentation of media has made Transitioning from TV advertising to the new world of more effective and more responsible Digital Connection Ross Sergeant Global Head of Media, Allwyn Entertainment Continued on page 38

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18 PUBLIC GAMING INTERNATIONAL • MAY/JUNE 2024 Lotteries in Europe: A Cultural Cornerstone, Social Contributor, and Economic Entity During a two days colloquium in Brussels under the six months Belgian Presidency of the European Council ( January until end of June 2024) the rich cultural heritage and important societal role of Lotteries in Europe was highlighted by a wide variety of speakers talking about the contributions of Lotteries to society, the cultural and economic dimension and the EU legal aspects. In the presence of her Royal Highness, Princess Claire of Belgium, speakers from different lotteries in Europe and experts did address the audience. Lotteries, with their tantalizing promise of life-changing wins, have long held a captivating presence in European society. From their humble beginnings in 15th century Bruges to their widespread adoption across the world, lotteries have evolved into more than just of chance; they have become deeply embedded in the cultural fabric, acting as significant contributors to social causes and economic activities. A Cultural Legacy The history of lotteries in Europe is a testament to their enduring appeal and cultural significance. The first modern lottery, held in Bruges in 1441, marked a turning point in the evolution of these games. This groundbreaking event sparked a lottery boom that swept across Europe, with the word "lottery" itself deriving from Flemish languages, reflecting the region's pivotal role in shaping this cultural phenomenon. Lotteries have long been associated with a sense of fairness and equal opportunity, embodying the belief that chance can provide a level playing field for individuals seeking fortune. This notion, deeply rooted in European history, has contributed to the enduring popularity of lotteries and their cultural significance. Social Contributions: A Cornerstone of Community Beyond their entertainment value, lotteries have played a crucial role in shaping over centuries European societies and require Why Lotteries deserve EU Protection? Arguing in favour of EU-level protection for lotteries may seem a little odd at first sight, but in reality it is not. Lotteries are an emanation of the sovereign power of Member States, which are the guarantors of their continuity. Made up of these, the European Union is the most appropriate level for confirming this national prerogative. This is why a Protocol in future treaties of the Union will establish a solid legal basis for the protection of the traditional Lotteries model. Continued on page 36


20 PUBLIC GAMING INTERNATIONAL • MAY/JUNE 2024 Lottery and other major consumer brand managers have long understood the value of collaboration to reinforce the value of the brands and connect with new consumer groups. In recent years, though, Team Lottery has come to appreciate, and learn how to leverage, the relative value of Brand Lottery to increase the ROI and effectiveness of these collaborations. Moderated by David Barden, CEO of the New Mexico Lottery and President of MUSL, the panel discussed a broad range of new gaming, branding, and promotional initiatives. They focused on how state lotteries working together nationally has enabled collaborations with brands like Dick Clark’s New Year’s Rockin’ Eve, NASCAR, and others. The panel also shared details of an exciting partnership that’s coming soon with another world-leading brand—the NFL—and highlighted a potential new national game. In addition to David, the panel consisted of: Stephen Durrell, Executive Director, Kansas Lottery Jay Finks, Executive Director, Oklahoma Lottery Norm Lingle, Executive Director, South Dakota Lottery Bret Toyne, Executive Director, MUSL Introducing the panel, David thanked each member for their contributions to MUSL and for helping to develop the Lottery’s collaborations with big brands nationally. Responding, Stephen Durrell praised MUSL’s work and David specifically. “Leading MUSL is a very important position,” he said, “and David has done a really great job. He’s relentlessly focused on expanding the brand and exploring new opportunities. And the successes we’ve enjoyed building the brand are a credit to David and his leadership.” David opened the discussion by asking how the impact of partnerships with mega-brands should be assessed. “When the Lottery collaborates with a megabrand is return on investment the sole, or even the primary, priority? Or is it just as much about brand development and connecting with new consumer groups as part of a long-term growth strategy?” Illustrating how nation-wide promotional collaborations can build the lottery brand, David mentioned the research showing how they had contributed to the strength of Powerball. Bret Toyne explained how New Year’s Rockin’ Eve’s “First Millionaire of the Year,” which started five years ago, was one of the earliest examples of a national Powerball promotion. MUSL’s multistate marketing budget enables that promotion, and David made clear that it P A N E L D I S C U S S I O N The following article is based on a panel discussion held at the PGRI Smart-Tech Conference on March 14 in Fort Lauderdale, FL. Leveraging the power of Brand Lottery L to R: Bret Toyne, Jay Finks, Norm Lingle, Stephen Durrell, David Barden “Let’s work with other leading brands to really leverage our power to connect with other consumer groups and bring in new players.”

