Colorado Lottery New Game Research Collaborative Review June 15, 2012 Prepared by: 10532 NE 68 th Street – Suite D200, Kirkland, WA 98033 (425) 827-6111.

Colorado Lottery New Game Research Collaborative Review June 15, 2012 Prepared by: 10532 NE 68 th Street – Suite D200, Kirkland, WA 98033 (425) 827-6111 info@crestwoods.com

Contents June 15, 2012Colorado Lottery New Game Research1

Research Objectives Overall New Game Research Project Objectives: Provide insights into trial likelihood and long-term game revenue potential for the new games, specifically to replace Match Play. Determine opportunities to optimize the current Lotto game. Estimate the business impact on the current Colorado Lottery portfolio; recommend specific games for pursuit, if any. Identify issues and opportunities for enhancement for each of the prospective games in terms of their: – Game design, – Positioning/Messaging, and – Marketing requirements. Quantitative Research: Determine if any of the games could achieve a $0.08 per cap Isolate the Lotto Plus upside Recommend games for development Provide guideposts to increase success June 15, 2012Colorado Lottery New Game Research2

Research Methodology 1,003 online interviews were conducted among Colorado adults by Crestwood Associates between May 7, 2012 and May 15, 2012; average interview length was 22 minutes. Respondent criteria was as follows: – 18 years of age or older – Colorado residents – No members of the household working in market research, for a gaming company, or for a retailer engaged in the selling of Lottery tickets – All were past 6 month Lottery players Quotas were identified and maintained for the key Colorado Lottery segments: – C-Store Dreamers (n=229) – Jackpot Hounds (n=220) – Young, Entitled, Spontaneous Men (n=67) – Female Fun Squad (n=242) – Traditional, Older, Small Splurgers (n=245) To ensure that collected data was representative of the true demographic makeup of Colorado, data was weighted according to the state’s 2010 US Census data for age, sex, ethnicity, and race. June 15, 2012Colorado Lottery New Game Research3

Overall Research Plan June 15, 2012Colorado Lottery New Game Research4 New Lottery Game Success Components New Game Success Top Prize Perceived Odds Game Price Game Positioning Secondary Prizes Play Style Ease of Play Mar- keting Support Initial Game Development Focus Groups: Boulder – Denver Seven Games Quantitative Research: n=1000 Four Games Analysis and Recommendations Go To Market

Games Evaluated in Quantitative Research Players were exposed to a game concept, which was then removed prior to their being asked for top-of-mind reactions. The concepts were then shown again for the player to refer to in answering several more, in-depth questions. Full size slide concepts can be found in the Appendix to this report. June 15, 2012Colorado Lottery New Game Research5

Evaluation Process and Survey Flow Game descriptions were presented using a variant of the Crestwood PreVu TM process designed to best capture top- of-mind reactions. Overall benefits of the PreVu TM process include: June 15, 2012Colorado Lottery New Game Research6 1 Timed viewing of concept(s): Respondents are exposed to a single concept or image for a limited period to replicate the brief, initial experience the consumer uses to make an initial evaluation. 2 Top-of-mind exploration: Once the concept disappears, respondents are asked a series of questions aimed specifically at gathering initial communications and top–of-mind reactions. The back button is disabled to insure all responses are unaided. 3 In-depth investigation with concept(s) present: Respondents answer additional probes with the concept present. Exposure time and responses are not controlled. 4 Side-by-side comparison of all the concepts: Concepts are viewed together and preferences are obtained. This comparison provides additional insights and exacerbates differences between concepts.

Executive Summary June 15, 2012Colorado Lottery New Game Research7

Overall Observations Overall, one game, 5 Card Cash appears to have the potential to meet the minimum per cap target: – 5 Card Cash was perceived as both easy to understand and unique. – Key defining characteristics are the 2 games in 1, cards theme, prize structure and instant win component. – While player expectations are similar to other games, the daily play and higher churn odds provide a higher sales expectation. The Lotto Plus game appeals to current Lotto Players and should generate incremental 10-15% Lotto sales: – Lotto Plus has a targeted appeal among current players. – The game is not expected to significantly change overall Lotto play patterns. Neither Colorado 3 nor Lucky in Life appear to have the opportunity to break through. – The simplified Colorado 3 game was still too difficult to understand: The core of prior Pick 3 players was both small and not particularly inspired. Key appeal of the game was three numbers, choosing how the numbers come up, and $0.50 wagers. Projected play patterns were consistent with other Western jurisdictions, and thus was primarily limited to a small core of players. – Lucky in Life suffered from lower uniqueness and the odds hurt the game. Players like the top prize and the lower level win chances. Little enthusiasm was generated, and only a few would be loyal to the game. June 15, 2012Colorado Lottery New Game Research8

Stated and Estimated Purchase Intent June 15, 2012Colorado Lottery New Game Research9 While stated purchase intent for 5 Card Cash, Lucky in Life, and Lotto Plus was fairly high, actual trial is anticipated to be much lower. Assuming 100% awareness, Crestwood estimates that 21% would try 5 Card Cash, 17% would try Lucky in Life, 15% would try Lotto Plus, and 13% would try Colorado 3. Only 5 Card Cash had strong Very Likely to purchase intent. Q2. Based on this description, if this game were available, how likely would you be to buy this game the next time you purchase lottery games? Stated and Estimated Purchase Intent Base = All Respondents (n=1,003) Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level

Lotto Plus Top of Mind Segmented Purchase Intent June 15, 2012Colorado Lottery New Game Research10 Overall, Lotto Plus is more appealing to current Lotto Players. 55% of Lotto Players and 28% of Non Lotto Players indicated they were somewhat or very likely to purchase Lotto Plus. Lotto play appears to be more discriminating than Player Segmentation for Lotto Plus as an “add-on.” Q2. Based on this description, if this game were available, how likely would you be to buy this game the next time you purchase lottery games? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Lotto Plus Top of Mind Purchase Intent – Lotto Players vs. Non Lotto Players Base = All Respondents Total (n=1,003), Young, Entitled, Spontaneous Men (n=67), Traditional, Older, Small Splurgers (n=245), Female Fun Squad (n=242), C-Store Dreamers (n=229), Jackpot Hounds (n=220)

Colorado 3 Top of Mind Purchase Intent by Pick 3 Awareness June 15, 2012Colorado Lottery New Game Research11 Those who have heard of or played Pick 3 from another Lottery are more interested in playing Colorado 3 than those previously unaware of the game. 24% of those aware of Pick 3 consider themselves very likely to purchase Colorado 3, whereas 10% of those unaware would be very likely to purchase the game. Q2. Based on this description, if this game were available, how likely would you be to buy this game the next time you purchase lottery games? Q20. Have you ever heard of or played the game Pick 3 from another Lottery? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Colorado 3 Top of Mind Purchase Intent by Pick 3 Awareness Base = All Respondents Aware of or Played Pick 3 (n=173), Unaware of Pick 3 (n=534)

Most Preferred New Game Concept 5 Card Cash was most appealing overall and particularly favored by the C-Store Dreamers, Female Fun Squad, and Jackpot Hound segments. Interestingly, 5 Card Cash was preferred over Lucky in Life by nearly 2:1 among 18 to 34 year old players while among those 35 and older were evenly split with 35% preferring 5 Card Cash and 32% preferring Lucky in Life. Lucky in Life preference was stronger among those who play traditional jackpot games, such as the C-store Dreamers, Jackpot Hounds, and those age 35+. June 15, 2012Colorado Lottery New Game Research12 Most Preferred New Game Concept Base = All Respondents Total (n=1,003), Young, Entitled, Spontaneous Men (n=67), Traditional, Older, Small Splurgers (n=245), Female Fun Squad (n=242), C-Store Dreamers (n=229), Jackpot Hounds (n=220) Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Q12. Please rank each of the concepts you have just evaluated in order of overall preference with 1 being the game you most prefer and 3 being the game you least prefer.

Favorite Games – Select Open Ends Colorado 3 Perceived winnability and costs were considered strengths. There was also some recognition of Numbers play from other jurisdictions. “Best chance to win.” “Because it has good odds and a good price.” “Less risky.” “Quick & easy.” “I like the $.50 bets.” “ONLY COST $1.00 TO PLAY.” “Kind of like horse betting.” “Because we had a game similar to this in Michigan.” “It was fun, appeared to be a better deal.” June 15, 2012Colorado Lottery New Game Research13 Lotto Plus As an add-on to the current Lotto game, Lotto Plus’ strengths were it’s ease of application, it’s cost and the 4X multiplier factor. “Easy to understand.” “Easy to understand - bigger payoff.” “I like lotto already so $1 more doesn't seem horrible. Also like the winnings times 4.” “Quadruple the winnings.” “4 times win.” “Best result possibilities for the money.” 5 Card Cash Ease of play, the Poker style theme, and odds were considered strengths. “Easiest to play and understand.” “Simple, buy it! Check it! Celebrate!” “It seemed the most fun.” “I like that you don’t have to select numbers” “I like the Poker element and fact that you can spot a winner without having to wait for a drawing.” “I like that the concept is different than a typical drawing and I prefer cards to other forms of gambling.” “Seemed mostly likely to win.” “Better odds” Lucky in Life Strengths included the games top prize and the name. The game was also perceived to be different from existing games. “The whole appeal to me with a lottery is that it is possible to win a jackpot that will change your life...the others games don't offer a real jackpot.” “Like the concept of $1000 per day for life.” “1000 a day for 30 years top prize.” “I LIKE THE NAME.” “I like the name and the fact that I can win $1000/day.” “It has the best overall winnings and is the most different from games I already play. It is a good value for my money as well.” Q14. Why did you select [Insert game most preferred from Q12 (Q12=1)] as the game you liked least?

