singare pools private limited revitalising toto – from 6/45 … case study august 2015... ·...
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Singapore Pools Private Limited
Revitalising TOTO –
From 6/45 to 6/49 August 2015
1. BACKGROUND ..................................................................................................................... 1
2. OPERATING ENVIRONMENT ................................................................................................ 1
3. TOTO 6/45 ........................................................................................................................... 3
4. CHANGES IN EXTERNAL ENVIRONMENT ............................................................................. 5
5. THE CASE FOR A CHANGE .................................................................................................... 5
6. DETERMINING THE CHANGES ............................................................................................. 6
7. THE NEW TOTO 6/49 ........................................................................................................... 9
8. PRE-LAUNCH PREPARATION .............................................................................................. 10
9. RESULTS ............................................................................................................................. 13
10. CONCLUSION ..................................................................................................................... 14
REVITALISING TOTO – FROM 6/45 TO 6/49
1 | P a g e
1. BACKGROUND
1.1 Singapore Pools (Private) Limited (“SPPL”) is Singapore’s only legal lottery
operator since 1968. We are a wholly-owned subsidiary of the Singapore
Totalisator Board (Tote Board) since 2004. Our mission is to provide a
legal avenue for betting in Singapore, and to channel surplus earnings,
through Tote Board, to benefit the community.
We offer three lottery games:
• TOTO
• 4-Digit Game
• Singapore Sweep, as well as
• Sports Betting.
1.2 We have 298 shops island wide, of which 90 are operated by SPPL staff.
The remaining shops are run by authorized retailers. To cater to
customers who want to watch football matches live and place their bets
as the matches are going on, we have two live betting avenues, located at
Sentosa and Marina Bay Sands, respectively.
1.3 In addition, for Singapore Pools Account customers, they can place their
sports bet and lottery bets via a call centre and an interactive voice
response system respectively.
2. OPERATING ENVIRONMENT
2.1 Singapore has a population of 5.57million, with a GDP of $339 billion or
an average of S$62,000 per capita in 2013, making it one of the
wealthiest countries in the world.
2.2 Besides SPPL, other gaming operators include Singapore Turf Club, which
offers horse race betting, and two casinos (Marina Bay Sands and Resort
World Sentosa). Social clubs are allowed to offer jackpot betting for their
members only. Through these available channels in Singapore, an average
of S$1,024 is placed in bets yearly, the highest in the world (1).
REVITALISING TOTO – FROM 6/45 TO 6/49
2 | P a g e
2.3 Despite the high gambling expenditure, there are tight rules that govern
communications, examples of which include:
(a) Unable to advertise on free to air TV or radio
(b) Unable to advertise on non-gambling dedicated cable channels
(c) Unable to advertise in any publication which is targeted at persons
under 18 years old
(d) Unable to offer free bets or their equivalent in cash, which can be
used for participation in any game to promote gambling
(e) Unable to advertise on the front and back pages of a Singapore
newspaper, or in any major section of such print media.
2.4 Besides the external guidelines, SPPL also has an internal marketing code
-- “Marketing Communications and Promotions Code of Conduct” --
which regulates the execution of communications to the customers.
2.5 In 2012, SPPL obtained the highest level of Responsible Gaming (RG),
Level 4 certification under the World Lottery Association framework. RG
has been incorporated in our corporate values since 2015. Our RG
Philosophy is as follows:
(a) RG is a value, more than complying with a set of written policies,
rules and manuals;
(b) The education of players to make informed decisions is the
cornerstone of RG;
(c) RG standards and measures should take cognizance of Singapore’s
multicultural and multi-religious diversity;
(d) RG practices and measures must be sustainable, and continue to
evolve in response to changing local and global perceptions; and
(e) RG is everyone’s responsibility. RG begins with top management
commitment. All SP staff and retailer staff selling SP products must
undergo RG training and pass the RG test before they are allowed to
serve customers.
2.6 For every S$1 in lottery sales, 30% is paid to the government as betting
duties.
REVITALISING TOTO – FROM 6/45 TO 6/49
3 | P a g e
3. TOTO 6/45
3.1 Lotto, or TOTO as our product is known here, was first launched in 1968.
Since then, TOTO has undergone several changes to keep pace with
population growth and changing customers’ needs.
