程阳：美国科罗拉多州彩票30年创新历史

An Innovative History

 

The Colorado Lottery has a number of things to crow about in its history, but faces new challenges with a renewed emphasis on profitability goals.

 

Thirty years ago this month, the Colorado Lottery opened for business as just the third American lottery West of the Mississippi, joining Arizona and Washington. And in that long history, it has earned its place in lottery folklore through a number of innovations and by outperforming most Western states in terms of per capita sales.

 

Director Abel Tapia discovered just how important innovation is in the lottery industry when he took over the helm in July 2010. “It’s such a dynamic business, and it changes almost daily. If you are not capable or willing to change what you are doing, you are going to be left behind.” He added that change doesn’t have to be life-altering, especially considering the governmental nature of the business. “We aren’t changing by leaps and bounds, we’re changing in measured approaches.”

 

And that approach has helped the Colorado Lottery generate more than $2.4 billion for the State of Colorado since its debut in 1983. “It’s the best state agency to work for,” said Tapia. “We don’t ask for general funds and we don’t need to get subsidies. And at the end of the day, we give money back to worthy causes.”

 

In fiscal 2012, the Lottery set a new sales record of $545.3 million, with $123.2 million of that returned to the State to fund various outdoor projects. Like most lotteries, it benefitted greatly from the record Mega Millions jackpot last March, but that was not the only reason for the growth – scratch tickets turned in another strong year as well. Still, despite that success, lottery officials have looked inward to make it even better, by taking steps to increase profitability – a more important measure than sales, in Tapia’s opinion.

 

 

A History of Innovation

 

In its 30 years, the Colorado Lottery has developed a number of innovations or was an early adopter of some of the most significant events that shaped the industry as we know it today. Product manager Lee Burnett, a 26-year veteran of the Lottery, recalled some of the highlights:

 

The wheel spin. The Lottery’s enabling legislation prohibited lotto-style games, so in order to create million-dollar prizes, a prize wheel was used in the early days. Players of the Lottery’s first instant game, launched in 1984, could win a weekly chance to spin the wheel on live television. “Back then it was kind of a big deal,” said Burnett, “because we invited families, retailers and lottery employees to participate and watch.” The wheel format was retired in 1989 after the statute was changed to allow a lotto game, which debuted in January that year.

 

Progressive annuities. The debut of lotto in 1989 brought with it the progressive annuity, which Burnett recalls was probably the first time any lottery had used anything but a flat rate annuity, and allowed for more attractive top prizes. What made it particularly interesting was the genesis of the new format. “At that time the NFL was offering progressive annuities for player salaries,” explained Burnett. “Our statistician Greg Glasner looked at the concept and developed a model for us so we could offer a larger top prize than would be otherwise possible.” It would be adopted by other lotteries around the country.

 

Comprehensive strategic plan. The Colorado Lottery has always relied heavily on scratch ticket sales, but by 1992 sales had declined significantly from the earliest years. So officials created a comprehensive strategic plan designed to reverse the disappointing sales trend. It included things like automated validation of tickets at any retailer, increased prize payouts, enhanced ticket distribution and accounting systems, a new retailer bonus program and other features. “Other lotteries had done some of these things, but I don’t think all the pieces had been done in one strategic plan at that time,” said Burnett. He credited the Lottery Commission for supporting lottery management and allowing the early adoption of what would prove to be industry game-changers. “It was a very significant milestone for us, a significant change in the way we did business.” Scratch sales almost doubled after the first year, and rose almost every year thereafter.

 

Colorado’s first $2 scratch ticket. Introduced to celebrate the Lottery’s tenth anniversary, Big 10 Cash was an immediate success, accounting for 23 percent of scratch sales in fiscal 1993. One of 14 scratch tickets (the others being $1 games) introduced during that year, the game silenced some of its critics within lottery management who never thought a $2 game would fly. “It was a huge success, and a benchmark for us to start looking at higher price points. And price point strategies for scratch have been the primary reason that scratch sales have increased over the past 10-plus years.”

 

Beneficiary model. Colorado is the only state where all of the Lottery’s proceeds are allocated to parks, recreation, open space, conservation education and wildlife projects. “I think that’s one of the reasons why all our employees have pride in this job,” said Burnett. “It is unique to us and I think it’s partly why our employees have been around for a long time.”

 

Other highlights of the Lottery’s history didn’t have such a profound impact on its future, but proved it was no stranger to innovation, willing to try things even if they ended up failures. In fact, you could say the Colorado Lottery was before its time with two different projects implemented in 1998. First was the year-long trial of Perfecto Games, terminal-based games that looked and played like instant games, with a different themed game introduced every 13 weeks. It was the first time any lottery had tried such a concept. “They were very innovative, but not sustainable at that time so they didn’t last long,” said Burnett. Also introduced that year was Player Express, in-lane terminals designed to break down the lottery barriers in large-format retail environments such as grocery stores. “There were a lot of reasons why Player Express didn’t work, but we were really disappointed that it didn’t take off,” said Burnett.

 

 

New Focus on Profits

 

In recent years, the Colorado Lottery remains committed to doing whatever it takes to provide revenue for its unique beneficiaries. In fact, there is a renewed emphasis on growing profits, not sales. “In the last five years, we’ve done really well in terms of increasing our sales, but for the most part our profit was flat over this period,” said Tapia. “So I questioned whether or not we’re doing everything to maximize profits.”