21 PUBLIC GAMING INTERNATIONAL • MAY/JUNE 2024 Continued on page 34 is beneficial for both parties. “Every time the draw takes place, the show’s ratings spike. So, Powerball brings value to our brand collaborators like Dick Clark Productions and ABC; and featuring on literally the highest-rated nationally syndicated show also delivers tremendous promotional value for Powerball.” Bret observed that the promotion’s power is that viewers see the winner’s live reaction. “We have Powerball winners all the time, but they’re at home, so we don’t see the reaction. But on the New Year’s Eve show you get a reaction from a real person who has just won millions, and that’s a really priceless example for all of our players.” Agreeing with that, Jay Finks emphasized that more pooling of resources would enable the Lottery to fulfill its potential as a powerful brand. “We are a big national brand, but do we always act like one? Partnering with Dick Clark Productions is great, but that’s just the start of a process. We now need to keep pushing to make it even bigger and better. Let’s work with other leading brands to really leverage our power to connect with other consumer groups and bring in new players.” Stephen reflected on another partnership with a major national brand. “When the NASCAR promotion came up on a national level for Powerball, some states were concerned about how it might affect the strong relationships we had with NASCAR locally. But it’s actually been very beneficial. It’s lifted us all up and put the icing on the NASCAR cake. Our players can still enjoy playing a Kansas NASCAR game, but they can also participate nationally, go to events in Arizona, and have the chance to win even bigger prizes.” Highlighting the learning from that, Stephen explained, "We all have to apply that open-minded thinking to other partnership opportunities. Obviously, all states have different regulatory requirements, philosophies, agendas, priorities, marketing plans, brand relationships, etc. But NASCAR shows how a national promotion can work even for states that have existing strong relationships with a big brand at a local level. And the folks who made that deal very diligently ensured that it’s beneficial for everyone.” Adding to that, Norm Lingle commented. “We couldn’t do these big promotions with NASCAR on our own in a small state like South Dakota. Our advertising budget just wouldn’t allow it. So, it’s great for us to be able to participate in these promotions, which have been lots of fun for our players and provided a huge promotional boost for the South Dakota Lottery.” Jay explained further how MUSL’s marketing fund has enabled these big-brand promotions to happen. “By pooling some of our resources, we can amplify the impact we each have in our own markets. This benefits all states, especially some of the smaller ones with limited budgets or those constrained by legislative restrictions. The fund enables us all to ask, ‘How can we get creative and unlock new promotional pathways?’” Building on that, Jay argued for an “aggressive” further push on national partnerships with big brands. “We have already seen how productive these collaborations can be on a return-oninvestment basis, a brand messaging basis, a short-term promotional basis, and a long-term brand development basis. So, let’s increase the scale and push these collaborations much further.” Jay outlined his vision for doing that. “I think we should be pooling ten times the amount of dollars that we’re spending right now and looking at not only national promotions but also national media and advertising. It would still be a very small portion of our revenues, and the record shows that every increase in investment delivers a huge return. So, let’s grow our brand to be big enough to be talking to the ESPNs and the NFLs, and let’s show them the value that collaborating with lottery brands will bring.” Echoing that, Stephen said, “We must be more aggressive with the Powerball brand and stress its value. Traditionally, the lottery business has presumed that we should pay for the privilege of licensing other brands’ intellectual property. But we now have a much better grasp of how to leverage or monetize our own brands’ value. Consumer brands like NASCAR, Dick Clark Productions, and even the NFL now appreciate the value that a partnership with Powerball confers.” “These are not one-sided relationships,” Stephen added, “with us just paying to access their audience. We are increasing their viewing figures and giving their brands greater visibility in tens of thousands of retailers nationwide. So, let’s continue being more assertive and pushing the power of our brand. Let’s build that value into our partnership agreements. And instead of just licensing a brand for a fee, let’s share the value of Powerball to offset that cost. And if Powerball’s value exceeds our partner’s value, they can absorb some of the costs of promotion or deliver compensatory value to us in another way.” Next, the panel discussed MUSL’s forthcoming collaboration with one of the world’s biggest brands: the NFL. Jay explained that MUSL and the NFL are “building a national game for all states, which will complement our current national games and tie our two brands together. We’re still in the early research stage, but the goal is to launch the game in September 2025. And this is a true partnership, we’re not paying any fee because they want to work with us. This is a massive and very exciting opportunity. So, watch this space because there’ll be a lot more news soon.” Reflecting again on how national partnerships impact states, Stephen praised the team working on the NFL agreement. “We already have a good relationship with our local NFL team, and we wanted to ensure that wouldn’t be affected by the national agreement. But it’s vital that everyone working on it understands and respects the existing local agreements. The new partnership is clearly going to be a benefit to those states that don’t have a local team and an additional benefit to those states that do.” “By pooling some of our resources, we can amplify the impact we each have in our own markets. This benefits all states.”