Table A: Key Changes in TOTO Game
1968 1969 1988 1997
Population 2.01M 2.04M 2.85M 3.79M
Matrix 6/49 5/49 6/42 6/45
Jackpot Odds 14.0M 1.9M 5.2M 8.1M
MGA* N/A $50K $300K $500K
Cost per board $0.50 $0.50 $0.50 $0.50
Draws per week 1 1 2 2
* Minimum Guaranteed Amount
3.2 TOTO 6/45 was launched in 1997, at the cost of S$0.50 for an Ordinary
Board (6 numbers), and the minimum entry was S$1. The Minimum
Guaranteed Amount for a jackpot (MGA) was S$500,000. Two draws were
held per week, on Monday and Thursday. The jackpot would cascade to
the lower prize group if it was not won by the fourth draw. Typically, the
jackpot for draw 1, 2, 3 and 4 were S$700,000, S$1.5M, S$3M and S$5.5M
respectively.
3.3 Prizes made up 54% of total sales, divided into 6 prize groups.
Table B: Game Structure of TOTO 6/45
Group
Winning
Numbers
Matched
Prize Pool
Allocation
Theoretical
Prize Per
Share
Odds
1 6 33% : shared $725,725 1 in
8,145,060
2 5 + 1 additional
number 13% : shared $47,649
1 in
1,357,510
3 5 13% : shared $1,254 1 in 35,724
4 4 + 1 additional
number 13% : shared $502 1 in 14,290
5 4 14.38% : fixed $30 1 in 772
6 3 + 1 additional
number 12.79% : fixed $20 1 in 579
REVITALISING TOTO – FROM 6/45 TO 6/49
4 | P a g e
Over the years, TOTO 6/45 sales went from strong growth in the late
1990s, to moderate growth in early 2000s, to stagnant from 2007
onwards.
The market for this game started to show signs of saturation in the
following ways:
(a) High Coverage Ratio
At the first draw, with sales of about S$4M, 98% of the 8.1M
possible combinations were sold. Jackpots wins were often
shared by multiple players.
(b) Fewer Jackpot Snowballed
70% of the draws were won on MGA basis, with a jackpot of
S$700,000 or less. The jackpot prize seldom snowballed more than
2 times.
(c) Need for Special Draws
There was an absence of cascade draws for nearly 3 years. To
compensate for the lack of naturally incurred jackpots, SPPL had
to fund the jackpot prize, in a bid to reach the usual cascade draw
jackpot of S$5M during Special Draws.
Table C: TOTO 6/45 Special Draws
No. of Special Draws Jackpot Funding Amount
FY06/07 1 S$1.9M
FY07/08 2 S$4.5M
FY08/09 2 S$5.1M
FY09/10 3 S$7.5M
FY10/11 3 S$4.7M
FY11/12 3 S$4.7M
FY12/13 3 S$5.3M
FY13/14 4 S$7.2M
Total 31 S$40.9M
REVITALISING TOTO – FROM 6/45 TO 6/49
5 | P a g e
4. CHANGES IN EXTERNAL ENVIRONMENT
4.1 Over the last 17 years, Singapore has experienced rapid changes in its
population and GDP growth).
Chart A: Singapore Population (1997 to 2014)
Chart B: Singapore GDP Per Capita (1997 to 2013)
5. THE CASE FOR A CHANGE
5.1 The growth in population and spending propensity of TOTO customers
resulted in stable, fairly high sales volume, even for first draws. While this
meant consistent income via the product, it also brought about a
situation where jackpot rollovers were rare.
REVITALISING TOTO – FROM 6/45 TO 6/49
6 | P a g e
In a TOTO Segmentation Study, conducted in 2011 to understand the
motivation to participate, it was discovered that 36% of all TOTO
customers were prize conscious, and will only participate when the
jackpot exceeded S$1M or Draw 2 onwards.
These customers were younger, with higher income and less commitment
to playing TOTO.
5.2 Combining quantitative data and customer surveys, the following issues
were identified for TOTO:
(a) For SPPL:
• Game was too small for its customer base
• Game was inexpensive
• Frequent funding was required to create a desirable jackpot
(b) For the customers:
• Jackpot was too low
• Wanted increased winning experience, through the availability
of smaller prizes
6. DETERMINING THE CHANGES
6.1 Jackpot
The jackpot for the new game must be a life transforming one. The Toto
Segmentation Study showed that the attraction towards the jackpot is
related to its ability to purchase a private property in Singapore. The
typical cost of a decent 1,200 sq foot (99 year lease) private dwelling in
Singapore ranges between S$1M and S$3M.
However, the size of the jackpot must not be used to create new
customers. The jackpot should only be allowed to grow up to S$6 to S$7M.
This is roughly equivalent to the Special Draw Jackpot ($5M-$6M) that
customers are already familiar with.