 

To address profitability, Lottery officials made a number of changes and improvements. One important component was the replacement of a back-office computer system. The old Wang system was at maximum capacity, explained Tapia, limiting both the number of terminal-based games and the ability to manage an increasing number of scratch games. The installation of a new IBM system was completed about a year ago. “Now we have a full-service computer that can allow us to offer more games quicker, and we can work with our vendor to maximize our profits.”

 

The Lottery also switched to a courier system to deliver scratch tickets, rather than relying on its sales force to carry new games to retailers around the state. A delivery system tracks game usage and the Lottery can send out new tickets daily to meet exact retailer needs. “That has really increased our profitability,” said Tapia.

 

These and other efforts have paid off – profit has increased from 21.6 percent of sales during the first year of review to 22.6 percent the next year, and Tapia hopes to reach about 23.5 percent during the current year. Ultimately, the goal is to have profits hit 25 percent of sales. “Every year we are increasing by a percentage point, which is really significant. In the lottery business we always talk about increasing our sales and offering new products. The sense is always that if your sales increase, your profit will go up. But in our case, we saw the increase in sales but not necessarily the increase in profits.”

 

To keep the profit growing in order to hit that 25 percent target, Lottery officials are now looking closely at the game portfolio. Relative to most other lotteries, Colorado has historically offered a limited number of terminal-based games over the years – scratch tickets account for nearly 70 percent of sales. Lotto, which is still in the original format that debuted in 1989, Cash 5, Powerball and Mega Millions make up the rest of the lineup, along with periodic raffle games.

 

That will soon change. In April, the Lottery will launch a Pick 3 game for the first time in its 30-year history. “We’re pretty excited about it,” said Tapia. “Pick 3 is kind of a game on which we think we can make up some profit.” It will start simple, but with the ability to expand with other options and promotions. “We consider it a churn game – hopefully people will play Pick 3, win $10, and maybe turn around and buy a Mega Millions or Powerball ticket.”

 

Other new terminal games may also be on the drawing board, but after Pick 3 is launched the attention will turn to the existing games Lotto and Cash 5. “We are looking to rebrand Lotto – it’s time to take a look at it, test out the matrix and give it new life.” And even Cash 5, the “little engine that could” according to Burnett, while consistently producing revenues, will also be reviewed.

 

By their very nature, these games contribute more to profitability than scratch games. “We’ve worked really hard to pick the right scratch games and to market them well,” noted Tapia. “But when we started looking at the profitability, scratch games just don’t have the profitability that draw games do. It’s not rocket science – you have to produce the ticket, store the ticket and deliver the ticket.” He noted that scratch games will continue to be a critical part of the mix, it’s just that other options will be considered to expand the portfolio.

 

Still, don’t expect to see a flood of new draw games hit the market. “The more games you put out there, you start looking at cannibalization and there is diminished return,” noted Burnett. “We need strong games that are sustainable over the long term and are that provide us the most possible return.”

 

On the scratch side, sales should remain strong. One reason Colorado’s scratch games have been so successful is that they have been very innovative in terms of graphics and play styles. “We’re absolutely passionate about our ticket graphics,” said Burnett, and current Scratch Product Manager Todd Greco has taken them “to what I call the more edgy side of ticket graphics.” And that philosophy has helped keep the games fresh. Currently, some 45 to 50 new scratch games are introduced annually.

 

Communicating with players

 

While games are of course the foundation of any lottery, in today’s world businesses of any kind must offer conveniences and communication to their customers. The Colorado Lottery launched My Lottery in 2002 as a way to reach players through the Internet. The site has evolved over the years and now offers many forms of interaction with customers. Players enter second chance drawings through My Lottery and can receive promotional offers and winning numbers messages. The Lottery also uses that player database in its ongoing research efforts.

 

Colorado’s use of social media has exploded over the past 18 months, recently reaching 30,000 followers on Facebook. Promotions and contests are an active part of the program, led by Media Relations Manager Heather Black. And she expects that to grow. “Our strategy going forward is to do more integrated campaigns, making sure we tag all our commercials, radio, billboards – everything – with a call to action to visit our Facebook page for promotions, and tying all our campaigns together.”

 

Looking Ahead

 

Lottery officials are looking forward to the future with the new focus on profits. By working on the State’s own draw games, that will hopefully improve profitability. Powerball and Mega Millions, by their very nature, are unpredictable. If those games don’t produce large jackpots, it’s hard to have a stellar year. But that’s also why the scratch product is still so important. “With nearly 70 percent of our portfolio being scratch, we have to continue to keep our games fresh, unique and in demand,” said Tapia. “There’s a group of players that follow us and know exactly when we start new games and they wait for those new games. We cannot rest on our laurels.”

 

Tapia and his team are closely watching other lotteries as they expand into Internet sales. Of course, what happens in Colorado depends on the State’s political leadership. “We look to the administration for guidance, to know what games they feel are acceptable to the general public.” But should the time come, the Lottery is ready – it already has a strong Web presence through its own website and with Facebook.

 

And don’t be surprised if keno finds its way into the product mix sometime in the next few years, although again that will depend on direction from the administration.

 

One thing for sure, the Colorado Lottery is a lot more visible now than it ever was. Tapia recently accomplished one goal of improving visibility at the Lottery’s main office in Pueblo, which had offices in the second floor of a building with entry on a side street. “I felt the headquarters of a state agency ought to have more presence. So when I took the job I kept my eye out for opportunities to give us more exposure.” A perfect opportunity finally became available, and in December the Lottery moved into an adjacent area vacated by a bank, with Main Street frontage, and consolidated some of its other offices into the expanded space. “It’s a beautiful building, and now it will be called the Lottery Building. We’re just thrilled to be here.”