The World Is Not Enough Presented By Brian George President amp CEO Supreme Ventures Limited Industry Overview Gaming Industry Lottery Market numerical games instants Top Player ID: 323765
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Slide1
Multi-Jurisdiction Games“The World Is Not Enough”
Presented By:Brian GeorgePresident & CEOSupreme Ventures LimitedSlide2
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 Billion2010 Worldwide Lottery Sales – US$180.6 BillionExcluding VLTs and Instant% Change Increase– 5.5%
Source: La
Fleur’sSlide3
Industry Overview2007-2011 Total Lotto/Spiel Sales
Source: La
Fleur’sSlide4
2011 Total Worldwide Lottery Sales
Games Include: Lotto/Spiel, Numbers, Keno, Toto, Bingo, Draw, Instant/Pulltab
2011 Worldwide
Lotto/Spiel Sales
Lotto/Spiel
Industry OverviewSource: La Fleur’s Annual Report 2012Slide5
Industry OverviewFirst Half of 2012 Sales by Region
Despite the financial crisis over the past few years lotteries worldwide continue to grow and perform strongly over the first half of 2012 (January- June)Increase of 10.7%
Source:
World Lottery AssociationSlide6
Industry Overview
2011 Top 10 Worldwide Lotteries (
Lotto&Spiel
) by Per Cap Sales
Source: La
Fleur’s Annual Report 2012US$Slide7
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
$41.58Slide8
Challenges in the IndustryJackpot FatiguePlayers no longer excited by the prospect of winning available jackpots.
Players demand higher jackpotsWill pay higher price for bigger jackpotsPowerBall January 2012 – Cost of ticket increased US$1 to US$2Gaps 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 buySlide9
Challenges in the IndustryKeeping up with TechnologyLast 15 years- internet / PC based era
Technology continues to advanceRapid growth of smartphones and tablets worldwideLotteries have to keep moving and growing with technologyReach its potential marketGain its most profitable returns
Regulatory Restrictions
Example: In Brussels there are legal and legislative battles underway on the issue of cross border gamblingSlide10
Adapting to the ChallengesPossible 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 buyExpansion of multi-jurisdictional gamesSlide11
Multi-Jurisdictional GamesMulti-Jurisdictional Games
A group of lottery jurisdictions offering the same gameProvides more excitementLarger pool, larger jackpotsExamples: Europe – Euro Millions
North America
Mega Millions
PowerBall
Caribbean – Super LottoChallenges Laws and regulations within the game and geographical restrictionsProviding games that deliver excitement and appeal to a more diverse consumer base CannibalizationSlide12
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 SalesTotal EuroMillions Sales 2011- £5.958 BillionTotal EuroMillions Sales 2010- £4.346 Billion% Change increase – 37.11%Slide13
Multi-Jurisdictional Games -
EuroMillions
Top 5
EuroMillion
Jackpots won:
August 2012, €190million, 1 winner, U.K.July 2011, €185million, 1 winner, ScotlandFebruary 2006, €183million, France and PortugalMarch 2011, €138.2million, 2 winners, Belgium and Portugal October 2010, €129.8million, 1 winner, U.K.Slide14
Multi-Jurisdictional Games -
EuroMillions
United Kingdom
EuroMillions
Per Capita Sales versus
Total EuroMillions Per Capita Sales 2004-20112011 UK EuroMillions Sales - £1.666 Billion2010 UK EuroMillions Sales - £1.056 Billion% Change increase – 57.85%Slide15
Multi-Jurisdictional Games -
EuroMillions
United Kingdom Product Portfolio 2005 vs. 2011
2005 – £5.013 Billion
2011 - £6.503 BillionSlide16
Multi-Jurisdictional Games - EuroMillions
United Kingdom % Change 2005 Vs. 2011Slide17
North America – Mega Millions & PowerBall
MEGA
MILLIONS ONLY
POWERBALL ONLY
BOTH MEGA MILLIONS & POWERBALL
Multi-Jurisdictional Games – North AmericaSlide18
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 IslandsTop 5 MegaMillions Jackpots won:March 2012, $656 Million, 3 winners Kansas, Illinois, Maryland March 2007, $390 Million, 2 winners New Jersey, GeorgiaJanuary 2011, $380 Million jackpot, 2 winners Washington State, IdahoAugust 28, 2009, $336 Million jackpot, 2 winners California, New YorkMarch 2011, $319 Million, 7 winners, New YorkMulti-Jurisdictional Games –
