Massachusetts State Lottery Commission Meeting

Transcription

1 Massachusetts State Lottery Commission Meeting Executive Director s Report Delivered by: Michael R. Sweeney March 27, 2018

2 Lottery Sales Update February Overall sales for February of 2018 were up $12.6 million from February Figures for the month of February 2018 February 2018 net profit and prize payout figures do not include accruals for prizes won that have not yet been paid. o Due in part to a Megabucks Doubler jackpot prize ($7,039,000 cash option) that was claimed in February 2018: Net profit for February 2018 was $68.6 million compared to $76.5 million in February 2017, a decrease of $7.9 million. Our prize payout for February 2018 was percent, as compared to percent in February Figures for Fiscal Year 2018 Our FY18 year-to-date net profit and prize payout figures both include accruals associated with an end of game $1 million a year for life prize in the Billion Dollar Blockbuster Instant Ticket game that is expected to be awarded in FY18. o Our year-to-date net profit for the first eight months of FY18 is $672.7 million compared to $723.7 million for the first eight months of FY17. After adding a 1-day average net profit figure of $2.7 million due to a shift in the calendar that resulted in 1 less day being included in the net profit figure for the first eight months of FY18, the adjusted year-over-year change for the first eight months of FY18 vs. the first eight months of FY17 is a $48.3 million decrease in net profit. o Our year-to-date prize payout for the first eight months of FY18 is percent, as compared to percent for the first eight months of FY17. February 2018 sales breakdown Instant Tickets, Keno, Mega Millions, the Numbers Game, Mass Cash and Lucky for Life all experienced sales increases in February of 2018 compared to February of Instant Ticket sales were up $10.5 million, Keno sales were up $7.2 million, Mega Millions sales were up $2.8 million (high jackpot of $222 million compared to $73 million in February 2017), Numbers Game sales were up $489,351, Mass Cash sales were up $360,677, and Lucky for Life sales were up $25,186. Compared to February of 2017, Powerball sales were down $7.6 million (high jackpot of $294.3 million compared to $435.3 million in February 2017), Megabucks Doubler sales were down $908,373 (high jackpot of $721,605 compared to $10.6 million in February 2017), and All or Nothing sales were down $345,039. 2

3 % 5 Year Comparison Prize Payout as a % of Sales Through February % 76.0% 76.1% 75.0% 74.7% 75.2% 74.0% 73.0% 72.0% 71.0% 70.0% 73.9% 73.0% 72.7% 72.4% 72.3% 72.0% 71.5% 71.9% 71.0% 71.2% 71.2% 70.9% 71.0% 70.8% 70.6% 70.7% 70.1% 73.6% 73.3% 73.1% 73.0% 72.3% 72.3% 71.7% 71.4% 70.5% 70.5% 73.4% 73.2% 73.1% 72.9% 72.5% 72.3% 73.0% 72.6% 71.4% 71.6% 71.6% 71.4% 71.6% 71.6% 73.3% 73.2% 72.4% 72.4% 72.0% 72.0% 71.8% 72.1% 73.4% 72.6% 72.3% 72.0% FY18 FY17 FY16 FY 15 FY % 68.0% 67.0% July-P1 Aug-P2 Sept-P3 Oct-P4 Nov-P5 Dec-P6 Jan-P7 Feb-P8 Mar-P9 Apr-P10 May-P11 June-P12 Period 3

4 MSLC Gross Sales Results FEBRUARY FY18 vs. FY17 Unadjusted Non Fiscal Year ($ millions) Through March 3, 2018 FY18 % of Total FY17 % of Total $ Change % Change Instant Tickets 69.9 to 80.4 $ % $ % $ % Mega Millions 50.0 $ % $ % $ % Powerball 50.0 $ % $ % -$ % Keno 70.0 $ % $ % $ % Mass Cash 55.0 $ % $ % $ % All or Nothing 70.0 $ % $ % -$ % Lucky for Life 60.0 $ % $ % $ % Numbers Game 63.0 $ % $ % $ % Megabucks Doubler 55.0 $ % $ % -$ % Total $ % $ % $ % Instant Tickets 69.9 to 80.4 $ % $ % $ % Draw Games 50.0 to 70.0 $ % $ % -$ % Monitor Games $ % $ % $ % Total $ % $ % $ % Unadjusted Month 2/4/17-3/3/18 Month 2/5/17-3/4/17 4 weeks 4 weeks 28 days 28 days 4