22 PUBLIC GAMING INTERNATIONAL • MAY/JUNE 2024 Is Lottery still top-of-mind among Americans? An American car buyer’s path to purchase a new vehicle combines advertising, demographics, and brand market share, which all impact buying behavior. Insight and understanding into the factors that drive consumer decisions helps auto brands and their agencies develop more informed strategies that improve marketing effectiveness. However, one factor is hands down the most important in the purchase process. 90% of all automobile purchase intent is due to unaided, or unprompted brand recall, awareness of a brand. This was a staggering finding from an AC Nielsen study in 2018*. Why is awareness so important for a brand? During a Q1 2024 research project, one of the first questions Lotto Research asked was ‘When you think of gambling, gaming and lottery sectors, which brand or brands do you immediately think of?’ This open-ended, unaided question has been asked since the dawn of time, by brands all over the world, to see if their particular brand is at the forefront of the consumer’s mind because this metric provides an excellent yard stick of awareness. However, this one was answered by 30,000 Americans. Usually, when we’re talking about top-of-mind awareness, we’re thinking about unprompted brand recall – that’s where the brand can be named without needing any help. First mention, the peak of consumers’ unaided awareness So, let’s start with the good news. Powerball is the #1 brand for being ‘first mention, top of mind’ among 9% of the population, significantly higher than DraftKings (7%), FanDuel (5%) and MGM Grand (5%), with Mega Millions at 3%. This ‘first mention’ is the first brand that ‘comes to mind’. However, there are some notable differences by demographics. For males, DraftKings is #1 over Powerball. For higher income households ($100k+), Powerball edges out DraftKings with MGM Grand seeing a significant boost to 8% and into third place. When we examine the ‘combined’ scores (top-of-mind) of the various industries, the picture becomes a little murkier. Casinos have the highest ‘first mention’ at 19%, driven by males (21%), with Lottery Games second (18%), driven by females (20%). Sports Betting and State Lottery mentions are tied for 3rd at just under 15%. Unsurprisingly, Sports Betting has twice the ‘top-ofmind’ level among men compared to women. Lottery Games are particularly top of mind among Asian Americans, at a demographic high of 24%. All top-of-mind, all the time The beauty of the unaided question also allows the respondents to answer multiple times, to give us a ‘net’ % of IS LOTTERY’S BATTLE TO REMAIN TOP-OF-MIND AMONG AMERICANS ONLY JUST BEGINNING? Simon Jaworski, Founder & CEO, Lotto Research Continued on page 39

23 PUBLIC GAMING INTERNATIONAL • MAY/JUNE 2024 THE FUTURE OF ILOTTERY: PREDICTIONS FOR 2030 As we approach 2030, the iLottery industry stands at a crossroads. Once viewed as a niche market, U.S. iLottery has reached a 2023 turnover of $8 billion and a projected $10.8 billion in 2024 (according to US State Lotteries & Eilers and Krejcik Gaming LLC), presenting both new opportunities and challenges for the industry. According to NeoGames CEO and iLottery, iGaming and Sports Betting expert, Moti Malul, we must ask ourselves “How will trends in the market affect the size of the industry ten years from now, based on the collective actions we take today?” Ten years from now, lottery turnover could increase by 20-50%, depending on how slowly or urgently we act, but could also lose as much as $30 billion to competing industries such as sports betting, retail, and iGaming, (all with significantly larger marketing budgets). To capitalize on iLottery’s impressive growth potential, the industry must act with urgency, focusing on GGR (Gross game Revenue) and owning the end-to-end player journey for both retail and online channels. Today, American iLottery is authorized in 14 U.S. states (plus Washington D.C., for a total of 15 jurisdictions), with 85% of the revenue coming from eInstants, and 15% coming from DBGs (draw based games). Virginia, New Hampshire and Michigan are currently leading the U.S. iLottery industry in terms of per capita sales, with North Carolina expected to join the list of top performers by 2025, if not sooner. While the U.S. iLottery industry and its player base is certainly unique, we have much in common with these competing industries, who are all marketing to our player base via their own social and marketing channels. Our iLottery market share is further threatened by potential competitors who wish to cross sell iLottery to our own players. Potential competitors will include iGaming operators who