Acting Director’s Comments

1. Acting Director’s Comments Presentation to California State Lottery CommissionSeptember 25, 2014 Director’s Report 7A

2. Overview • YTD Sales Update • First Quarter Highlights • Action Items on the Agenda • DR Part b – Santa Fe Springs Property Update • DR Part c – MONOPOLY ™ Millionaires’ Club Presentation

3. Sales Update: YTD Sales Surpassed $1 Billion A Week Sooner Than Last Year

4. Total Sales Good Despite Low Jackpots This Summer • Through September 20th, the largest jackpot this fiscal year is $196 million for Powerball • Last fiscal year, by mid-September, there were already 7 draws with jackpots above $200 million including 2 draws at $400 million

5. Strong Summer for Scratchers • Typically, Summer Scratchers sales are 6% lower than Spring • This year’s plan was to minimize this “Summer Slump” • Result: We mitigated the summer slump with just a 2% decline in sales from Spring

6. Operational Highlights • Achieved WLA Certification in Security • Submitted Application for WLA Level 4 in Responsible Gaming • Response expected February 2015 • SLED Underage Gaming Compliance Checks • New Front Door for Public Website California Lottery • 24 of the 33 New Projects Approved for 2014/15 have been opened and are underway

7. Today’s Action Items on Agenda • Purchase of Real Property to Replace Van Nuys District Office – Dani Fischer • Amended Lottery Regulations – Disqualified Persons – Stephen Tacchini • Security Guard Services Contract Amendment – Stephen Tacchini • Advertising Research Contract Amendment – Jim Hasegawa • Marketing Promotional Service Payment – Leticia Saldivar • Consideration of MONOPOLY™ Millionaires’ Club, a New Multi-State Lottery Game – Richard Mahan