Colorado Lottery Segmentation Study Presentation by Simon Jaworski

Colorado Lottery Segmentation Study Presentation by Simon Jaworski Thursday, February 2 nd 2012

Thought process into Segmentation Methodology Profile of respondents High level view and comparison of Segments Detailed Segment Analysis DREAMER$: C-$tore Gambler$ TOSS’rs: Traditional Older, Small-Splurgers FUNZIES: Female Fun Squad TURTLES: Jackpot Cheapskates YES Men: Young, Entitled, Spontaneous Men PRONGS: Pragmatic, Non-Gaming Conservatives Strategic Conclusions Questions

Analytical Methodology: Multi-Domain Segmentation Actionability is the key to any segmentation approach, indeed to all market research. To be successfully actionable, a segmentation study must address the following three key criteria. – What Lottery Players Do? – Why They Do It? – Who They Are?

TRi. G’s objectives for the Colorado Lottery Segmentation Study were to : 1. Allow the Lottery to use information attained in the segmentation study for strategic planning, product development, product enhancements, pricing, market positioning and communications. It is anticipated that this data will help the Lottery maximize revenue potential and minimize risk associated with new product introductions and product enhancements. 2. Learn the values, attitudes, motivations and lottery buying behavior of Colorado adults which results in a division of the public into categories known as segments. 3. Find segments that could be easily understood and differentiated from one another. Factors that we assumed would be assessed, but were not limited to, included geographic, demographic, socioeconomic, lifestyles, motivations and product usage.

Methodology: Colorado respondents participated in a 35 minute survey in December, 2011. 1, 044 completed the online survey The respondents all had to: Be older than 18 years of age have no moral objections to Colorado running a state lottery not work for an advertising agency, market research company, marketing consultant, any type of Lottery or a store that sells lottery tickets Margin of Error – Statistical Sample Accuracy at 90% confidence on n=1, 044 completes is + or – 2. 2%

www. trig-us. com

www. trig-us. com

Segment Sketches YES Men: Young, Entitled, Spontaneous Men. “Young Males, with a heavy over index of Hispanics and Asians, this segment believes the Lottery is immoral, but that in itself is part of the allure of playing. They are the epitome of the ‘me’ generation; within Lottery this means they will check odds of winning, they use vending machines, they are heavy scratch spenders with a focus on the $5, $10 and $20 tickets and they’d enjoy non-cash prizes. ” PRONGS: Pragmatic, Non-Gaming Conservatives. “Integrity, Privacy, Truth. These occasional Lottery players, play the least, spend the least, and look down on the Lottery (with only 2% having played in the past month). They believe in careful, informed fact-based decisions and that the Lottery takes advantage of the poorer members of society. However, they seem to appreciate the benefits the Lottery brings to Colorado. ” TOSS’rs: Traditional Older, Small-Splurgers. “The most deceptive segment. These are regular and core Lottery players, who have remained loyal throughout their advancing years. 1/3 have played in the past month, and they like their comfort zone of playing Lottery at the same retailer, on their ‘usual’ day. These creatures of habit are low spenders, and will no doubt continue to play their $1 and $2 tickets across all games. ” 9

Segment Sketches (2) TURTLES: Jackpot Cheapskates: “Big Jackpots. Huge Jackpots. They dream of making their good lives better (they are the highest average earning segment). They spend more as Powerball and Mega Millions Jackpots increase, and their interest is peaked in Scratch Games for those ‘high 1 st prize’ tickets. They can afford to, and will play, $20 tickets, but they are still a little confused as to where Lottery revenues go. An explanation may help this affluent segment justify playing more often. ” FUNZIES: Female Fun Squad “ Emotional and Financial Security is high on the agenda for these social, fun seekers. Heavily over –indexing female, they are shop-til-they drop types, who enjoy the thrill of competition which helps feed their entertainment needs. The Lottery helps fill part of this void, with challenging games providing cash payouts. Heavy Online game players, these larger family mom’s love to play their lucky numbers too. ” DREAMER$: C-$tore Gambler$. “Lottery players to the core, they love winning, their Lottery pools, their neighborhood Convenience Store and the Colorado Outdoors cause: but Lottery is not the focal point of their lives, despite the adrenalin rush it serves. Social Mediarites (Facebook heavy) who would welcome Lottery promotions via that medium. New products and ideas will stream from these optimists who love to win. ” 10

High Level Descriptions of the Segments Target Group Past Year Play Past % of Pop. Month played in Play Past month Key Lottery Games Importance to Lottery YES Men Young, Entitled, Spontaneous Men 9% $32 53% 2% Future Lottery game design PRONGS Pragmatic, Non-Gaming Conservatives 17% $2 26% 2% 0. 3% Irrelevant TOSS’rs Traditional Older, Small-Splurgers 25% $21 71% 33% 8% TURTLES Jackpot Cheapskates 21% $12 71% 14% 3% FUNZIES Female Fun Squad 8% $34 73% 38% 3% Fun, fun 7% Involve in all aspects of Lottery DREAMER$ C-$tore Gambler$ Segment Spend Population per Size Month 20% $36 82% 36% Steady stream of income Jackpot information – Future TOSS’rs

Distinguishing Characteristics of each segment* High Low Dreamer$ TOSS’rs Funzies Turtles YES Men PRONGS Enjoy risk and spontaneity 17% -35% 15% 21% 63% -36% Careful, informed decisions 9% -34% -33% 1% 14% 45% Believe in Fate 21% -3% 14% -2% 12% -31% Budget my money -5% 5% 12% -15% 35% -7% Giving 14% 4% 28% -9% -26% -11% Optimistic 15% -11% -8% 0% 8% -2% New Products 41% -4% 41% -32% -42% Fortune tellers are a waste of time -21% 2% 6% 8% -15% 17% High Low www. trig-us. com