MegaMillionsSlide19
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%Slide20
Multi-Jurisdictional Games –
MegaMillions
2011 Top 10
MegaMillions
States by Per Capita SalesSlide21
North America – PowerBall started April 1992Previously known as Lotto AmericaStarted with 15 JurisdictionsDistrict of Columbia, Delaware, Idaho, Indiana, Iowa, Kansas, Kentucky, Minnesota, Missouri, Montana, Oregon, Rhode Island, South Dakota, West Virginia, Wisconsin
Currently Available in 44 JurisdictionsTop 5 PowerBall Jackpots won:February 2006, $365million, Multiple Winners, NebraskaAugust 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 – PowerBallSlide22
Multi-Jurisdictional Games –
PowerBall
2011 Top 10
PowerBall
States by Per Capita SalesSlide23
Multi-Jurisdictional Games – PowerBall
PowerBall
Per Capita Sales Vs. Total US Lottery Sales 2006-2011
Total
Sales 2011
US$3.107 BillionTotal Sales 2010 US$3.228 Billion% Change decrease – 3.74%Slide24
Multi-Jurisdictional Games –
MegaMillions
&
PowerBall
MegaMillions
& PowerBall Sales as % of Total US Lottery Sales 2006 Vs. 2011Slide25
Multi-Jurisdictional Games –
MegaMillions &PowerBall
MegaMillions
&
PowerBall Per Capita % Sales Change 2006 Vs. 2011In 5 years – slight increaseMaturity stage in product life cycleNeeds innovation, “new life” – to increase and grow profitsSlide26
Multi-Jurisdictional Games –
MegaMillions
&
PowerBall
Total Multi-Jurisdictional Us Games Sales Per Capita
Vs. Total US Lottery Sales 2006-2011Slide27
Caribbean- Super Lotto started August 2009Only muliti-jurisdictional game currently operating in Caribbean, Central and South AmericaAvailable 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$14.477 Million2011
SuperLotto
Per Capita Sales- US$ 5.17
Super Lotto Jackpots won:
October 2010, J$467 Million/ US$5.4 Million St. MaartenSeptember 2011, J$387 Million (split price) won J$232 Million / US$2.6 Million, JamaicaMulti-Jurisdictional Games – SuperLottoSlide28
Multi-Jurisdictional Games – United States vs. Jamaica
Opportunity
for growth in
country
Tremendous opportunity for growth in
SuperLottoTrinidad & 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 USMulti-Jurisdictional game represent 31% in JamaicaSlide29
Multi-Jurisdictional GamesHow 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 cannibalizationExpand reach of customers (population base)Change value propositionsAre we going to need to increase region? Or increase how we market?Slide30
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.”Slide31
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.Slide32
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 Slide33
7 Billion
Potential “Worldwide
Lottery” MarketSlide34
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 inSlide35
Multi-Jurisdictional Games will inevitably lead to a “Worldwide Lottery Jackpot”Slide36
Multi-Jurisdictional Games will inevitably lead to a “Worldwide Lottery Jackpot”Benefits for participating countries
Opportunity for retailer expansion Increased employment Increased agents commissionIncreased 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 20138 Award CategoriesGuaranteed minimum weekly prize of US$6.48MPossibility to accumulate prizes up to US$51.87MSlide37
Creating more exciting options for consumers to choose and buyThese 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 businessA treasury function/management which creates a electronic account/wallet that can be credited or debited through your cell phone Slide38
Creating more exciting options for consumers to choose and buyThe growing mobile industry contributes to the
increasing growth of mobile gamingAt the end of 2011- 6 billion mobile subscriptions worldwide87% 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 gamesDistributors – by enabling them to sell more products and deliver better value to their customersConsumer – giving them more options, making it easy to exercise their freedom to chooseThe ultimate consumer trigger in the buying processSlide39
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.Slide40
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?Slide41
“The World Is Not Enough”