5 MSLC Gross Sales Results YEAR-TO-DATE FY18 vs. FY17 Unadjusted Non Fiscal Year ($ millions) Through March 3, 2018 FY18 % of Total FY17 % of Total $ Change % Change Instant Tickets 69.9 to 80.4 $2, % $2, % $ % Mega Millions 50.0 $ % $ % $ % Powerball 50.0 $ % $ % $ % Keno 70.0 $ % $ % $ % Mass Cash 55.0 $ % $ % $ % All or Nothing 70.0 $ % $ % -$ % Lucky for Life 60.0 $ % $ % -$ % Numbers Game 63.0 $ % $ % $ % Megabucks Doubler 55.0 $ % $ % -$ % Jackpot Poker $ % $ % -$ % Total $3, % $3, % $ % Instant Tickets 69.9 to 80.4 $2, % $2, % $ % Draw Games 50.0 to 70.0 $ % $ % $ % Monitor Games $ % $ % $ % Total $3, % $3, % $ % Unadjusted Year 6/25/17-3/3/18 Year 6/26/16-3/4/17 36 weeks 36 weeks 252 days 252 days 5

6 Recent Grand Prize Winners $10,000,000 Instant Prize Winner Dorchester $1,000,000 Instant Prize Winner Norwood $100,000 Mass Cash Prize Winner Woburn $100,000 Mass Cash Prize Winner Adams $100,000 Mass Cash Prize Winner Belchertown Lucky for Life $25,000 a Year for Life Prize Winner Sharon 6

7 February Instant Tickets Sales Update Mad Money Price Point: $1 4-Week Sales: $1,260,750 $50, $100 and $500 Blowout Price Point: $10 4-Week Sales: $43,731,570 $1,000,000 Double Jackpot Price Point: $5 4-Week Sales: $11,709,405 Fast $100s Price Point: $2 4-Week Sales: $3,846,476 7

8 $50, $100 and $500 Blowout Instant Ticket 4-week sales of $43,731,570 is highest for a $10 game since percent sold 86 percent of books are out of warehouse 8

9 Cash Vault Instant Ticket Launch (April 3) Price Point: $5 Scratch YOUR COORDINATES Scratch the corresponding grid locations on the CASH VAULT GRID Match 3 like symbols, win a prize Only the 12 CASH VAULT GRID squares that match YOUR COORDINATES are eligible for prizes Incorrect scratching will not void or alter the winning or non-winning status of the ticket Unscratched Entire play area revealed 9

10 Cash Vault Player Education 8.5 x 11 Poster Instructional Video 10

11 Problem Gambling Awareness Month As we do each March, the Lottery is participating in Problem Gambling Awareness Month (PGAM) in a variety of ways: Keno and All or Nothing monitor displays Draw game ticket message Signage in Customer Service areas of Braintree headquarters and regional offices Mass. Council on Compulsive Gambling GameSense information table in Braintree, New Bedford, Springfield and Worcester Prominent presence on homepage of Lottery website Social media activity 11

12 Social Media Messaging March is Problem Gambling Awareness Month (Instagram) Mass. Council on Compulsive Gambling GameSense Advisor visiting Braintree lobby (Facebook) MCCG Conference attended by Lottery representatives (Twitter) 12

13 Social Media Messaging St. Patrick s Day (Twitter) KENO 2 millionth Draw Promotion (Facebook) Lucky for Life Promotion (Instagram) Links to videos: CSWYPvHOQ DImC33I 13