Distinguishing Gaming & Lottery Attitudes of each segment* High Low Dreamer$ TOSS’rs Funzies Turtles YES Men PRONGS Lottery benefits Colorado 13% -10% 7% 2% 18% -16% Fun, exciting and entertaining 57% -25% 66% 8% 43% -96% Takes advantage of uneducated people -47% -42% -32% 17% 28% 96% Playing the odds 62% -55% -7% -20% 64% 1% Challenging and entertaining games 15% -2% 34% -16% 9% -27% Easy games & instant gratification 17% -5% 9% 0% 11% -32% Impulsive player 9% 6% 21% 6% 10% -59% Cash prizes 26% -26% 48% 38% -71% -47% Big jackpot hunters -12% -45% -76% 84% 50% -3% High Low www. trig-us. com

Distinguishing Jackpot/Drawing Game Play of each segment* High Low Dreamer$ TOSS’rs Funzies Turtles YES Men PRONGS Lucky and usual numbers 6% -21% 131% -41% 43% -17% Play in a Lottery pool 39% -37% -18% -15% 38% 21% Big jackpots only 11% -57% -79% 57% 53% 18% No. of prizes/chances to win 59% -23% 3% -50% 23% -2% Lucky numbers -18% -36% 235% -23% 25% -35% Recent win on same game 20% -7% 16% -14% 13% -38% Vending machine players 8% -13% -6% -5% 29% 10% Advertising 12% -9% -7% 38% -11% High Low www. trig-us. com

Distinguishing Scratch Game Play for each segment* High Low Dreamer$ TOSS’rs Funzies Turtles YES Men PRONGS Ticket Importance: Prefer Big Top Prizes 56% 15% 35% 40% 57% 29% Adrenalin rush and winning feeling 47% 26% 47% 37% 55% 23% 46% 30% 54% 40% 60% 25% 14% 13% 16% 26% 55% 10% Smaller prizes, better odds 33% 15% 21% 25% 52% 31% Buying Scratch Tickets as Gifts 62% 50% 72% 54% 63% Non-cash prizes 23% 9% 11% 7% 51% 0% Extended play and entertainment Vending Machines & Online Purchases High Low www. trig-us. com

Distinguishing Demographics of each segment* High Low Dreamer$ TOSS’rs Funzies Turtles YES Men PRONGS GENDER – MALE % 46% 42% 34% 48% 63% 55% AGE : 18 – 34 YEAR OLDS 30% 23% 30% 54% 19% AGE : 55+ YEAR OLDS 25% 41% 31% 27% 12% 38% ETHNICITY: WHITE/CAUCASIAN 82% 86% 87% 69% 89% HISPANIC 21% 20% 16% 33% 12% AVERAGE H/HOLD INCOME $53 k $61 k $45 k $71 k $51 k $69 k Home Owners 54% 65% 47% 68% 49% 71% High Low www. trig-us. com

www. trig-us. com

PAST YEAR PLAY: 82% Spend per Month PAST MONTH PLAY: 36% $36 ü Highest spenders ü 3 rd highest segment size ü Lottery lovers GAMES THEY PLAY 49% “Spend different amount on different game each week”. www. trig-us. com Only 21% “Spend the same amount on the same games”.

“QUOTE” q Who are they? q Values (Sec B) v The Middle of the Road Family v Income, Age, Gender, Ethnicity – Loyalty Nothing separates this group demographically Self-respect NOT ‘Other’s opinion of me’ SEGMENT 6: DREAMER$ q What are their thoughts on life? (Sec A) C-$tore Gambler$ v Enjoy giving gifts (93%) #1 v Seek out all relevant facts (88%) #2 v Always looking for a bargain (87%) #1 v Try new products (79%) #1 q Colorado Lottery Benefits, Issues & Proceeds (E 2, 3, 4) v Like to be entertained (70%) #2 v Chance to win money (83%) #1 v Do exciting things (72%) #2 v Keeps money in the State (74%) #1 v Optimistic about the future (57%) #2 v People want it for entertainment (71%) #1 v When I do something fun, I like the v Revenue for the State (70%) #1 opportunity to win something (62%) #1 v Proceeds go to COGO (68%) #1 v I am a competitive person (50%) #2 v People who can’t afford it play anyway (38%) #2 v Others consider me a leader (54%) #2 v Schools/Teachers/Education (68%) #1 v Spontaneous person (48%) #2 v Help the poor and homeless (68%) #1 v Like to read Ads to find out more about products (50%) #2 www. trig-us. com

Play - Past Month Year 36% 62% Average Spend Per Play Per Month (among players) $5 ($8) $10 ($16) 16% 40% $3 ($7) $4 ($11) 32% 57% $4 ($7) $6 ($10) 12% 30% $2 ($8) $3 ($10) 7% 18% $1 ($6) $1. 50 ($9) Key Drawing attributes #1 reasons/differentiators Dream of winning big Odds of winning Number of prizes available SEGMENT 6: DREAMER$ C-$tore Gambler$ Drawing Game Attitudes (F 1) v I realize in a pool group my portion of the jackpot would be lower than my trigger amount that I buy myself. (62%) #3 v I prefer to let the computer pick my numbers (47%) #3 v I enjoy playing in a pool because it is a social connection with friends, family and co-workers (23%) #2 www. trig-us. com

