Product Portfolio & Marketing Update Q3 of Business Year 2020

April 15, 2020

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Lottery Products Portfolio Update

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Gaming Products Portfolio Update

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Scoreboard Update

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Scoreboard – What We Need to Do Now

Goal: Keep existing customers engaged while finding opportunities to expandto new player segments

How: Research new potential options to enhance portfolio. Current situationhas accelerated efforts

Actively researching & evaluating new sport options daily - Some will comethrough the gate and others will not

Integrity Monitoring Are players considered professional or amateur? Is there a governing body? How much are players paid? Is it a top tier league? Is there risk? Is market common and found in other books in US or

Europe?

Recent options approved: Bandy, Darts, Table Tennis, Sumo, Bowls, Chinese BaseballRecent options declined: OSCARS, Food, Weather

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Scoreboard Approved Addition: Virtual Sports

What is Virtual Sports?

• Simulated version of real sporting events

• Appear in standard sportsbook, starting every three minutes

• Random, computer generated set of odds and outcomes for wagering

• Motion graphics, sound, play-by-play and overall experience are lifelike and create familiar moments from games, matches and contests players enjoy.

• Examples of available graphics: • Horse Racing• Soccer• Greyhound Racing

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Scoreboard Approved Addition: Virtual Sports

EvaluationVirtual Sports has always has been part of the roadmap as a feature to enable later• Current circumstances make it prudent to move up the roadmap to try and capture additional revenue immediately• Existing system can accommodate new game type

What is the Goal?• Increased revenue• Increased player engagement• Increased website/app traffic• Increased profitability

What will it do for Scoreboard?• Expanded features drive more traffic to website/app,

especially with limited live sport wagering options available• Filler to engage bettors between wagers even after live

sports return

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Scoreboard Investigation: eSports

What is eSports?• Professional video gaming• Individual players or teams together battle in competitive video games tournaments for cash prizes• Audience numbers and prize pools comparable to major sporting events• More popular than MLB or NHL among 18-34 year old

Why we chose to launch without eSports• Perception of the games

o Not widely offered in the United Stateso Not well-understood by Lotteryo Age of Playerso Lack of regulation

So, we did some research…

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Evaluation - eSports League Play is Not What We Thought

Concerns About Regulation

• Codes of ethics• Heavy penalties for cheating• Anti-doping policies and testing• Sportradar data/integrity services (also used for NFL, NBA, etc.)• Players are paid professionals, not amateurs• Member of eSports Integrity Commission• ESPN airing eSports

Concerns About Age

• Audience median age is 26 • Player must be at least 16; average age is 23• Only 6% of players 18 or younger (7 total players)• This is in line with similar age restrictions held by major sport leagues currently offered on Scoreboard

• 38% of teams have a higher average age than the NBA’s Timberwolves

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eSport Considerations

eSports represents an opportunity for Lottery to relatively quickly expand its Scoreboard offering to include a highly popular form of wagering – in a regulated, age-controlled environment that is not currently available

Responsible Gaming• Lottery only to offer regulated leagues • Responsible Gaming rules enforced within the app

Scoreboard Adoption• Draws players from offshore sites to legalized wagering• Adds new players and new revenue to Scoreboard• Diversifies the content portfolio to keep Scoreboard competitive

Mainstream and growing in popularity• NASCAR launched iRACING• ESPN airing eSports including Rocket League, NBA 2K, and Madden• Wagering approved in Pennsylvania and Nevada; under review in New Jersey, Mississippi, Colorado, and Indiana

Although we have learned new insights, our current recommendation is to monitor the offering and evaluate appropriate timing for engaging in eSports

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Scoreboard Approved Market Addition: Simulated Motor Racing

NASCAR and INDYCAR iRacingWith actual motor racing on hold, industry has turned to virtual racing events

What makes it different?• Live streamed• Professional drivers• Racing industry has used iRacing for years to get ready for actual races

Cross-Play Appeal• Digital simulation provides similar concept to Virtual Sports but with

outcome based on competitive, live event (not RNG)• Test the waters with introduction into an “e-space” market similar to eSports

Scoreboard Markets• NASCAR Pro Invitational iRacing Series

Follows NASCAR Integrity Policies Approved by New Jersey DGE and Nevada Gaming Control Board

• INDYCAR iRacing Challenge Endorsed by NTT INDYCAR Series including integrity policies

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Scoreboard Investigation: Retail Strategy - Kiosk

Evaluation• Currently researching role kiosks might play in retail strategy

for sports betting

• Lottery received a test kiosk and POS terminal to “play” with and help us learn about the user experiences that bettors and retailers would have as they engage with both the hardware and software.

• Puts us in a better position to work on requirements• Collecting learning’s while our retailers are closed so we

can engage them thoughtfully when they reopen

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Scoreboard Investigation: Retail Strategy - Kiosk

Next Steps• Product team to continue research activity of learning about solution• Formal kick-off to follow including discussion on trial and field test

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Product Marketing/Digital Marketing Update

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Marketing: Budget Reductions, Messaging AgilityMAXIMIZING ENGAGEMENT VIA “OWNED” DIGITAL CHANNELS AND LOW COST DIGITAL ADVERTISING.

• Sharing online sales channel (Scoreboard) updates and information in a limited sports environment. Communications with customers about the games they can purchase, play and enjoy from home

• NFL Draft and futures bets• Fun and unique sports currently available - Darts, Bandy, Table Tennis

• Highlight Lottery products at grocery and convenience with light touch on moments of customer delight and safe ways purchase

• Use LTG’s • Add Scratch-It’s when stocking up (Lottery games in and of themselves are non-

essential) • Support local business & retailers• Use Mobile App to check tickets, watch Keno draws

• Focus on the virtual Problem Gambling treatment options available for Oregonians in need

• Utilize social channels to promote community support of retailers; both grocery and convenience and retailers who offer carry-out and/or gift certificate purchases

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Marketing: Budget Reductions, Messaging Agility

RECENT & UPCOMING EMAIL & SOCIAL MEDIA SUPPORT

• NFL Draft• Try NEW sports (Darts, Table

Tennis, Bandy, etc.)• Tease addition of Virtual Sports• Special & Free Exclusive Offers

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Marketing: Budget Reductions, Messaging Agility

MESSAGING & MEDIA MODIFICATIONSRESPONSIBLE GAMING & PROBLEM GAMBLING

• Moving to a relevant tone for customers sheltered in place

• Focus on GamTalk – Our online group support tool

• Emphasis placed on Telehealth for PG outreach

• Appears on social media, digital display ads, etc.