FY 2014–15 Business Plan
Presented to the
California State Lottery Commission
5/22/14
3-Year Strategic Direction
• Provides the Foundation for developing the FY
2014-15 Business Plan
• Long-Term Goal of becoming one of the largest
AND most profitable lotteries in the U.S.
• Do this by:
– Maintaining Highest Integrity
– Growing sales in a responsible manner
– Having a well-prepared and united team around the
strategic goals
Development of the Plan
Inputs into this Process:
• Internal analysis and review of our business
• Strategic planning through each Lottery division
• Senior management review and prioritization
4 Themes for Focusing our Activities
–
–
–
–
PRODUCTS
PLAYERS
RETAILERS
LOTTERY INFRASTRUCTURE
Products
Goals:
Continue Scratchers Enhancements
Optimize Draw Game Product Mix
Scratchers Sales Growth with
Higher Price Points
Scratchers Plan
• Continue development of Higher Price Points
–
–
–
–
–
Increase number of $10 & $20 Games introduced
Advertising to Promote $5 Category (Q1)
Advertising other Scratchers Games during the year
Adding one $10 Game Facing at Retail (Q1)
Adding one $20 Game Facing at Retail (Q3)
• Simplify selection of which game to buy at retail
– Key Barrier among non-players
– Research then Pilot a solution in selected retailers
Draw Games
• Initiative to boost sales of Multi-state Games
– Potential to join new multi-state game
– Or, marketing efforts against existing Powerball or
Mega Millions game
• Re-invigorate California’s own Jackpot Game
– SuperLotto Plus sales have declined
– Yet, this game has more players than other games
– Tactics of Advertising and Periodic Promotions
Players
Goals:
Grow Playership of Lottery Games
Improve Lottery’s Overall Image
Expand Corporate Social Responsibility Program
Maximize ROI of Advertising & Promotion
40% of Lottery Players Buy Jackpot
Games but not Scratchers
% of Lottery Players
Source: Tracking Study, July 2012 – Dec 2013
Gaining New Lottery Players
Requires Improved Brand Image
• Building awareness and knowledge about the
Lottery’s Mission of supporting public schools
– Using digital and print advertising for this message
• Corporate Social Responsibility
– Applying for Level 4 certification in Responsible Gaming
• Efforts with Events and Experiential Marketing
• Winner Awareness Programs particularly at local
level
Additional Tactics
• Exploring Lottery Gift Card
• Developing Mobile Apps
• Continuing to engage adults in Digital and Social
media to build relevancy with consumers
• Enhancing Business Intelligence with analytics
to gain deeper player insights
Retailers
Goals:
Expand the Network of Lottery Retailers
Optimize Support Provided to Lottery Retailers
Retailer Recruitment and Retention
• To grow network need to retain good existing
locations as well as recruit new retailers
– New Program to address retention
– BIBA to expand to include more retail-centric
measures
• R & D towards Pilot of purchasing Jackpot
Game tickets at Gas Pump
Nearly Half of Scratchers Sales
Sold by Top 20% Locations
Source: Scratchers Sales – March 2014
Optimizing Support Levels
• Provide service and support in relation to
location’s sales and potential
–
–
–
–
Frequency of scheduled DSR visits
Frequency of Scratchers ticket delivery
Handling needs of lower volume stores differently
Expand Route Sales service model to more chains
• Continue with Retail Promotion Kits
• Begin exploring new Point of Sale items
Infrastructure
Goals:
Improve the Lottery’s Infrastructure
Build a “One Lottery” Culture within the Organization
Initiatives in These Areas
• Increasing our internal capacity
– Implementing Facilities Master Plan (District Offices)
– Developing Lottery staff with Succession Planning
• Efficiencies through automation
– Financial System Enhancements
– Human Resource Areas
• Mitigating internal risk
– Example of new tools to track assets in automated
fashion
Results of Business Plan
Financial Goals
FY 14/15 Financial Goals
• Financial goals for FY 2014-15:
– Achieve sales of $5.4 billion
– Deliver over $1.34 billion to CA Schools.