1. Colorado Lottery Tracking Study The Hispanic & Non-Hispanic Market Differentials May 2011 (W1) for Colorado Lottery by Simon Jaworski

2. 2 2 CO Lottery Tracking Study: Hispanic v Non-Hispanic Content PAGE K EY F INDINGS & R ECOMMENDATIONS 3 – 5 S ECOND C HANCE D RAWING, S OCIAL M EDIA & M AIN L OTTERY B ENEFITS 6 – 9 L OTTERY P LAYERSHIP 10 – 18 S CRATCH GAMES19 – 24 M ULTI -S TATE J ACKPOT G AMES – P OWERBALL & M EGA M ILLIONS 25 – 35 L OTTO 36 – 38 M ILLIONAIRE RAFFLE 39 – 40 K EY L OTTERY D YNAMICS : P LAYER T YPE, D AY P LAYED, 41 – 44

3. 3 3 Key Findings (1)   Hispanics engage with Social Media more than non-Hispanics, specifically YouTube, Twitter and Yahoo, (although Hispanics also skew younger).   Hispanic respondents have greater playership numbers than non-Hispanics across all games, significantly greater in Scratch, Powerball, Lotto, Mega Millions and MatchPlay.   Hispanic respondents also express their plans to purchase CO Lottery games in the future more strongly than non-Hispanics.   Hispanic respondents are significantly more likely to purchase CO Lottery tickets at convenience stores than non-Hispanics.   Hispanic respondents are more significantly more likely to purchase CO Lottery tickets during the mid-week period (Tuesday - Thursday), especially Wednesday.

4. 4 4 Key Findings (2)   Reported average monthly spend on Scratch Tickets is significantly higher for Hispanics ($30) than non-Hispanics ($18).   Hispanics were more likely to be driven to purchase Scratch Games tickets by a ‘lucky’ feeling, than any other factor, significantly higher than non-Hispanics.   Hispanics are significantly more likely to participate in the Scratch Game Second Chance Drawing, than non-Hispanics.   Hispanics are more driven to play Powerball when jackpots are higher, and are also significantly more likely to increase their spend as jackpots increase.   Hispanic respondents were more likely to state their ‘preference for Powerball’ as a key driver for deciding not to purchase Mega Millions.   Hispanics (55%) express a greater likelihood to purchase (Top 2 Box % Definitely/Probably buy) Bonus Millionaire Raffle than non-Hispanics (37%).

5. 5 5 Recommendations 1. 1.Hispanic players love the Colorado Lottery. They are heavier Scratch Game players, they play at convenience stores and more heavily in mid- week, but are their needs being met? Are there specific Scratch Games and Ad campaigns directed at this market? Is there enough point-of-sale materials in Spanish language in convenience stores. 2. 2.‘Feeling lucky’ is a large component of Hispanic’s Scratch game purchase ideals, and should be used as a theme in either advertising or point of purchase material, in Spanish. 3. 3.The Scratch game second chance drawing should also have a Spanish ad campaign as Hispanics are more likely to take part in the drawing. 4. 4.There is also an opportunity with the Bonus Millionaire Raffle, to attract more Hispanics to play. 5. 5.Hispanics appear not to have fully embraced Mega Millions, with a lack of understanding/preference for Powerball currently preventing some players from trying the game. 6. 6.Hispanics claim to play more as Powerball jackpots increase. The Lottery should ensure that awareness of higher jackpots reaches all demographics within the state of Colorado effectively. There is potential for effective use of Social Media with a younger Hispanic market.

6. 6 6 Second Chance Drawing, Social Media & Main Lottery Benefits

7. 7 7 Second Chance Drawing   Hispanics are significantly more likely to participate in the Scratch Game Second Chance Drawing. Capital letters indicate a significant difference across player groups at the 95% confidence level Q5.Are you aware of the Second Chance Drawing that the Colorado Lottery runs, which allows players to submit their losing Scratch tickets for an opportunity to still win prizes from a separate drawing? Q6. Are you likely to participate in a Colorado Lottery Second Chance Drawing? Hispanic (n=125) Awareness of Second Chance Drawing Likely to Participate in Second Chance Drawing Non-Hispanic (n=471) Hispanic (n=125) Non-Hispanic (n=471) C