Ease of Understanding & Differentiation June 15, 2012Colorado Lottery New Game Research14 Overall, all games with the exception of Colorado 3 were perceived as easy to understand by 60% or more of those surveyed. 5 Card Cash and Colorado 3 were perceived as the most new and different. Q6/Q7. Using the scale provided, how strongly do you disagree or agree with the following? Ease of Understanding & Differentiation – Top-2 Box Summary (Agree) Base = All Respondents (n=1,003) Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level

General Game Perceptions June 15, 2012Colorado Lottery New Game Research15 Overall, 5 Card Cash and Lucky in Life received the highest perception ratings. Key differentiation was found in fun to play, prize structures and winnability. Few agree however, that these games provide good value, have good odds, or believe they would play these games regularly. Q6/Q7. Using the scale provided, how strongly do you disagree or agree with the following? General Game Perceptions – Top-2 Box Summary (Agree) Base = All Respondents (n=1,003)

Leverage Grid Analysis The attributes reviewed were statistically linked to purchase intent to arrive at a derived motivation score. The motivational impact was plotted in relation to the perceived delivery of each of the attributes to highlight the most leveragable attributes to generate trial. A summary of the resulting plots, seen on the following page may be interpreted as follows: June 15, 2012Colorado Lottery New Game Research16 OpportunitiesHot Buttons Irrelevant Cost of Entry Or Baseline Promote Hot Buttons: Key Drivers. These are essential attributes that are perceived highly. Points of leverage – Promote. Invest Opportunities: Highly motivating but not universally perceived as well delivered. Potential paradigm shifters – Invest. Maintain Cost of Entry: Although considered well delivered, will not create incremental business. Represent norms or standards – Maintain. Ignore Irrelevant: Not seen as important. Insufficient motivation to build value; Efforts may have no effect - Ignore. Perceived Delivery Derived Motivation

5 Card Cash Attribute Leverage Strengths include the 2 games in 1 aspect as well as the game appears fun to play, promoting these will have positive effect as they are moderately motivating. Improving perceptions of I think I would play this game regularly and this game provides good value for my money are opportunities as they are considered motivating but prospective players are not yet sold on them. June 15, 2012Colorado Lottery New Game Research17 Perceived Delivery Derived Motivation Opportunities Hot Buttons Irrelevant Cost of Entry

Lucky in Life Attribute Leverage Strengths include appears fun to play, can win by just matching the Lucky Ball, I can choose my own numbers or use Quick Pick, and I like the name. Note the prizes were not motivating. Improving perceptions of I think I would play this game regularly and this game provides good value for my money are opportunities as they are considered motivating but prospective players are not yet sold on them. June 15, 2012Colorado Lottery New Game Research18 Perceived Delivery Derived Motivation Opportunities Hot Buttons IrrelevantCost of Entry

Colorado 3 Attribute Leverage Strengths include the game appears fun to play and I like that I can choose how my numbers come up, promoting these will have positive effect as they are moderately motivating. Improving perceptions of I think I would play this game regularly and this game provides good value for my money are opportunities as they are motivating, but only among a small group. June 15, 2012Colorado Lottery New Game Research19 Perceived Delivery Derived Motivation Opportunities Hot Buttons Irrelevant Cost of Entry

Lotto Plus Attribute Leverage The only strength identified for Lotto Plus is that the game appears fun to play, promoting this will have positive effect as they are moderately motivating. Improving perceptions of I think I would play this game regularly and this game makes me want o play Lotto more often are opportunities as they are considered motivating but prospective players are not yet sold on them. June 15, 2012Colorado Lottery New Game Research20 Perceived Delivery Derived Motivation Opportunities Hot Buttons IrrelevantCost of Entry

Lotto Plus Estimated % of Time Purchasing Game June 15, 2012Colorado Lottery New Game Research21 Those who would buy Lotto Plus would purchase the add-on about half the time. Lotto Plus Estimated % of Time Purchasing Game Base = Would Buy Game Total (n=783), Young, Entitled, Spontaneous Men (n=56), Traditional, Older, Small Splurgers (n=134), Female Fun Squad (n=194), C-Store Dreamers (n=200), Jackpot Hounds (n=199) Q5a. What percent of the time do you think you might spend the extra $1 to add the Lotto Plus option? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level

Key Business Dynamics June 15, 2012Colorado Lottery New Game Research22 5 Card Cash has the highest anticipated trial among the games evaluated followed by Lucky in Life. Anticipated purchase frequency is highest for both the daily games. Lucky in Life, while only trailing somewhat in trial, is hampered by lower purchase frequency and spend per play. Colorado 3 appears to have high spending, but is limited to a concentrated audience; sales are low due to low trial and poor stickiness with 1:167 odds, thus will have a small sustaining base. Lotto Plus has the lowest annual spend, even amongst those who say they will try the game.

Sustaining Sales Forecast June 15, 2012Colorado Lottery New Game Research23 Game sales on all games will be dependent on awareness generated. 5 Card Cash generates the highest sales potential, followed by Lucky in Life and Colorado 3 (Lotto Plus is shown following) Sales forecast is for sustaining levels, post introductory efforts. Notes: 1. Awareness levels based upon SWAG and 2010 Image Study reported 46% Match Play “aided” awareness. 2. Balance of forecast based upon key business metrics and Crestwood formula

Lotto Plus Sales Forecast June 15, 2012Colorado Lottery New Game Research24 Lotto Plus is expected to increase Lotto sales by up to 14%; almost all gains will come from Players. Minimal cannibalization of current sales is expected as the majority of transactions appear to be single ticket.

Sources of Growth – Cannibalization of Existing Games June 15, 2012Colorado Lottery New Game Research25 Much of the spending would result from cannibalization of existing products with 2-3% incremental sales. More than half of the spending is predicted to be cannibalized from Scratch (24% - 27%) and Powerball (27%) while 22% to 26% of the spending would come from the existing Lotto game. Cash 5 would see few adverse effects. Retained Match Play sales will probably merge into other games in general. Sources of Growth and Cannibalization Base = All Respondents (n=1,003)

Conclusions & Recommendations All of the games tested were basically considered “Lottery” games and thus would only incrementalize the business; there are no game changers. – None of the games showed truly broad based trial intent. – Play patterns were similar to existing games. – Games tested primarily cannibalized current sales. – Beyond trial interest, the main differences accrued to game construction. The 5 Card Cash game shows the greatest potential: – Has the highest sales potential. – Is perceived to be the most unique. – The game structure supports stronger “stickiness.” Instant win portion is a key differentiator. Instant win odds support continued churn. The daily frequency supports both planned and spontaneous play. The Lotto Plus game appears to have low risk and should be pursued as a niche opportunity: – Sales expectations appear to mirror post introductory jackpot game add-ons. – However, half of those who like the game will make it a regular play. – Unfortunately, it does not appear to add to the appeal of the base game, thus may not change long term trends. June 15, 2012Colorado Lottery New Game Research26

Conclusions and Recommendations (con’t) Key success factors for 5 Card Cash will be: – Targeting at the current Lotto type players, such as C-store Dreamers and Jackopot Hounds; YES Men are a developmental opportunity – Maintaining awareness at retail – Establishing the perception of fun and 2 games in 1, particularly leveraging the key differences of instant win and the card theme – The 5 Card Cash name should be retained. – Leveraging the churn prize potential We have fears about continuing Lucky in Life: – The top prize appeal is well understood and strong – The game was not seen as unique, resulting in relatively low trial – Even though odds and stickiness appear in line, purchasing characteristics are low – We recommend closely monitoring the New England success to measure sustainability after the abnormal awareness from the initial hit Unfortunately, even after the simplification of the game, Colorado 3 could not break out: – While there is higher interest among those aware of the game, those players only represent one quarter of the population – Without a stronger tradition, stickiness at current odds is bothersome – Results are similar to other Western states. June 15, 2012Colorado Lottery New Game Research27