Ever Played: 77% Past Year: 70% Past Month: 39% PAST YEAR PLAYERSHIP BY TICKET $ $1 % play: Rank 56% #4 $2 48% #3 $3 34% #1= $5 39% #2 $10 16% #2 $20 5% #3 “FAVORITE SCRATCH GAMES” BY $ Key Scratch attributes #1 reasons/differentiators SEGMENT 6: DREAMER$ C-$tore Gambler$ Top prize amount Odds of winning Number of top prizes award Spend per play: $6 ($8) Spend per month: $12($18) Scratch Game Attitudes (G 9) v I like scratch games because you know you have won immediately. (76%) #2 v I expect a bigger prize when I buy a higher price point Scratch ticket (72%) #2 v I see Scratch Games as a form of entertainment in addition to a chance to win a prize a win (63%) #2 v I prefer Scratch Games with a big top prize (62%) #2 v The first thing I notice when I look at Scratch Games is the Top Prize (57%) #1 v Number of top prize winners influence which Scratch Games I will buy (43%) #2 www. trig-us. com

“WE’LL SEE YOU FRIDAYS AT THE C-STORE” “DAYS OF THE WEEK PLAY” % MONDAY 28% TUESDAY 29% WEDNESDAY 47% THURSDAY 25% FRIDAY 50% SATURDAY #2 SUNDAY 21% #1 #2 #1 #1 #1 54% #1 “WHERE DO THEY PURCHASE? ” CONVENIENCE 84% #1 (69% MOST OFTEN) GROCERY 48% LIQUOR “DAY PLAY MOST OFTEN” - % SATURDAY 27% FRIDAY 24% WEDNESDAY 22% (C 1 & D 2) Lottery & Gaming Attitudes v v v 15% #2 SEGMENT 6: DREAMER$ C-$tore Gambler$ It is important to me that proceeds from the lottery go to a good cause (87%) #1 I dream about winning a really big Lottery prize (73%) #1 I would vote for the Lottery if there was an election today (73%) #2 The Lottery is fun (69%) #2 Even if it is a small prize, I really enjoy winning something from the Lottery (69%) #2 When I bet money I want to be entertained as well as have a chance to win a prize (65%) #2 www. trig-us. com

“MOVIES, THE INTERNET AND FACEBOOK CONSUME MY WEEK” q Media Habits v 47% own a Smartphone v 54% own Gaming Console v 30% play Online games v 64% read a newspaper #3 #2 #3 #1 q TV - 17 Hours per week Internet Use per week ü 16 hours personal ü 9 hours professional 75% 63% 56% 54% 39% 27% 20% 16% q Radio – 5 Hours per week v v Classic Rock Current Rock Country/Western Top 40/Pop 41% 38% 25% VISIT Colorado Lottery website? ü 63% Ever #1 ü 19%/34% Past Week/Month #1 ü 71% (T 3 B) Excellent website #1 #1 #2 #2 SEGMENT 6: DREAMER$ C-$tore Gambler$ Social Media – 60% use it daily v 6. 4 Hours Per Week 81% #1 = 48% #2 34% #1 20% #2 18% #2 Social Media Product/Brand Promotions ü 40% interested #1 www. trig-us. com

“I ENTER EVERY SWEEPSTAKE & RAFFLE I CAN & I AM A SOCIAL BUTTERFLY” q Hobbies & Interests q Other Gaming activities Sweepstakes – 75% #1 67% 59% 55% 49% Raffles – 49% #1 Slots – 48% #1 48% 45% 44% 33% Casino – 45% #1 SEGMENT 6: DREAMER$ C-$tore Gambler$ Bingo – 26% #3 31% 29% 21% 20% Cards for money – 23% #2 55% www. trig-us. com

PAST YEAR PLAY: 71% PAST MONTH PLAY: 33% Spend per Month $21 ü Physically the largest segment of the Colorado Lottery playing population! ü Second highest Monthly spenders in terms of Volume $. ü Only 4 th highest in terms of Average spend. ü Play lots of game, just little amounts on each. Lotto Players!!! GAMES THEY PLAY 42% “Spend same amount on same game each week”. 35% “Spend different amount on different games”. www. trig-us. com

“QUOTE” q Who are they? q Values (Sec B) v These older folk have been playing the Responsibility Loyalty Lottery for a long time, and it’s now a habit, Truth NOT ‘planning for the future’ though they secretly enjoy it and are very loyal to the Lottery, they rarely spend a great deal. SEGMENT 3: TOSS’rs q What are their thoughts on life? (Sec A) Traditional, Older, v Like to do things that are relaxing (91%) Small - Splurgers v Enjoy giving gifts to others (86%) #3 v Paying for advice from fortune tellers is a waste of money (78%) #3 q Colorado Lottery Benefits, Issues & Proceeds (E 2, 3, 4) v I am always looking for the next ‘get-rich’ v Proceeds go to Colorado Great Outdoors (GOCO) scheme (74%) #4 58% v I rely on the advice of my friends when v Keeps money in the state (55%) deciding what to purchase (41%) #5 v None/Don’t Know (50%) v I am a bit of a daredevil (35%) #5 v Best spent on Education (56%) #3 v I am a risk-taker (28%) #5 v Colorado Outdoors (33%) #5 v I like to make decisions on the spur of the moment (23%) #5 www. trig-us. com