8. 8 8 Social Media Websites Used   Hispanics engage with Social Media more than Non-Hispanics  Significantly more in the Yahoo, YouTube and Twitter channels Lower case letters indicate a significant difference across player groups at the 90% confidence level Capital letters indicate a significant difference across player groups at the 95% confidence level Q7.Which of the following Social Media websites do you actively use (or visit frequently)? Facebook Yahoo YouTube MSN My Space Twitter LinkedIn Google-Talk Do not follow / visit Social Media websites C C C C

9. 9 9 Main Benefits of CO Lottery for the Residents of CO   While many of the benefits numbers are similar for each group, Hispanics are more likely to see the benefit of the CO Lottery in terms of the financial windfall an individual winner receives   Hispanics also express greater uncertainty about this topic Lower case letters indicate a significant difference across player groups at the 90% confidence level Capital letters indicate a significant difference across player groups at the 95% confidence level Q11.When you think about the Colorado Lottery, what are the main benefits for the residents of Colorado that come to mind? (n=125) Funding for/ maintenance of parks & recreation, open space, outdoor projects Money/Chance to win money/ get rich/Win money to help finances Money goes toward education/ schools Money for state/Colorado/ state projects/ government OtherDon't know (n=471) C C b b

10. 10 Lottery Playership

11. 11 CO Lottery Games - Playership Among Ever Played Colorado Lottery   Hispanic respondents have greater playership numbers than Non- Hispanics across all games  Significantly greater in Scratch, Powerball, Lotto, Mega Millions and MatchPlay *Base=Respondents who have ever played CO lottery games Lower case letters indicate a significant difference across player groups at the 90% confidence level Capital letters indicate a significant difference across player groups at the 95% confidence level Q13.Have you ever played any of [these] Colorado Lottery games? Q14. Which Colorado Lottery games have you ever played? (n=596) Games Played EverEver Played CO Lottery Games Scratch Games Powerball Lotto Mega Millions Cash 5 MatchPlay Raffle tickets None c c C C C

12. 12 Games Played In … TOTAL MARKET   Hispanics have generally higher playership across all games and time periods and are significantly more likely than Non-Hispanics to have played any game in the past week with the exception of Raffle Tickets Lower case letters indicate a significant difference across player groups at the 90% confidence level Capital letters indicate a significant difference across player groups at the 95% confidence level Q15.IN THE PAST YEAR, which of these Colorado Lottery games have you played? Q16.AND IN THE PAST MONTH, which of these Colorado Lottery games have you played? Q17.AND IN THE PAST WEEK, which of these Colorado Lottery games have you played? Total Lottery Playership Scratch Games Powerball Lotto Mega Millions Cash 5 MatchPlay Raffle tickets None … Past Year… Past Month… Past Week Hispanic (n=125) Non- Hispanic (n=471) C C C C C C C C C C C C B c c c c

13. 13 C Games Played In … Among Players within each time period   When viewing CO Lottery players only, the higher Hispanic playership percentages are even more apparent (and statistically significant) *Base=Respondents who have played CO lottery games ever /past year/month Lower case letters indicate a significant difference across player groups at the 90% confidence level Capital letters indicate a significant difference across player groups at the 95% confidence level Q15.IN THE PAST YEAR, which of these Colorado Lottery games have you played? Q16.AND IN THE PAST MONTH, which of these Colorado Lottery games have you played? Q17.AND IN THE PAST WEEK, which of these Colorado Lottery games have you played? Total Lottery Playership Scratch Games Powerball Lotto Mega Millions Cash 5 MatchPlay Raffle tickets None … Past Year… Past Month… Past Week C B C C c C C C c C C B C C C c C C C

14. 14 Outlets Where CO Lottery Tickets Purchased Regularly TOTAL MARKET   Hispanic respondents are significantly more likely to purchase CO Lottery tickets at convenience stores   While Non-Hispanics are more likely to purchase at grocery stores Lower case letters indicate a significant difference across player groups at the 90% confidence level Capital letters indicate a significant difference across player groups at the 95% confidence level Q18.From which of the following outlets do you regularly purchase your Colorado Lottery tickets? Convenience Stores Grocery Liquor Stores Restaurant/Bar Other Outlets C b