Detailed Findings June 15, 2012Colorado Lottery New Game Research28

Game Reviews 5 Card Cash Lucky in Life Colorado 3 Lotto Plus June 15, 2012Colorado Lottery New Game Research29

5 Card Cash 5 Card Cash is a game where you get 2 ways to play your hand— an instant win game and an evening draw game with one ticket. You can win up to $100,000 in the nightly drawings and $5,000 instantly. When you play 5 Card Cash, your ticket will print with 5 quick picked playing cards. You win instantly if your 5 Card Cash hand is a pair of Jacks or better, and the words "Instant Winner" will print right on your ticket. You can also win again in the nightly drawings by matching 2 or more cards in any order. Cost per play: $2. A fun new way to play Poker where your hand has 2 ways to win! Sample ticket Check your instant win hand to see if you won instantly! Check your draw wins that evening for the same cards

5 Card Cash Top of Mind Purchase Intent June 15, 2012Colorado Lottery New Game Research31 Overall, half of all players surveyed indicated they would be somewhat or very likely to purchase 5 Card Cash. Jackpot Hounds are the most likely to purchase the game (75%) followed by C-Store Dreamers (60%), YES Men (54%) and members of the Female Fun Squad (48%). Traditional, Older, Small Splurgers found the game less attractive, only 19% indicated they were somewhat or very likely to purchase the game. Q2. Based on this description, if this game were available, how likely would you be to buy this game the next time you purchase lottery games? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level 5 Card Cash Top of Mind Purchase Intent Base = All Respondents Total (n=1,003), Young, Entitled, Spontaneous Men (n=67), Traditional, Older, Small Splurgers (n=245), Female Fun Squad (n=242), C-Store Dreamers (n=229), Jackpot Hounds (n=220)

5 Card Cash Stated and Estimated Purchase Intent June 15, 2012Colorado Lottery New Game Research32 5 Card Cash was most appealing to YES Men, C-Store Dreamers and Jackpot Hounds; at 100% awareness Crestwood expects a little over a quarter would try the game. Traditional, Older, Small Splurgers show very little interest in purchasing the game. Q2. Based on this description, if this game were available, how likely would you be to buy this game the next time you purchase lottery games? 5 Card Cash Stated and Estimated Purchase Intent Base = All Respondents Total (n=1,003), Young, Entitled, Spontaneous Men (n=67), Traditional, Older, Small Splurgers (n=245), Female Fun Squad (n=242), C-Store Dreamers (n=229), Jackpot Hounds (n=220)

5 Card Cash Top of Mind Purchase Intent by Age & Ethnicity June 15, 2012Colorado Lottery New Game Research33 5 Card Cash is more appealing to younger players and Hispanic or Latino players. Q2. Based on this description, if this game were available, how likely would you be to buy this game the next time you purchase lottery games? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level 5 Card Cash Top of Mind Purchase Intent by Age & Ethnicity Base = All Respondents Total (n=1,003), Age 18-34 (n=141), Age 35+ (n=862), Hispanic or Latino (n=86), Not Hispanic or Latino (n=917)

5 Card Cash Ease of Understanding & Differentiation June 15, 2012Colorado Lottery New Game Research34 Overall, approximately two thirds of the players surveyed perceived 5 Card Cash to be easy to understand and perceived the game to be new and different. Jackpot Hounds and C-Store Dreamers were most favorable toward the game. While YES Men and Traditional, Older, Small Splurgers tended to be less favorable toward the game overall, 50% or more perceived the game to be easy to understand, though only 45% of the Traditional, Older, Small Splurgers perceived the game to be new and different. Q6/Q7. Using the scale provided, how strongly do you disagree or agree with the following? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level 5 Card Cash Ease of Understanding & Differentiation – Top-2 Box Summary (Agree) Base = All Respondents Total (n=1,003), Young, Entitled, Spontaneous Men (n=67), Traditional, Older, Small Splurgers (n=245), Female Fun Squad (n=242), C-Store Dreamers (n=229), Jackpot Hounds (n=220)

5 Card Cash Perceptions June 15, 2012Colorado Lottery New Game Research35 Overall, 5 Card Cash generated strong, positive perceptions. Only one third agreed however that this game provides good value for my money, this game has good odds, or that they would play this game regularly – these scores were pulled down by lower scores among the Traditional, Older, Small Splurgers and Female Fun Squad segments. Q8 Based on this description, please tell us the extent to which you disagree or agree with each of the following statements. Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level 5 Card Cash Perceptions – Top-2 Box Summary Base = All Respondents

5 Card Cash Average Estimated Annual Purchases June 15, 2012Colorado Lottery New Game Research36 Overall, respondents who would play 5 Card Cash indicate they would buy it approximately 39 times per year or 3 times per month. YES Men (76 times per year/6 times per month) and Jackpot Hounds (51 times per year/4 times per month) believe they would play the game most often while C-Store Dreamers, members of the Female Fun Squad, and Traditional, Older, Small Splurgers anticipate playing less often. Q3. Based on this description, if this game were available, how often do you think you would you buy it? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level 5 Card Cash Average (Mean) Estimated Annual Purchases Base = Would Purchase 5 Card Cash Total (n=801), Young, Entitled, Spontaneous Men (n=53), Traditional, Older, Small Splurgers (n=136), Female Fun Squad (n=210), C-Store Dreamers (n=205), Jackpot Hounds (n=208)

5 Card Cash Average Estimated Plays per Purchase June 15, 2012Colorado Lottery New Game Research37 Those who would purchase 5 Card Cash would probably purchase 2-3 tickets at a time. 5 Card Cash Average (Mean) Estimated Plays per Purchase Base = Would Purchase Game Total (n=801), Young, Entitled, Spontaneous Men (n=56), Traditional, Older, Small Splurgers (n=136), Female Fun Squad (n=210), C-Store Dreamers (n=205), Jackpot Hounds (n=208) Q4. You indicated you would buy this game [INSERT Q3 RESPONSE]. If this game was available, how many plays do you think you might purchase at one time? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level

5 Card Cash Average Satisfactory Win Amount June 15, 2012Colorado Lottery New Game Research38 A win of $10 would be viewed as satisfactory by 50% of the 5 Card Cash players C-Store Dreamers have a lower satisfactory win amount of $5. 5 Card Cash Average (Median) Satisfactory Win Amount Base = Would Buy Game Total (n=810), Young, Entitled, Spontaneous Men (n=54), Traditional, Older, Small Splurgers (n=138), Female Fun Squad (n=203), C-Store Dreamers (n=209), Jackpot Hounds (n=206) Q9. As you know, not all lottery purchases result in someone winning a top prize. With this in mind and assuming you spent ___to play this game, what amount of money would you need to win from this game to be satisfied enough to play again? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level

5 Card Cash Average Loss Tolerance June 15, 2012Colorado Lottery New Game Research39 Most indicate they would play 4 or 5 times without a win before giving up on 5 Card Cash. The Female Fun Squad, C-Store Dreamers, and Jackpot Hounds segments have the highest loss tolerance. 5 Card Cash Average Loss Tolerance Base = Would Buy Game Total (n=806), Young, Entitled, Spontaneous Men (n=54), Traditional, Older, Small Splurgers (n=138), Female Fun Squad (n=202), C-Store Dreamers (n=207), Jackpot Hounds (n=205) Q10. Earlier, you mentioned that you might purchase ___plays when buying this game. Approximately how many times do you think you would be willing to play this game without having a satisfactory instant win? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level

Leveraging 5 Card Cash for Maximum Trial Strengths include the 2 games in 1 aspect as well as the game appears fun to play, promoting these will have positive effect as they are moderately motivating. Improving perceptions of I think I would play this game regularly and this game provides good value for my money are opportunities as they are considered motivating but prospective players are not yet sold on them. June 15, 2012Colorado Lottery New Game Research40 Perceived Delivery Derived Motivation Opportunities Hot Buttons Irrelevant Cost of Entry

Leveraging 5 Card Cash Total Young, Entitled, Spontaneous Men Traditional, Older, Small Splurgers Female Fun SquadC-Store DreamersJackpot Hounds Game appears fun to playHot ButtonIrrelevantHot Button I like the other prizes availableCost of EntryIrrelevantCost of EntryHot ButtonCost of Entry I like the top prizeCost of EntryHot ButtonCost of Entry Lots of ways to winIrrelevantCost of Entry Hot ButtonIrrelevant I like the nameIrrelevant Cost of EntryIrrelevant Opportunity Good value for my money OpportunityIrrelevant OpportunityIrrelevant Has good oddsIrrelevant I'd play regularly Opportunity This game is 2 games in 1Hot Button Cost of Entry Like the nightly drawIrrelevant OpportunityCost of EntryHot ButtonIrrelevant Opportunity I can win with 2 JacksCost of Entry Hot ButtonCost of EntryHot ButtonCost of Entry Like the card themeCost of Entry Hot Button Like knowing if i've won instantlyCost of Entry Like that I don't have to pick any numbers Irrelevant OpportunityCost of Entry Irrelevant June 15, 2012Colorado Lottery New Game Research41

