1. Director’s Comments Presentation to California State Lottery Commission September 27, 2012 Director’s Report 6A

2. Overview General Business Update Major Budget Changes Operational Updates Projects Update

3. General Business Update Final results in for Fiscal Year 2011/12 –$4.371 billion in sales, a 27% increase over FY 2010/11 –$1.32 billion to education, a 17% increase over FY 2010/11 Lottery experienced the “Summer Slump” that has occurred in previous years Instituted a bonus program for players and retailers to generate sales Revenues in Fiscal Year 2012/13 are 10% below goal, but 20% ahead of last year at this time General Business Update

4. Major Budget Changes Implementation of Powerball moved up from July 1, 2013 to April 8, 2013 Eliminated use of Retired Annuitants and Student Assistants per Governor’s Executive Order –24 SAs/RAs eliminated FY 2011/12 –29 SAs/RAs in FY 2012/13 Received Commitment from CVS for increased participation –205 Current CVS retailers to convert to new business model –314 new CVS retail outlets in No. California

5. Operational Updates Cal-Card Visa Deactivations Provision of Attire to Sales Staff Letters to Low Volume Retailers Scratchers RFP/Implementation Timeline Extended Focus on Activations/Sales Staff Accountability Developing Loyalty Program RFP

6. Project Updates Supply Chain Management Study District Office Consolidations Put on Hold –East Bay / San Francisco –San Diego / Santa Ana Regulatory Review Effort On-going Completion of Contract Management Study Completion of Customer Contact Center Study