Multi-Jurisdiction Games “The World Is Not Enough”
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Transcript of Multi-Jurisdiction Games “The World Is Not Enough”
Multi-Jurisdiction
Games“The World Is Not
Enough”Presented By:
Brian GeorgePresident & CEO
Supreme Ventures Limited
Industry Overview Gaming Industry
Lottery Market (numerical games, instants) – Top Player Betting Market (sports, financials) Casinos and Video Lottery Games
2007-2011 Total Worldwide Lottery Per Capita Sales (Excluding VLTs and Instant)
2011 Worldwide Lottery Sales - US$190.5 Billion 2010 Worldwide Lottery Sales – US$180.6 Billion
Excluding VLTs and Instant % Change Increase– 5.5% Source: La Fleur’s
Industry Overview2007-2011 Total Lotto/Spiel Sales
Source: La Fleur’s
2011 Total Worldwide Lottery Sales
Games Include: Lotto/Spiel, Numbers, Keno, Toto, Bingo, Draw, Instant/Pulltab
2011 Worldwide Lotto/Spiel Sales
Lotto/Spiel
Industry Overview
Source: La Fleur’s Annual Report 2012
Industry Overview First Half of 2012 Sales by Region
Despite the financial crisis over the past few years lotteries worldwide continue to grow and perform strongly over the first half of 2012 (January- June) Increase of 10.7%
Source: World Lottery Association
Industry Overview 2011 Top 10 Worldwide Lotteries (Lotto&Spiel) by Per
Cap Sales
Source: La Fleur’s Annual Report 2012
US$
Industry Overview2011 Top 10 US State Lotteries (Lotto&Spiel) Showing the
Contribution of Multi-jurisdictional Games by Per Cap Sales
Population 8.8 M
Population 19.1 M
US$
Source: La Fleur’s Annual Report 2012
Population 8.8 M
Population .6 M
Population 19.5 M
Population 19.1 M
Population 12.7 M
Population .9 M
Population 1.1 M
Population 1.3 M
Population 3.6 M
Population 6.6 M
$65.56
$63.58
$57.88
$46.88$46.43
$43.40$43.80$42.59$42.46
$41.58
Challenges in the Industry Jackpot Fatigue
Players no longer excited by the prospect of winning available jackpots.
Players demand higher jackpots Will pay higher price for bigger jackpots
PowerBall January 2012 – Cost of ticket increased US$1 to US$2
Gaps in Customer Gaming Market Traditional lottery player – 35-65 years old Product offerings do not appeal to all target markets 18-35 demographic is shrinking and lacking
motivation to buy within industry A key market, “tech-savvy” consumers – to find a
way to communicate and buy
Challenges in the Industry
Keeping up with Technology Last 15 years- internet / PC based era Technology continues to advance
Rapid growth of smartphones and tablets worldwide
Lotteries have to keep moving and growing with technology Reach its potential market Gain its most profitable returns
Regulatory Restrictions Example: In Brussels there are legal and legislative
battles underway on the issue of cross border gambling
Adapting to the Challenges
Possible increase of customer base to reach a broader market by bridging demographic gaps through new technology and communication channels such as mobile gaming.
Introduction of lotteries in the mobile gaming industry will create many profitable opportunities such as: Creating more options and exciting ways for
consumers to choose and buy Expansion of multi-jurisdictional games
Multi-Jurisdictional Games Multi-Jurisdictional Games
A group of lottery jurisdictions offering the same game Provides more excitement
Larger pool, larger jackpots
Examples: Europe – Euro Millions North America
Mega Millions PowerBall
Caribbean – Super Lotto
Challenges Laws and regulations within the game and geographical
restrictions Providing games that deliver excitement and appeal to a more
diverse consumer base Cannibalization
Multi-Jurisdictional Games - EuroMillions Europe – EuroMillions started February 2004 European Countries
February 2004 -U.K, France, Spain, October 2004-Austria, Belgium, Luxembourg, Portugal
,Sweden 2007 – 2011 Total EuroMillions Per Capita Sales
Total EuroMillions Sales 2011- £5.958 Billion Total EuroMillions Sales 2010- £4.346 Billion
% Change increase – 37.11%
Multi-Jurisdictional Games - EuroMillions
Top 5 EuroMillion Jackpots won: August 2012, €190million, 1 winner, U.K. July 2011, €185million, 1 winner, Scotland February 2006, €183million, France and Portugal March 2011, €138.2million, 2 winners, Belgium and
Portugal October 2010, €129.8million, 1 winner, U.K.