5 Card Cash Favorite Alternate Names June 15, 2012Colorado Lottery New Game Research42 5 Card Cash tested best overall, however, this was possibly biased by the fact that it was the name the game was evaluated under. Overall, respondents were open to the other names: – 5 Card Draw had fairly high preference overall and was favored by the Female Fun Squad and the C- Store Dreamers. – Poker Pick was the least favored, though it was preferred by the YES Men. Q15. The Colorado Lottery is considering other names for this game; from this list, please rank these 3 choices in priority of names. Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level 5 Card Cash Favorite Alternate Names Base = Would Buy Game Total (n=810), Young, Entitled, Spontaneous Men (n=54), Traditional, Older, Small Splurgers (n=138), Female Fun Squad (n=203), C-Store Dreamers (n=209), Jackpot Hounds (n=206)

Lucky in Life Lucky in Life gives you the chance to win $1,000 per day! Playing Lucky in Life is easy: just pick five (5) numbers from 1 to 40 and a “Lucky Ball” number from 1 to 21 on the play slip, or choose Quick Pick. You win if you match the Lucky Ball or at least two (2) numbers drawn by the lottery. If you match all 5 numbers and the Lucky Ball, you win $1,000 per day. The $1,000 per day is for 30 years. Lucky in Life is played in Colorado, Oklahoma, and Arizona. Drawings are held twice a week. Price per play is $2. Win $1,000 every day! Sample ticket Choose 5 numbers and 1 Lucky Ball number or use Quick Pick Check your numbers in the drawing to see if you won.

Lucky in Life Top of Mind Purchase Intent June 15, 2012Colorado Lottery New Game Research45 Overall, 46% of the players surveyed indicated they would be somewhat or very likely to purchase Lucky in Life. YES Men are especially likely to purchase Lucky in Life. Jackpot Hounds are the most likely to purchase the game (68%) followed by YES Men (57%), C-Store Dreamers (55%), and members of the Female Fun Squad (37%). Traditional, Older, Small Splurgers found the game less attractive, only 18% indicated they were somewhat or very likely to purchase the game. Q2. Based on this description, if this game were available, how likely would you be to buy this game the next time you purchase lottery games? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Lucky in Life Top of Mind Purchase Intent Base = All Respondents Total (n=1,003), Young, Entitled, Spontaneous Men (n=67), Traditional, Older, Small Splurgers (n=245), Female Fun Squad (n=242), C-Store Dreamers (n=229), Jackpot Hounds (n=220)

Lucky in Life Stated and Estimated Purchase Intent June 15, 2012Colorado Lottery New Game Research46 Lucky in Life was most appealing to YES Men, C-Store Dreamers and Jackpot Hounds; at 100% awareness Crestwood expects about a quarter would try the game. Traditional, Older, Small Splurgers show very little interest in purchasing the game. Q2. Based on this description, if this game were available, how likely would you be to buy this game the next time you purchase lottery games? Lucky in Life Stated and Estimated Purchase Intent Base = All Respondents Total (n=1,003), Young, Entitled, Spontaneous Men (n=67), Traditional, Older, Small Splurgers (n=245), Female Fun Squad (n=242), C-Store Dreamers (n=229), Jackpot Hounds (n=220)

Lucky in Life Top of Mind Purchase Intent by Age & Ethnicity June 15, 2012Colorado Lottery New Game Research47 Lucky in Life is more appealing to younger players and Hispanic or Latino players. Q2. Based on this description, if this game were available, how likely would you be to buy this game the next time you purchase lottery games? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Lucky in Life Top of Mind Purchase Intent by Age & Ethnicity Base = All Respondents Total (n=1,003), Age 18-34 (n=141), Age 35+ (n=862), Hispanic or Latino (n=86), Not Hispanic or Latino (n=917)

Lucky in Life Ease of Understanding & Differentiation June 15, 2012Colorado Lottery New Game Research48 Overall, approximately two thirds found Lucky in Life easy to understand, however, 48% agreed that it was new and different. The game appeared to resonate more strongly with the Jackpot Hounds and C-Store Dreamers than other segments who were less likely to perceive the game as differentiated. Q6/Q7. Using the scale provided, how strongly do you disagree or agree with the following? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Lucky in Life Ease of Understanding & Differentiation – Top-2 Box Summary (Agree) Base = All Respondents Total (n=1,003), Young, Entitled, Spontaneous Men (n=67), Traditional, Older, Small Splurgers (n=245), Female Fun Squad (n=242), C-Store Dreamers (n=229), Jackpot Hounds (n=220)

Lucky in Life Perceptions June 15, 2012Colorado Lottery New Game Research49 Overall, players like the top prize, like choosing their own numbers or using Quick Pick, and like that they can win by just matching the Lucky Ball. Lucky in Life was not perceived positively for its odds, value, or as a game to play regularly. Q8 Based on this description, please tell us the extent to which you disagree or agree with each of the following statements. Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Lucky in Life – Top-2 Box Summary Base = All Respondents

Lucky in Life Average Estimated Annual Purchases June 15, 2012Colorado Lottery New Game Research50 Overall, respondents who would play Lucky in Life indicate they would buy it approximately 19 times per year or once or twice per month. YES Men (30 times per year/2 to 3 times per month) and Jackpot Hounds (25 times per year/twice per month) believe they would play the game most often while C-Store Dreamers, members of the Female Fun Squad, and Traditional, Older, Small Splurgers anticipate playing less often. Q3. Based on this description, if this game were available, how often do you think you would you buy it? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Lucky in Life Average (Mean) Estimated Annual Purchases Base = All Respondents Total (n=1,003), Young, Entitled, Spontaneous Men (n=67), Traditional, Older, Small Splurgers (n=245), Female Fun Squad (n=242), C-Store Dreamers (n=229), Jackpot Hounds (n=220)

Lucky in Life Estimated Plays per Purchase June 15, 2012Colorado Lottery New Game Research51 On average, those who would play indicate they would purchase 2 to 3 plays per occasion. YES Men and C-Store Dreamers would purchase more plays, on average, than the other segments. Lucky in Life Average (Mean) Estimated Plays per Purchase Base = Would Purchase Game Total (n=795), Young, Entitled, Spontaneous Men (n=56), Traditional, Older, Small Splurgers (n=146), Female Fun Squad (n=187), C-Store Dreamers (n=198), Jackpot Hounds (n=207) Q4. You indicated you would buy this game [INSERT Q3 RESPONSE]. If this game was available, how many plays do you think you might purchase at one time? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level

Lucky in Life Average Satisfactory Win Amount June 15, 2012Colorado Lottery New Game Research52 Overall, a satisfactory win for Lucky in Life $10 would be satisfying for half of those Lucky in Life players surveyed. Lucky in Life Average (Median) Satisfactory Win Amount Base = Would Buy Game Total (n=796), Young, Entitled, Spontaneous Men (n=53), Traditional, Older, Small Splurgers (n=145), Female Fun Squad (n=189), C-Store Dreamers (n=204), Jackpot Hounds (n=205) Q9. As you know, not all lottery purchases result in someone winning a top prize. With this in mind and assuming you spent ___to play this game, what amount of money would you need to win from this game to be satisfied enough to play again? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level

Lucky in Life Average Loss Tolerance June 15, 2012Colorado Lottery New Game Research53 Loss tolerance for Lucky in Life is fairly high (4-5 draws). The Female Fun Squad, C-Store Dreamers, and Jackpot Hounds segments would be willing to play through 5-7 draws without a satisfactory win. Lucky in Life Average Loss Tolerance Base = Would Buy Game Total (n=790), Young, Entitled, Spontaneous Men (n=53), Traditional, Older, Small Splurgers (n=144), Female Fun Squad (n=187), C-Store Dreamers (n=202), Jackpot Hounds (n=204) Q11. Earlier, you mentioned that you might purchase ___plays when buying this game. How many drawings would you be willing to go through before having a satisfactory win? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level

Leveraging Lucky in Life for Maximum Trial Strengths include appears fun to play, can win by just matching the Lucky Ball, I can choose my own numbers or use Quick Pick, and I like the name. Improving perceptions of I think I would play this game regularly and this game provides good value for my money are opportunities as they are considered motivating but prospective players are not yet sold on them. June 15, 2012Colorado Lottery New Game Research55 Perceived Delivery Derived Motivation Opportunities Hot Buttons IrrelevantCost of Entry

