The Illinois Lottery recently celebrated its 50th anniversary, marking its five decades with a nostalgic look at the 1970s and working hard to adapt to a changing environment.
By Patricia McQueen
Published September 11, 2024
Disco took the 1970s by storm, and if you were anywhere near Chicago’s Pioneer Court Plaza on July 18, you might have been having flashbacks to the era. Celebrating its 50th anniversary, the Illinois Lottery dazzled passers-by with a 35-foot disco ball and a live DJ playing disco tunes.
After all, the Lottery made its debut in July 1974. Through FY24, it has provided $26.9 billion to good causes in Illinois. The lion’s share of that revenue ($25.1 billion) has supported K-12 education, which has been the Lottery’s primary beneficiary since 1985. Before then, $1.1 billion went to the state’s General Fund. Specialty causes have received $95.5 million in revenues from designated tickets since that program began in 2006. Finally, between 2009 and 2022, the Capital Projects Fund received excess funds over a legislated amount, totaling $606 million during the period.
Harold Mays has been the Illinois Lottery Director since July 2018, first serving as Acting Director before being confirmed by the Illinois Senate in March 2022. His background at the Lottery goes deep, as he previously held the role of Chief of Operations and Technology, so he has seen a lot of changes. And a lot of positive impacts on the state!
ADVERTISEMENT
“It’s not only the financial impact with the revenues raised, it’s the impact we’ve had on the communities,” reflects Mays. “We’re going into our fourth generation of interacting with Illinoisans, keeping pace and engaging with players, and with the retail relationships we value. It’s all about trying to stay relevant and continuing to make a difference in what we do for Illinois.”
Along the way, the Illinois Lottery has marked some notable firsts in the industry, even going back to its early days. In fact, in its inaugural year, Illinois was the first state to air a drawing live on television. Much more recently, Illinois was the first of a cluster of three well-established lotteries to outsource key marketing, retail and sales functions to a private company, as directed by policymakers in each state (the others were Indiana and New Jersey). The initial contract was signed with Northstar Lottery Group in 2011; after a few tumultuous years, a new bidding process began and a new contract was awarded to Camelot Illinois (now Allwyn North America) in 2017.
The Illinois Lottery was also the first in America to launch single-draw online lottery sales when an iLottery platform went live in March 2012. And in November 2021, it was the first to launch Fast Play online. That was a game-changer, and online Fast Play sales were $431.8 million in FY24, or more than 90% of total Fast Play sales. Illinois now leads all lotteries with Fast Play sales by a wide margin. And this past June, an Illinois iLottery player won a $552 million Mega Millions jackpot, the largest prize ever won with an online lottery play.
The addition of a private manager, whose primary responsibilities in Illinois include marketing, sales, retail and product, forever changed lottery operations, but the legislature had its reasons. “Running a lottery is not easy, and you need viable resources to be successful,” Mays explains. “Having the private manager dynamic in some respects does complicate the situation, but it also presents opportunities.”
He noted that there have been some exceptional recent years across the entire lottery industry due to macroeconomic and other factors beyond anyone’s control. “Both Allwyn and the Illinois Lottery have stepped up and kept pace with all of those conditions, so together we are leveraging those things in a positive way for the benefit of Illinois. We’re coming off our three best years!” Indeed, total sales reached an all-time high of more than $3.8 billion in FY24, up 35.6% since FY20. Better still, transfers to good causes surpassed $883.7 million in FY23, up 27% during the same period.
Along with that revenue success, the Illinois Lottery maintains a successful responsible gambling program consistent with industry best practices. It holds Level 4 certification in the World Lottery Association’s Responsible Gaming Framework, the highest level possible. The Lottery also maintains a sustaining level in the NASPL/NCPG Responsible Gambling Verification Program.
ADVERTISEMENT
The Game Portfolio
One of the private manager’s key responsibilities is the game portfolio – evaluating current game performance and recommending new games and new opportunities based on existing laws and capabilities.
The in-state draw game portfolio has been relatively stable. When Fast Play was introduced in September 2020, it was the first new draw game since the short-lived Hit or Miss was introduced in 2013. Unlike that game, which only stayed in market for about 18 months, Fast Play has been resounding success. It’s proof that lotteries always have to be willing to try new things – if one game is a “miss,” the next one might be a “hit.”
The Lottery’s other draw games are the industry staples – Lotto (which underwent a complete revision in 2021, and offers the Extra Shot add-on), Lucky Day Lotto (with EZ Match), Pick 3 and Pick 4 (both with the Fireball add-on). And of course, Mega Millions and Powerball. All are available at both retail and online, although the EZ Match option with Lucky Day Lotto can only be added to a retail purchase.
