Multi-Jurisdiction
Games
“The World Is Not
Enough”
Presented By:
Brian George
President & 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$180.6 Billion
 Excluding VLTs and Instant
% Change Increase– 5.5%
Source: La Fleur’s
Industry Overview
2007-2011 Total Lotto/Spiel Sales
Source: La Fleur’s
Industry Overview
2011 Total Worldwide
Lottery Sales

Games Include: Lotto/Spiel,
Numbers, Keno, Toto, Bingo, Draw,
Instant/Pulltab
2011 Worldwide
Lotto/Spiel Sales

Lotto/Spiel
Source: La Fleur’s Annual Report 2012
Industry Overview

First Half of 2012 Sales by Region

Despite the financial crisis over the past few years lotteries
worldwide continue to grow and perform strongly over the
first half of 2012 (January- June)
 Increase of 10.7%
Source: World Lottery Association
Industry Overview

2011 Top 10 Worldwide Lotteries (Lotto&Spiel) by Per Cap Sales
US$
Source: La Fleur’s Annual Report 2012
Industry Overview
2011 Top 10 US State Lotteries (Lotto&Spiel) Showing the Contribution of
Multi-jurisdictional Games by Per Cap Sales
US$
Population 8.8 M
Population 8.8 M
Population .6 M
Population 19.1 M
$65.56
$63.58
Population 19.5 M
$57.88
Population 19.1 M
$46.88
Population 12.7 M
$46.43
Population .9 M
Population 1.1 M
Population 1.3 M
Population 3.6 M
Population 6.6 M
$43.40
$43.80
$42.59
$42.46
$41.58
Source: La Fleur’s Annual Report 2012
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



Examples:




A group of lottery jurisdictions offering the same game
Provides more excitement
 Larger pool, larger jackpots
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 - EuroMillions
United Kingdom Product Portfolio 2005 vs. 2011

2005 – £5.013 Billion

2011 - £6.503 Billion
Multi-Jurisdictional Games - EuroMillions
United Kingdom % Change 2005 Vs. 2011
Euro
Lotto
Plus5
Lotto
Millions
283.01%
Thunder
ball
-18.07%
Scratch
cards
-7.13%
78.52%
Hotpicks
99.51%
-11.2%
Multi-Jurisdictional Games – North America

North America – Mega Millions & PowerBall
MEGA MILLIONS ONLY
POWERBALL ONLY
BOTH MEGA MILLIONS &
POWERBALL
Multi-Jurisdictional Games – MegaMillions

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
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
Multi-Jurisdictional Games – PowerBall

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
2011 Top 10 PowerBall States by Per Capita Sales
Multi-Jurisdictional Games – PowerBall
PowerBall 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
Multi-Jurisdictional Games – MegaMillions &PowerBall
MegaMillions & PowerBall Per Capita % Sales Change 2006 Vs. 2011
Mega
Millions

Power
9.32%
Ball
10.22%
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
Multi-Jurisdictional Games – SuperLotto

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 – United States vs. Jamaica
US 2011
MultiJurisdictional
games
represent 60%
in the US
Other
US
Lottery
40%



JA 2011
JA MJG
31%
US MJG
60%
Other JA
Lottery
69%
MultiJurisdictional
game
represent 31%
in Jamaica
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

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
Potential “Worldwide
Lottery” Market
Northern
Europe
100M
Africa
1.1B
Western
Europe
189M
Eastern
Europe
295M
India
1.2B
7 Billion
Southern
Europe
155M
China
1.34B
Central
America &
Caribbean
197.4M
South
America
400.1M
USA &
Canada
347.4M
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”
Mega
Millions
$656M
Super
Lotto
$5M
Potential
Worldwide
Lottery
Jackpot
$12.177B
Euro
Millions
$257M
Powerball
$364M
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”