Leveraging Lucky in Life Total Young, Entitled, Spontaneous Men Traditional, Older, Small Splurgers Female Fun SquadC-Store DreamersJackpot Hounds Game appears fun to playHot ButtonCost of Entry Opportunity Hot Button I like the other prizes availableCost of Entry Hot ButtonCost of Entry I like the top prizeCost of EntryHot Button Cost of Entry Lots of ways to winIrrelevant OpportunityHot ButtonCost of EntryIrrelevant I like the nameHot ButtonCost of Entry Hot ButtonCost of EntryHot Button Good value for my moneyIrrelevant OpportunityIrrelevant Opportunity Has good oddsIrrelevant OpportunityIrrelevant I'd play regularly Opportunity I like that it's played only in CO, AZ and OKCost of Entry Like having 2 draws per weekCost of EntryHot ButtonCost of Entry Would rather be paid over timeIrrelevant Like that I can choose numbers or QuickpickHot Button Cost of Entry Hot Button Can win by just matching the Lucky BallHot Button June 15, 2012Colorado Lottery New Game Research56

Lucky in Life Favorite Alternate Names June 15, 2012Colorado Lottery New Game Research57 Overall, respondents are open to both names Lucky in Life and Daily Grand. It should be noted that Lucky in Life results could be biased by the fact that it was the name the game was evaluated under. Lucky Life was the least favorite name. Q16. The Colorado Lottery is considering other names for this game; from this list, please rank these 3 choices in priority of names. Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Lucky in Life Favorite Alternate Names Base = All Respondents Total (n=796), Young, Entitled, Spontaneous Men (n=53), Traditional, Older, Small Splurgers (n=145), Female Fun Squad (n=189), C-Store Dreamers (n=204), Jackpot Hounds (n=205)

Lucky in Life Prize Alternate Structuring June 15, 2012Colorado Lottery New Game Research58 Most (86%) of the players surveyed were neutral or welcoming to the proposed restructuring of the payouts to one lump sum or to annual payments. More than one third (36%) of potential game buyers would be more likely to play if the game’s payout was restructured (50% were neutral). Only 15% of potential game buyers would be less likely to play if the payout was not daily. Q17. Imagine you won the grand prize for the new game Lucky in Life of $1,000 per day for 30 years. If the Lottery were only able to deliver your winnings in one lump sum or 30 annual payments—instead of paying you every day, would you be…? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Lucky in Life Prize Alternate Structuring Base = Would Buy Game Total (n=796), Young, Entitled, Spontaneous Men (n=53), Traditional, Older, Small Splurgers (n=145), Female Fun Squad (n=189), C-Store Dreamers (n=204), Jackpot Hounds (n=205)

Lucky in Life Preferred New Payment Schedule June 15, 2012Colorado Lottery New Game Research59 Overall, players indicate they would prefer a lump sum payout over annual payments. Q18. Which payment schedule would you prefer for Lucky in Life? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Lucky in Life Preferred New Payment Schedule Base = Would Buy Game if the Payment were Restructured Total (n=723), Young, Entitled, Spontaneous Men (n=48), Traditional, Older, Small Splurgers (n=125), Female Fun Squad (n=175), C-Store Dreamers (n=187), Jackpot Hounds (n=188)

Colorado 3 Colorado 3 gives you lots of ways to win with just three (3) numbers. Colorado 3 lets you pick your numbers and the different ways they come up, and you can win up to $500! Set your own strategy and you can win with more than one wager type. To play Colorado 3: Pick your three (3) numbers on the play slip, or choose Quick Pick. Select the bet type you’d like to play: o Straight – match your numbers in exact order o Box – match your numbers in any order o Straight & Box – both bet types in one wager Choose the draw you wish to play: midday, evening, or both. You win if your numbers match the Lottery numbers according to your bet type. Colorado 3 costs as little as $0.50 per bet; all wagers must be in increments of $1. Drawings are twice per day. Sample ticket Pick 3 numbers or select Quick Pick Choose your bet type Select the draw time The fun new way to play with only 3 numbers and lots of way to win!

Pick 3 Awareness & Penetration June 15, 2012Colorado Lottery New Game Research62 Most players had neither heard of nor played the game Pick 3 from another Lottery. YES Men and Jackpot Hounds were most likely to be aware of Pick 3, though only 13% of the YES Men andf 12% of the Jackpot Hounds had ever played. Q20. Have you ever heard of or played the game Pick 3 from another Lottery?Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Pick 3 Awareness & Penetration Base = Would Buy Game Total (n=730), Young, Entitled, Spontaneous Men (n=52), Traditional, Older, Small Splurgers (n=116), Female Fun Squad (n=183), C-Store Dreamers (n=186), Jackpot Hounds (n=193)

Colorado 3 Top of Mind Purchase Intent June 15, 2012Colorado Lottery New Game Research63 Approximately one-third of the players surveyed indicated they would be somewhat or very likely to purchase Colorado 3. Yes Men are the most likely to purchase the game (51%); C-Store Dreamers (45%), Jackpot Hounds (47%), and members of the Female Fun Squad (30%) also showed some interest. Traditional, Older, Small Splurgers found the game less attractive, only 9% indicated they were somewhat or very likely to purchase the game. Q2. Based on this description, if this game were available, how likely would you be to buy this game the next time you purchase lottery games? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Colorado 3 Top of Mind Purchase Intent Base = All Respondents Total (n=1,003), Young, Entitled, Spontaneous Men (n=67), Traditional, Older, Small Splurgers (n=245), Female Fun Squad (n=242), C-Store Dreamers (n=229), Jackpot Hounds (n=220)

Colorado 3 Stated and Estimated Purchase Intent June 15, 2012Colorado Lottery New Game Research64 Colorado 3 was most appealing to YES Men, C-Store Dreamers and Jackpot Hounds; at 100% awareness Crestwood expects a quarter or less would try the game. Traditional, Older, Small Splurgers show very little interest in purchasing the game. Q2. Based on this description, if this game were available, how likely would you be to buy this game the next time you purchase lottery games? Colorado 3 Stated and Estimated Purchase Intent Base = All Respondents Total (n=1,003), Young, Entitled, Spontaneous Men (n=67), Traditional, Older, Small Splurgers (n=245), Female Fun Squad (n=242), C-Store Dreamers (n=229), Jackpot Hounds (n=220)

Colorado 3 Top of Mind Purchase Intent by Age & Ethnicity June 15, 2012Colorado Lottery New Game Research65 Colorado 3 is more appealing to younger players and Hispanic or Latino players. Q2. Based on this description, if this game were available, how likely would you be to buy this game the next time you purchase lottery games? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Colorado 3 Top of Mind Purchase Intent by Age & Ethnicity Base = All Respondents Total (n=1,003), Age 18-34 (n=141), Age 35+ (n=862), Hispanic or Latino (n=86), Not Hispanic or Latino (n=917)

Colorado 3 Top of Mind Purchase Intent by Pick 3 Awareness June 15, 2012Colorado Lottery New Game Research66 Those who have heard of or played pick 3 from another Lottery we more interested in playing Colorado 3. 24% of those aware of Pick 3 consider themselves very likely to purchase Colorado 3, whereas 10% of those unaware would purchase the game. Q2. Based on this description, if this game were available, how likely would you be to buy this game the next time you purchase lottery games? Q20. Have you ever heard of or played the game Pick 3 from another Lottery? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Colorado 3 Top of Mind Purchase Intent by Pick 3 Awareness Base = All Respondents Total (n=1,003), Aware of or Played Pick 3 (n=173), Unaware of Pick 3 (n=534)

Colorado 3 Ease of Understanding & Differentiation June 15, 2012Colorado Lottery New Game Research67 Colorado 3 was perceived easy to understand by less than half of the respondents surveyed, but it was considered differentiated by most players. Traditional, Older, Small Splurgers rated the game lower for both being easy to understand and for being differentiated than any other segment. Q6/Q7. Using the scale provided, how strongly do you disagree or agree with the following? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Colorado 3 Ease of Understanding & Differentiation – Top-2 Box Summary (Agree) Base = All Respondents Total (n=1,003), Young, Entitled, Spontaneous Men (n=67), Traditional, Older, Small Splurgers (n=245), Female Fun Squad (n=242), C-Store Dreamers (n=229), Jackpot Hounds (n=220)

Colorado 3 Perceptions June 15, 2012Colorado Lottery New Game Research68 Overall, perceptions of Colorado 3 were not very positive. Highest ratings were for I like that I can choose my own numbers to play, and I like that wagers start at just $0.50 per play. Only 21% of respondents indicated they would play the game regularly. Q8 Based on this description, please tell us the extent to which you disagree or agree with each of the following statements. Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Colorado 3 Perceptions – Top-2 Box Summary (Agree) Base = All Respondents

