washington’s lottery business plan

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Washington’s Lottery Business Plan

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  • 1. Washingtons Lottery Business Plan 2009-2011 Biennium(Fiscal Years 2010 and 2011)Vision: Washingtons Lottery: Leader in public value, first in fun.Product Mission: To offer imaginative games that bring fun and dreams into peoples lives.Economic Mission: To responsibly maximize our revenues to the State of Washington.Social Mission: To enhance the quality of life for the people of Washington by financially contributing to education and other community endeavors. 67.70.40 in order that such a lottery be initiated at the earliest feasible and practicable time, and in order that such lottery produce the maximum amount of net revenues for the state consonant with the dignity of the state and the general welfare of the peopleThe use of electronic or mechanical devices or video terminals which allow for individual play against such devices or terminals shall be prohibited. Approval of the legislature shall be required before entering any agreement with other state lotteries to conduct shared games;] RCW 67.70.330 To the extent set forth in this section, the office of the director shall be a law enforcement agency of this state with the power to investigate for violations of and to enforce the provisions of this chapter and to obtain information from and provide information to all other law enforcement agencies. Submitted June 13, 2008, the information in this Business Plan is subject to change as legislation, policy changes and economic factors change.

2. Washingtons Lottery Business Plan 2009-2011 Biennium Table of ContentsWhere are we today?Business Description . . . . . . . . . . . . . . . . . . . . . . . . . . 1Major Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3Appraisal of External Environment . . . . . . . . . . . . . . .4Trends in Customer Characteristics . . . . . . . . . . . . . . . 8Human Capacity Assessment . . . . . . . . . . . . . . . . . . . . 10Internal Resource Assessment . . . . . . . . . . . . . . . . . . .10Performance Assessment . . . . . . . . . . . . . . . . . . . . . . .11Financial Health Assessment . . . . . . . . . . . . . . . . . . . . . 14Where do we want to be?Vision Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15Strategic Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16Strategic Assessment . . . . . . . . . . . . . . . . . . . . . . . . . .18 Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 Obstacles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20 Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21How do we intend to close the gap between where weAre and where we want to be?Operational Production Plan . . . . . . . . . . . . . . . . . . . . 25Marketing Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26AttachmentsHigh-level Organizational Chart . . . . . . . . . . . . . . . . . . AAgency Departmental Organizational Charts . . . . . . . . . BCommissioner Organizational Chart . . . . . . . . . . . . . . . CDraft Fiscal Year 2009 Marketing Activities . . . . . . . . . . DDraft Fiscal Year 2009 Advertising Activities . . . . . . . . . ERisk Assessment Plan . . . . . . . . . . . . . . . . . . . . . . . . . . FPerformance Measures . . . . . . . . . . . . . . . . . . . . . . . . . G 3. Washingtons Lottery Business Plan2009 2011 BienniumBusiness DescriptionWashingtons Lottery provides funding for education and for community endeavors bymaximizing profits from the sale of creative and entertaining Lottery products within ourguidelines of regulation. The Lotterys two current product lines include Scratch and Drawgames. Scratch games Played by scratching latex from a paper ticket to reveal any predeterminedwins. Priced from $1 to $20. 50 60 new games scheduled to be launched yearly. Draw games Played by matching numbers on a game ticket to numbers Drawn by theLottery, either daily, twice a week, or three times per week... Priced at $1, includes Lotto,Mega Millions, Hit 5, Daily Keno and The Daily Game and our newest game, Match 4, whichis at a $2 price point.A small staff of 145 full- and part-time employees operates the Lottery. (See organization charts,attachments A and B). A Lottery Commission adopts the administrative rules that govern theestablishment and operation of Washingtons Lottery. This Commission is comprised of fiveCommissioners, appointed by the Governor to rotating six-year terms. (See organization chart,attachment C). Private sector contractors (GTECH, Scientific Games provide lottery tickets andthe support systems to facilitate ticket sales at retail locations. The Lottery engages and licensesretail business partners to distribute Lottery products. Currently almost 4000 retailers sell ourcomplete product line across the State.The Lottery currently accounts for approximately 10% of the gaming market share in the State ofWashington (Washington State Gambling