Presentation to California State Lottery Commission May 17, 2017 Director’s Comments Presentation to California State Lottery Commission May 17, 2017 Director’s Report 6A

Overview General Business Update Agenda Action Items YTD Sales Update Draft Fiscal Year 2017-18 Budget Agenda Action Items Ratification of Central Valley District Office Lease Termination Ratification of East Bay District Office Lease Amendment Van Nuys District Office Lease Amendment General Market Advertising Contract Extension Hispanic Advertising Services Contract Extension Draw Auditing and Review Services Contract Gaming System Contract Amendment Problem Gambling Prevention Contract Renewal Advertising Tracking Research Contract Amendment Fiscal Year 2017-18 Business Plan Good morning Commissioners and welcome back to Sacramento. For today’s director’s report, I will provide our year to date sales picture As well as a few general information items of interest After going over the voting item agenda, Jim Hasegawa will provide research information about who plays the lottery

Sales Update

Scratchers Sales in January-May Average about 10% More than in Prior Year Weekly Consumer Scratchers Sales: % Change Compared to the Same Week Last Year

CY 2016 Industry Sales: CA Continues to be 2nd Largest Lottery State CY 2012 Total Sales CY 2015 Total Sales CY 2016 Total Sales New York $7.25 billion (1st) $7.46 billion $7.83 billion (1st) California $4.45 billion (4th) $5.86 billion $6.40 billion (2nd) Florida $4.76 billion (3rd) $5.79 billion $6.20 billion (3rd) Mass $4.78 billion (2nd) $5.07 billion $5.25 billion (4th) Texas $4.32 billion (5th) $4.59 billion $5.13 billion (5th)

CY 2016 Industry Sales: CA is #1 in Instant Ticket Sales State CY 2012 Instant Sales CY 2015 Instant Sales CY 2016 Instant Sales California $2.91 billion (4th) $4.27 billion $4.39 billion (1st) Florida $2.80 billion (5th) $3.90 billion $4.06 billion (2nd) New York $3.73 billion (1st) $3.87 billion $3.93 billion (3rd) Texas $3.15 billion (3rd) $3.54 billion $3.79 billion (4th) Mass $3.29 billion (2nd) $3.56 billion $3.62 billion (5th)

Other CY 2016 Industry Sales Rankings Sales in California are also ranked: #1 in Mega Millions Sales among all U. S. lotteries #1 for Powerball Sales #2 for In-State Lotto Game Sales (SLP) But, lower rankings for other games such as Daily 3, Daily 4 and Hot Spot