Colorado 3 Average Estimated Annual Purchases June 15, 2012Colorado Lottery New Game Research69 Overall, respondents who would play Colorado 3 indicate they would buy it approximately 37 times per year or 3 times per month. YES Men (98 times per year/8 times per month) indicate they would play weekly while Jackpot Hounds, C- Store Dreamers, members of the Female Fun Squad, and Traditional, Older, Small Splurgers anticipate playing less often. Q3. Based on this description, if this game were available, how often do you think you would you buy it? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Colorado 3 Average (Mean) Estimated Annual Purchases Base = All Respondents Total (n=1,003), Young, Entitled, Spontaneous Men (n=67), Traditional, Older, Small Splurgers (n=245), Female Fun Squad (n=242), C-Store Dreamers (n=229), Jackpot Hounds (n=220)

Colorado 3 Average Estimated Plays per Purchase June 15, 2012Colorado Lottery New Game Research70 On average, those who would purchase Colorado 3 indicate they would probably purchase 2-3 tickets at a time. Colorado 3 Average Estimated Plays per Purchase Base = Would Purchase Game Total (n=727), Young, Entitled, Spontaneous Men (n=51), Traditional, Older, Small Splurgers (n=116), Female Fun Squad (n=183), C-Store Dreamers (n=185), Jackpot Hounds (n=192) Q4. You indicated you would buy this game [INSERT Q3 RESPONSE]. If this game was available, how many plays do you think you might purchase at one time? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level

Colorado 3 Average Estimated Spending per Purchase June 15, 2012Colorado Lottery New Game Research71 Colorado 3 players anticipate spending $2 to $3 per play. YES Men anticipate spending more per play versus the other players. Colorado 3 Average Estimated Spending per Purchase Base = Would Purchase Game Total (n=727), Young, Entitled, Spontaneous Men (n=51), Traditional, Older, Small Splurgers (n=116), Female Fun Squad (n=183), C-Store Dreamers (n=185), Jackpot Hounds (n=192) Q5. Colorado 3 wagers begin at $0.50 for a ‘Straight’ or ‘Box’ bet and are $1.00 for a ‘Straight Box’ bet. All wagers must be in increments of $1. With this in mind, how much do you think you would spend on Colorado 3 per play? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level

Colorado 3 Average Satisfactory Win Amount June 15, 2012Colorado Lottery New Game Research72 On average, a satisfactory win for Colorado 3 is $5. Young, Entitled, Spontaneous Men and Traditional, Older, Small Splurgers have a much higher satisfactory win requirement of $10. Colorado 3 Average (Median) Satisfactory Win Amount Base = Would Buy Game Total (n=730), Young, Entitled, Spontaneous Men (n=52), Traditional, Older, Small Splurgers (n=116), Female Fun Squad (n=183), C-Store Dreamers (n=186), Jackpot Hounds (n=193) Q9. As you know, not all lottery purchases result in someone winning a top prize. With this in mind and assuming you spent ___to play this game, what amount of money would you need to win from this game to be satisfied enough to play again? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level

Colorado 3 Average Loss Tolerance June 15, 2012Colorado Lottery New Game Research73 On average, respondents would be willing to play through 4 or 5 Colorado 3 draws without having a satisfactory win. The Female Fun Squad, C-Store Dreamers, and Jackpot Hounds segments have higher loss tolerance for Colorado 3, playing up to 6 draws. Colorado 3 Average Loss Tolerance Base = Would Buy Game Total (n=727), Young, Entitled, Spontaneous Men (n=52), Traditional, Older, Small Splurgers (n=116), Female Fun Squad (n=183), C-Store Dreamers (n=185), Jackpot Hounds (n=191) Q11. Earlier, you mentioned that you might purchase ___plays when buying this game. How many drawings would you be willing to go through before having a satisfactory win? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level

Leveraging Colorado 3 for Maximum Trial Strengths include the game appears fun to play and I like that I can choose how my numbers come up, promoting these will have positive effect as they are moderately motivating. Improving perceptions of I think I would play this game regularly and this game provides good value for my money are opportunities as they are considered motivating but prospective players are not yet sold on them. June 15, 2012Colorado Lottery New Game Research74 Perceived Delivery Derived Motivation Opportunities Hot Buttons Irrelevant Cost of Entry

Leveraging Colorado 3 Total Young, Entitled, Spontaneous Men Traditional, Older, Small Splurgers Female Fun SquadC-Store DreamersJackpot Hounds Game appears fun to playHot Button OpportunityHot Button OpportunityHot Button I like the other prizes availableCost of EntryHot Button Cost of Entry Irrelevant I like the top prizeCost of EntryIrrelevantCost of Entry Hot ButtonCost of Entry Lots of ways to winCost of Entry I like the nameCost of EntryIrrelevantHot ButtonIrrelevant Cost of Entry Good value for my money OpportunityIrrelevant OpportunityIrrelevant Opportunity Has good oddsIrrelevant OpportunityIrrelevant I'd play regularly Opportunity Like that I can choose my own numbersCost of Entry Hot ButtonCost of Entry I can choose how my numbers come upHot ButtonCost of Entry Hot Button I can play twice a dayIrrelevant OpportunityIrrelevant Opportunity I only have to pick 3 numbersCost of Entry Wagers start at just $0.50 per playCost of EntryHot ButtonCost of Entry June 15, 2012Colorado Lottery New Game Research75

Colorado 3 Favorite Alternate Names June 15, 2012Colorado Lottery New Game Research76 Colorado 3 was the preferred name evaluated though some of this may be due to the bias of Colorado 3 being the name used during the concept evaluation. Q19. The Colorado Lottery is considering other names for this game; from this list, please rank these 3 choices in priority of names. Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Colorado 3 Favorite Alternate Names Base = Would Buy Game Total (n=730), Young, Entitled, Spontaneous Men (n=52), Traditional, Older, Small Splurgers (n=116), Female Fun Squad (n=183), C-Store Dreamers (n=186), Jackpot Hounds (n=193)

Lotto Plus The new Lotto Plus wager on Colorado Lotto lets you multiply your Lotto winnings by 4 times! You still play Lotto like normal, but with Lotto Plus, any winnings you might receive for Lotto will be multiplied by 4 (except the jackpot). Adding Lotto Plus is easy: Pick your six (6) Lotto numbers, or choose Quick Pick. Select Lotto Plus on the play slip. Adding Lotto Plus costs an additional $1 for a total of a $2 Lotto wager. Increase your Lotto winnings with Lotto Plus! Sample ticket Play Lotto as you normally would Add Lotto Plus

Lotto Penetration June 15, 2012Colorado Lottery New Game Research79 About 80% of respondents have played Lotto in the past. 93% of Jackpot hounds have purchased Lotto Plus. Lotto Penetration Base = All Respondents Total (n=1,003), Young, Entitled, Spontaneous Men (n=67), Traditional, Older, Small Splurgers (n=245), Female Fun Squad (n=242), C-Store Dreamers (n=229), Jackpot Hounds (n=220) S6. When did you last play each of the following Colorado Lottery games? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level

Lotto Plus Top of Mind Purchase Intent June 15, 2012Colorado Lottery New Game Research80 Less than half (41%) of the players surveyed indicated they would be somewhat or very likely to purchase the Lotto Plus. Jackpot Hounds are the most likely to purchase the game (56%) followed by YES Men (53%), C-Store Dreamers (51%), and members of the Female Fun Squad (34%). Traditional, Older, Small Splurgers found the game less attractive, only 16% indicated they were somewhat or very likely to purchase Lotto Plus. Q2. Based on this description, if this game were available, how likely would you be to buy this game the next time you purchase lottery games? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Lotto Plus Top of Mind Purchase Intent Base = All Respondents Total (n=1,003), Young, Entitled, Spontaneous Men (n=67), Traditional, Older, Small Splurgers (n=245), Female Fun Squad (n=242), C-Store Dreamers (n=229), Jackpot Hounds (n=220)

Lotto Plus Stated and Estimated Purchase Intent June 15, 2012Colorado Lottery New Game Research81 Lotto Plus was most appealing to YES Men, C-Store Dreamers and Jackpot Hounds; at 100% awareness Crestwood expects a little less than a quarter would try the game. Traditional, Older, Small Splurgers show very little interest in purchasing the game. Q2. Based on this description, if this game were available, how likely would you be to buy this game the next time you purchase lottery games? Lotto Plus Stated and Estimated Purchase Intent Base = All Respondents Total (n=1,003), Young, Entitled, Spontaneous Men (n=67), Traditional, Older, Small Splurgers (n=245), Female Fun Squad (n=242), C-Store Dreamers (n=229), Jackpot Hounds (n=220)