REVITALISING TOTO – FROM 6/45 TO 6/49
7 | P a g e
6.2 Type of Matrix
The new matrix should be sustainable for the next 5 years, catering to a
projected population growth to 6M in year 2020. The matrix should yield
a jackpot of S$6M to S$7M by Draw 4.
6.3 Price per Board
The price per board of S$0.50 has not changed since 1968. To fund a
higher jackpot for Draw 1, the price per board must be raised. A
comparison with 30 overseas LOTTO operators showed that the average
price per board was about S$1.40, which is almost triple the current cost.
Chart C: Average Price per Board of LOTTO
6.4 Odds of Winning
The odds of winning (1 in 321) for TOTO 6/45 were way above the
international standard of 1 in 39.
0
1
2
3
1.10
South Africa
0.39
Greece
0.39
Singapore (Current)
0.41
Sweden
0.47
Illinois
0.50
New York
0.50
Wisconsin
0.50
New
Zealand
0.50
Singapore (New)
0.81
Poland
0.94
California
1.00
Texas
1.00
Michigan
1.00
Florida
1.00
Ohio
1.00
New
Jersey
1.00
Indiana
1.00
Massachusetts
1.00
Hong Kong
1.29
Belgium
1.31
Finland
1.31
UK1.52
Pennsylvania
2.00
Ireland
1.97
France
2.62
Union Lotto
0.31
Pow
erball
0.86
Mega Millions
1.00
Oz Lotto
1.21
Pow
erball
2.00
Eurojackpot
2.62
2.62
1.10
REVITALISING TOTO – FROM 6/45 TO 6/49
8 | P a g e
Chart D: Odds of Winning for LOTTO
6.5 Prize Structure
An hour-glass model was proposed for the prize allocation. The number
of mid-tiered prizes will be reduced, and more prize money to jackpot
and smaller prizes will be allocated. Among the 30 operators, the average
jackpot prize to be allocated will make up 46% of the prize pool. A new
prize category, “Match 3 to Win”, will be created to increase the winning
experience.
Chart E: Prize Allocation for LOTTO Jackpot
0
100
200
300
400
39
France
6
Indiana
6
Pennsylvania
18Missouri
20
California
23
Belgium
25
Washington
27
Wisconsin
27
Il lionois
32
Massachusetts
34
Ireland
45
Michigan
47
New
York
49
New
Zealand
50
Hong Kong
54
Singapore (New
)
54
UK
54
South Africa
54
New Jersey
54
Poland
54
Sweden
55
Florida
67
Texas
71
F inland
83
Singapore (Current)
321
EuroMillions
13
Union Lotto
15
Eurojackpot
21
Aus Pow
erball
30
US Pow
erball
32
Mega Mil lions
40
Oz Lotto
59
39
0
20
40
60
80
100%
46%
Tex
as81
%
New York
75%
Wisconsin
72%
Illin
ois
70%
New
Jersey
68%
Florida
64%
Califo
rnia
61%
Ireland
46%
Michigan
46%
Poland
44%
Singa
pore (Ne
w)
38%
Singapore (C
urrent )
33%
Finland
33%
UK32%
Hon
g Ko
ng29
%Fran
ce20
%US Pow
erba
ll64
%
Meg
a Millions
64%
Oz Lo
t to40
%
Aus Powerba
ll37%
EuroMillions
32%
Eurojackpo
t22
%
46%
REVITALISING TOTO – FROM 6/45 TO 6/49
9 | P a g e
7. THE NEW TOTO 6/49
7.1 The new TOTO, in the form of 6/49 matrix, was determined after months
of study and formally launched on 7 October 2014.
Table D: Comparison of TOTO 6/45 and TOTO 6/49
Matrix 6/49 6/45
Jackpot Odds 1 in 13.98M 1 in 8.14M
Minimum Guaranteed
Amount S$1,000,000 S$500,000
Price per board S$1 S$0.50
Minimum bet amount per
ticket
S$1
(Minimum one board)
S$1
(Minimum two boards)
Prize pool 54% of sales 54% of sales
Group 1 Prize funding 38% of Prize pool 33% of Prize pool
Odds of Winning Any Prize 1 in 54 1 in 321
No. of prize groups
7
(Group 7 – Match 3
Numbers)
6
Jackpot Sequence S$1M, S$2.2M, S$3.8M &
S$6M
S$700k, S$1.5M, S$3M
& S$5.5M
Total number of winners 260,624 25,410
7.2 Prize Pool Allocation
Under the new matrix, 38% of the prize pool is allocated to the jackpot,
while another 30% is allocated to a newly created Group 7. This group
would give more than 50,000 customers a chance to win a smaller prize
at each draw, even for Draw 1.