offer einstant games via their portal or courier services for lottery scratch-off tickets, and sports betting platforms who also sell (i) lottery products. The appetite for iLottery is evident, with the Virginia lottery—the leading per capita U.S. iLottery per capita jurisdiction—currently seeing more than 55% of sales from online, with GGR expected to approach $400 million in 2024. Where there's a will, there's a way, and so, if we don't meet our players' desire for online lottery play, our competitors certainly will. A prime example of this is DraftKings’ recent acquisition of Jackpocket, who are now seamlessly embedding Powerball and Mega Million sales into their website (without cutting a Continued on page 41 Moti Malul, CEO, NeoGames

24 PUBLIC GAMING INTERNATIONAL • MAY/JUNE 2024 The changing competitive landscape necessitates reforms in services, offerings, data analysis, and responsible gaming capabilities. The Optimus Program is a strategic initiative aimed at revitalizing the company's customer service capabilities and establishing a loyalty program with related technological infrastructure (e.g., developing a super application) to increase player loyalty and commitment to the company. The Optimus Program relies on numerous international trends and best practices in its objectives and tools, while also taking into account the company's starting position and capabilities. In its development, we examined the global trends currently influencing customer service operations: • Integrated data processing: Consolidating information gathered across various channels and integrating disparate systems can reveal previously hidden correlations and customer needs, increasing transparency. • Analysis of customer feedback: Beyond dedicated customer service channels, players often share their experiences with services online. Customer comments, direct likes, shares, and interactions provide additional insights into consumer behavior, which can enhance the effectiveness of personalized customer experiences. • Personalized customer experience: Tailored experiences, such as personalized offers, enhance customer satisfaction by simplifying processes and making customers feel valued and important. This trend is based on the understanding that in today's world, customers want to feel more than just a number or data point. Personal interactions or unique opportunities/messages create a sense of importance, potentially increasing brand loyalty. • Artificial intelligence and automation: The use of artificial intelligence and automation facilitates process optimization. For example, AI can prepare unique offers and creatives within seconds using predictive analytics and tools. • Self-service options: Forums, knowledge bases, interactive chatbots, and certain sales solutions are among the most commonly used self-service options. These accelerate and streamline customer processes, such as complaint handling, thereby increasing customer satisfaction levels. These five trends reinforce each other, amplifying their impact on the market. For instance, integrated data processing enables the creation of personalized offers for players by observing more accurate correlations, thereby enhancing the overall customer experience. Planned until 2026, the Optimus Program aims to achieve its objectives through various projects and nearly 100 different degrees of development within Szerencsejtáék Zrt. along the following four pillars: 1. Expansion of player base and data assets: Increasing the quantity of available and usable player data and further developing the company's data asset strategy. 2. Development of analysis and modeling, knowledge sharing: Generating analyses and accurate traffic forecasts based on available player data, drawing conclusions, and sharing them within the organization. 3. In-house offering capability: Alongside the development of relevant processes, expanding and modernizing the offering capabilities of online and physical networks. Establishing an appropriate toolset. 