Play - Past Month Year 28% 48% Average Spend Per Play Per Month (among players) $2 ($5) $5 ($11) 13% 27% $1 ($5) $3 ($10) 28% 47% $2 ($4) $5 ($9) 5% 16% <$1 ($4) $1 ($8) 6% 15% <$1 ($5) $1 ($9) Key Drawing attributes #1 reasons/differentiators Cost of ticket Weekly ritual Ease of play SEGMENT 3: TOSS’rs Traditional, Older, Small - Splurgers Drawing Game Attitudes (F 1) v I prefer to let the computer pick my numbers (53%) #2 v I track previous numbers to help me decide on future numbers (79%) #5 v I use hunches to pick lucky numbers (69%) #6 v I enjoy playing in a pool because it is a social connection with friends/family (68%) #6 v I used to play any jackpot amounts but now I only play when the jackpot is high (65%) #5 www. trig-us. com

Ever Played: 59% Past Year: 50% Past Month: 22% PAST YEAR PLAYERSHIP BY TICKET $ $1 % play: Rank 58% #3 $2 47% #4 $3 $5 19% #5 30% #6 $10 6% #5 $20 2% #4 “FAVORITE SCRATCH GAMES” by $ SEGMENT 3: TOSS’rs Traditional, Older, Small - Splurgers Key Scratch attributes #1 reasons/differentiators Cost of ticket Odds of winning Number of ways to win Spend per play: $3 ($7) Spend per month: $6 ($12) Scratch Game Attitudes (G 9) v I like scratch games because you know you have won immediately. (57%) #5 v I see Scratch Games as a form of entertainment in addition to a chance to win a prize a win (41%) #5 v I vary where and how I purchase my scratch tickets to increase my odds of winning (46%) #5 v Number of top prize winners influences which Scratch Games I will buy (38%) #6 v I am motivated to buy a Scratch Game because of its theme (30%) #6 www. trig-us. com

“QUOTE” “DAYS OF THE WEEK PLAY” % MONDAY 18% TUESDAY 27% WEDNESDAY 33% THURSDAY 18% FRIDAY 33% SATURDAY 49% #3 SUNDAY 14% “Where do they purchase? ” #3 CONVENIENCE 65% (57% MOST OFTEN) GROCERY 50% #3 “DAY PLAY MOST OFTEN” - % SATURDAY 32% FRIDAY 20% Lottery & Gaming Attitudes (C 1 & D 2) WEDNESDAY 15% v It is important than proceeds from the Lottery go to a good cause. (75%) #5 v I would rather win cash versus a trip or other non-cash prize. (71%) #5 v I buy tickets to win money (46%) #5 v A jackpot has to be high before I buy a ticket (45%) #5 v I am willing to spend more on a Lottery ticket if the prize is higher (38%) #5 v Odds are important to me when selecting which games to play (40%) #6 v I like the excitement of betting on games and sports (42%) #5 www. trig-us. com SEGMENT 3: TOSS’rs Traditional, Older, Small - Splurgers

“QUOTE” q Media Habits v Only 40% own a Smartphone #6 v 16% never bought anything online #5 v 55% read a newspaper #5 q TV - 13 Hours per week 58% 37% 49% 26% 45% 44% 16% q Radio – 5 Hours per week v v Classic Rock Country/Western Oldies Easy Listening 27% 26% 22% 16% #5 #3 #2 #4 VISIT Colorado Lottery website? ü 52% Ever #3 ü 13%/28% Past Week/Month #4 ü 52% (T 3 B) Excellent website Internet Use per week ü 14 hours - personal ü 8 hours - professional SEGMENT 3: TOSS’rs Traditional, Older, Small - Splurgers Social Media – 40% use it daily (lowest) v 3. 2 Hours Per Week 67% #6 23% #6 14% #4 7% #6 Social Media Product/Brand Promotions ü 16% interested #6 www. trig-us. com

“QUOTE” q Hobbies & Interests q Other Gaming activities Raffles – 36% #3 54% 47% 45% 39% Slot machines – 35% #4 In-State Casino – 26% #5 39% 29% 27% Cards for money – 17% #5 Bingo – 16% #4 23% 21% 20% 80% Broncos fans SEGMENT 3: TOSS’rs Traditional, Older, Small - Splurgers www. trig-us. com

PAST YEAR PLAY: 73% PAST MONTH PLAY: 38% ü Smallest segment ü Love the Social aspects of Lottery and Life. ü Want to have fun. GAMES THEY PLAY 50/50 on same/different spend per week. www. trig-us. com Almost 50/50 on same/different games per week Spend per Month $34 #2

q Who are they? q Values (Sec B) v Predominantly female players, who love the Emotional Security Trust Lottery for the fun it brings to their lives. They Financial Security Not Privacy have their usual numbers, they enjoy extended play Scratch Games and they do dream of winning big! SEGMENT 5: FUNZIES q What are their thoughts on life? (Sec A) Female Fun Squad v v v Believe in working hard for earnings (94%) #1 Don't care what others think (73%) #1 Like opportunity to win something (60%)#2 Like to play competitive games (58%) #3 More Likely to try simple activates (54%) #2 q Colorado Lottery Benefits, Issues & Proceeds (E 2, 3, 4) Lookout for gifts, treats for others (53%) #2 v Chance to win money (60%) #2 Shopping is a fun and entertaining activity (42%) v Entertainment/fun (47%) #2 #2 v Education (BEST program) (45%) #1 Comfortable with current financial situation v No Problems (38%) #1 (49%) #6 v Schools/Education (61%) #2 There is no such thing as luck (42%)#6 Like to invest my money (31%) #6 Other consider me a leader (21%) #6 Like to plan activates in advance (20%) #6 www. trig-us. com

