BuSiNeSS PlAN - California Lottery

Unfortunately, increasing jackpot sizes invariably comes at the expenseof worse odds and longer periods between what are perceived to beattractive jackpots. This further feeds into the belief that no one winsanymore, so jackpot fatigue combines with poorer odds to result indeclining sales. The CSL may be the most vulnerable lottery in thecountry because, of the ten most populous states, we rely the mostheavily on sales from our large lotto games.As we have seen in recent years, MEGA Millions has cannibalizedSuperLOTTO Plus sales more than expected. These games were poorlypositioned within our portfolio because they are essentially the same gamewith the same play style. Our billboards display jackpots amounts forboth games side-by-side and invite consumers to make comparisons andchoose between the two games. SuperLOTTO Plus sales were on a slightdownward trend before the introduction of MEGA Millions, and a changeor replacement game was certainly worth consideration. However, theintroduction of MEGA Millions has dramatically hastened the decline ofSuperLOTTO Plus to the point where it has become critical to begin theresearch and development effort to change or replace SuperLOTTO Plusbefore it is overwhelmed by the much larger jackpots of MEGA Millions.We must implement a strategyto rely less and less on largejackpot games. Shifting thejackpot paradigm entails lessfocus on large jackpot gamesand providing consumerswith fun, entertaining gamesthat are conducive to moreregular play, and providemore winning experiencesat smaller but meaningfulprize levels.In assessing the sales of our daily draw games and Hot SPOT monitorgame, it is apparent that there is room for significant growth. Thesegames provide more regular play and more winning experiences than eitherSuperLOTTO Plus or MEGA Millions. There has been little to no marketingof our daily games due to their disparate personalities and relatively smallplayer bases. By aligning these products into a single portfolio and creatingsynergy between these currently disparate products, we can begin tomore effectively and efficiently market these games and build a strongerplayer base. Aligning this portfolio also allows us to cross-promote andcross-sell these games as a suite of games. This portfolio of games mustalso be analyzed to determine if prize funds are optimally distributed toenhance players’ experiences and maximize sales.We must implement a strategy to rely less and less on large jackpotgames. Shifting the jackpot paradigm entails less focus on large jackpotgames and providing consumers with fun, entertaining games that areconducive to more regular play, and provide more winning experiencesat smaller but meaningful prize levels.5.4 Modernize OperationsOur goal is to implement a modern infrastructure that minimizes our relianceon manual processes so that we are in a better position to take advantageof new business opportunities as they arise. These improvements will alsohelp the CSL keep up with changing consumer and retail trends.California Lottery 2007–2010 Business Plan – 73 –