Like any lottery, Illinois has to enhance and maintain its game portfolio based on current laws and capabilities. Currently under study are games like Cash Pop and a “for life” game, whatever the next iteration of that might be after Cash4Life and Lucky for Life. “We have to fully leverage our capabilities based on what we can and can’t do. It really takes an investment in time and resources to introduce a new game,” explains Mays.
One current “can’t do” is keno in its typical form. As much as the game would provide a highly-desirable entry into social establishments, the conventional keno game presents challenges in Illinois based on existing laws that prohibit games with that kind of play style, unless a new design can be found. That is an ongoing process.
Allwyn’s proposal to offer Fast Play online was an example of thinking outside the box in terms of what draw games can do, and how they can be presented differently. “We’re very pleased with Fast Play, and one of our goals for 2025 is to continue to expand and introduce new games in that category to continue to drive interest for our players.”
And then there are the two national games, Mega Millions and Powerball. The Illinois Lottery is a founding member of the Mega Millions consortium, back when the game originated as the Big Game in 1996. Both of the national games now almost routinely generate jackpots over $1 billion, something Mays doesn’t think anyone would have ever envisioned even just a few years ago. And the world record Powerball jackpot of $2 billion? “How do you put your head around the idea that a $2 game can produce a jackpot of $2 billion?”
He sees the industry at a crossroads with these two games, given jackpot fatigue and the evidence that players wait longer and longer to engage as the jackpots grow. “The choices that we make will be critical for both games’ success going forward.” Those choices need to be based on a thorough understanding of how people are spending their entertainment dollars, and a desire to differentiate the products (a path already being taken by Mega Millions with game changes in the works). “I don’t think there are any magic pills for both games. As an industry, we need to come together to chart their paths.”
ADVERTISEMENT
While draw games account for a larger share of the Illinois Lottery’s game mix compared to many other American lotteries, thanks in no small part to the success of online Fast Play, the Illinois team continues to recognize the importance of instant games in the retail environment, and continues to learn about how players respond to different games.
The Lottery introduced its first $50 game, $10 Million, last December. It has been a great success, contributing considerably to top-line sales. That has been important in the current environment, where instant sales are softening around the country. “We continue to look at building on the interest generated from the $50 game,” says Mays. That includes improving the next iteration of the $50 ticket, leveraging the things that have been learned from the first, as well continuing to optimize the whole portfolio of games.
“We’re really trying to focus on the basics of what’s in retail, how it’s being sold, how players are responding to what’s out there, and trying to give players games they want to play. I think there are some opportunities for growth in doing that, and the $50 game is a good example.” He added that there is an ongoing deep dive into the data to help explore what attributes of the $50 game are working well, where in the state it does particularly well, and what tweaks can be made going forward. “It’s an iterative process for us to try to maximize and optimize our portfolio.”
And as with most lotteries, holiday games are a particular focus, with a big emphasis on second-chance promotions throughout the season. Outside the holidays, second-chance promotions are being used a little more strategically than in the past, to really help continue to add value and improve the player experience.
ADVERTISEMENT
Specialty Causes
Playing a small but important role in the instant product mix are specialty-cause games. While many lotteries have specific instant games that send their proceeds to certain causes, most commonly funding for veterans, Illinois takes that up a notch or 10. There are now 10 causes that receive 100% of the profits from each specialty ticket sold: veterans’ causes, Special Olympics programs, breast cancer research and support, multiple sclerosis research, HIV/AIDS research and treatment, police memorial funding, Alzheimer’s support, homelessness prevention, United Negro College Fund, and the DREAM fund (higher education scholarships).
“The specialty ticket program is one of our shining stars from my perspective,” says Mays. “It’s something I hold dear because it’s so tangible, with the specific impact of those proceeds and the relationships we have with those causes.”
The specialty-cause program began with just two causes in 2006, each having their own game. Over the years, as more organizations wanted to participate, the formula to add and continue to support more causes wasn’t optimal. Each organization would have to present its case to the legislature in order to get a new law authorizing a dedicated ticket. That process could take years. There was also no limit to the number of causes that could participate in the program. That presented challenges for the Lottery as the number of specialty-cause games increased.
“With 10 causes and 10 individual tickets, they were about 20% of our portfolio and all competing for the same retail space and for the same players who are interested in tickets like this,” explains Mays. “It wasn’t maximizing our ability to optimize our portfolio or giving each cause the best chance to be as successful as they could.”
In FY23, the Lottery was able to get a new law passed that streamlined the program by allowing one joint ticket to be sold in support of all 10 causes. Profits are split evenly across all the participating organizations, and the $5 price point provides enough revenue to share. “Now the Lottery and each cause can promote the cause with one ticket that’s in the market year-round, and retailers can also more easily highlight their support of the program. We view it as a win-win for the good causes, a win-win for the retailers, and a win-win for the Lottery. Not only can we maximize the proceeds from that ticket, it allows us to properly balance our portfolio in the lower price points to help drive higher sales.”
