14 PUBLIC GAMING INTERNATIONAL • NOVEMBER/DECEMBER 2022 The effective collaboration between Lottery Operator and its commercial/ technology partners is essential to successful long-term growth and service to good causes. How can Lottery Operator and technology partners forge the kind of relationship that drives short-term focus and results but is also flexible to support ongoing investment in innovation and integration of new technologies, and positions the Lottery for long-term success? What are progressive lotteries and their commercial/technology partners doing on an ongoing basis to promote alignment of purpose, maximize the productivity and effectiveness of their collaboration, and facilitate the integration of third-party suppliers? Moderator: Rebecca Paul, President and Chief Executive Officer, Tennessee Education Lottery Corporation; President of the World Lottery Association (WLA) Panelists: Jay Gendron, Chief Operating Officer Global Lottery, IGT John Schulz, President, Americas and Global Instant Products, Scientific Games Matt Strawn, President and Chief Executive Officer, Iowa Lottery Lorne Weil, Executive Chairman, Inspired Entertainment Jennifer Westbury, Executive Vice President, Sales & Customer Development, Pollard Banknote Rebecca Paul: I am a big believer in building a mutually supportive partnership with the people I do business with because that is the more productive and effective way to optimize performance and results. I stretch to forge win-win solutions because that is the best long-term strategy to maximize the funds we transfer to good causes. We think of vendors as true partners in the mission to accomplish ambitious goals for the benefit of all lottery stakeholders. When Paul first talked to me about doing this panel, he thought the discussion should be about RFP’s, and how RFP’s might be constructed to drive the most collaborative partnership. I explained that my experience is that partnerships are driven by the right attitude, not by what is stipulated in the contract. The spirit of trust and ongoing communication needed for effective partnership can’t be effectively dictated by an RFP. Without the right attitude, you will never ever have a productive partnership regardless of what the RFP says. Those are a few of my thoughts. Let’s ask our panelists what they think. Since John and I started in the same year, 1985, and John was mentored by one of my mentors, Dave Bausch, and he happens to be sitting next to me here, let’s start with John. You launched Scientific Games’ first Cooperative Services Partnership in New York in 1985. Take us back to the brainstorming sessions of the time. How did you come up with that plan? John Schulz: Wow. A lot has happened since then. Back in 1985 it was called Shared Risk before the name changed to Cooperative Services. And that name aptly described the program. As extraordinary as it may sound now, the New York Lottery was going to end their instant game program. Sales were about $57 million a year. They said that draw-based games drove a majority of the sales and paper tickets had low sales and were very time intensive to administer So they called Scientific Games and advised us that they want to cancel their orders and not sell any more scratch games. Our CEOs at the time, Dan Bower and John Koza knew we had to come up with a solution quickly. The solution was to create a shared-risk arrangement that would essentially enable the New York Lottery to offload some of the cost of managing certain components of the instant game program. At the time, pay out was 40%, and they had 19 different distributors that got paid a commission for every book of tickets that they sold. Tickets were Cash On Delivery and took about three or four weeks to get to retailers. We hired mathematicians, who are called data scientists today, logistics experts and others to help us re-assess business practices and processes, pricing and product management strategy, order fulfilment and retail support methods. We looked at this as an opportunity to redesign our whole approach to partnership. At the same time, we terminated the contracts with 19 local distributors and installed a nationwide courier service. We built an inside sales operation, which was a staff comprised of small teams dedicated to handling almost all aspects of the product from design and promotion to fulfillment to Creating Alignment of Mission, Purpose, and Action P A N E L D I S C U S S I O N E X E CU T I V E SUMMARY O F PANE L D I SCUS S I ON F ROM PGR I L OT T E RY E XPO 2 0 2 2 NYC CON F E R ENC E
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