Multi-Jurisdictional Games - EuroMillions
United Kingdom EuroMillions Per Capita Sales versus Total EuroMillions Per Capita Sales 2004-2011
2011 UK EuroMillions Sales - £1.666 Billion 2010 UK EuroMillions Sales - £1.056 Billion
% Change increase – 57.85%
Multi-Jurisdictional Games - EuroMillionsUnited Kingdom Product Portfolio 2005 vs. 2011
2005 – £5.013 Billion 2011 - £6.503 Billion
Multi-Jurisdictional Games - EuroMillions
United Kingdom % Change 2005 Vs. 2011
283.01%
EuroMillions -
18.07%
Lotto
78.52%
Lotto Plus5
-7.13%
Thunderball
99.51%
Scratchcards
-11.2%
Hotpicks
North America – Mega Millions & PowerBall
MEGA MILLIONS ONLY
POWERBALL ONLY
BOTH MEGA MILLIONS & POWERBALL
Multi-Jurisdictional Games – North America
North America – MegaMillions started August 1996 Started with 6 Jurisdictions
Georgia, Illinois, Maryland, Massachusetts, Michigan, Virginia
Currently available in 42 states along with District of Columbia and U.S Virgin Islands
Top 5 MegaMillions Jackpots won: March 2012, $656 Million, 3 winners Kansas, Illinois,
Maryland March 2007, $390 Million, 2 winners New Jersey, Georgia January 2011, $380 Million jackpot, 2 winners Washington
State, Idaho August 28, 2009, $336 Million jackpot, 2 winners California,
New York March 2011, $319 Million, 7 winners, New York
Multi-Jurisdictional Games – MegaMillions
Multi-Jurisdictional Games – MegaMillions
MegaMillions Per Capita Sales Vs. Total US Lottery Sales 2006-2011
Total Sales 2011 US$3.236 Billion Total Sales 2010 US$3.078 Billion
% Change Increase – 4.23%
Multi-Jurisdictional Games – MegaMillions
2011 Top 10 MegaMillions States by Per Capita Sales
North America – PowerBall started April 1992 Previously known as Lotto America Started with 15 Jurisdictions
District of Columbia, Delaware, Idaho, Indiana, Iowa, Kansas, Kentucky, Minnesota, Missouri, Montana, Oregon, Rhode Island, South Dakota, West Virginia, Wisconsin
Currently Available in 44 Jurisdictions
Top 5 PowerBall Jackpots won: February 2006, $365million, Multiple Winners, Nebraska August 2012, $337milloin, 1 winner, Michigan February 2012, $336.4, 2 winners, Rhode Island March 2008, $276million, 1 winner, West Virginia August 2009, $259.9million, 1 winner, South Carolina
Multi-Jurisdictional Games – PowerBall
Multi-Jurisdictional Games – PowerBall2011 Top 10 PowerBall States by Per Capita Sales
Multi-Jurisdictional Games – PowerBallPowerBall Per Capita Sales Vs. Total US Lottery Sales
2006-2011
Total Sales 2011 US$3.107 Billion Total Sales 2010 US$3.228 Billion
% Change decrease – 3.74%
Multi-Jurisdictional Games – MegaMillions &PowerBall
MegaMillions & PowerBall Sales as % of Total US Lottery Sales 2006 Vs. 2011
9.32%Mega Millio
ns 10.22%Power
Ball
Multi-Jurisdictional Games – MegaMillions &PowerBall
MegaMillions & PowerBall Per Capita % Sales Change 2006 Vs. 2011
In 5 years – slight increase Maturity stage in product life cycle
Needs innovation, “new life” – to increase and grow profits
Multi-Jurisdictional Games – MegaMillions & PowerBall
Total Multi-Jurisdictional Us Games Sales Per Capita Vs. Total US Lottery Sales 2006-2011
Caribbean- Super Lotto started August 2009 Only muliti-jurisdictional game currently operating in
Caribbean, Central and South America Available in Dominican Republic, Jamaica, Barbados,
Anguilla, Antigua, and Barbuda, Bermuda, St Kitts and Nevis, Barbados, St Marteen and United Virgin Islands.
