Gamblification

Gamblification

June 2014

The intersection of social games and gambling

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The biggest threat/opportunity in 40 years

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Smartphones: #1 starting place for anything online

Smartphone 65% 63% 65% 47% 59% 66% 56%

Searching Browsing Shopping Planning Managing Social Watching an for info The internet Online a Trip Finances Networking Online Video

Started on a smartphone

More media interactions occur on a smartphone than on any other device

38%of our daily media interactions

Google – “The New Multi-screen World”

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80% 80% 67% (40%) 64% 69% 33%

Mobile Mobile Time Spent on Apps Used vs. 2012 vs. 2012Downloads Revenue Tablets (phones) Daily

What do people do on mobile?

Mostly, they play games.

50%146 million 87%80%

Number with mobile device who play games

Socialnomics – “Social Gaming Infographic: 81 Million Play Each Day + More Stats, Wired – “Mobile Kills the Console But Advances the Gaming Industry”, DigitalBuzz – ”infographic: Mobile Gaming Statistics 2011”, FactBrowser – “Mobile Game Fact Feed”

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Mobile is crushing it. Annual growth rates =

Mobile games

6.70% =

3.30% =

27.4% =

All games

Lotteries

2.05% = Operating Income

Newzoo Data Explorer 2013, LaFleur’s 2014 World Lottery Almanac

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Social Casino

Lottery[Candy Crush Saga = 62M Daily Active Users,1B games played per day]

7

33

67

Over 45

Under 45

Who are mobile gamers?

5248

30

66%

Owners who play every day

53%

Superdataresearch.com/blog/f2p-mobile-gamers-spend, iqu.com/blog/mobile-game-stats-you-need, Socialnomics – “Social Gaming Infographic: 81 Million Play Each Day + More Stats, Wired – “Mobile Kills the Console But Advances the Gaming Industry”, DigitalBuzz – “Infographic: Mobile Gaming Statistics 2011”, FactBrowser – “Mobile Game Fact Feed”, 2012 Newzoo Data Explorer

(2012- 2013)

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Who is your consumer?

Casino

Lottery

46

52

18-24 25-34 35-44 45-54 55-64 65+0%

500%

1000%

1500%

2000%

2500%

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14 17 20 2319

Lottery player profile by age (US)

50%

40

66%

Social Casino Player

Likelihood of Gen Y & Z to play slots vs. Boomers = 1/2

Fewer 18-34s since 1995

Casual Games Association “Social Casino Gaming 2012”, John Welte Gambling Participation in the US, 2002”, “Zmags: Meet the Connected Consumer, Harrah’s Survey “Profile of the American Casino Gambler, 2006”

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Propensity to play mobile lottery in next 30 days

All 18-34s

Lottery players

Non-lottery players

0 25 50 75 100

80%

97%

65%

LottoInteractive/Chatter Mobile Lottery Research – Q4-Q10, Camelot

16-18 19-24 25-34 35-44 45-54 55-64 65-74 75+0

5

10

15

20

25

30

InteractiveRetail

UK Lottery Player Profile by Age

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What about the Industry? Adapt or die.

TomorrowUtilize internet and mobile channels

Provide games people want to play (and already are)

Incorporate features that will drive engagement and retention

TodayDraw products = flat to declining sales

All growth is in low margin Instants

Jackpot fatigue = rising price points. Higher prices ≠ younger players

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What are the risks?

Current Retail • Cash-based• Anonymous• Unenforceable procedures• Unaudited performance• Average convenience store clerk

Tenure = 34 days

85% failure rate of age verification in Maryland

25% of under-age adolescents report buying a lottery ticket

Problem Gambling

Forensic Marketing LLC, Maryland State Lottery, National Council on Problem Gambling

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What are the risks?

Land-based Sales ImpactOnline lottery jurisdictions includeIllinois (2012)Georgia (2013)Canada (2004)UK (2002)and many European countries

In every jurisdiction with online lottery products, retail sales have continued to grow

Problem GamblingProtections not available at retail1. 100% age verification2. Monetary restrictions3. Limit setting4. Self-exclusions5. Time outs6. Enforcement7. Reinstatement protocols8. Personalized information9. Clock visibility10. Spend to date/cash balance

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Don’t be these people