Maximising digital for lotteries Richard Bateson Commercial Director February 2015

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence Understanding the opportunity How to maximise the opportunity Focusing on consumer demand as well as fulfilment Top five tips for successfully managing player lifecycle Agenda 2

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence Understanding the opportunity 3

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence 4 Unprecedented uptake in mobile

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence 5 Gartner, 2014 Unprecedented uptake in Smartphones…

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence 6 Morgan Stanley Mobile Internet Report Mobile is where it is going…

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence More people have mobiles in the world, than have toothbrushes There are FIVE times as many mobiles in the world as there are PCs 90% of text messages are read within THREE MINUTES of being received and 70% of mobile searches lead to action, within ONE hour Time spent on mobile apps is dominated by gaming and social networks Mobile internet access in 2014 exceeded PC internet Almost 50% of tablet owners use the device while watching TV on a DAILY basis Three quarters of people will leave a mobile website if it doesn’t load within 5 seconds And even quirkier… 7

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence 8 Marketing opportunities are endless… Marketing benefits are almost endless… digital allows us to know and target our players like never before

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence 9 Falling net revenue returns Falling net revenue returns Declining participation Declining participation The Lottery Industry….

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence Understanding the opportunity 10

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence Lotteries are well-suited to digital. Players often don’t play due to convenience and CNBB factors! Lotteries are mass-market. Digital is mass-market and mobile is driving this more and more Lottery markets are typically mature. A new approach is required to unlock younger players. Digital offers an answer to unlocking a new audience Established digital and mobile lottery channels have proved successful in markets where it is allowed to operate properly Adjacent industries have gathered significant value through mobile Understanding the opportunity 11

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence How to maximise the opportunity 12

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence 3 guiding principles for maximising the opportunity 1.Change to a retailer mind-set with your digital activities 2.Management of the Player lifecycle 3.Adoption of digital tech processes, tools & people How to maximise the opportunity 13

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence 1) Change of mind-set to that of a retailer Actively drive digital connections Flexible technology solutions Test & learn - improve One-to-One Player interaction Anytime, Anywhere access Optimize POE media Requires channel agnostic perspective, investing in accessibility and convenience

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence 2) Management of the Player life-cycle Display ads SEO / PPC Affiliates Partnerships Social /Viral Response/ROI Analysis Display ads SEO / PPC Affiliates Partnerships Social /Viral Response/ROI Analysis ATTRACT Search Promotions Usability Merchandising Player Support Response/ROI Analysis Search Promotions Usability Merchandising Player Support Response/ROI Analysis CONVERT RETAIN GROW Targeted Communication Personalisation Community Loyalty Campaign Management Site Performance Trigger campaigns Segmentation Targeted Communication Personalisation Community Loyalty Campaign Management Site Performance Trigger campaigns Segmentation Data Analytics Web Analytics Predictive Modelling Campaign Management Response/ROI Analysis Usability Data Analytics Web Analytics Predictive Modelling Campaign Management Response/ROI Analysis Usability Invest and focus on player life-cycle management… need to focus on targeting the right players and their LTV

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence 3) Adoption of digital tech, processes, tools and people Key to achieving the first two objectives is having the right enablers: Processes / Tools / People (The Enablers) Analytics Campaign Management Personalisation/ Relevance Building a forensic understanding of the player Operational insight Digital channels should enable quicker reaction to player insights The Challenge lies in making these insights actionable Challenges of technical legacy Understanding play motivations and sustaining regular play Game awareness and perceptions Optimal win experiences Individual games evaluation and optimisation Identifying and assessing the real competitive set Multi-channel Media ROI

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence Case study UK: New iLottery platform 17

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence In 2014 Camelot launched its own iLottery platform in the UK… why? 18 The old platform could not provide the technical agility needed to under-pin future growth plans Limited ability to optimise site engagement and path to purchase No adequate mobile capability Often the longest lead time in game development and commercial planning Dependent on vendor roadmap, rather than of lottery operator requirements/future needs 2 or 3 releases a year, requiring the business to work in waterfall methodology Difficult to integrate with third party tools and systems Expensive to run and test Requirement from the sales and marketing team to develop a platform with a world class player experience (in-line with wider e-commerce market), whilst reducing costs, protecting players and maintaining highest levels of integrity.

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence What did the new UK platform offer the lottery that the old platform could not. 19 An open, service-orientated web platform Designed and built using latest methods and technologies Approach allows re-use of components and infrastructure where necessary Web services platform can be integrated with any host lottery system; designed to be multi-language, multi-currency and multi-jurisdictional Responsive web application allows easy access across mobile, tablet and desktop Supports both draw-based and instant games New platform went live in September 2014 with 6 million live player records and a new PC, mobile and tablet rendered iLottery channel.

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence What have the results been in the UK? 20 Sales - Digital sales are currently tracking 12% up year on year Total digital sales were up 13% in December 2014 v December 2013 New registrations for the year is currently at 995,000 – up 21% year on year DBGs were up 6.5% in December 2014 v December 2013 IWG sales have set new records since the new website went live - recently recorded £7.6M in a week Total IWG sales are up an average £1.4M (56% ) per week since launch Mobile - Mobile sales are up 68% year on year and Mobile (smartphone only) Now accounts for 20% of all digital sales The range of 17 new MIWGs has seen IWG penetration of interactive players rise from 17% pre iLottery to 25% post iLottery 29% of MIWG players are completely new to the category Sales at record levels for both PC and mobile…

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence Focusing on consumer demand as well as fulfilment 21

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence Having the best digital offering is nothing if you don’t have a reason to use the channel Lotteries drive footfall and engagement from their core ‘a chance to dream offering’ The task for the next generation of lottery games is to create new content that pushes entertainment and taps into new need states… The indirect competition is ‘gentrifying’ our brand! Focusing on consumer demand as well as fulfilment 22

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence Lotteries have the toolkit today…

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence Lottery in the future… need to better map and align propositions against player needs

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence Instant Win Games are important – for cross sell and player value and are likely to evolve into the Next Gen Lottery game. In the UK 29% of players of MIWG are new to the category

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence Top five tips for successfully managing player lifecycle 26

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence 1.Get the basic right 2.Get close to your data 3.Build the right segmentation 4.Mobile at the heart of your strategy 5.Test and learn Top five tips for successfully managing player lifecycle 27

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence 1.Get the basic right Don’t get distracted by the latest fads – you must have the basics in place first before you start on the cutting edge stuff 2.Data Get close to your data. Big data & advanced analytics MUST DRIVE business decisions. You must have access to your data 3.Segment your player base Target your activities around your player understanding and serve the right activities (promotions, comms etc.) against proven player insights Top five tips: 28

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence 3.Segment It’s crucial to focus efforts to build the right segmentation up front It should become the framework for the player lifecycle strategy Each life stage should address player mind/need state and objectives Look after the most valuable players – work out where you will get bang for $, ie what is better 10% new player uplift v 2% spend increase on active players Top five tips: 29

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence 4.Mobile The future for lottery. In the UK 60% of traffic online comes through mobile. A responsive site is a must, and investment is required to get it right 5.Test and Learn The environment must encourage this culture – do 100 things 1% better, even if it means the odd failure on the way Top five tips: 30

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence In conclusion 31

Camelot Global Services Limited© Confidential and Proprietary - Commercial in Confidence Mobile and iLottery is here and it is only going to get bigger All lotteries must start to focus on iLottery and adopt a retail mind-set Focus on targeting the right players and LTV You must have the right: Processes Tools (technology enablers) People Focus on the basics and get the foundations right, focus on your data and player targeting. Have a platform that allows for mobile and T&L In conclusion 32