Difficult Budgets, New Ideas 23 rd March 2010. The Public private partnership structure has enabled...
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Transcript of Difficult Budgets, New Ideas 23 rd March 2010. The Public private partnership structure has enabled...
The Public private partnership structure has enabled the UK government to maximise the value of The UK National Lottery
Under a licence granted by the National Lottery Commission (UK Lottery Regulator), the UK National Lottery is operated by Camelot through a public-private partnership
This approach has enabled the UK government to maximize returns from The National Lottery through aligning the interest of the operator with those of the state
This approach returns to the state 40% of all proceeds received by Camelot
Camelot operates under significant regulatory constraints and faces a highly competitive gaming industry – growth has therefore been driven through innovation
Camelot, delivering a long term strategy for socially responsible growth
The Camelot model is based on high penetration (73% of adult population play) and lower per capita sales
The long-term strategy for growth is based on offering players a regularly refreshed portfolio of games and convenient new ways to play (Interactive, Fast Pay, etc.)
Camelot’s commitment to responsible play is enshrined in its everyday operations and is the guiding principle in all its commercial decision- making
Background behind UK launch of Interactive
Now delivering 13% of total UK National Lottery sales and growing at more than twice the rate of the UK e-commerce industry
Attracts a younger and more affluent player
In the top 5 UK e-commerce sites along with
UK National Lottery online sales have grown since launch – while retail sales also continue to grow
£m
Camelot interactive management model comprises of in-depth expertise in:Player attractionPlayer management and retentionResponsible player growth and cross-selling strategiesInternet marketing optimization
Over 5 million interactive players registered to date and 78% Player retention
Average weekly registrations % Purchasing within period
Month
Longstanding players (registering prior to 07/08) drove 5% more revenue in 08/09 than in 07/08Player registrations and purchasing patterns
Protecting players online
Non-interactive IIWG game demos now give an overview of game play to non-registered players
Interactive lottery enables you to have a direct relationship with players
Comprehensive player protection is key:
Authentication of player’s age and location
Permanent exclusion
Daily buy and try limits on Instant Win Games (interactive scratchcards)
Weekly wallet load limits
“Reality Checks” showing recent spending on account load
Time spent logged-in display
Try for free versions of Instant Win Games (only available to registered players)
Assisting lotteries in global markets
Camelot Global Services was set up to focus on making the most of the knowledge, understanding and expertise acquired in operating the UK National Lottery to assist lotteries outside of the UK market
Camelot Global was recently selected by the California State Lottery to work with them to improve overall performance
We believe in a vendor agnostic philosophy and business model which aligns our interests solely to that of the lottery
Overview of the CA Lottery Partnership
Under this agreement Camelot is partnering, over a four-year period, with the California State Lottery, with the aim to maximize returns to the beneficiaries of the lottery
Purpose: Develop a 3-year business plan and support its implementation
Objective: Build a strategy and execution capability that will substantially and sustainably enhance Net Returns to education
The agreement has created a public private partnership that is unique in its scope:
Clear alignment of incentives for both parties
Camelot Global Services provides an un-conflicted view on the proposed path to success
Although still in its early stages, the partnership is already starting to deliver some immediate and tangible benefits
Public private partnership - value model
Private operator mindset
and capability
Private operator mindset
and capability
US market relevance
US market relevance
StrategyStrategy
Ability toexecute
Ability toexecute
Sustainableprofit growth
Sustainableprofit growth
CA Lottery expertise
CA Lottery expertise
A unique partnership
The engagement is unique in the industry, providing a number of new benefits to the State of California:
Private operator mindset and capability without full scale privatization
Total alignment of incentives model specific to execution
Focus on both top-line growth and operational efficiency to drive bottom-line returns
Teaming with lottery employees to create a sustainable ability to execute – emphasis on staff acceptance, coaching and development
Access to valuable operator knowledge: sales, marketing, games, Scratcher optimization, retailer & stakeholder management, etc
Customer/Operators perspective with respect to main vendors
Results to date
Scratchers
Business Wide
DBG Marketing Retail
•Sales growth this fiscal•Trading mindset
•Mandate and urgency for decisions on game changes
•Refocus on core activities: MegaMillions and Scratcher campaigns
•Agenda of change and focus on performance•Initiation of retail pilot
Very early days, but we are starting to see some tangible effects
•Appetite and enthusiasm for change•Sense of the possible – base potential for $1.7 billion incremental sales over 3 years
Early Benefits – real and tangible
For the scratchers business specifically, there is tangible evidence of the shoots of revenue growth.
Settlements ($m)
28
30
32
34
36
38
40
11
/07
/20
09
25
/07
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09
08
/08
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22
/08
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05
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03
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17
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31
/10
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14
/11
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28
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12
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/12
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/01
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23
/01
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10
06
/02
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/02
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10
06
/03
/20
10
Settlements ($m)
TREND
Quick Wins Implementation
Outlook – CSL
2010 is going to be a very big year for the California Lottery:
Approval of the 3-year business plan
Realization of Quick Wins: achieving this year’s stretch revenue targets (not just stemming the decline!!)
Shaping the implementation Program for success
Integrating the 3-year business plan back into next year’s budget
Critical decisions on draw-based games
Implementation of base initiatives
Outlook – Camelot for 2010
Primary market of focus outside of the UK is the US
Dedicated US-based team with an optimal blend of UK and US experience
We believe Camelot’s model and experience aligns well to the US Market:
States need to increase revenue to deal with budgetary pressures
Aligned incentive model – state wins, Camelot wins
Need for operator expertise with new ideas and an un-conflicted agenda
Strong benefits to be gained through an aligned incentive public private partnership model