15. 15 Issues Faced at Lottery Retail Stores   Hispanics respondents are also more likely to experience issues relating to Scratch Games at retail stores *Base=Respondents who have played CO lottery games in the past year Lower case letters indicate a significant difference across player groups at the 90% confidence level Capital letters indicate a significant difference across player groups at the 95% confidence level Q19.Which, if any, of the following issues have you faced at Lottery Retail stores over the past year? Scratch Games you wanted to play were unavailable Store clerks/employee had little knowledge about games Drawing Game terminals were not working Scratch Game tickets in the dispensers were not visible Lottery Game instructions were unclear Incorrect numbers were displayed at location Other None of the above c c

16. 16 Reasons for Never Playing CO Lottery   Non-Hispanics who have never played CO Lottery are significantly more likely to feel lottery games are not worth the money Capital letters indicate a significant difference across player groups at the 95% confidence level *Base=Respondents who have never played CO lottery Q21.Why have you never played the lottery? B

17. 17 Key Reasons Why Play Lottery   Hispanic respondents are significantly more likely to be motivated to play CO Lottery games to win some money, to try a new game and to join co- workers in an office pool Lower case letters indicate a significant difference across player groups at the 90% confidence level *Base=Respondents who have played lottery in past year Q22.Which of the following are key reasons why you play the Lottery? c c c c

18. 18 Mean Rating: 4.07 3.83 Likelihood to Purchase CO Games in the Future   Hispanic respondents also express their plans to purchase CO Lottery games in the future more strongly than Non-Hispanics. Lower case letters indicate a significant difference across player groups at the 90% confidence level Capital letters indicate a significant difference across player groups at the 95% confidence level 5-point scale where ‘5’ means Definitely Purchase and ‘1’ means Definitely Not Purchase Q23.How likely are you to purchase Colorado Lottery games in the future? Top 2 Box: 73% 66% C c

19. 19 Scratch Games

20. 20 How Often Play Scratch Games   80% of Hispanic scratch players have played within the past month. Capital letters indicate a significant difference across player groups at the 95% confidence level *Base=Respondents who have played Scratch games in the past year Q24. How often do you play Scratch games? Would you say you play? Hispanic (n=70)* Non-Hispanic (n=217)* C

21. 21 C Hispanic (n=70)* How Often Purchase Scratch Game Tickets Lower case letters indicate a significant difference across player groups at the 90% confidence level Capital letters indicate a significant difference across player groups at the 95% confidence level *Base=Respondents who have played Scratch games in the past year Q25.Which of the following best describes how often you purchase each of the following prices of Scratch Game tickets? b B B b b Non-Hispanic (n=217)* C C C   Hispanics are more frequent purchasers of lower and higher price point Scratch tickets

22. 22 Amount Spent on Scratch Games…   Hispanic respondents were more likely to have spent more than $10 the last time they played Scratch Games and also more likely to spend more than $20 in a typical month   The typical month mean spend for Hispanics was $30! …Last Time Played…in Typical Month Lower case letters indicate a significant difference across player groups at the 90% confidence level Capital letters indicate a significant difference across player groups at the 95% confidence level *Base=Respondents who have played Scratch games in the past year Q26.How much did you spend the last time you played Scratch games? Q27.Approximately how much do you spend on Scratch Games in a typical month? Mean: $12 $10 Mean: $30 $18 c b C C C B

23. 23 Importance When Deciding to Buy Scratch Games   Hispanics were more likely to be driven to purchase Scratch Games tickets by a lucky feeling Note: Capital letters indicate a significant difference across player groups at the 95% confidence level *Base=Respondents who have played Scratch games in the past year Q30.Please think about the last time you bought Scratch games. Below is a list of reasons that may or may not have been important to you in deciding to buy these Scratch games. Please check whether each reason was important or not important in deciding to buy the Scratch games. I had spare money I saw the scratch tickets I felt lucky I saw a lottery sign I remembered the advertising The sales clerk mentioned it Reasons for Deciding to Buy Scratch Games C

