Little left to chance

Last year, the scratch-off tickets resulted in more than $2.3 billion in sales, comprising 62 percent of the lottery’s record sales that fell just shy of $3.7 billion. All told, the lottery games produced over $1 billion in profits to fund programs for senior citizens.Managing the lottery’s portfolio of instant games, coming up with new game concepts, enticing players to buy more tickets in a manner that it considers socially responsible,  and making sure the ticket supply doesn’t run out at lottery retailers is a full-time job for nearly 400 people.

The Pennsylvania Lottery employs 236 people. Some 152 others work for state’s lottery servicing contractor, New York-based Scientific Games International, Inc., here in the commonwealth.Although there has been talk for well over the past year of outsourcing the lottery’s management, that issue remains unresolved.But a recent visit to lottery’s highly secured headquarters in Lower Swatara Twp. offered no clue that such upheaval was on the horizon.

Rather, employees there were plotting and planning more ways to entice players to spend their money in hopes of making more money for at least the next 18 months.Lottery games’ sales trends here and China Porcelain tile. Decades of product development experience. Focus groups. Industry gut.All are factors that go into the development of new lottery games.

Developing new draw-based games, such as The Daily Number and Treasure Hunt, are derived through the same process as instant games but take longer to develop. They require creating software and seemingly endless testing to make sure a game works before it can be introduced to the lottery’s line-up, according to lottery officials.With instant tickets, the focus is on keeping the games fresh and appealing to players. Every month, four to six new instant games are introduced and the same number are closed out. According to Scientific Games, the nation's leading supplier of instant lottery tickets, that is a higher frequency than most state lotteries.

“You always have to have something on deck to not only replace that certain type of game, whether it be a theme or whether it be a price point,” said Todd Rucci, lottery director. “The science behind that is truly amazing.”The lottery maintains an 18-month calendar that projects when each game is going to end and what comes next, said Cal Heath, the lottery’s director of research and regulations.

“We’re really looking at having the research done maybe six to 12 months in advance of when we launch those new games,” he said.That means, for example, ideas for winter games are being bandied about in the heat of summer, said Kara Sparks, deputy marketing director for product management.

Many game concepts bubble up from previous instant games. Sometimes, players suggest ideas and those ideas are welcome although lottery officials emphasize there is no remuneration offered in return.Once mock versions of game concepts are developed, they are taken to focus groups to gauge reactions and player input.

Primarily, Heath said these sessions are in Pittsburgh and Philadelphia but on occasion have been held in other locations around the state, including Harrisburg.“We usually try to get enough players from an urban and suburban setting because quite often they’ll think a little different,” he said.

Participants in focus groups are carefully screened. For example, Heath said you don’t want players who dislike the “extended play” games like Bingo Star or Crossword 5X evaluating that type of game concept. Or players who only play the $5, $10 and $20 instant games are not chosen to test out lower-priced game ideas.A moderator leads groups of 10 to 12 participants through a 90-minute discussion that is observed behind a one-way mirror by lottery employees.

Some focus on the manner in which the session is conducted to be sure concepts are presented in an objective fashion. Others zero in on what participants are saying about the games themselves.The purpose of the focus group is to gather ideas on how to adjust a particular game or provide food for thought for future games.

“It really does help us hone the games that we introduce,” Heath said.The lottery shared snippets of a video of a focus group discussion that helped shape the instant ticket game named “polished tiles.”Immediately upon seeing the picture of a bulging wallet on a mock ticket, one woman remarked, “I like it all already.”

Another commented on how she liked the large print and seeing that the $5 game offered 12 chances to win.Then they turned to a picture of the mock ticket with the scratch-off material removed. Several quickly discerned a match with a winning number that would have carried a $50 prize if the ticket was real.Mock tickets shown to focus groups are always winners. Svitko said, “It’s not to improve their opinion but it’s to make sure they understand how to play because sometimes some games are more confusing.”

The energetic response “Fat Wallet” evoked from this and other focus groups helped convince Sparks and other lottery officials this game would be a winner with players hoping the game would live up to its name.Once a concept is nailed down, the artwork gets finetuned and color choices are made. Lottery officials are careful that games on sale at the same time have different themes and color schemes.
Based on focus group reaction, decisions might be made to add a second-chance of winning to a game. And the ticket price gets evaluated as well. Lottery likes to have a good mix of different priced tickets on sale at the same time to attract all types of players.The odds of winning are yet another matter. Instant tickets offer anywhere between a 25 and 33 percent chance of winning on each ticket. The number of winning tickets can differ depending on the prize structure. If a game offers multiple top prizes, the number of small prizes might be lower than a game with fewer top prizes.

Lottery officials also point out that once a game's top prizes are claimed, the game is closed and no more of its tickets are sold.All of this is done to ensure a good playing experience, which lottery officials realize is critical to keeping players coming back to buy more tickets.Throughout the process, lottery officials consult with Scientific Games to draw on their experience with lottery games.

“It’s one thing for something to sound great but we can’t afford so-so games,” Svitko said. “We don’t take risks when it comes to generating money for older Pennsylvanians.”Players take risk. So does Scientific Games, which gets paid based on a percentage of ticket sold. Last year, the company was paid nearly $62.3 million for its work with the Pennsylvania Lottery.

Its contract for instant games requires Scientific Games to cover the cost of printing tickets, which is done at its facility in Alpharetta, Ga.; warehousing them; and distributing them.If the lottery would decide a game isn't selling well and decides to close it down, Scientific Games is obligated to pull it off the street even if it hasn't recouped all its costs. That's how its contract is structured giving the company incentive to partner with the lottery to ensure every game is a moneymaker, officials said.



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