Lotto Plus Top of Mind Purchase Intent – Lotto Players vs. Non Lotto Players June 15, 2012Colorado Lottery New Game Research82 Overall, Lotto Plus is more appealing to current Lotto Players though Non Lotto Players also found the concept moderately attractive. 55% of Lotto Players and 28% of Non Lotto Players indicated they were somewhat or very likely to purchase Lotto Plus. Q2. Based on this description, if this game were available, how likely would you be to buy this game the next time you purchase lottery games? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Lotto Plus Top of Mind Purchase Intent – Lotto Players vs. Non Lotto Players Base = All Respondents Total (n=1,003), Young, Entitled, Spontaneous Men (n=67), Traditional, Older, Small Splurgers (n=245), Female Fun Squad (n=242), C-Store Dreamers (n=229), Jackpot Hounds (n=220)

Lotto Plus Top of Mind Purchase Intent by Age & Ethnicity June 15, 2012Colorado Lottery New Game Research83 Lotto Plus is more appealing to Hispanic or Latino players. Q2. Based on this description, if this game were available, how likely would you be to buy this game the next time you purchase lottery games? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Lotto Plus Top of Mind Purchase Intent by Age & Ethnicity Base = All Respondents Total (n=1,003), Age 18-34 (n=141), Age 35+ (n=862), Hispanic or Latino (n=86), Not Hispanic or Latino (n=917)

Lotto Plus Ease of Understanding & Differentiation June 15, 2012Colorado Lottery New Game Research84 Overall, Lotto Plus was perceived as easy to understand but not very differentiated from other games. Only 24% of the Traditional, Older, Small Splurgers and 33% of the Female Fun Squad segments think that Lotto Plus is new and different. Q6/Q7. Using the scale provided, how strongly do you disagree or agree with the following? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Lotto Plus Ease of Understanding & Differentiation – Top-2 Box Summary (Agree) Base = All Respondents Total (n=1,003), Young, Entitled, Spontaneous Men (n=67), Traditional, Older, Small Splurgers (n=245), Female Fun Squad (n=242), C-Store Dreamers (n=229), Jackpot Hounds (n=220)

Lotto Plus Average Estimated Annual Purchases June 15, 2012Colorado Lottery New Game Research85 Overall, respondents who would play Lotto Plus indicate they would buy it approximately 14 times per year or about once a month. YES Men and Jackpot Hounds believe they would play the game most often (about twice per month) while C-Store Dreamers, members of the Female Fun Squad, and Traditional, Older, Small Splurgers anticipate playing less often. Q3. Based on this description, if this game were available, how often do you think you would you buy it? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Lotto Plus Average (Mean) Estimated Annual Purchases Base = All Respondents Total (n=1,003), Young, Entitled, Spontaneous Men (n=67), Traditional, Older, Small Splurgers (n=245), Female Fun Squad (n=242), C-Store Dreamers (n=229), Jackpot Hounds (n=220)

Lotto Plus Perceptions June 15, 2012Colorado Lottery New Game Research86 Two thirds or more agree that they like the top prize (66%), and 67% like being able to multiply winnings by 4. General perceptions of Lotto Plus tended to be less positive; less than a third of respondents feel this game provides good value for the money, think this game has good odds, think they would play this game regularly, or would want to play Lotto more often. Q8 Based on this description, please tell us the extent to which you disagree or agree with each of the following statements. Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Lotto Plus Perceptions – Top-2 Box Summary Base = All Respondents

Lotto Plus Estimated Plays per Purchase June 15, 2012Colorado Lottery New Game Research87 Those who would purchase Lotto Plus would buy on average 3 plays per purchase. Lotto Plus Estimated Plays per Purchase Base = Would Purchase Game Total (n=753), Young, Entitled, Spontaneous Men (n=60), Traditional, Older, Small Splurgers (n=126), Female Fun Squad (n=184), C-Store Dreamers (n=191), Jackpot Hounds (n=196) Q4. You indicated you would buy this game [INSERT Q3 RESPONSE]. If this game was available, how many plays do you think you might purchase at one time? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level

Lotto Plus Estimated % of Time Purchasing Game June 15, 2012Colorado Lottery New Game Research88 Those who would buy Lotto Plus would purchase the add-on about half the time. Lotto Plus Estimated % of Time Purchasing Game Base = Would Buy Game Total (n=783), Young, Entitled, Spontaneous Men (n=56), Traditional, Older, Small Splurgers (n=134), Female Fun Squad (n=194), C-Store Dreamers (n=200), Jackpot Hounds (n=199) Q5a. What percent of the time do you think you might spend the extra $1 to add the Lotto Plus option? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level

Lotto Plus Average Satisfactory Win Amount June 15, 2012Colorado Lottery New Game Research89 Overall, a satisfactory win for Lotto Plus would be $10, $2 dollars less than the actual minimum win. Lotto Plus Average (Median) Satisfactory Win Amount Base = Would Buy Game Total (n=783), Young, Entitled, Spontaneous Men (n=56), Traditional, Older, Small Splurgers (n=134), Female Fun Squad (n=194), C-Store Dreamers (n=200), Jackpot Hounds (n=199) Q9. As you know, not all lottery purchases result in someone winning a top prize. With this in mind and assuming you spent ___to play this game, what amount of money would you need to win from this game to be satisfied enough to play again? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level

Leveraging Lotto Plus for Maximum Trial The only strength identified for Lotto Plus is that the game appears fun to play, promoting this will have positive effect as they are moderately motivating. Improving perceptions of I think I would play this game regularly and this game makes me want to play Lotto more often are opportunities as they are considered motivating but prospective players are not yet sold on them. June 15, 2012Colorado Lottery New Game Research91 Perceived Delivery Derived Motivation Opportunities Hot Buttons IrrelevantCost of Entry

Leveraging Lotto Plus Total Young, Entitled, Spontaneous Men Traditional, Older, Small Splurgers Female Fun SquadC-Store DreamersJackpot Hounds Game appears fun to playHot ButtonCost of EntryHot ButtonCost of EntryHot Button I like the other prizes availableCost of EntryIrrelevantCost of Entry I like the top prizeCost of Entry Lots of ways to winIrrelevant I like the nameCost of EntryIrrelevantCost of Entry Good value for my moneyIrrelevantCost of EntryIrrelevant Has good oddsIrrelevant OpportunityIrrelevant OpportunityIrrelevant I'd play regularly Opportunity Like multiplying my winningsCost of Entry Hot ButtonCost of EntryHot Button Makes me want to platy Lotto more often Opportunity Irrelevant June 15, 2012Colorado Lottery New Game Research92

New Game Preference June 15, 2012Colorado Lottery New Game Research93

Favorite Game June 15, 2012Colorado Lottery New Game Research94 Overall, 5 Card Cash was favored more than any other game evaluated; the game had particularly strong appeal with the C-Store Dreamers (44%) though the game was preferred by approximately one third or more of all surveyed. Lucky in Life was preferred by 29% of those surveyed and its appeal was fairly equal across all segments. Colorado 3 and Lotto Plus had lower appeal overall across all audiences. Q12. Please rank each of the concepts you have just evaluated in order of overall preference with 1 being the game you most prefer and 3 being the game you least prefer. Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Favorite Game Base = All Respondents Total (n=1,003), Young, Entitled, Spontaneous Men (n=67), Traditional, Older, Small Splurgers (n=245), Female Fun Squad (n=242), C-Store Dreamers (n=229), Jackpot Hounds (n=220)

Reasons for Favorite Game Selection Colorado/Arizona 3 Perceived winnability and costs were considered strengths. There was also some recognition of Numbers play from other jurisdictions. “Best chance to win.” “Because it has good odds and a good price.” “Less risky.” “Quick & easy.” “I like the $.50 bets.” “ONLY COST $1.00 TO PLAY.” “Kind of like horse betting.” “Because we had a game similar to this in Michigan.” “It was fun, appeared to be a better deal.” June 15, 2012Colorado Lottery New Game Research95 Lotto Plus As an add-on to the current Lotto game, Lotto Plus’ strengths were it’s ease of application, it’s cost and the 4X multiplier factor. “Easy to understand.” “Easy to understand - bigger payoff.” “I like lotto already so $1 more doesn't seem horrible. Also like the winnings times 4.” “Quadruple the winnings.” “4 times win.” “Best result possibilities for the money.” 5 Card Cash Ease of play, the Poker style theme, and odds were considered strengths. “Easiest to play and understand.” “Simple, buy it! Check it! Celebrate!” “It seemed the most fun.” “I like that you don’t have to select numbers” “I like the Poker element and fact that you can spot a winner without having to wait for a drawing.” “I like that the concept is different than a typical drawing and I prefer cards to other forms of gambling.” “Seemed mostly likely to win.” “better odds” Lucky in Life Strengths included the games top prize and the name. The game was also perceived to be different from existing games. “The whole appeal to me with a lottery is that it is possible to win a jackpot that will change your life...the others games don't offer a real jackpot.” “Like the concept of $1000 per day for life.” “1000 a day for 30 years top prize.” “I LIKE THE NAME.” “I like the name and the fact that I can win $1000/day.” “It has the best overall winnings and is the most different from games I already play. It is a good value for my money as well.” Q14. Why did you select [Insert game most preferred from Q12 (Q12=1)] as the game you liked least?

