Charitable Bingo Operations Business Plan - Texas Lottery

similar sales performance incentive programs beginning with the FY 2010-11 biennium. This budgetary
allocation was over and above the standard 5 percent commission that is paid to retailers based on sales.
After studying other lottery retailer incentive programs and evaluating standards in the retail industry for
measurement of sales performance, the agency worked to develop a same-store sales growth program that
incentivized retailers based on performance. The retailer incentive program is designed to reward retailers
who meet and exceed their sales goal using a two-phase approach:
• Phase I: Eligible retailers are required to meet a specific sales goal in order to receive an incentive
payment.
• Phase II: Retailers who reach their goal in Phase I are also automatically qualified to receive entries
into a random drawing for additional cash prizes. Retailers continue to receive additional entries as
they reach new sales milestones.
At the end of FY 2011, the agency had completed a total of five 13-week retailer incentive programs since
program introduction in September 2009. Participating retailers generated more than $290 million in
additional sales yielding more than $49 million in additional revenues to the state during these programs.
Qualifying retailers have received incentive payments totaling more than $25 million for these sales efforts.
Challenges and Opportunities
The agency must continually evaluate its incentive program to ensure that the design of the program is
appealing to retailers, resulting in high levels of retailer participation and yielding increased sales and
revenue. It is also important that the agency closely communicates with its retailers both directly and
through the lottery operator sales force to ensure that the program design remains optimized.
Key Initiatives
The Texas Lottery is the only lottery in the industry that incentivizes retailers based on true same-store
sales performance. As the agency is an industry leader in this area, it must monitor its program closely,
obtain feedback from its retailers and sales force, and identify opportunities to modify future program
parameters based on the results of each of its in-market programs.
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