The OCSA’s relationship with Ontario Lottery and Gaming Corporation (OLG) spans several decades. Over that time, we have maintained strong connections with OLG’s executive leadership and with the leaders dealing directly with our OCSA retail members.
We want to introduce you to OLG’s new Chief Lottery and Customer Officer, Kerstin Lack. She joined the organization in September 2021. Kerstin was gracious enough to take part in a Question-and-Answer session with us:
Tell us a bit about your background and how you came to OLG?
Kerstin: It is my pleasure to introduce myself to such valued partners for OLG.
I come from a 20 year plus background in the telecommunication industry, an industry that has undergone great change in the past few years. I held a number of executive roles at Rogers, in sales, marketing, commercial strategy and product strategy and also just prior to joining OLG, I was Vice President, Consumer Sales and Solutions at SaskTel, the lead telecommunications provider in Saskatchewan. SaskTel, like OLG had a very strong social purpose, bringing broadband connectivity to all the provinces’ people.
I was very attracted to OLG’s social purpose and its path of transformation, wanting to position itself for future growth. I was very motivated by OLG’s vision of growth by delivering great customer experience and I saw that my past transformation, customer and channel experience could be a great asset in helping OLG deliver its mission.
What surprised you as you started to settle into your new position at OLG?
Kerstin: As a provincial crown agency generating about $8 billion in revenue (pre-COVID), I knew it was a well-oiled machine especially with its lottery operations. We have approximately 10,000 lottery retail locations across the province, that’s a huge network that depends heavily on a seamless ticket distribution system, extensive retailer support both from our Retail Field team and our Customer Care team, and an open dialogue with our vital retail owners.
I was impressed by the high quality of execution across an operation of such scale and with such a variety of footprints within the network.
I was pleased how well connected we are with our retail partners in the convenience and gas channel, and especially with our independent owner partners, as I know it is critical that we work together and learn from each other.
Over the last six months, I have come to realize that while OLG has a great lottery system in place, there is always room for innovation and improvement. Feedback from our retailer partners is key. My team also is responsible for the development of new products, enhanced customer experience, engaging underserved segments of the market and operating our supply chain, all to best deliver to the preferences of our customers and evolving marketplace dynamics.
I have had the pleasure to visit several retailers since my arrival at OLG and also have been carefully listening to my front-line teams – the Retail Field team and the Customer Care team – who are in constant contact with our retail partners. They are giving me their best advice on what retailers want from OLG. The OCSA is also a strong voice for its members and has OLG’s ear.
I see that retailers are excited when we have new products to offer and would like to see some improvement in how we rollout those products and the training we offer.
Ultimately, our goal is to always offer the best support to our retailers, so we are continuously working to improve the processes around product rollout, execution, and the retailer care.
How has the pandemic reshaped OLG’s business?
Kerstin: First of all, we recognize that our approximately 10,000 valued retailer partners across the province were critical to the lottery business during the pandemic. Safeguarding the health of our lottery retail network was and continues to be of utmost importance to OLG.
Despite the challenges faced in the last two years, we continued to drive the performance of the lottery business. Lottery retail sales reached an all-time high of $4.2 billion in the fiscal year that ended in March 2021 (Fiscal 2020-2021).
The convenience and gas category helped generate $3.8 billion of OLG’s lottery sales in Fiscal 2020-2021 with 70% of the convenience and gas stores earning 81% of sales. I am happy to say we’re on track for similar results this year.
Here’s an interesting fact, more than half of the $4.2 billion of lottery retail proceeds in F21 – $2.4 billion – were returned to Ontarians in prize money. Lottery winners represent a key driver for in-store lottery sales. Each year, retailers process approximately $1.9 billion in lottery prize claims at their stores, collectively paying out between $1.1 billion – $1.4 billion in cash prizes.
OLG paid more than $330 million in commissions to our retailers across the province in the last fiscal year. Compare that to the $196 million in commissions paid in Fiscal 2009-10. This represents an increase of 5 percent compounded annual growth rate (CAGR) to total commissions paid to retailers over the past decade.
How is OLG investing in its relationship with convenience retailers?
Kerstin: Maintaining a strong relationship with our valued retailers is key to me. As OLG’s retail network remains the traditional place to purchase and redeem lottery products, we continue to invest in this important channel.
I was so happy to learn that before my arrival at OLG, several unique Lottery Retailer Initiatives were launched that have provided increased commissions on the sale of a variety of lottery products. In January 2021, in what was an Ontario lottery first, OLG launched the “Support Local” initiative that returned all profits to retailers for three months’ worth of sales on the new INSTANT PLINKO game. Based on the success of the INSTANT PLINKO initiative, other programs quickly followed for such games as LIGHTING LOTTO and INSTANT TOP UP.
The commission increase on these products ranged from 10 percent to 30 percent. Another such initiative just launched, with OLG giving all the profits from sales of $3 INSTANT CROSSWORD and $3 INSTANT BINGO that take place between March 1 and March 31, 2022, to the retailers that activate these tickets. And in fact, we received such positive results in just the first few days that will be extending this program, for another month, so that it runs until the end of April. We continue to explore other such initiatives with the goal of driving higher retail sales, which benefits both OLG and our retailer partners.
OLG continues to find new opportunities to optimize lottery sales and drive traffic to lottery retailers in order to increase their commissions. In February, OLG launched new and exciting new PROLINE sports betting products at retail The new PROLINE allows in-store customers to make single event wagers on sports based on dynamic competitive odds, and also have access to new sports, events, and markets to place bets on. In fact, having the new PROLINE in stores for this year’s Super Bowl helped drive more traffic and set new betting records.
We also have exciting changes coming to LOTTO 6/49, the game Canadians have loved for decades. More details will be shared soon about how LOTTO 6/49 will get bigger in September 2022.
Also, retailers are starting to see a refresh of two core pieces of OLG’s merchandise – the Lottery Playstand and the Instant Ticket Display. The new designs include several operational and aesthetic enhancements that will improve lottery experience for retailers and customers.
Any final thoughts for our OCSA members?
Kerstin: In the process of building my understanding of our business, which I see as an ongoing process, I have learned firsthand from my retailer visits, of the incredible impact the C&G channel and independent retailers have on the economy of Ontario. The independent retailers are family-run small businesses and it is critical that OLG continues to provide the needed support to ensure selling our products as easy as possible for them, in order to help their bottom line.
To that end, I feel there is real progress in our goal for continuous improvements, such as offering new games to draw more foot traffic into stores and drive more overall in-store sales, a continuation of our Retailer Incentive programs, and new merchandise displays. But this is just the beginning and I look forward to more successes ahead.
If our retailers succeed than OLG succeeds and ultimately our province succeeds. That’s because 100 percent of OLG proceeds are reinvested into provincial priorities to improve the quality of life for all Ontarians.
When you play OLG games, you play for Ontario.