Play - Past Month Year 29% 42% Average Spend Per Play Per Month (among players) $3 ($7) $7 ($16) 11% 18% $1 ($6) $4 ($22) 31% 46% $2 ($5) $6 ($12) 6% 18% $1 ($3) $1 ($5) 7% 18% $1 ($5) $3 ($16) Key Drawing attributes #1 reasons/differentiators Dream of winning big Play same numbers every time Cost of ticket Drawing Game Attitudes (F 1) v Usually play same numbers all the time (69%) #1 v Decide numbers to play before go into store (67%) #1 v Use birthdays/ages of family members to pick numbers (51%) #1 v Buy tickets at same retailer (39%) #1 v Only buy tickets when jackpot amount is high (67%) #6 v Prefer to let computer pick numbers (59%) #6 www. trig-us. com SEGMENT 5: FUNZIES Female Fun Squad

Ever Played: 68% Past Year: 62% Past Month: 39% PAST YEAR PLAYERSHIP BY TICKET $ % play: Rank $1 66% #2 $2 49% #2 $3 34% #1 $5 36% #4 $10 11% #3 $20 2% #5 “FAVORITE SCRATCH GAMES” SEGMENT 5: FUNZIES Female Fun Squad Key Scratch attributes #1 reasons/differentiators Cost of ticket Spend per play: $5 ($9) Previously won on before Spend per month: $14 ($22) Amount of time it takes to play Scratch Game Attitudes (G 9) v Like Scratch Games because you know immediately if you won (79%) #1 v Buy Scratch Games as gift (72%) #1 v Scratch Games also form of entertainment (66%) #1 v Name of the game is the first thing noticed (55%) #2 v Would like to buy scratch ticket on i. Phone/i. Pad/Tablet (79%) #6 v Usually let clerk pick out Scratch Game tickets (79%) #6 v Top Prize influences type of scratch game bought (21%) #5 www. trig-us. com

“DAYS OF THE WEEK PLAY” % MONDAY 21% TUESDAY 23% WEDNESDAY 39% THURSDAY 15% FRIDAY 33% SATURDAY SUNDAY 11% “DAY PLAY MOST OFTEN” - % SATURDAY FRIDAY 20% WEDNESDAY 14% “WHERE DO THEY PURCHASE? ” CONVENIENCE 71% #2 (65% MOST OFTEN) 58% GROCERY 40% LIQUOR 43% 5% SEGMENT 5: FUNZIES Female Fun Squad Lottery & Gaming Attitudes (C 1 & D 2) v Rather win cash (94%) #1 v Enjoy winning something (85%) #1 v Lottery is fun (72%) #1 v Want entertainment and prize (72%) #1 v Like instant wins instead of waiting for drawing (63%) #1 v Gambling is a good way to boost economy (44%) #1 www. trig-us. com

“GAME SHOW TIE-INS, SOCIAL MEDIA LOTTERY PROMOTIONS FOR THIS INTERNET SAVY GROUP” q Media Habits v v 40% own a Smartphone 47% own Gaming Console 37% play Online games 57% read a newspaper #5 #4 #1 #4 q TV - 17 Hours per week 65% 32% 59% 24% 48% 24% q Radio – 5 Hours per week v v Classic Rock 40% #2 Current Rock 38% #1 Country/Western 33% #1 Top 40/Pop 31% #1 VISIT Colorado Lottery website? ü 53% Ever #2 ü 12%/20% Past Week/Month ü 73% (T 3 B) Excellent website Internet Use per week ü 18 hours personal ü 8 hours professional SEGMENT 5: FUNZIES Female Fun Squad 46% 20% Social Media – 46% use it daily v 5. 4 Hours Per Week 81% #1 34% #5 24% #3 13% #3 Social Media Product/Brand Promotions ü 39% interested #2 www. trig-us. com

“QUOTE” q Other Gaming activities q Hobbies & Interests Sweepstakes – 73% #2 62% 59% 52% 49% Slots – 45% #2 46% 42% Casino – 42% #2 34% Raffles – 41% #2 SEGMENT 5: FUNZIES Female Fun Squad Bingo – 29% #2 28% 27% Cards for money – 22% #3 www. trig-us. com

PAST YEAR PLAY: 71% Spend per Month PAST MONTH PLAY: 14% $12 ü We must get the Turtles to play more often ü We must get this segment to play Mega Millions!! GAMES THEY PLAY www. trig-us. com

“QUOTE” q Who are they? q Values (Sec B) v These highest income and highest home Hard Work owners pop out there Lottery heads when the Happiness Jackpots for Powerball and Lotto are high. q What are their thoughts on life? (Sec A) v Like to do relaxing things (97%) #1 v Investing in stock market is riskier these days (65%) #2 v Important to save for retirement (74%) #2 v Psychics/Fortune tellers are a waste of money (79%) #2 v Look out for myself (76%) #1 v Often use credit cards (49%) #1 v Always looking for next get rich quick scheme (74%) #3 v Can often tell when something big is going to happen (30%) #6 v Like to read ads to find out more about product (24%) #6 Friendships NOT ‘Religion’ SEGMENT 4: TURTLES Jackpot Cheapskates q Colorado Lottery Benefits, Issues & Proceeds (E 2, 3, 4) v Revenue for the state (54%) #3 v People should be spending on other things (25%) #3 v None (29%) #3 v Colorado Outdoors (40%) #2 www. trig-us. com