14 News Item How Toys R Us became the island of misfit toys By Janelle Nanos, Boston Globe, February 13, 2018 It wasn t until 2017 that Toys R Us said it would invest $100 million to revamp its website. Some organizations recognize faster than others there are shifts in the ways customers want to be communicated with and the way customers want to purchase products, Toys R Us chief executive David Brandon told USA Today. It was already too late. In 2016, Toys R Us controlled just 13.6 percent of the toy market in the United States, according to research from IBISWorld, compared with Walmart s 29.4 percent, Amazon s 16.3 percent, and GameStop s 13.9 percent. 14

15 Billions Toys R Us Annual Revenues $16 $14 $13.54 $12 $10 $12.34 $12.54 $12.36 $11.33 $11.09 $11.80 $11.54 $10.43 $10.00 $8 $6 $4 $2 $1.13 $1.16 $1.23 $1.33 $1.50 $ Total Revenues Retail Store Sales Ecommerce Sales 15

16 Monthly Sales $400,000,000 Instant Tickets Monthly Sales Unadjusted Non Fiscal Year March 2015 through February 2018 $350,000,000 $300,000,000 $250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 $- March April May June July August September October November December January February Mar17-Feb18 Monthly Sales $273,938,994 $271,288,398 $360,247,336 $205,262,474 $335,952,836 $336,603,290 $260,549,479 $265,713,468 $327,135,114 $278,942,942 $326,729,624 $272,342,241 Mar16-Feb17 Monthly Sales $282,292,164 $273,801,609 $364,438,626 $209,301,553 $335,863,468 $328,303,282 $257,132,139 $265,447,444 $328,268,756 $285,299,842 $337,750,779 $261,819,580 Mar15-Feb16 Monthly Sales $288,605,564 $284,255,916 $365,827,589 $211,238,331 $345,467,848 $336,871,082 $268,528,759 $265,696,270 $341,915,759 $303,381,685 $332,514,211 $273,653,324 Month Ending 16

17 Monthly Sales $100,000,000 Keno Game Monthly Sales Unadjusted Non Fiscal Year March 2015 through February 2018 $90,000,000 $80,000,000 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $- March April May June July August September October November December January February Mar17-Feb18 Monthly Sales $75,553,888 $74,943,381 $91,798,292 $52,632,110 $87,763,041 $88,375,116 $71,304,919 $73,036,564 $94,907,202 $80,024,061 $93,795,926 $80,282,794 Mar16-Feb17 Monthly Sales $72,909,013 $72,728,510 $88,960,245 $51,058,011 $81,300,671 $81,509,976 $67,170,283 $67,903,575 $87,121,263 $71,379,200 $86,695,983 $73,079,093 Mar15-Feb16 Monthly Sales $71,944,020 $69,631,178 $83,584,962 $50,103,169 $82,017,087 $82,944,568 $65,938,626 $67,205,726 $87,688,787 $71,686,031 $84,543,773 $72,830,251 Month Ending 17

18 Monthly Sales $5,000,000 All or Nothing Game Monthly Sales Unadjusted Non Fiscal Year March 2015 through February 2018 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- March April May June July August September October November December January February Mar17-Feb18 Monthly Sales $938,145 $799,596 $938,981 $634,213 $1,089,434 $1,135,981 $784,151 $699,384 $859,732 $739,477 $845,234 $715,146 Mar16-Feb17 Monthly Sales $- $- $- $- $3,316,397 $4,313,187 $1,837,867 $1,328,770 $1,425,445 $959,434 $1,091,127 $1,060,185 Mar15-Feb16 Monthly Sales $- $- $- $- $- $- $- $- $- $- $- $- Month Ending 18