Chart F: Prize Pool Allocation for TOTO 6/45 and TOTO 6/49
REVITALISING TOTO – FROM 6/45 TO 6/49
10 | P a g e
7.3 Sales Projection and Rollover Occurrences
The annual sales of TOTO 6/49 were expected to be marginally higher
than the old matrix initially, but would grow by 20% to S$750M after five
years of operation.
Table E: Sales Projection for TOTO 6/49
Draw Type Ave Sales Ave Jackpot Theoretical
Occurrences
Draw 1 * $4.5M $1.0M 42
Draw 2 $5.1M $2.0M 29
Draw 3 $7.2M $3.5M 21
Draw 4 (Cascade) $16.3M $6.8M 12
No of draws in a year
104
Chart G: 5 Years Sales Projection for TOTO 6/49
8. PRE-LAUNCH PREPARATION
8.1 Communication Strategy
A communication strategy in line with our marketing code was crafted.
The guiding principle was to ensure that we avoid any impression of
creating new customers, or promoting gambling or getting customers
unduly excited.
It is for this reason that we did not provide any media release, on the
basis that the target audience was our existing customer base.
REVITALISING TOTO – FROM 6/45 TO 6/49
11 | P a g e
The new TOTO matrix was communicated to customers via the SPPL
website and outlets, and pains were taken to ensure the information
provided was factual in nature.
The key message was that the SPPL made the changes in response to
customers’ requests, and highlighted the three salient changes:
• Revision in the cost per board to S$1 (from S$0.50),
• The minimum guaranteed jackpot of S$1M (from S$500,000), and
• The addition of a new prize group - Match 3 Numbers - to win
S$10.
8.2 Communication Strategy
A two-phased communication approach was adopted.
The first phase was initiated four weeks before the launch of the TOTO
6/49 matrix. Customers were informed that TOTO was to be modified, so
that they were not caught by surprise when the new matrix came into
effect.
A newspaper announcement was placed in the major English and Chinese
dailies, informing customers of the pending changes. The dates of the
last TOTO 6/45 draw, and first TOTO 6/49 draw, were also published.
After the implementation of TOTO 6/49 on 7 October 2014, another
round of communication was launched to ensure customers understood
the new TOTO game.
The newspaper notice, and posters used under Phase 1 and Phase 2 of
the communication strategy are as follows:
REVITALISING TOTO – FROM 6/45 TO 6/49
12 | P a g e
Newspaper Notification
Phase 1 Poster
Phase 2 Poster
REVITALISING TOTO – FROM 6/45 TO 6/49
13 | P a g e
9. RESULTS
9.1 Response from the Public
Most local major media covered the change in TOTO game factually, with
little adversity. Customers’ feedback was also within expectation. There
were no negative reactions from the anti-gambling public.
9.2 Design and Sales
The new game matrix has proven to be a good fit and is well accepted by
customers. Between the launch of TOTO 6/49 and as at 30 July 2015,
there has been only one instance where a draw required a top-up by SPPL
to meet the MGA.
Actual sale figures have surpassed expected sales by a margin of 10% to
20% for Draw 1 to Draw 3. Draw 4 is the only exception, with sales slightly
below what was anticipated.
We believe this to be a chain effect, as the good sales for preceding draws
may have affected the purchasing power for Draw 4.
9.3 Draw Occurrences and Winners
The higher than expected sales of TOTO 6/49 also resulted in less rollover
draws.
Table F: Draw types for TOTO 6/49
Actual
Theoretical
Occurrences Variance
Draw 1 41% 40% 1%
Draw 2 34% 28% 6%
Draw 3 16% 20% -4%
Draw 4 8% 12% -4%
100% 100%
Nevertheless, Group 1 winners have larger jackpot winnings, due to the
higher prize pool. The largest winner was an $8.0M jackpot in the draw
held on 12 March 2015, which is a record amount in TOTO’s history.
REVITALISING TOTO – FROM 6/45 TO 6/49
14 | P a g e
10. CONCLUSION
The launch of TOTO 6/49 was a smooth one, with the new matrix well received
by customers. This success could be attributed to the substantial research done
prior to the game revision, taking into account views of customers,
communication with stakeholders’ and addressing their concerns in a timely
manner, as well as taking our cue from the best industry practice.
However, it is imperative for the game to continue being monitored closely,
particularly in the areas of jackpot estimation and customer communications, to
ensure the product stays relevant to its customers.
Reference:
(1) La Fleur’s 2014 World Lottery Almanac
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