1. Presentation to California State Lottery Commission May 24, 2018
FY Business Plan
Presentation to
California State Lottery Commission
May 24, 2018

2. Background
FY sales will be record- breaking: More than $600 million higher than the prior year
Over 19 million Californians played the Lottery last year
But, FY will achieve new records

3. Recap of Strategic Plan
Vision: to become largest Lottery in U.S.
Desired Outcomes:
Increase profits for CA public education
To increase profits, need to grow sales
To grow sales, must increase purchases by Casual Players AND increase number of Californians who play Lottery games

4. FY Business Plan

5. Selection into proposed Plan Evaluation and review
Determine resources needed
Develop tactical details
Define key objectives for this FY
Start with 3-Year Strategic Plan

6. Overview of the Plan
In support of our key themes and strategies, we have developed 4 pillars for this Fiscal Year:
• Create significant sales growth in Jackpot Games and Hot Spot
• Continue the momentum in Scratchers sales growth
• Improve the Customer Experience for players, retailers
and internal customers
• Elevate perceptions about the Lottery to grow
player base

7. Create Significant Sales Growth in Jackpot Games and Hot Spot
Draw Games have higher profit rates than Scratchers
Mega Millions: Continue benefits from game change
Super Lotto Plus: Create stronger bonds with CA consumers
Hot Spot: Build for future growth by growing network and testing new features

8. Plan for FY
Continue investing in the SLP Brand to strengthen connection with Californians and boost frequency of play
Utilize executions from new campaign launching May 2018
Also run SLP promotions to generate added interest and short-term sales lifts

9. Hot Spot Continues to have Potential for Sales Growth
Even with sales gains for 6 consecutive years, Hot Spot still has potential for further increases based on industry review (Per capita sales; # of social retailers selling game; etc.)
Develop and test new game features with consumers for future sales growth
Goal of increasing social retail network by 75 locations during FY

10. Continue Momentum in Scratchers Growth
Scratchers sales this year will be more than $400 million higher than last yr and about $1 billion more than 3 yrs ago
Higher dollar Scratchers and Crossword-style games have fueled growth
Advertising generated awareness of new games

11. Other Elements to FY 2018-19 Scratchers Plan
Total of 51 new games to be introduced next year including a few months having 5 games launched together
Marketing support to operate on two fronts:
Continue efforts to existing players for promoting the new game
Begin efforts aimed at non-players about the benefits of Scratchers in general to change game perception and grow future participation
Retail Support

12. Customer Experience (CX) is
the sum of all the customer’s interactions with your brand. It’s how they perceive you – consciously or unconsciously.
more choices
more channels
choosing a Scratchers ticket
getting a jackpot alert
in my neighborhood
seeing a billboard
the money for schools
internet security
claiming a prize
seeing a winner on Instagram
a seamless purchase
data security
for internal customers too
You can see this slide without transitions/effects in the appendix
personalization
my store
getting entered for a
Second Chance drawing
how I expect it to be

13. The Winning Experience: Key Moment in Customer Journey
Concentrate on touchpoints that impact a large number of customers or occur at critical moments
A Pilot for expediting claims at District Offices launched this spring
FY will see the start of a Pilot to pay prize claims up to $1,000 at a District Office

14. The Lottery is enhancing digital communications
Website
App
SMS texts

15. Improvements at Retail
Gaming System enhancements includes new retail equipment and services
New Retailer Website will be completed and launched

16. Elevate the Perception of the Lottery Brand
Research showed that improving the perception of the Lottery and some of its products (like Scratchers) was essential to increase participation
Some campaigns discussed in the SLP and Scratchers Plan address this issue

17. Corporate Social Responsibility and Brand Perception
Continue to promote Responsible Play and awareness of problem gambling help line
Ensuring safety with enhanced data and information security
Conduct an independent security assessment next year

18. In Conclusion
FY narrows strategic focus on four pillars and delivers both sales gains in the current year and building for future growth:
Sales to surpass $7 billion for the first time in our history
Sets the stage for continued growth to become #1 in U. S.