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Confidential Property 1 Rick Weil President, Sciplay A World of Possibilities: U.S. iLottery & iGaming.

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Presentation on theme: "Confidential Property 1 Rick Weil President, Sciplay A World of Possibilities: U.S. iLottery & iGaming."— Presentation transcript:

1 Confidential Property 1 Rick Weil President, Sciplay A World of Possibilities: U.S. iLottery & iGaming

2 Confidential Property 2 THE LOTTERY UNIVERSE IS EXPANDING – BUT NOT OUT OF CONTROL iLOTTERY JUST MEANS BRINGING INTERNET & MOBILE CHANNELS INTO THE LOTTERY WORLD

3 Confidential Property 3 ECOSYSTEM STAYS THE SAME STATE LOTTERY OVERSIGHT GOOD CAUSES RETAILERS SUPPLIERSPLAYERS

4 Confidential Property 4 Red Gaming GAMING SPECTRUM Loyalty & Rewards Programs Social Games + Virtual Goods Draw Games Electronic Instant Tickets BingoPokerCasino Extensive 'player segmentation' research has shown that, just like in the offline world, players view lottery as distinctly different than gaming iLOTTERYiGAMING The global Green Gaming market was valued at approximately US$5.35bn in 2010. Growth is expected to reach 23.6% of total global interactive gaming by 2015, with a value of US$9.67bn. Sports Green Gaming

5 Confidential Property 5 CENTRAL GROWTH OPPORTUNITY TOPLINE RESULTS EU player research supports the importance of an online channel as a central growth opportunity INTERNET IS AN IMPORTANT CHANNEL FOR NEW SEGMENTS, ESPECIALLY YOUNGER PLAYERS Finding: 57% are in 18 – 44 Age Group INTERNET GAMING HAS NOT CANNIBALIZED RETAIL LOTTERY SALES; THIS IS VERY CLEAR Finding: Retail Sales Grew at 2X rate for Lotteries with Internet ONLINE PURCHASES ARE INCREMENTAL TO OFFLINE FINDING: 60% Report that EIT Purchases are in Addition to Retail Play EU TRENDS TRANSLATE TO US LOTTERY MARKET FINDING: More Than 45% in U.S. Report They Would Like to Buy Lottery Online

6 Confidential Property 6 RETAIL IMPACT In the EU market there is more sales growth for lotteries with internet presence; an online channel supports retail growth & serves as a promotional tool to drive players back to retail. 2%2% 1%1% Internet Sales Retail Sales 3%3% 1%1% Retail Sales 1%1% Retail Sales 4%4% Internet Sales Retail Sales 6%6% 2%2% DRAW GAMES 5 YR CAGR GROWTH INSTANT GAMES 5 YR CAGR GROWTH Lotteries With Internet Presence Lotteries Without Internet Presence Lotteries With Internet Presence Lotteries Without Internet Presence Sources: Sciplay Analysis, MECN Lottery Benchmarking Report

7 Confidential Property 7 Draws new consumers to the games and grows retail sales Lottery customers buy on average 50% more items in-store than non-lottery customers Drives new growth; does NOT cannibalize traditional lottery retail sales UK National Lottery retail commissions (a proxy for retailer sales) increased by more than 8% from 2003-2011 while they launched iLottery products Retail sales grew—instant games grew 20% in 2011 Serves as a complementary lottery sales and marketing channel – NOT a replacement channel Italian Lottery increased instant ticket sales from €408 million to over €10 billion over an 8 year period while expanding all their online products including Lottery games, Sports Betting, Poker, Casino games and rolled out 25,000 VLTs Provides a social experience Facebook (of course), Checking In on Four Square is a good example for retailers Reward Retailers for driving sales on the Internet INTERNET CAN INCREASE RETAIL REVENUES

8 Confidential Property 8 MULTIPLE OPPORTUNITIES TO ENSURE SUCCESS

9 Confidential Property 9 CRITICAL COMPONENTS A HOLISTIC APPROACH Serving all stakeholders and growing the Lottery holistically across internet and retail USE OF ALL THE TOOLS Differentiate with engaging content, more win opportunities, and embedded retail presence SECURITY & INTEGRITY Player trust is more important than ever

10 Confidential Property 10 THE RIGHT FOUNDATION Player and retailer engagement ties everything together Online Convenience Draws New Participation Purchase at Retail Unlocks More Online Opportunities Online Promotion and eCoupons Drive New Trips to Retail

11 Confidential Property 11 PROVEN GLOBAL PARTNER 3500 EMPLOYEES 40 YEARS EXPERIENCE 120 GAMING CUSTOMERS ON SIX CONTINENTS MORE THAN 100 INTERNET GAMES DEVELOPED LAUNCHED 400+ U.S LOTTERY MICROSITES DISTRIBUTION THRU 280 THOUSAND POINTS-OF-SALES WORLDWIDE CAPACITY TO PRINT 45 BILLION INSTANT TICKETS ANNUALLY REVENUES OF 878 MILLION (2011) 35 LOTTERY CSP + SYSTEM OPERATIONS WORLDWIDE A proven & responsible supplier to the Global Lottery Industry

12 Confidential Property 12 BEST PRACTICES Instant Games Simple scratch to start Leverage paper/offline liquidity to maximize play Migrate to instant win with higher payout % Web Presence Shopping cart model Rewards Club as foundation for engagement Marketing Connect internet with bricks & mortar retail Traditional web techniques (e.g. affiliate, etc.) Funding Options Credit, debit, prepaid, voucher, etc. Winnings deposited in eWallet Draw Games Daily/weekly games are most common for launch Higher frequency offer better sales growth (Keno, etc.)

13 Confidential Property 13 HOW WILL YOUR LOTTERY GET THERE?


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