4. Integrated loyalty program: Creating a unified loyalty program within the Super application that spans across different gaming segments. The Program brings tangible benefits to players, retailers, and back office colleagues alike. It achieves mass exclusivity and hyper-personalized service. Overall, players will experience a higher level of customer experience and gain access to numerous convenience features. Such features include loyalty programs, partner discounts, or payment options with player card balances. Retailers have the opportunity for customized service provision through terminal messages or OCRM systems, while central employees are able to send data-driven automated campaigns using easily accessible and expanded data. During the period since Optimus Program's launch, we have achieved several significant results: • By the end of 2024, we will reach nearly 2 million identified players in the land-based network, compared to just 15,000 in 2022. The growth of identified players supports our efforts in responsible gaming organization as well. • The number of annual engagements has increased to 18 million. • 20% of customers are omnichannel, providing opportunities for integrated offers. • The marketing consent rate stands at 82%, which is 15 percentage points higher than the Hungarian retail sector average. Over the next three years, the Optimus Program will build business capabilities and implement technological solutions that significantly enhance the company's data assets, enabling a deeper understanding of our players' habits and needs, and reforming the process of personalized offer delivery. Through these developments, customer service is placed on new foundations that will shape Szerencsejáték Zrt.’s operations for the next decade strengthening its competitiveness in the growing competition. n Headquarters Szerencejáték Zrt. Lottery Data-driven customer management is the future of national lottery companies— continued from page 14

25 PUBLIC GAMING INTERNATIONAL • MAY/JUNE 2024 What is “leading with gratitude” and how could it help your staff to thrive and forge authentic, win-win relationships with partners? Moderated by Matt Strawn, CEO of the Iowa Lottery, the panel considered subjects ranging from Simon Sinek’s “start with why” principle to the challenges of connecting with staff in the digital age. Panelists shared practical advice about how to turn buzzwords like authenticity, connection, and purpose into tangible actions that will help lotteries deliver their missions. Alongside Matt, the other panelists were: • Jay Finks, Executive Director, Oklahoma Lottery • Joshua Johnston, Executive Director, Washington Lottery • Ryan Mindell, Deputy Executive Director, Texas Lottery • Doug Pollard, Co-Chief Executive Officer, Pollard Banknote Matt began the discussion by describing his unorthodox introduction to a recent Iowa Lottery’s Board of Directors meeting. He shared a message of gratitude received from the winner of an Iowa Lottery experiential prize: “Thanks again for an amazing time at the concert. My husband and I never get to do something like that for ourselves. We have six kids and our youngest has a terminal disorder. So, everything we do is to make his time left the best it can possibly be. So, for us to do something just for ourselves, well, it was awesome. It meant more than you would ever know.” Everyone in the lottery industry knows how thankful winners are for their good fortune. The winner in Matt’s example did not win a life-changing jackpot. But their expression of gratitude captures the personal impact that lottery has on winners and captures the impulse to appreciate our blessings, an impulse that brings out the best in all of us. The billions of dollars that are generated for the benefit of good causes and society also evoke heartfelt expressions of gratitude. The theme of this discussion was how all of us, even though we haven’t won the lottery or been a direct recipient of lottery funds, nurture that impulse to be grateful for all that we do have and are blessed with. How can we make the meaning and purpose of gratefulness come alive on a more personal level for everyone around us and how does it apply to business and leadership? Or, as Matt put it, “How can the concept of gratitude be infused throughout the entire organization to create a sense of connection and appreciation?” Referencing Webster’s definition of gratitude as “awakened thankfulness,” he asked, “How do we as leaders awaken that thankfulness in ourselves so that we lead with gratitude? And, more importantly, how do we awaken that thankfulness in those that we’ve been entrusted to lead so that they not only fulfill their work objectives but also feel fulfilled at work?” Concluding his opening remarks, Matt expressed gratitude to the “amazing lottery community for the love and support” he received during his recent health struggles. He also thanked “the team at the Iowa Lottery who not only had my back as I P A N E L D I S C U S S I O N The following article is based on a panel discussion held at the PGRI Smart-Tech Conference on March 13 in Fort Lauderdale, FL. Leading with Gratitude L to R: Matt Strawn, Jay Finks, Ryan Mindell, Doug Pollard and Joshua Johnston We have to connect personally and meaningfully and make that integral to our communication style and corporate culture. Continued on page 35