Play - Past Month Year 20% 57% Average Spend Per Play Per Month (among players) $3 ($5) $4 ($7) 10% 26% $1 ($4) $1 ($5) 14% 40% $2 ($5) 1% 5% >$1 ($3) >$1 ($2) 1% 5% >$1 ($7) >$1 ($8) Key Drawing attributes #1 reasons/differentiators When the jackpot is high #1 When the jackpot is over $100 m #1 I dream of winning big #1 SEGMENT 4: TURTLES Jackpot Cheapskates Drawing Game Attitudes (F 1) v I realize in a pool group my portion of the jackpot would be lower than my trigger amount that I buy myself. (65%) #2 v I prefer to let the computer pick my numbers (63%) #1 v I used to play any jackpot amounts but now I only buy tickets when the jackpot amount is very large (38%) #2 v For each online game that I play, I try to buy a ticket for every drawing (83%) #5 v I track numbers from previous drawings to help me decide which numbers to play in the future (84%) www. trig-us. com #6 v I usually play the same numbers all the time (72%) #6

Ever Played: 54% Past Year: 36% Past Month: 15% % play: Rank PAST YEAR PLAYERSHIP BY TICKET $ $1 74% #1 $2 50% #1 $3 21% #4 $5 30% #5 $10 7% #4 $20 7% #1 “FAVORITE SCRATCH GAMES” SEGMENT 4: TURTLES Jackpot Cheapskates Key Scratch attributes #1 reasons/differentiators Cost of ticket Top prize amount Odds of winning Spend per play: $3 ($8) Spend per month: $3 ($10) Scratch Game Attitudes (G 9) v I like scratch games because you know you have won immediately. (74%) #3 v I expect a bigger prize when I buy a higher price point Scratch ticket (70%) #3 v I prefer Scratch Games with a big top prize (37%) #3 v The first thing I notice when I look at Scratch Games is the Top Prize (41%) #3 v I like to buy my Scratch tickets from the Vending Machines (36%) #2 v I would be likely to purchase a ticket featuring a licensed brand or character that I like (40%) #6 www. trig-us. com

“QUOTE” “DAYS OF THE WEEK PLAY” % MONDAY 22% TUESDAY 30% WEDNESDAY 36% THURSDAY 18% FRIDAY 36% SATURDAY SUNDAY 16% “DAY PLAY MOST OFTEN” - % SATURDAY WEDNESDAY 20% FRIDAY 16% “WHERE DO THEY PURCHASE? ” CONVENIENCE 68% #3 (56% MOST OFTEN) 45% GROCERY 51% #2 LIQUOR 5% 30% SEGMENT 4: TURTLES Jackpot Cheapskates Lottery & Gaming Attitudes (C 1 & D 2) v A jackpot has to be high before I purchase a ticket (56%) #1 v I would rather win cash versus a trip or other non-cash prize (87%) #2 v I buy tickets to win money (75%) #2 v I don’t really believe that I will win a jackpot prize (60%) #2 v Lottery is a form of gambling (76%) #2 v I talk to my friends or co-workers frequently about the lottery (81%) #5 v I am a good source of information on lottery games (69%) #5 www. trig-us. com

“QUOTE” q Media Habits v 62% own MP 3 player v 51% own a Smartphone v 53% read a newspaper #1 #2 #6 Internet Use per week ü 15 hours personal ü 10 hours professional q TV - 14 Hours per week 58% 54% 46% 50% 32% 33% 29% 19% q Radio – 4 Hours per week v v Classic Rock Current Rock Top 40/Pop News format 35% #3 24% #3 11% #2 VISIT Colorado Lottery website? ü 44% Ever #5 ü 8%/11% Past Week/Month #5 ü 52% (T 3 B) Excellent website SEGMENT 4: TURTLES Jackpot Cheapskates Social Media – 46% use it daily v 4. 0 Hours Per Week 72% #4 37% #3 22% #1 14% #3 Social Media Product/Brand Promotions ü 24% interested #4 www. trig-us. com

“QUOTE” q Hobbies & Interests q Other Gaming activities Sweepstakes– 61% #3 63% 57% 51% 50% Slots – 44% #3 Casino – 37% #4 41% 39% 38% 36% Raffles – 31% #4 Bingo – 8% #6 29% 28% 22% 20% www. trig-us. com SEGMENT 4: TURTLES Jackpot Cheapskates

PAST YEAR PLAY: 53% Spend per Month PAST MONTH PLAY: 23% ü 2 nd smallest segment ü Very active in terms of Lottery and Gambling/Gaming in general ü Love those high priced Scratch Games GAMES THEY PLAYER TYPE 43% “Spend the same amount on the same games each week”. www. trig-us. com 21% “Spend the different amounts on the same games”. $31

“QUOTE” q Who are they? q Values (Sec B) v Young, dynamic and ethnically diverse men, Social Status Future Planners they play the Lottery but are much more Independence Optimism technologically focused. They love new NOT ‘ethics’ or ‘family’ products and excitement. q What are their thoughts on life? (Sec A) v Like to be entertained (76%) #2 SEGMENT 1: YES Men v Try new products (74%) #1 Young, Entitled, v Like to do exciting things (73%) #1 Spontaneous Men v I often look for ways to relieve boredom of everyday life (72%) #1 v I am usually willing to try something that is q Colorado Lottery Benefits, Issues & Proceeds new and different (69%) #1 (E 2, 3, 4) v Consider myself brand loyal to products I v Proceeds going to COGO (40%) #6 know and like (67%) #1 v Lower taxes (33%) #1 v Like to do things by myself (66%) #1 v I like plenty of options when deciding what to v People who can’t afford it play anyway (25%) #5 do in my free time (66%) #1 v Reduce taxes (46%) v I am optimistic about the future (63%) #1 v Schools/Teachers/Education (42%) v I am a competitive person (60%) #1 www. trig-us. com