19 Monthly Sales $5,000,000 Jackpot Poker and All or Nothing Games Monthly Sales Unadjusted Non Fiscal Year March 2015 through February 2018 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 All or Nothing $500,000 $- Jackpot Poker March April May June July August September October November December January February Mar17-Feb18 A.N. Monthly Sales $938,145 $799,596 $938,981 $634,213 $1,089,434 $1,135,981 $784,151 $699,384 $859,732 $739,477 $845,234 $715,146 Mar16-Feb17 A.N. Monthly Sales $- $- $- $- $3,316,397 $4,313,187 $1,837,867 $1,328,770 $1,425,445 $959,434 $1,091,127 $1,060,185 Mar16-Feb17 J.P. Monthly Sales $158,612 $162,934 $179,435 $105,374 $22,044 $- $- $- $- $- $- $- Mar15-Feb16 J.P. Monthly Sales $217,580 $198,198 $251,033 $141,896 $230,357 $224,836 $178,966 $177,892 $216,348 $158,805 $190,315 $182,688 Month Ending 19

20 Monthly Sales $35,000,000 Numbers Game Monthly Sales Unadjusted Non Fiscal Year March 2015 through February 2018 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $- March April May June July August September October November December January February Mar17-Feb18 Monthly Sales $25,275,749 $25,497,065 $31,690,710 $18,453,902 $30,661,529 $30,736,469 $24,533,112 $24,874,264 $31,519,969 $25,413,239 $29,699,634 $25,259,961 Mar16-Feb17 Monthly Sales $25,856,638 $25,642,934 $31,964,051 $18,921,745 $30,527,848 $30,882,626 $24,561,460 $24,620,633 $31,043,731 $25,431,191 $30,775,435 $24,770,610 Mar15-Feb16 Monthly Sales $25,550,943 $25,766,506 $31,784,967 $18,797,702 $31,201,461 $30,998,815 $24,581,151 $24,578,629 $31,596,253 $25,969,168 $30,751,904 $25,666,264 Month Ending 20

21 Monthly Sales $9,000,000 Mass Cash Game Monthly Sales Unadjusted Non Fiscal Year March 2015 through February 2018 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $- March April May June July August September October November December January February Mar17-Feb18 Monthly Sales $6,113,012 $6,146,061 $7,653,772 $4,551,956 $7,464,329 $7,667,798 $6,226,521 $6,264,886 $7,868,552 $6,384,027 $7,798,092 $6,348,169 Mar16-Feb17 Monthly Sales $6,422,290 $6,259,710 $7,768,135 $4,573,992 $7,484,247 $7,618,003 $5,970,023 $5,954,338 $7,437,632 $6,209,782 $7,534,299 $5,987,492 Mar15-Feb16 Monthly Sales $5,912,485 $5,919,267 $7,355,841 $4,485,680 $7,440,307 $7,416,148 $5,842,616 $5,862,879 $7,401,889 $6,018,179 $7,800,528 $6,451,061 Month Ending 21

22 Monthly Sales $3,000,000 Megabucks Doubler Game Monthly Sales Unadjusted Non Fiscal Year March 2015 through February 2018 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- March April May June July August September October November December January February Mar17-Feb18 Monthly Sales $1,409,920 $1,165,475 $1,562,843 $1,005,592 $1,711,383 $1,961,802 $1,512,736 $1,551,952 $2,047,615 $2,270,338 $2,220,653 $1,146,212 Mar16-Feb17 Monthly Sales $1,233,433 $1,284,347 $1,705,330 $1,084,924 $1,907,019 $1,907,536 $1,566,341 $1,610,177 $2,136,411 $2,238,197 $2,363,779 $2,054,585 Mar15-Feb16 Monthly Sales $1,230,785 $1,287,900 $1,752,031 $1,089,321 $1,869,656 $1,951,270 $1,646,438 $1,719,557 $2,312,527 $2,371,758 $2,715,960 $2,087,143 Month Ending 22