Commission-Fiscal Year Net Receipts Comparison).The Lotterys sole competitive advantage is rooted in its legislated control over the sale ofgaming products at retail locations such as convenience stores and supermarkets. In addition, theLottery is, for now, the only gaming choice in Washington that offers top prizes of millions ofdollars for a wager as small as one dollar.Gaming / gambling market share consists of tribal casino offerings of table games of chance(e.g., craps, roulette), house-banked card games (e.g., blackjack, poker), multi-draw Keno, andVideo Lottery Terminals (VLTs). Private casinos and card rooms offer traditional poker inaddition to house-banked card games.The following information is presented as the Lotterys approach to implementing our StrategicPlan. The focal strategies are: 1) Attract and Retain Quality Staff; 2) Maximize Net Revenue; 3)Drive Sales; 4) Grow Lottery Player Base; 5) Grow a Stable, Predictable Retailer Base; 6) Createa Stable Game portfolio and 7) Provide Value to Our Stakeholders!The Lottery believes that these strategies will be instrumental in meeting or exceeding our visionand mission. 1 4. Major PartnersThe Lotterys key partners are those outside contractors that work as an extension of the Lottery,and without which we could not operate as efficiently and effectively as we do.! Retailers: The approximately 4000 retailers selling Lottery tickets at their locations are theLotterys single most important business partners. The number of retailers was expanded in2007 and 2008 to improve the availability of Lottery products. Retailers represent not onlythe distribution network for Lottery products, but they are also the main point of contact withthe people who purchase our games. The Lottery works with retailers not only to encouragethe responsible promotion and sale of Lottery products at retail, but also to ensure thatLottery products are represented favorably with the public. It is crucial for the Lottery tocontinue to review its business relationship with retailers and to seek ways to improve thatrelationship through constant refinement of the Lotterys business practices.! GTECH: GTECH Corporation is the leading global supplier of systems and services for theLottery industry. Serving clients in over 50 countries, it has 340,000 point of sale terminalsand processes 500 million transactions daily through the entire GTECH network. TheLottery in 2006 signed a contract with GTECH for a six-year period (FY2007-FY2012), withfour one-year extension options. The company designs, produces, implements, operates andservices computerized networks. GTECH is the Lotterys combined Draw game and Scratchoperations vendor and, as such, plays a critical role in the distribution of tickets, salestracking, validations of winning tickets, best practices, consulting services, and the Lotterysoverall integrity and accountability. The company also provides the Lottery with new andrevised game concepts, systems modifications, information about other lotteries andassistance with servicing retailers. GTECH is also the Lotterys provider of Lottery ProductVending Machines (LPVMs). LPVMs provide player convenience through self-servicedispensing of Scratch tickets from machines that can offer up to 24 different games at onetime. In addition, GTECH now offers new functionality that allows participants to purchaseDraw game tickets at these same machines. GTECH Printing Corporation: Todays marketplace is filled with entertainmentalternatives that make it difficult for lotteries to create and launch products that can competesuccessfully. We understand that competing successfully requires a variety of resources. InFebruary 2007, GTECH Printing acquired Creative Games International (CGI), anexperienced scratch card provider. This acquisition allowed GTECH Corporation to completeits product and services portfolio. As the true Architects of Gaming, GTECH had longthought that the industry needed something more than just another scratch card provider itneeded a leader capable of taking scratch card gaming to a new level. GTECH Printingcombines the proven scratch card printing technology of CGI with GTECH Corporationsstrengths, i.e. its industry-leading scratch card management and delivery solutions and thecreativity and energy of its various marketing organizations. Through the marriage of thesetwo industry leaders, GTECH Printing has the capability to go far beyond what traditionalscratch card printers can offer. The Lottery issued an RFP for Secondary Scratch TicketVendor RFP in January 2008. The Lottery contracted with GTECH Printing in May 2008 asthe Lotterys secondary Scratch ticket printing vendor. 2 5. ! Scientific Games Corporation: Scientific Games is a global marketing and technologyleader in the lottery industry with over 120 national and international customers, includingmany of the worlds highest revenue-producing lotteries. It works in close partnership wi

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