Least Favorite Game June 15, 2012Colorado Lottery New Game Research96 Overall, the least favorite concepts were Colorado 3 and Lotto Plus – each was ranked last by 32% of the respondents. Q12. Please rank each of the concepts you have just evaluated in order of overall preference with 1 being the game you most prefer and 3 being the game you least prefer. Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level Least Favorite Game Base = All Respondents Total (n=1,003), Young, Entitled, Spontaneous Men (n=67), Traditional, Older, Small Splurgers (n=245), Female Fun Squad (n=242), C-Store Dreamers (n=229), Jackpot Hounds (n=220)

Reasons for Least Favorite Game Selection 5 Card Cash Poker themes can be polarizing and some don’t like Poker and card related themes. “Don’t like poker/don't like cards.” “I don't play cards so the concept seems more complicated to me.” “Hard to understand completely.” “Seems like a lot of hassle AND I don't like cards.” “I like the game, I just don't poker that much. It's still a good game. They all are.” “Odds are too high. There should be a higher payout for non-top winning –prizes.” June 15, 2012Colorado Lottery New Game Research97 Lucky in Life The game was perceived to have poor overall odds and was found to be complicated. “Are you kidding... 13 million to 1 odds.” “The odds are to big and I do not like the game.” “Too complicated.” “Just didn't seem all that different from other games out there and the name is silly.” “I believe this reminds me as how the Powerball is now played. Besides I am cheap and would rather only pay a 1.00 and chance to win.” Lotto Plus For players who did not like Lotto, Lotto Plus did little to change their opinion. Others believed there may have been changes made to the current game. “I don’t have very good luck with lotto.” “I have never liked the Lotto and Lotto Plus is just a multiplier for the original game.” “It didn't appeal to me.” “1-40 sometimes it seems like the regular games – nothing new.” “Too similar to what is already available.” Colorado Colorado 3 was perceived to be confusing by many; the odds were not perceived to be favorable and the top prize was perceived as being too small. Two draws per day were seen as excessive. “To complicated.” “Confusing!” “The largest prize is only $500?” “Didn't like the top prize.” “The ROI is low for the amount of time and effort it requires.” “2 times a day drawings are too many. Can’t get to a store 2 times a day don’t like the odds seems to hard to figure out.” Q13. Why did you select [Insert game most preferred from Q12 (Q12=1)] as the game you liked best?

Forecast Dynamics June 15, 2012Colorado Lottery New Game Research98

New Game Sales Forecasting The Crestwood Model is based upon the volumetric formula shown on the right. The model forecasts a “sustaining sales rate.” Cannibalization is calculated independently, outside the model Elements that the model cannot account for in this test include: – The final game structure and graphics – Brand name changes – Brand development programs – Breadth of retail distribution – Retail merchandising – Game promotions.. June 15, 2012Colorado Lottery New Game Research99

Sustaining Sales Forecast June 15, 2012Colorado Lottery New Game Research100 Game sales on all games will be dependent on awareness generated. 5 Card Cash generates the highest sales potential, followed by Lucky in Life and Colorado 3 (Lotto Plus is shown following) Sales forecast is for sustaining levels, post introductory efforts. Notes: 1. Awareness levels based upon SWAG and 2010 Image Study reported 46% Match Play “aided” awareness. 2. Balance of forecast based upon key business metrics and Crestwood formula

Lotto Plus Sales Forecast June 15, 2012Colorado Lottery New Game Research101 Lotto Plus is expected to increase Lotto sales by up to 14%; almost all gains will come from Players. Minimal cannibalization of current sales is expected as the majority of transactions appear to be single ticket.

A B C D E F G H 10 1 7 4 2 9 6 5 A C F G 6 5 1 F A 6 5 A = 28% B = 3% C = 23% D = 13% E = 5% F = 23% G = 2% H = 2% Using logistic regression the individual responses to a tournament of lottery games can then be turned into “preference shares”. These shares represent the likelihood that the player will choose each of the games they rated. While not ideal for individual predictions of behavior, in the aggregate this method has been shown to be a powerful predictor of consumer choice and an excellent way to assess cannibalization. Tournament Process for Cannibalization Estimates June 15, 2012Colorado Lottery New Game Research102

Sources of Growth – Cannibalization of Existing Games June 15, 2012Colorado Lottery New Game Research103 Much of the spending would result from cannibalization of existing products with 2-3% incremental sales. More than half of the spending is predicted to be cannibalized from Scratch (24% - 27%) and Powerball (27%) while 22% to 26% of the spending would come from the existing Lotto game. Cash 5 would see few adverse effects. Retained Match Play sales will probably merge into other games in general. Sources of Growth and Cannibalization Base = All Respondents (n=1,003)

Demographics & Respondent Profile June 15, 2012Colorado Lottery New Game Research104

Demographics June 15, 2012Colorado Lottery New Game Research105

Game Penetration June 15, 2012Colorado Lottery New Game Research106 Game Penetration Base = All Respondents S6. When did you last play each of the following Colorado Lottery games? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level

Average Weekly Spending by Game June 15, 2012Colorado Lottery New Game Research107 Average Weekly Spending by Game Base = All Respondents S9. Thinking about all of the Colorado Lottery games that you buy and play, approximately how much money do you usually spend on each one of these games in a typical week? Upper case letters indicate significance at the 95% confidence level Lower case letters indicate significance at the 80% confidence level

Appendix June 15, 2012Colorado Lottery New Game Research108

5 Card Cash 5 Card Cash is a game where you get 2 ways to play your hand— an instant win game and an evening draw game with one ticket. You can win up to $100,000 in the nightly drawings and $5,000 instantly. When you play 5 Card Cash, your ticket will print with 5 quick picked playing cards. You win instantly if your 5 Card Cash hand is a pair of Jacks or better, and the words "Instant Winner" will print right on your ticket. You can also win again in the nightly drawings by matching 2 or more cards in any order. Cost per play: $2. A fun new way to play Poker where your hand has 2 ways to win! Sample ticket Check your instant win hand to see if you won instantly! Check your draw wins that evening for the same cards

Colorado 3 Colorado 3 gives you lots of ways to win with just three (3) numbers. Colorado 3 lets you pick your numbers and the different ways they come up, and you can win up to $500! Set your own strategy and you can win with more than one wager type. To play Colorado 3: Pick your three (3) numbers on the play slip, or choose Quick Pick. Select the bet type you’d like to play: o Straight – match your numbers in exact order o Box – match your numbers in any order o Straight & Box – both bet types in one wager Choose the draw you wish to play: midday, evening, or both. You win if your numbers match the Lottery numbers according to your bet type. Colorado 3 costs as little as $0.50 per bet; all wagers must be in increments of $1. Drawings are twice per day. Sample ticket Pick 3 numbers or select Quick Pick Choose your bet type Select the draw time The fun new way to play with only 3 numbers and lots of way to win!

Lotto Plus The new Lotto Plus wager on Colorado Lotto lets you multiply your Lotto winnings by 4 times! You still play Lotto like normal, but with Lotto Plus, any winnings you might receive for Lotto will be multiplied by 4 (except the jackpot). Adding Lotto Plus is easy: Pick your six (6) Lotto numbers, or choose Quick Pick. Select Lotto Plus on the play slip. Adding Lotto Plus costs an additional $1 for a total of a $2 Lotto wager. Increase your Lotto winnings with Lotto Plus! Sample ticket Play Lotto as you normally would Add Lotto Plus

Lucky in Life Lucky in Life gives you the chance to win $1,000 per day! Playing Lucky in Life is easy: just pick five (5) numbers from 1 to 40 and a “Lucky Ball” number from 1 to 21 on the play slip, or choose Quick Pick. You win if you match the Lucky Ball or at least two (2) numbers drawn by the lottery. If you match all 5 numbers and the Lucky Ball, you win $1,000 per day. The $1,000 per day is for 30 years. Lucky in Life is played in Colorado, Oklahoma, and Arizona. Drawings are held twice a week. Price per play is $2. Win $1,000 every day! Sample ticket Choose 5 numbers and 1 Lucky Ball number or use Quick Pick Check your numbers in the drawing to see if you won.

Colorado Lottery New Game Research Collaborative Review June 15, 2012 Prepared by: 10532 NE 68 th Street – Suite D200, Kirkland, WA 98033 (425) 827-6111.

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Colorado Lottery New Game Research Collaborative Review June 15, 2012 Prepared by: 10532 NE 68 th Street – Suite D200, Kirkland, WA 98033 (425) 827-6111.

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Presentation on theme: "Colorado Lottery New Game Research Collaborative Review June 15, 2012 Prepared by: 10532 NE 68 th Street – Suite D200, Kirkland, WA 98033 (425) 827-6111."— Presentation transcript:

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