23 Monthly Sales $3,000,000 Lucky for Life Game Monthly Sales Unadjusted Non Fiscal Year March 2015 through February 2018 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- March April May June July August September October November December January February Mar17-Feb18 Monthly Sales $1,973,906 $1,882,964 $2,307,906 $1,384,216 $2,301,838 $2,380,590 $1,848,784 $1,853,560 $2,232,798 $1,963,724 $2,248,644 $1,838,946 Mar16-Feb17 Monthly Sales $1,965,948 $1,933,080 $2,511,942 $1,471,538 $2,418,993 $2,385,674 $1,852,494 $1,903,010 $2,328,274 $2,031,316 $2,360,732 $1,813,760 Mar15-Feb16 Monthly Sales $2,217,614 $2,156,300 $2,630,260 $1,596,984 $2,646,929 $2,588,692 $2,029,908 $2,021,366 $2,520,803 $2,264,116 $2,496,400 $1,939,872 Month Ending 23

24 Monthly Sales $20,000,000 Mega Millions Game Monthly Sales Unadjusted Non Fiscal Year March 2015 through February 2018 $18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- March April May June July August September October November December January February Mar17-Feb18 Monthly Sales $4,506,419 $3,070,678 $3,870,438 $3,222,311 $7,483,441 $9,564,398 $3,477,126 $2,964,417 $6,105,169 $9,586,572 $10,743,128 $6,111,340 Mar16-Feb17 Monthly Sales $3,363,281 $3,655,927 $7,411,826 $8,750,067 $17,680,426 $4,577,251 $3,799,974 $3,154,921 $4,040,911 $4,092,354 $5,454,116 $3,290,421 Mar15-Feb16 Monthly Sales $3,577,679 $3,847,661 $9,807,056 $2,993,566 $6,212,343 $4,581,799 $4,024,319 $4,453,797 $6,877,119 $5,449,201 $5,394,327 $4,283,740 Month Ending 24

25 Monthly Sales $80,000,000 Powerball Game Monthly Sales Unadjusted Non Fiscal Year March 2015 through February 2018 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $- March April May June July August September October November December January February Mar17-Feb18 Monthly Sales $5,327,739 $4,854,401 $13,236,099 $11,027,302 $8,268,165 $34,456,871 $5,461,592 $6,183,263 $6,882,079 $12,755,854 $14,747,567 $8,221,513 Mar16-Feb17 Monthly Sales $5,280,054 $8,518,134 $12,422,527 $4,974,442 $19,469,389 $7,379,166 $6,393,920 $5,959,329 $14,169,749 $5,599,470 $8,074,568 $15,822,474 Mar15-Feb16 Monthly Sales $5,014,458 $4,368,650 $8,704,067 $3,498,271 $5,958,979 $6,361,913 $12,467,307 $5,268,723 $6,796,855 $14,315,141 $73,668,498 $8,488,686 Month Ending 25

26 Monthly Sales $600,000,000 All Games Monthly Sales Unadjusted Non Fiscal Year March 2015 through February 2018 $500,000,000 $400,000,000 $300,000,000 $200,000,000 $100,000,000 $- March April May June July August September October November December January February Mar17-Feb18 Monthly Sales $395,037,772 $389,648,019 $513,306,377 $298,174,076 $482,695,996 $512,882,315 $375,698,420 $383,141,758 $479,558,230 $418,080,234 $488,828,502 $402,266,322 Mar16-Feb17 Monthly Sales $399,481,433 $393,987,185 $517,362,117 $300,241,646 $499,990,502 $468,876,701 $370,284,501 $377,882,197 $477,972,172 $403,240,786 $482,100,818 $389,698,200 Mar15-Feb16 Monthly Sales $404,271,128 $397,431,576 $511,697,806 $293,944,920 $483,044,967 $473,939,123 $385,238,090 $376,984,839 $487,326,340 $431,614,084 $540,075,916 $395,583,029 Month Ending 26

