From Lottery Games to Slot Machine Games: The Growing Momentum of Internet Gaming July 31, 2013

Gaming Spectrum Green GamingRed Gaming Rewards & Loyalty Draw Games Electronic Instant Tickets Bingo PokerCasino LOTTERYCASINO Sports iLOTTERYiGAMING Social Games & Virtual Goods

VS Broader potential audience, chance-based experience 10-minute or less play dynamic Lower payout %, low volume Direct connection to retail product is critical (e.g. hybrid game) Points + rewards is engagement currency Player development through up-sell & cross-sell Narrower potential audience, session-based experience 60-minute or more play dynamic Higher payout %, high volume Can be independent from in-venue product Cash + free play is engagement currency Player development through bonusing “I LOST” “I DIDN’T WIN” For Social: Implications are Different

SOCIAL GAMING

Global Gaming Industry Worldwide gaming sales of $350 billion* Casinos operate in over 100 countries; more than 3,500 casinos** More than 4,300,000 slot machines worldwide** Online gaming annually generates almost $30 billion in win* -Sports = $14.8 billion -Casino = $7.1 billion -Poker = $4.0 billion -Bingo = $2.1 billion * H2 Gambling Capital ** Bank of America Merrill Lynch Gaming Primer 2013

U.S. Gaming Industry US 2012 total gaming revenue $64 billion* Las Vegas Strip 10% US Regional 47% Native American 43% Over 800 casinos in the U.S. in 39 states* 16 states with commercial casinos (~ 450 Casinos) 24 states with tribal casinos (~ 425 Casinos) ~900,000 slot machines in North America US iGaming Sales Currently estimated at $3.1 billion** Pre-UIEGA sales estimated at more than $6.0 billion** * Bank of America Merrill Lynch Gaming Primer 2013 ** H2 Gambling Capital

Social Casino Gaming

Why It’s Important Source: Casual Games Association (CGA), May 2013 Social game audience estimated to be m people Social casino audience currently at ~170m

Why It’s Important Source: Casual Games Association (CGA), Macquarie Research, May 2013

UK Study: Majority Play For Fun Or Money 42% play for money only 56% play for fun only 2% play for money and for fun 22% of respondents play poker online either for fun or for money Of those … 52% play for money only 46% play for fun only 3% play for money and for fun 27% of respondents play casino games online either for fun or for money Of those … 55% play for money only 42% play for fun only 3% play for money and for fun 29% of respondents play bingo online either for fun or for money Of those … Source: KantarSport Research Jan 2012

Social Considerations Session-based of casino games nature match well with social model Proven real-money casino themes translate best into engaging social games But, are social players a source of future real- money patrons?

SOCIAL LOTTERY

Global Lottery Industry Global Lottery Snapshot ~180 global lottery jurisdictions* ~$275B of revenues generated in 2012 * ­ Draw sales ~$200B ­ Instant sales ~$75B Less than 15% of lotteries selling products online ** *Source: Lafleur’s Lottery Almanac. ** Company estimates. Global Lottery Retail Sales ($ in billions)*

U.S. Lottery Industry 44 lotteries, including the District of Columbia ~$70B in annual revenues* –54% instant tickets –46% draw games 147 million Americans play lottery games** Lottery websites are top visited in their geography Today, just three lotteries are active with internet sales: IL, GA & MN * Source: Lafleur’s Lottery Almanac. **Source: SGI’s State of the Industry FY’12. U.S. Lottery Retail Sales ($ in billions)*

Social – The Basics Today, virtually all lotteries are actively leveraging social mechanics: Interactive 2 nd Chance promotional games Mobile 2 nd Chance games Internet-based loyalty and rewards programs

Example: Monopoly Jackpot Multi-State Linked Game Every non-winning Monopoly ticket provides a second chance to instantly win Players scan 2D code on scratch ticket to access website on mobile Players collect properties to achieve a “monopoly” for a chance to win one of 10 rolling cash jackpots or qualify to win a progressive cash jackpot - up to $1 million! Concept Art 16

iLottery – The Basics Draw Games Instant Games

Instant Games – Stage 1 Basic Play –Plays like a printed game –Very simple play action –Game reveals an outcome –Shared prize pool

Instant Games – Stage 2 Extended Play –Adds interactive mechanics (e.g. player choice) –Provides bonus features –Ideal for licensed brands

Instant Games – Stage 3 Social Play –Player choice –Collections –Power Ups –Continuity –Multiplayer –Leaderboards –Points / Micro-Wins –Progressive Jackpot

Social – Next Steps Leverage social sharing Create lottery social games Play with friends ­ Team-Play Draw ­ Multi-Player Instants eInstants – “Stage 3”

Social Considerations Lottery player dynamics match well with social model Social mechanics important to next generation real-money lottery games eInstant “Stage 3” games will emerge as a major market opportunity

Sciplay.Studio World leader in supplying iLottery instant games to lotteries and the know how to make them work An innovator in touch- games for lotteries that bridge the gap between social and online, mobile gaming Creates game play products that represent emerging genres and advanced business models 30 years of gaming experience and a deep understandin g of casual and social gaming on the internet Leading provider of casino, slot and social themed games The most experienced provider of lottery- specific interactive content in the industry Culmination of more than 12 years experience developing, deploying and operating internet-based solutions for the real-money gaming industry

Questions?