Why Lottery needs a multi channel approach RICHARD BATESON, 5 TH NOVEMBER 2013

2 Our philosophy Background – our players The need for multi-channel The results

Our philosophy

Allow players to play wherever and whenever they want to… 4 It is about player convenience We don’t tell our players where to play, they tell us!

Background – our players

The UK lottery operates in one of the most competitive markets in the world 6 9,000 Sports Betting outlets 677 Bingo Halls 144 casino’s 800 Society Lotteries 2,000 gaming centres

7 The UK lottery makes up only 22% of the gambling market UK consumers have ‘choice overload’ Camelot has had to innovate Compounded by consumer changes

The changing consumer:

Consumers are adopting technology quicker and this will accelerate 9 To reach an audience of 50m took: 50 radio years 30 TV years 4 Internet years 3 iPod years 1 Twitter year

10 Smartphones are accelerating this need for convenience

Retail is adapting to convenience demanded by consumers 11 Use of smartphones in-store Click and collect E-vouchers/couponing Self serve/self check-out Taking the store to the shopper …. the list goes on

The need for multi-channel

The need? 13 Our core-weekly players don’t demand it! You can’t download an Instant You can play in thousands of shops in my State! Business has grown by over 3.5% last year! Who are we missing from our current set-up? How can we become relevant to more consumers? How can you fend-off competition? How can we make the lottery more convenient? V’s

The facts 14 Player penetration is falling Younger players aren’t interested in the current tired lottery format Today’s consumer expects immediacy and convenience from all brands Gamification/other leisure activities are stealing our lottery $

The offer 15 Offer full interactive services: - PC, smartphone and tablet (today) Continue to invest in retail: - UK $220m over the last decade Carefully target players to compliment spend and bring in new players to the lottery

Continue to invest in retail! 16 Place order View & select Pay Receive tickets App YOU R NUM BER S My Card Scan phone order Virtual ticket / voucher Paper ticket / Game Store voucher Scan player card / registered Fast Pay card ‘DRP’ points Traditional Retail experience Digital retail experience Place order View & select Pay Receive tickets App YOU R NUM BER S My Card Scan phone order Virtual ticket / voucher Paper ticket / Game Store voucher Scan player card / registered Fast Pay card ‘DRP’ points Traditional Retail experience Digital retail experience

The results

The results so far… 18 Over 6 million players registered Growing retail and interactive business - record lottery sales at $11bn - interactive sales over $1.9bn - retail has grown 28% over past 5 years Positivity and trust in the UK lottery at record levels Record participation levels – 70%+ Top 5 interactive site in UK and Top 3 consumer goods brands

Players shop across channels and their value increases as they do 19

In summary

Multi channel is not an if, it is a when 21 Competition is increasing and requires innovation to stay ahead Our players’ behaviours are changing and will do so more rapidly in the future – consumer expect immediacy and convenience Multi-channel builds value - It is not about retail or interactive, it is about both Need to invest in all channels Interactive will attract younger players and those not currently disposed to the lottery

Thank you