27 Monthly Sales Monthly Net Profit March 2015 through February 2018 $140,000,000 $120,000,000 $100,000,000 $80,000,000 $60,000,000 $40,000,000 $20,000,000 $- March April May June July August September October November December January February Mar17-Feb18 Monthly Sales $70,657,044 $47,017,246 $112,022,390 $56,808,328 $96,754,213 $108,446,664 $76,841,827 $72,258,816 $95,626,330 $98,399,359 $81,233,852 $68,602,971 Mar16-Feb17 Monthly Sales $61,238,053 $90,935,449 $86,585,674 $59,872,410 $90,162,126 $107,647,430 $69,657,349 $87,242,409 $108,339,712 $94,341,505 $105,646,645 76,540,597 Mar15-Feb16 Monthly Sales $69,696,888 $87,519,820 $109,342,255 $55,717,641 $67,110,257 $100,117,725 $73,374,852 $106,500,668 $86,113,138 $91,913,902 $125,334,875 $50,967,118 Month Ending 27

28 MASSACHUSETTS STATE LOTTERY COMMISSION (MSLC) TECHNOLOGY MODERNIZATION PROGRAM Executive Briefing March 27, 2018 Status Reported as of 8/14/15 28

29 Modernization Program Overview and Accomplishments Purpose $65M Modernization Program that upgrades the lottery host system, terminal application, agent terminals, and multi-media solution as well as components that support business intelligence, helpdesk, asset tracking and field services activities. Major Projects Terminal and Hardware Peripheral Replacement To date, MSLC has replaced 1,100 of 8,000+ obsolete terminals Implemented terminal emulation software for the legacy system interface (in a phased approach)» This approach helped mitigate risks by avoiding a big bang approach Testing and deploying 3 rd party terminals» diversifies vendor pool and opens up new business models for MSLC Legacy Host System Conversion and Replacement Application Conversion» Core Business Functionality» Data Integration (Conversion and Interfaces)» Business Intelligence Data Center hardware and software acquisition Training and Knowledge Transfer Agent Training on new terminals and application MSLC training and knowledge transfer after Go-Live to take over maintenance and operations 3/27/2018 Subject Matter Experts Onboarded to develop a PMO/Implementation Team to Support Program Activities and Help Mitigate Risks 29

30 IGT Implementation Plan Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr Plan Actual Requirements Duration Requirements Phase; Sept 17 Jan Key Challenge: Requirements Phase has stretched into March/April. Vendor had Planned a Jan 12 th 18 completion. IGT states no impact to the overall schedule as software development has started on time Terminal Deployment on Track - Key Challenge: Majority of new Terminals (5,000) to arrive in May (due to vendor lead times). Terminals be deployed by FY Q2. Mitigation: Commission approved plans proactively put in place to help ensure legacy terminal decommissioning activities are successful IGT reports their Development is on track. Vendor Development: Jan - Jul. Vendor Software Testing Mar- Jul Key challenge: Waterfall Project Mgmt. Method has proven to be problematic in MA and many other states Mitigation: Joint QA testing to take place with vendor prior to formal Customer Testing MSLC/IGT Data Center Design, Build, Test Jan 2018 Dec 2018 IGT/MSLC Data Conversion, Migration Activities Feb 2018 Dec 2018 Key Challenge: History of data conversion issues on major Commonwealth Projects. Vendor has not fully defined scope of data integration yet. Mitigation: Vendor SMES and MSLC SMEs built legacy system and have deep understanding of all aspects of the data. PMO team started data activities last fall to prepare for migration/conversion MSLC Customer Testing supported by IGT Aug 2018 Jan 19 Legend Key Risk Item: Vendor does not fully follow Commonwealth and Industry Project Management practices leading to a lack of visibility into their progress and creating a challenge to validate their reports and status. Parallel Processing Pilot Approach IGT warranty Support Milestone is on track no risks Some schedule slip no impact to overall dates Major Schedule Delays risk to project 30