Play - Past Month Year 26% 39% Average Spend Per Play Per Month (among players) $3 ($9) $7 ($19) 7% 22% $2 ($11) $4 ($20) 27% 37% $4 ($11) $6 ($18) 11% 22% $2 ($11) $4 ($20) 8% 20% $2 ($9) $3 ($15) Key Drawing attributes #1 reasons/differentiators Dream of winning big Ease of play When the jackpot is high SEGMENT 1: YES Men Young, Entitled, Spontaneous Men Drawing Game Attitudes (F 1) – Highest for most attributes v I used to play any jackpot amounts, but now I play only when the jackpot is very large (45%) #2 v I decide which numbers to play before I go to the store (45%) #2 v I buy my tickets on the same day as the drawing (40%) #1 v I use hunches to pick lucky numbers (43%) #1 www. trig-us. com

Ever Played: 42% Past Year: 38% Past Month: 27% PAST YEAR PLAYERSHIP BY TICKET $ $1 % play: Rank 38% #6 $2 38% #6 $3 $5 14% #6 41% #1 $10 19% #1 $20 5% #2 “FAVORITE SCRATCH GAMES” by $ SEGMENT 1: YES Men Young, Entitled, Spontaneous Men Key Scratch attributes #1 reasons/differentiators Number of ways to win Game theme Number of winners left Spend per play: $4 ($11) Spend per month: $7 ($19) Scratch Game Attitudes (G 9) – Highest on virtually all attributes v I like Scratch Games that take a while to play (65%) #1 v I prefer Scratch Games with a big top prize (62%) #1 v The prizes on Scratch Games give me the feeling of a “winning experience” (62%) #1 v The dollar amount of top prize influence which Scratch Game I play (62%) #1 v Like to be able to buy a ticket for my I-Phone/I-Pad/Tablet(56%) #1 v I like to buy tickets from the Vending Machines (54%) #1 www. trig-us. com

“The Weekenders” “DAYS OF THE WEEK PLAY” % MONDAY 10% TUESDAY 15% WEDNESDAY 24% THURSDAY 19% (Highest) FRIDAY 34% SATURDAY 40% SUNDAY 15% “WHERE DO THEY PURCHASE? ” CONVENIENCE 67% (63% MOST OFTEN) GROCERY 45% LIQUOR “DAY Play MOST OFTEN” - % SATURDAY FRIDAY 24% WEDNESDAY 18% 24% 16% #1 SEGMENT 1: YES Men Young, Entitled, Spontaneous Men Lottery & Gaming Attitudes (C 1 & D 2) v I like to know that my chances of winning are in my control and not just luck (63%) #1 v The Lottery is fun (53%) #3 v • I am willing to spend more on a Lottery ticket if the odds of winning are better (54%) #2 v I often buy lottery tickets as gifts for friends or relatives (49%) #1 v Playing the Lottery can lead to compulsive gambling (43%) #2 v Advertising for Colorado Lottery is memorable (41%) #1 www. trig-us. com

“QUOTE” q Media Habits v 58% own a Smartphone v 57% own Gaming Console v 25% own a Tablet v 50% post to Facebook >1 a day v 34% play games Online #1 #1 #2 q TV - 16 Hours per week – 4 hours Spanish TV 69% 38% 33% 28% 9% q Radio – 6 Hours per week v v Classic Rock Current Rock Rap/Hip Hop R&B/Soul 28% #4 26% #4 23% #1 21% #1 30% VISIT Colorado Lottery website? ü 49% Ever #4 ü 18%/30% Past Week/Month #3 ü 53% (T 3 B) Excellent website #3 Internet Use per week ü 15 hours personal ü 7 hours professional SEGMENT 1: YES Men Young, Entitled, Spontaneous Men Social Media – 60% use it daily v 6. 4 Hours Per Week 72% #3 50% #1 29% #2 19% #1 Social Media Product/Brand Promotions ü 34% interested #3 www. trig-us. com

“QUOTE” q Other Gaming activities In-State Casino – 36% #4 q Hobbies & Interests Slots – 35% #5 36% 32% 29% Bingo – 33% #1 Video Poker – 31% #1 29% 28% 25% 23% Black Jack – 31% #1 Cards for money – 26% #1 Roulette – 26% #1 Gambled on the Internet – 20% #1 SEGMENT 1: YES Men Young, Entitled, Spontaneous Men Bet on Horse/Dog Race – 19% #1 www. trig-us. com

PAST YEAR PLAY: 26% Spend per Month PAST MONTH PLAY: 2% $2 ü 4 th largest segment, but really non-players, averaging $2 a month spend. ü Exclude this segment for all future research. ü Only 58% believe Colorado should have a Lottery ü Just keep out of their way, they are content. GAMES THEY PLAY www. trig-us. com

q Who are they? q Values (Sec B) v Definitely older, white home owners who never Integrity usually bother to play the Lottery, but at the Not Generosity same time they understand the benefits for the Colorado Outdoors. Privacy SEGMENT 2: PRONGS: Pragmatic, Non-Gaming Conservatives q What are their thoughts on life? (Sec A) v Seek all relevant facts when making decisions (92%) #1 v Paying for psychic/fortune tellers is a waste (89%) #1 v I make sure I am getting the best deal before buying (80%) #2 q Colorado Lottery Benefits, Issues & Proceeds v Like to play competitive games (58%) #3 (E 2, 3, 4) v Make up my mind after careful thinking (77%) #1 v Benefits go to the Great Outdoors Colorado (GOCO) (61%) #3 v Consider myself an economic conservative (52%) #2 v People who can’t afford it play anyway v No such thing as luck (31%) #2 (78%) #1 v Always looking for the ‘get rich quick’ scheme (83%) #6 v People spend money that should go elsewhere (73%) #1 v Life is mainly controlled by fate (55%)#6 v Preys on poor people (51%) #1 v Often buy things I had no intention of buying (40%) #6 v Promotes gambling (28%) #1 v Worry how I will pay the bills (43%) #6 v I am a bit of a daredevil (42%) #6 v Always looking for gifts/treats for others (20%) #6 www. trig-us. com

