1. A Second Chance How to Enhance your Scratch Product Through Second-Chance Drawings Presented By: Todd Greco – Colorado Lottery Scratch Product Manager Ken Sabey, Director of Sales, HostWorks, Inc.

2. Overview Pre-Second Chance Drawings Mail-in, then Internet Internet Second Chance Drawings Evolve Success

3. Taking a Second Chance 1983 – Players sent in non-winning scratch tickets for a chance to spin a wheel to win $1,000,000 Second-chance wheel spin drawings end with the introduction of Lotto in 1989 Mail-in second-chance drawings return in September 2003 with the game Trucks and Bucks First second-chance Internet drawing held in August 2004 as part of the scratch game Coral Cash

4. Taking a Second Look at Second Chance Drawings Internet second-chance drawings evolve into a Family of Games promotional opportunity –Games associated with a similarly themed group of games are entered into one drawing for a chance to win four to six $500 prizes. First Family of Games Internet promotion drawing takes place in January 2005 associated with the Luck series of games – $1 Bee Lucky – $2 Triple Luck – $5 Lucky Bucks

5. Seconds Are Not Enough To expand the popularity of Internet second- chance drawings – a new twist is introduced with the Holiday family of games in 2006 –All games associated with the family of games are included in one drawing –One ticket from the entries will be selected as the winner –Each price point is assigned a prize value $1 -- $1,000 $2 -- $2,000 $3 -- $3,000 $5 -- $5,000 $10 -- $10,000

6. Seconds Turn Into Minutes The success of the second-chance Internet promotional drawings lead to thoughts of ending mail-in drawings all together –As of January 2008 top-prize second-chance drawings still rely solely on the mail-in entry option –Players spent nearly $300,000 in postage to enter top-prize drawings each year –The Colorado Lottery had to process and store in excess of a million tickets each year –Drawings took several hours to complete –Security of the drawings was the main concern of switching from mail-in to Internet top-prize second- chance drawings

7. Silver Seconds In association with the Colorado Lottery’s 25 th Anniversary, a $10 game called Silver Celebration was developed –Top prize of $25,000 –Provided a good opportunity to test Internet top-prize second-chance drawing with a relatively small prize amount -- $25,000

8. Overview Data Center Security Server Security Receiving HASH Data Testing Entry Process Drawing Process

9. Secure Environment Data center security Manned 24/7 SAS70 Controlled Security Procedures Locked cabinets Security cameras Colorado Department of Revenue personnel background checks Yearly security audits

10. Secure Environment Server security Follow the manufacturer’s security standards for the operating system and development platform Dedicated firewall Server and database access via VPN tunnels only Access controlled at user level Secure Socket Layers (SSL) used to encrypt data Robust suite of anti-virus tools Pro-active monitoring of the servers

11. Drawing Setup Receiving the HASH data Data is transmitted via an encrypted SFTP protocol (must have key to connect) Access limited to authorized personnel Encrypted files uploaded to web server, then unencrypted with the key HASH data uploaded into database for specific game over encrypted connection HASH = plug a string into it, outputs a 32 character string back

12. Drawing Setup Testing Developer does initial test with non-active VIRN numbers to verify it works Lottery personnel conduct second level of testing prior to sign-off on the game Test entries are tracked and stored separately from actual entries

13. Entry Process Entering the Ticket Number Player enters 2CD section of Lottery’s web site2CD section Enters VIRN number from non-winning scratch ticket System does one-way encryption to HASH algorithm to determine validity If non-valid, user is presented with immediate feedback on reason If valid, entry is stored in entry table Numerous failed attempts result in entry form access being temporarily disabled for player

14. Entry Process Entry Submission Upon successful submission, player is provided option to enter another ticket number MyLottery player has option to review their 2CD history when logged in or to opt-in to a weekly email summary All drawing entrants will receive an email notification revealing the winner of the drawing.

15. Drawing Process Acquiring Entrants Authorized Lottery personnel login into Admin section of web siteAdmin section Second level of dual logins required to access Drawing system Drawing team chooses a 2CD game from list of available games, system provides output of total number of entrants Automated security audit performed on data to scrub for possible duplicate entries Lottery security performs data integrity check

16. Drawing Process Winner Selection Drawing team runs the drawing on a separate stand alone automatic draw machine Drawing team logs back into drawing system and inputs the winning entrant’s number; system outputs that entrant’s contact information Drawing team now downloads copy of the entrants database Winner is contacted by Lottery personnel Winner has to physically present the scratch game ticket

17. Summary Generate player interest and ticket sales Save money for both Lottery and players Security