Confidential Property 1
Rick WeilPresident, Sciplay
A World of Possibilities: U.S. iLottery & iGaming
Confidential Property 2
THE LOTTERY UNIVERSE IS EXPANDING –BUT NOT OUT OF CONTROL
iLOTTERY JUST MEANS BRINGINGINTERNET & MOBILE CHANNELS INTO THE LOTTERY WORLD
Confidential Property 3
ECOSYSTEM STAYS THE SAME
STATELOTTERY
LOTTERYOVERSIGHT
GOOD CAUSES RETAILERS
SUPPLIERSPLAYERS
Confidential Property 4
Red Gaming
GAMING SPECTRUM
Loyalty & Rewards Programs
Social Games +
Virtual Goods
Draw Games
Electronic Instant Tickets
Bingo Poker Casino
Extensive 'player segmentation' research has shown that, just like in the offline world, players view lottery as distinctly different than gaming
iLOTTERY iGAMING
The global Green Gaming market was valued at approximately US$5.35bn in 2010.Growth is expected to reach 23.6% of total global interactive gaming by 2015, with a value of US$9.67bn.
Sports
Green Gaming
Confidential Property 5
CENTRAL GROWTH OPPORTUNITY
TOPLINE RESULTS
EU player research supports the importance of an online channel as a central growth opportunity
INTERNET IS AN IMPORTANT CHANNEL FOR NEW SEGMENTS,ESPECIALLY YOUNGER PLAYERS
Finding: 57% are in 18 – 44 Age Group
INTERNET GAMING HAS NOT CANNIBALIZED RETAIL LOTTERY SALES; THIS IS VERY CLEAR
Finding: Retail Sales Grew at 2X rate for Lotteries with Internet
ONLINE PURCHASES ARE INCREMENTAL TO OFFLINE
FINDING: 60% Report that EIT Purchases are in Addition to Retail Play
EU TRENDS TRANSLATE TO US LOTTERY MARKET
FINDING: More Than 45% in U.S. Report They Would Like to Buy Lottery Online
Confidential Property 6
RETAIL IMPACTIn the EU market there is more sales growth for lotteries with internet presence; an online channel supports retail growth & serves as a promotional tool to drive players back to retail.
2%
1%
Internet Sales
Retail Sales
3%
1% RetailSales 1% Retail
Sales
4%
Internet Sales
Retail Sales
6%
2%
DRAW GAMES5 YR CAGR GROWTH
INSTANT GAMES5 YR CAGR GROWTH
Lotteries With
Internet Presence
Lotteries WithoutInternet Presence
Lotteries With
Internet Presence
Lotteries Without Internet Presence
Sources: Sciplay Analysis, MECN Lottery Benchmarking Report
Confidential Property 7
• Draws new consumers to the games and grows retail sales • Lottery customers buy on average 50% more items in-store than non-lottery customers
• Drives new growth; does NOT cannibalize traditional lottery retail sales• UK National Lottery retail commissions (a proxy for retailer sales) increased by more than 8% from 2003-2011 while they launched iLottery products• Retail sales grew—instant games grew 20% in 2011
• Serves as a complementary lottery sales and marketing channel – NOT a replacement channel
• Italian Lottery increased instant ticket sales from €408 million to over €10 billion over an 8 year period while expanding all their online products including Lottery games, Sports Betting, Poker, Casino games and rolled out 25,000 VLTs
• Provides a social experience• Facebook (of course), Checking In on Four Square is a good example for retailers
• Reward Retailers for driving sales on the Internet
INTERNET CAN INCREASE RETAIL REVENUES
Confidential Property 8
MULTIPLE OPPORTUNITIES TO ENSURE SUCCESS
Confidential Property 9
CRITICAL COMPONENTS
A HOLISTIC APPROACH
Serving all stakeholders and growing the Lottery holistically across internet and retail
USE OF ALL THE TOOLS
Differentiate with engaging content, more win opportunities, and embedded retail presence
SECURITY & INTEGRITY
Player trust is more important than ever
Confidential Property 10
THE RIGHT FOUNDATIONPlayer and retailer engagement ties everything together
OnlineConvenience Draws NewParticipation
Purchase atRetail UnlocksMore Online
Opportunities
Online Promotionand eCouponsDrive New Trips
to Retail
Confidential Property 11
PROVEN GLOBAL PARTNER
3500EMPLOYEES
40YEARS
EXPERIENCE
120GAMING
CUSTOMERSON SIX CONTINENTS
MORE THAN
100INTERNET GAMES
DEVELOPED
LAUNCHED
400+U.S LOTTERYMICROSITES
DISTRIBUTION THRU
280THOUSANDPOINTS-OF-SALES
WORLDWIDE
CAPACITY TO PRINT
45BILLION
INSTANT TICKETSANNUALLY
REVENUES OF
878MILLION
(2011)
35LOTTERY
CSP + SYSTEMOPERATIONS WORLDWIDE
A proven &responsiblesupplier tothe Global
Lottery Industry
Confidential Property 12
BEST PRACTICES
Instant Games• Simple scratch to start• Leverage paper/offline liquidity to maximize play•Migrate to instant win with higher payout %
Web Presence• Shopping cart model• Rewards Club as foundation for engagement
Marketing• Connect internet with bricks & mortar retail• Traditional web techniques (e.g. affiliate, etc.)
Funding Options• Credit, debit, prepaid, voucher, etc.•Winnings deposited in eWallet
Draw Games• Daily/weekly games are most common for launch• Higher frequency offer better sales growth (Keno, etc.)
Confidential Property 13
HOW WILL YOUR LOTTERY GET THERE?