24. 24 Prize Amount that is a Winning Experience for Scratch Games   Hispanic respondents are more likely to view prizes of more than $100 as a “winning experience” Capital letters indicate a significant difference across player groups at the 95% confidence level *Base=Respondents who have played Scratch games in the past year Q32.When you play Scratch games, what prize amount do you have to win before you feel like you have had a winning experience? $ Prize Amount that is a ‘Winning Experience B C

25. 25 Multi-State Games Powerball

26. 26 How Often Play Powerball   Hispanic Powerball players play the game more frequently than Non- Hispanics Lower case letters indicate a significant difference across player groups at the 90% confidence level *Base=Respondents who have played Powerball in the past year Q33. How often do you play Powerball? Would you say you play? Hispanic (n=66)* Non-Hispanic (n=213)* b

27. 27 Amount Spent on Powerball…   Non-Hispanics are more likely to have spent less than $5 on Powerball the last time they played, as well as being more like to spend less than $5 on Powerball in a typical month Lower case letters indicate a significant difference across player groups at the 90% confidence level *Base=Respondents who have played Powerball in the past year Q34.How much did you spend the last time you played Powerball? Q35.Approximately how much do you spend on Powerball in a typical month? …Last Time Played…in Typical Month Mean: $8 $8 Mean: $14 $15 b b c

28. 28 Importance When Deciding to Buy Powerball   Lottery signs and other advertising were more important to Hispanic respondents when deciding to buy Powerball tickets Note: Capital letters indicate a significant difference across player groups at the 95% confidence level *Base=Respondents who have played Powerball in the past year Q36.Please think about the last time you bought Powerball. Which, if any, of the following reasons was important or not important in deciding to buy Powerball? The Jackpot was high I had spare money I felt lucky I saw the Powerball tickets I saw a lottery sign I remembered the advertising The sales clerk mentioned it Importance When Buying Powerball C C

29. 29 At What Jackpot Amount Do You Begin Playing Powerball   Hispanic Powerball players are more likely to be influenced to play by higher jackpot sizes than Non-Hispanics. Note: Capital letters indicate a significant difference across player groups at the 95% confidence level *Base=Respondents who have played Powerball in the past year Q37.At what jackpot amount do you begin playing Powerball? Size of Jackpot doesn’t matter Mean Amount: $80M $59M C C

30. 30 Jackpot Amount Spent   Hispanics are more likely to spend more on Powerball when jackpot sizes increase Lower case letters indicate a significant difference across player groups at the 90% confidence level Capital letters indicate a significant difference across player groups at the 95% confidence level *Base=Respondents who have played Powerball in the past year Q38. Do you typically spend more on Powerball tickets as the jackpot grows? Do you typically spend more on Powerball tickets as the jackpot grows? Hispanic (n=66)* Non-Hispanic (n=213)* C

31. 31 Multi-State Games Mega Millions

32. 32 How Often Play Mega Millions   Hispanic Mega Millions players play more frequently than Non-Hispanics Lower case letters indicate a significant difference across player groups at the 90% confidence level Capital letters indicate a significant difference across player groups at the 95% confidence level *Base=Respondents who have played Mega Millions in the past year Q46. How often do you play Mega Millions? Would you say you play? Hispanic (n=39)* Non-Hispanic (n=130)* B c

33. 33 Amount Spent on Mega Millions…   Hispanics are more likely to have spent more than $5 the last time they played Mega Millions and more likely to spend more than $5 on the game in a typical month Lower case letters indicate a significant difference across player groups at the 90% confidence level Capital letters indicate a significant difference across player groups at the 95% confidence level *Base=Respondents who have played Mega Millions in the past year Q47.How much did you spend the last time you played Mega Millions? Q48.Approximately how much do you spend on Mega Millions in a typical month? …Last Time Played…in Typical Month Mean: $7 $7 Mean: $18 $15 C B c

34. 34 Mega Millions New Money Spent   Hispanics are more likely than Non-Hispanics to have increased incremental spend of more than $2 on Mega Millions Lower case letters indicate a significant difference across player groups at the 90% confidence level Capital letters indicate a significant difference across player groups at the 95% confidence level *Base=Respondents who have played Mega Millions in the past year Q49.Of the money you spend on MEGA MILLIONS, about how much in a given week is "new money", that is, money you were not spending on the lottery prior to MEGA MILLIONS being offered in Colorado? Mean Spend : $9 $9 c B