Current games:
Instant tickets: Approximately 53 new games launched annually; $1, $2, $3, $5, $10, $20, $25, $30 and $50.
Terminal games: Lotto, Lucky Day Lotto, Pick 3, Pick 4, Powerball, Mega Millions, Fast Play
Vital statistics:
Number of employees (Department of Lottery only): 152 at 6/30/24
Number of licensed retailers: 6,860 at 6/30/24
Self-service equipment: Approx. 3,000 units
ADVERTISEMENT
Retail Opportunities
Retailers are indeed any lottery’s most important partners, and Mays considers retail to be the biggest potential opportunity for the Illinois Lottery. “There are things we can do to continue to make retail more efficient, so we can optimize retail sales while supporting our retailers’ needs as they sell our products,” says Mays.
Several years ago, there was a complete retail refresh after Camelot Illinois first began its term as private manager. Such ventures are always a challenge for retailers at the beginning, but usually a welcome challenge in the end. “I think we’re in a good space from that standpoint, and now we really have to focus on our ongoing retailer support.”
One key component for that was the introduction last year of gem|Intelligence to help sales reps and retailers better manage lottery products in-store. The software provides a wide variety of detailed information about game and retail performance. “Our sales reps and regional coordinators have embraced the product and we are really starting to see some efficiencies with it,” says Mays. For example, activation rates have increased dramatically, with ticket activations now well over 90% each month.
Perhaps one of the biggest future opportunities for retail in Illinois is expanding into the social space with bars and restaurants. Keno would be ideal for that, but as noted, in its typical form would not be legal in Illinois. “Without a product like keno, it’s harder to attract those types of locations, so there are very few in the Lottery’s retail network.” Still, he sees social environments as a good source of potential growth, and if keno can’t be tweaked so that it doesn’t fall under old Illinois prohibitions, one possible alternative is Fast Play.
There’s also work going on in the areas of retailer recruitment, digging down deep into GIS data to analyze customer traffic patterns in different parts of the state. The goal is to find any areas underserved by lottery retailers.
And like other lotteries, Illinois continues to evaluate recent industry initiatives in the areas of in-lane sales and the potential to reach even more retailers. “We’re trying to figure out a way that it would make sense in our state,” notes Mays.
Anniversary Fun
In the meantime, the Illinois Lottery team had to have fun with its 50th anniversary, heavy on nostalgia and also honoring both retailers and players. “When we look back on all these years, there is so much nostalgia, excitement and history to be proud of,” marvels Mays. “Our rich history is what made the Illinois Lottery what it is today, and we continue to strive to make a difference in local communities across the state of Illinois.”
The pinnacle July 18 celebration in Chicago not only had that giant disco ball, it offered an interactive photo booth and opportunities to win cash prizes up to $500. The disco ball, the largest ever in the U.S., drew crowds of several thousand, and over 500 people won cash and prizes totaling more than $10,000, including 10 players who walked away with $500 in cash each.
That was a big celebration, but by far from the only one. From June through August, a retail tour made 50 stops throughout the state. Depending on the location, there were things like photo booths, chances to win prizes and of course, ticket sales. “With a big state, there’s a lot of ground to cover and thousands of retailers,” explains Mays. “There were places where we had never been before, so it was good to interact with people and players that we don’t typically interact with, getting a different perspective of what’s going in the different parts of the state we serve.”
Among the many other activities and promotions, a “Get in the Groove” sweepstakes runs through September 30, offering instant tickets and $500 gift cards as prizes. A family of Celebration instant games was released in May at the $2, $5, $10 and $20 price points; it was accompanied by a second-chance promotion that offered 50 weekly prizes of $500 for 15 weeks; the final drawing was held September 1 and offered one $500,000 cash prize and five $50,000 cash prizes.
ADVERTISEMENT
Looking Ahead
It has clearly been a busy year for the Illinois Lottery and its partner Allwyn, and everyone is looking to carry the energy forward. But there’s plenty of work to be done, as there is for every lottery.
Mays hopes that one day Illinois will allow eInstants to be added to the iLottery mix – they are currently not legal under current statutes and new legislation would be required. The team has been trying for several years, but there are a lot of variables in play. Not the least of which is potential opposition from other operators in a crowded gaming field. There are currently 15 licensed casinos, more than 48,000 video gaming machines at 8,600 locations, and sports betting through the casino operators, most offering both in-person and online betting. Mays isn’t taking any bets on whether eInstants will eventually be authorized.
So, for now, as noted earlier, he sees retail as the biggest growth opportunity – attracting new retailers and finding ways to reposition the value of lottery to potential retailers. “A lot can be done in those areas. The Illinois Lottery is 50 years old, and I want to help make sure the next 50 are even better than the first.”
Comments