From Lottery Games to Slot Machine Games: The Growing Momentum of Internet Gaming

1. From Lottery Games to Slot Machine Games: The Growing Momentum of Internet Gaming July 31, 2013

2. Gaming Spectrum iLOTTERY iGAMING LOTTERY CASINO Green Gaming Red Gaming Bingo Draw Games Electronic Instant Tickets Poker Casino Sports Social Games & Virtual Goods Rewards & Loyalty

3. For Social: Implications are Different VS • Narrower potential audience, • session-based experience • 60-minute or more play dynamic • Higher payout %, high volume • Can be independent from in-venue product • Cash + free play is engagement currency • Player development through bonusing • Broader potential audience, • chance-based experience • 10-minute or less play dynamic • Lower payout %, low volume • Direct connection to retail product is critical (e.g. hybrid game) • Points + rewards is engagement currency • Player development through up-sell & cross-sell “I LOST” “I DIDN’T WIN”

4. SOCIAL GAMING

5. Global Gaming Industry • Worldwide gaming sales of $350 billion* • Casinos operate in over 100 countries; more than 3,500 casinos** • More than 4,300,000 slot machines worldwide** • Online gaming annually generates almost $30 billion in win* • Sports = $14.8 billion • Casino = $7.1 billion • Poker = $4.0 billion • Bingo = $2.1 billion * H2 Gambling Capital ** Bank of America Merrill Lynch Gaming Primer 2013

6. U.S. Gaming Industry • US 2012 total gaming revenue $64 billion* • Las Vegas Strip 10% • US Regional 47% • Native American 43% • Over 800 casinos in the U.S. in 39 states* • 16 states with commercial casinos (~ 450 Casinos) • 24 states with tribal casinos (~ 425 Casinos) • ~900,000 slot machines in North America • US iGaming Sales • Currently estimated at $3.1 billion** • Pre-UIEGA sales estimated at more than $6.0 billion** * Bank of America Merrill Lynch Gaming Primer 2013 ** H2 Gambling Capital

7. Social Casino Gaming

8. Why It’s Important Social game audience estimated to be 700-750m people Social casino audience currently at ~170m Source: Casual Games Association (CGA), May 2013

9. Why It’s Important Source: Casual Games Association (CGA), Macquarie Research, May 2013

10. UK Study: Majority Play For Fun Or Money 22% of respondents play poker online either for fun or for money Of those … 27% of respondents play casino games online either for fun or for money Of those … 29% of respondents play bingo online either for fun or for money Of those … 56% play for fun only 42% play for fun only 46% play for fun only 2% play for money and for fun 3% play for money and for fun 3% play for money and for fun 42% play for money only 55% play for money only 52% play for money only Source: KantarSport Research Jan 2012

11. Social Considerations • Session-based of casino games nature match well with social model • Proven real-money casino themes translate best into engaging social games • But, are social players a source of future real-money patrons?

12. SOCIAL LOTTERY

13. Global Lottery Industry Global Lottery Snapshot • ~180 global lottery jurisdictions* • ~$275B of revenues generated in 2012* • Draw sales ~$200B • Instant sales ~$75B • Less than 15% of lotteries selling products online** Global Lottery Retail Sales ($ in billions)* *Source: Lafleur’s Lottery Almanac. ** Company estimates.

14. U.S. Lottery Industry • 44 lotteries, including the District of Columbia • ~$70B in annual revenues* • 54% instant tickets • 46% draw games • 147 million Americans play lottery games** • Lottery websites are top visited in their geography • Today, just three lotteries are active with internet sales: IL, GA & MN U.S. Lottery Retail Sales ($ in billions)* * Source: Lafleur’s Lottery Almanac. **Source: SGI’s State of the Industry FY’12.

15. Social – The Basics Today, virtually all lotteries are actively leveraging social mechanics: Interactive 2nd Chance promotional games Mobile 2nd Chance games Internet-based loyalty and rewards programs

16. Example: Monopoly Jackpot • Multi-State Linked Game • Every non-winning Monopoly ticket provides a second chance to instantly win • Players scan 2D code on scratch ticket to access website on mobile • Players collect properties to achieve a “monopoly” for a chance to win one of 10 rolling cash jackpots or qualify to win a progressive cash jackpot - up to $1 million! Concept Art

17. iLottery – The Basics Draw Games Instant Games

18. Instant Games – Stage 1 • Basic Play • Plays like a printed game • Very simple play action • Game reveals an outcome • Shared prize pool

19. Instant Games – Stage 2 • Extended Play • Adds interactive mechanics (e.g. player choice) • Provides bonus features • Ideal for licensed brands

20. Instant Games – Stage 3 Social Play • Player choice • Collections • Power Ups • Continuity • Multiplayer • Leaderboards • Points / Micro-Wins • Progressive Jackpot

21. Social – Next Steps • Leverage social sharing • Create lottery social games • Play with friends • Team-Play Draw • Multi-Player Instants • eInstants– “Stage 3”

22. Social Considerations • Lottery player dynamics match well with social model • Social mechanics important to next generation real-money lottery games • eInstant “Stage 3” games will emerge as a major market opportunity

23. Sciplay.Studio • World leader in supplying iLottery instant games to lotteries and the know how to make them work • An innovator in touch-games for lotteries that bridge the gap between social and online, mobile gaming • Creates game play products that represent emerging genres and advanced business models • 30 years of gaming experience and a deep understanding of casual and social gaming on the internet • Leading provider of casino, slot and social themed games • The most experienced provider of lottery-specific interactive content in the industry Culmination of more than 12 years experience developing, deploying and operating internet-based solutions for the real-money gaming industry

24. Questions?