35. 35 Reason for Not Buying Mega Millions Ticket   Hispanic respondents were more likely to state their preference for Powerball as a key driver for deciding not to purchase Mega Millions   Hispanics’ pessimism about prospects of winning also was significant Lower case letters indicate a significant difference across player groups at the 90% confidence level *Base=Respondents who have played Powerball and not played Mega Millions in the past year Q51.In the PAST YEAR, you said you have played Colorado Lottery’s Powerball game, but not the Mega Millions game. Both games are very similar, being National Jackpot drawing games, so what is the main reason you have not bought a Mega Millions ticket? c c c

36. 36 Lotto

37. 37   Hispanics play Lotto more frequently than Non-Hispanics Lower case letters indicate a significant difference across player groups at the 90% confidence level *Base=Respondents who have played LOTTO in the past year Q43. How often do you play LOTTO? Would you say you play? Hispanic (n=55)* Non-Hispanic (n=166)* B c How Often Play Lotto

38. 38 Amount Spent on LOTTO…   Hispanic respondents on average spent significantly more than Non- Hispanics the last time they played Lower case letters indicate a significant difference across player groups at the 90% confidence level Capital letters indicate a significant difference across player groups at the 95% confidence level *Base=Respondents who have played LOTTO in the past year Q44.How much did you spend the last time you played LOTTO tickets? Q45.Approximately how much do you spend on LOTTO in a typical month? …Last Time Played…in Typical Month Mean: $16 $6 Mean: $18 $17 c B C c

39. 39 Millionaire Raffle

40. 40 Likelihood to Purchase Bonus Millionaire Raffle   Hispanics express a greater likelihood to purchase Bonus Millionaire Raffle. Capital letters indicate a significant difference across player groups at the 95% confidence level *Base=Respondents who have ever played CO lottery games Q57.How likely are you to purchase a Bonus Millionaire Raffle game from the Colorado Lottery between April and July 2011? Mean Rating: 3.6 3.3 Top 2 Box:55% 37% C C C B

41. 41 Key Lottery Dynamics

42. 42 Days of the Week Typically Buy Lottery Tickets   Hispanic respondents are more likely to purchase CO Lottery tickets during the mid-week period (Tuesday, Wednesday and Thursday) Lower case letters indicate a significant difference across player groups at the 90% confidence level Capital letters indicate a significant difference across player groups at the 95% confidence level *Base=Respondents who have played games in the past year Q61.On which days of the week do you typically buy Lottery tickets? Monday Tuesday Wednesday Thursday Friday Saturday Sunday C c c

43. 43 Lottery Statements – Agree – Top 2 Box %   Hispanic respondents are significantly more likely to feel that gas prices and hearing about local winners impact their lottery purchase behavior   Non-Hispanics are less likely to increase spend in the future Lower case letters indicate a significant difference across player groups at the 90% confidence level Capital letters indicate a significant difference across player groups at the 95% confidence level Q63.On a 1 to 5 scale, where 5 is Strongly Agree and 1 is Strongly Disagree, please rate how much you agree or disagree with each of the following Lottery statements… It is unlikely that I will increase my spend on the Lottery in the future. The Lottery has been an overall benefit to the state of Colorado. The Colorado Lottery has been run honestly. The price of gas has directly lowered my spend on the Colorado Lottery. The state of the economy has had a direct effect on my Lottery spending habits. The lottery is an inexpensive form of entertainment. I am more likely to play lottery games when I've heard about a local winner. The chances of winning a prize in the Colorado Lottery are good. Top 2 Box Scores 5 = Strongly Agree, 4 = Somewhat Agree 1-5 scale C C b

44. 44 Satisfaction with Powerball   Hispanic respondents are significantly more likely to classify themselves as “extremely satisfied” with Powerball Lower case letters indicate a significant difference across player groups at the 90% confidence level *Base=Respondents who have played Powerball in the past year Q59a.For the following games that you have played in the past year, how satisfied are you with each game you have played? Please use a scale from 1 to 5 where 5 is Extremely satisfied and 1 is Not at all satisfied. Mean Rating: 3.26 3.23 Top 2 Box: 41% 40% B c