Play - Past Month Year 3% 13% Average Spend Per Play Per Month (among players) $1 ($4) $0 ($3) 2% 5% $0 ($4) 2% 13% $1 ($4) $0 ($3) 0% 1% $0 ($8) $0 ($15) SEGMENT 2: PRONGS: Key Drawing attributes #1 reasons/differentiators Pragmatic, Non-Gaming Conservatives When the jackpot is high Cost of ticket Dream of winning big 1% 3% $0 ($4) $0 ($5) Drawing Game Attitudes (F 1) v In a pool group my portion of the jackpot would be much lower than my trigger amount I buy myself (68%) #1 v For each online game I play, I try to buy a ticket for every drawing (89%) #6 v I purchase tickets for multiple drawings (73%) #6 v I give a lot of thought to the numbers I play (62%) #3 v I decide which numbers I will play before I go into the store (62%) #5 www. trig-us. com

Ever Played: 23% Past Year: 15% Past Month: 5% PAST YEAR PLAYERSHIP BY TICKET $ % play: Rank $1 57% #5 $2 41% #5 $3 22% #3 $5 37% #3 $10 $20 NA NA 0% #6 “FAVORITE SCRATCH GAMES” SEGMENT 2: PRONGS: Pragmatic, Non-Gaming Conservatives Key Scratch attributes #1 reasons/differentiators Cost of ticket Top prize amount Odds of winning Scratch Game Attitudes (G 9) v Expect bigger prize on higher price point Scratch ticket (74%) #1 v Would buy Scratch Game as a gift for others (63%) #2 v Scratch Games with small prizes generally have more winners (48%) #2 v Vary where and how I purchase Scratch tickets to increase my odds of winning (48%) #6 v Would be willing to purchase a ticket with a top prize other than money (59%) #6 v Generally paly new Scratch games as soon as they come out (67%) #6 v Expect to win more often than I lose (44%) #6 www. trig-us. com

“DAYS OF THE WEEK PLAY” % MONDAY 17% TUESDAY 20% WEDNESDAY 29% THURSDAY 10% FRIDAY 31% SATURDAY SUNDAY 12% “DAY PLAY MOST OFTEN” - % SATURDAY FRIDAY 22% WEDNESDAY 22% “WHERE DO THEY PURCHASE? ” CONVENIENCE 47% 32% GROCERY 54% #1 (46% MOST OFTEN) LIQUOR 6% 23% SEGMENT 2: PRONGS: Pragmatic, Non-Gaming Conservatives Lottery & Gaming Attitudes (C 1 & D 2) v The Lottery is a form of Gambling (87%) #1 v Playing the Lottery can lead to compulsive gambling (44%) #1 v The Lottery takes advantage of the poor (41%) #1 v Mostly suckers play the Lottery (39%) #1 v The jackpot has to be high before I purchase a ticket (35%) #3 v I am a good source of information on Lottery games (86%) #6 v Playing the Lottery is the one thing I can do to help my family (84%) #6 www. trig-us. com

“QUOTE” q Media Habits v v 44% own a Smartphone 42% own Gaming Console 21% play Online games 58% read a newspaper #4 #5 #4 #2 q TV - 11 Hours per week 53% 48% 47% 39% 26% 19% 8% 5% Classic Rock News Format Christian/Gospel Top 40/Pop 24% 18% 17% 11% q Radio – 4 Hours per week v v #6 #1 #1 #6 VISIT Colorado Lottery website? ü 19% Ever #6 ü 1%/3% Past Week/Month #6 ü 41% (T 3 B) Excellent website Internet Use per week ü 16 hours personal ü 6 hours professional SEGMENT 2: PRONGS: Pragmatic, Non-Gaming Conservatives Social Media – 44% use it daily v 3. 1 Hours Per Week 68% #5 31% #4 16% #3 12% #5 Social Media Product/Brand Promotions ü 18% interested #5 www. trig-us. com

“QUOTE” q Hobbies & Interests q Other Gaming activities Raffles – 29% #5 55% 50% 44% Slots – 20% #6 Cards for money – 15% #6 42% 36% 35% 34% Casino – 13% #6 Bingo – 5% #6 32% 27% 24% SEGMENT 2: PRONGS: Pragmatic, Non-Gaming Conservatives www. trig-us. com

www. trig-us. com

61 Strategic recommendations moving forward 1. Please try and ensure that the Colorado Lottery buys into these segments and fully understand them. TRi. G would be more than happy to answer any further questions following this presentation. 2. Start to use these segments in every available aspect of your business, specifically the Sales, Marketing, Market Research and Cactus team. These segments should be valid to use for approximately 5 years and will allow the Colorado Lottery to see their players from a different viewpoint. 3. Don’t be afraid to use multiple segments for different projects or issues. 4. The segmentation study can be used demographically or by player type very easily. There are 1, 044 interviews in total and the segmentation results, while very interesting and useful, are not the only way the data should be used. www. trig-us. com