2011 Total SuperLotto Sales- US$14.477 Million 2011 SuperLotto Per Capita Sales- US$ 5.17
Super Lotto Jackpots won: October 2010, J$467 Million/ US$5.4 Million St. Maarten September 2011, J$387 Million (split price)
won J$232 Million / US$2.6 Million, Jamaica
Multi-Jurisdictional Games – SuperLotto
Multi-Jurisdictional Games – United States vs. Jamaica
US MJG60%
Other US
Lottery40%
US 2011
JA MJG31%
Other JA Lottery
69%
JA 2011
Opportunity for growth in country
Tremendous opportunity for growth in SuperLotto Trinidad & Tobago, Central & South America
The expansion of multi-jurisdictional games would allow this region to become a player in the world stage of multi-jurisdictional lotteries and give the region leverage with negotiation and participation with other multi-jurisdictional lotteries
Multi-Jurisdictional
games represent 60% in the
US
Multi-Jurisdictional
game represent
31% in Jamaica
Multi-Jurisdictional Games How do we increase sales among existing jurisdictions?
How do we increase sales across multi-jurisdictional games?
How do we address the consumer buying industry to penetrate for more reach in existing games whilst expanding regions?
Key ideas: Expand total revenue Increase per cap sales with an increase in contribution
without cannibalization Expand reach of customers (population base) Change value propositions
Are we going to need to increase region? Or increase how we market?
Multi-Jurisdictional Games will inevitably lead to a “Worldwide Lottery”
Tremendous opportunity to expand multi-jurisdictional games
The present reality of mergers, partnerships and acquisitions is helping to create a foundation Enables lottery companies to meet the increasing demand
for innovative gaming products.
Individual jurisdiction lotteries and current multi-jurisdictional games will reach a point of jackpot fatigue
Tipping point of an increase pool and jackpots
“Multi-jurisdictional lottery games are not only inevitable but necessary for growth in the lottery
industry.”
Multi-Jurisdictional Games will inevitably lead to a “Worldwide Lottery”
Establishing a worldwide lottery, which can and will exist with the growth of the mobile industry.
Customers want better chances/odds of winning worldwide lottery will increase chances of winning,
bigger jackpots Increase profit for the lottery companies (customers
will increase their spend when the jackpot it high).
Attracting public participation to the global game by focusing on the good causes/ public funded projects that will benefit from additional revenue, Generated through the larger pool of funds.
Multi-Jurisdictional Games will inevitably lead to a “Worldwide Lottery Jackpot”
2011 Worldwide Lottery Sales
Potential future growth
in these markets
especially due to their large
population size
Northern
Europe 100M Wester
n Europe 189M
Eastern Europe 295M
Southern
Europe 155M
USA & Canada 347.4M
South America 400.1M
Central America
& Caribbean 197.4M
China 1.34B
India 1.2B
Africa 1.1B
7 Billion
Potential “WorldwideLottery” Market
Multi-Jurisdictional Games will inevitably lead to a “Worldwide Lottery Jackpot”
Maximum Generated Jackpots: Mega Millions - US$656 Million Powerball - US$364 Million Euro Millions - US$257 Million Super Lotto - US$5 Million
If all four of these were to be combined on a Per Capita basis, a possible worldwide lottery jackpot, based on a population size of 7 billion, would potentially generate US$12.177Billion
The additional contribution to the pool of funds would also be significantly increased when Africa, China and India are factored in
Multi-Jurisdictional Games will inevitably lead to a “Worldwide Lottery Jackpot”
Potential Worldwide Lottery Jackpot
$12.177B
Mega Million
s$656M
Powerball
$364M
Euro Million
s$257M
Super Lotto$5M
Multi-Jurisdictional Games will inevitably lead to a “Worldwide Lottery Jackpot”
Benefits for participating countries Opportunity for retailer expansion
Increased employment Increased agents commission
Increased taxes collected in the country of residence of the winner
Increased revenue to be used for “Good Causes”
Larger players in the industry who have access to more resources/funds can boost the growth of the industry by investing in smaller lottery companies/partnerships Provide design support Marketability of new/other games, Functional and technological modernization of the draws in the smaller
operations/territories
Example: The new partnership of Spain’s State Society State Lotteries (SELAE) and Loteria Nacional de la Republica Dominicana will introduce the lottery “El Gordo de la Primitiva” in Dominica Republic, February 2013 8 Award Categories Guaranteed minimum weekly prize of US$6.48M Possibility to accumulate prizes up to US$51.87M
Creating more exciting options for consumers to choose and buy
These incentives might not be enough. To fully maximize the potential of multi-jurisdictional lottery
mobile money cannot be ignored. Allows lotteries to expand their reach without
proportionally increasing their cost. New way of consumer access.
Mobile creates access It will continue to help to grow the lottery industry by being able
to drive the expansion of territories through the idea of mobile money
Mobile Money Is the ability to use your cell phone to transact business A treasury function/management which creates a electronic
account/wallet that can be credited or debited through your cell phone
Creating more exciting options for consumers to choose and buy
The growing mobile industry contributes to the increasing growth of mobile gaming At the end of 2011- 6 billion mobile subscriptions worldwide
87% of the world population of 7.043 Billion. It will bridge the gap between demographics and tap into the 18-35 demographic
Technology enable operators to turn every player user interface into a medium to provide consumers with the entire portfolio of games It will benefit all:
Content Providers- by giving them the widest exposure of games Distributors – by enabling them to sell more products and
deliver better value to their customers Consumer – giving them more options, making it easy to
exercise their freedom to choose The ultimate consumer trigger in the buying process
Multi-Jurisdictional Games will inevitably lead to a “Worldwide Lottery Jackpot”
How should Lottery companies/participating countries prepare themselves and players for someone to wake up a billionaire:
Lottery companies would need to consider the possibility that potential players may think that such large jackpots are impossible to conceive and win, and hence may choose not to participate. September 3, 1988 the largest single lottery jackpot in world history,
to that date, was won in Florida (Winter Springs) for US$55.16M in 2012 there was a winning Mega Millions jackpot of US$656 Million
(now the largest winning jackpot in American history)
Participating Lottery companies would also need to consider if such a collaboration could be so big that it could fail, perhaps because of challenging regulatory issues, legal and legislative concerns which would have to be tackled
Lottery companies could also, for jackpot winners, direct them to financial institutions and advisors who would be able to assist and advise them with making wise decisions with their new found and massive wealth.
Multi-Jurisdictional Games will inevitably lead to a “Worldwide Lottery Jackpot”
Is it possible for a jackpot to be too big?
Is it possible for it to be so big that it is a set up to fail?
Would jackpots so big lead to the participating jurisdictions being forced to think differently on how they payout winning prizes?
Could a higher percentage of payments go to lower tiered prizes to help generate excitement and participation to the “Worldwide Lottery” game? Do subsidiary prizes now become more important in keeping interest? Can we now create multiple lower tier millionaires?
“The World Is Not Enough”