September 22, 2017 COMMISSION REPORT

September 22, 2017 COMMISSION REPORT

Table of Contents Notice of Public Meeting... 3 Agency Reports... 7 Director s Presentation... 7 Out-of-Stock Incentive... 7 Retailer Satisfaction Survey Results... 7 Products/Marketing Presentation... 7 New Games Introduction... 7 New Business Item #1... 9 Instant Scratch Game Profiles... 9 New Business Item #2... 10 Willie s Holiday Bonus Second Chance Promotion Profile #82... 10 New Business Item #3... 11 Mega Millions Amended Game Profile #2... 11 2

NOTICE OF PUBLIC MEETING AND EXECUTIVE SESSION OF THE ARIZONA STATE LOTTERY COMMISSION Pursuant to Arizona Revised Statute (A.R.S.) 38-431.02, notice is hereby given to the members of the Arizona State Lottery Commission and to the general public that the Arizona State Lottery Commission will hold a meeting open to the public on September 22, 2017, at 10:00 a.m., in the Arizona Lottery Board Room located at 4740 East University Drive, Phoenix, Arizona. Pursuant to A.R.S. 38-431.02(B), notice is hereby given to the Arizona State Lottery Commission and members of the public that the Arizona State Lottery Commission may vote to go into Executive Session, which will not be open to the public, for the purpose of obtaining legal advice pursuant to A.R.S. 38-431.03(A)(3) regarding any of the agenda items, as well as for the purposes listed on the agenda under Executive Session. The Commission may also vote on any item listed on the agenda. One or more members of the Commission may participate by means of telephonic communication. Call to Order 1. Call for Quorum 2. Call for Notice 3. Approval of Minutes for August 18, 2017, Public Meeting Agency Reports 1. Director s Presentation 2. Out-of-Stock Incentive 3. Retailer Satisfaction Survey Results 4. Products/Marketing Presentation New Business 1. Discussion and Action on instant scratch game profiles Cash Adventure #1136, Bingo #1140, Spicy Hot Crossword #1141, Crossword Connect #1144, Triple Red 7 s #1148, Wild Jokers #1149, High 5 #1151, and $250,000 Crossword #1154. 2. Discussion and Action on Willie s Holiday Bonus Second Chance Promotion Profile #82. 3. Discussion and Action on Mega Millions Amended Game Profile #2. Call to the Public Consideration and discussion of comments from the public. Those members of the public wishing to address the Commission need not request permission in advance and will be given approximately five minutes for their comments and requests. Action taken as a result of public comment will be limited to directing staff to study the matter or rescheduling the matter for further consideration at a later date to comply with A.R.S. 38-431.02. 3

Announcements The next Commission meeting will be held October 20, 2017, at 10:00 a.m. Adjournment Materials A copy of the agenda and background material provided to Commission members, which is not exempt by law from public inspection, is available for public inspection at least 24 hours in advance of the meeting at the Lottery Office located at 4740 East University Drive, Phoenix, Arizona. Notice Any amendments or additions to the agenda will be made available at least 24 hours prior to the meeting. Dated this 18 th day of September, 2017 Gregory R. Edgar Executive Director Persons with a disability may request a reasonable accommodation, such as a sign language interpreter, by calling (480) 921-4486. Requests should be made as early as possible to allow time to arrange the accommodation. 4

PUBLIC MEETING OF THE ARIZONA LOTTERY COMMISSION MINUTES August 18, 2017 PRESIDING Chair Jeff Weintraub COMMISSIONERS Andy Anderson, Debra Roth, Chad Wilson LOTTERY GUESTS PUBLIC Gregg Edgar, Executive Director, Chris Rogers, Director of Products & Marketing; Raynie Hosto, Director of Sales, Lisa Wahlin, Director of Legal Services and Biju Kamaleswaran, Chief Financial Officer Kimberly Siddall, Ivy Gilio, Valerie Hanna, Nikki O Shea, Shelby Alessi, Roland Tang, Stacey Henderson, Vanessa Shuya, Michelle Anderson, Nikki O Shea, Anthony Demas, Luanne Mansanares IGT Representatives: Russ Harben and Serena Arlotta Scientific Games Representatives: Topper Wilson and Julio Dieppa Owens Harkey Representatives: Scott Harkey and Dawn Kemmer Attorney General Representative: Grant Pearson Liz Truppa, Kim Lujan, and Sam Affronti Call to Order Pursuant to the Public Notice dated August 18, 2017, the public Meeting of the Arizona State Lottery Commission was called to order at 10:00 a.m. by Chair Weintraub. A quorum was present. Chair Weintraub entertained a motion to approve the minutes of the June 23, 2017 Public meeting; Commissioner Roth made the motion, Commissioner Chad Wilson seconded, all members voting aye, motion carried. Retailer of the Year Mr. Roland Tang recognized Fry s Food Store #28 as retailer of the year. Directors Report - Director Edgar presented a video of Bruce Arian that was filmed at the Arizona Lottery. The video showcased the new Arizona Cardinals Scratchers ticket and how the Arizona Lottery gives back. The presentation focused on CASA, one of the beneficiaries of the Arizona Lottery. The Director s presentation is attached for the official minutes. Mr. Biju Kamaleswaran demonstrated a new financial program that can capture up to the minute sales and compare them to prior fiscal years. The new program can capture sales, narrowing information from instant, draw games, and price points and pinpoint why the numbers fluctuate. Director Edgar also had a Power Point presentation regarding financials. The Director s presentation is attached for the official minutes Marketing Update Mr. Chris Rogers provided a marketing update which focused on instant tickets that utilize social media and radio stations to generate a Lottery presence. 5

New Business Chair Weintraub asked if any members of the public wanted to address the Commission regarding the discussion and action on amended instant scratch game profile Royal Millions #1134 and new instant scratch game profile Slingo Trio #1131 Chair Weintraub asked if any members of the public wanted to address the Commission regarding the above mentioned profiles. In accordance with A.R.S. 5-554 (C), Chair Weintraub entertained a motion to approve the order and authorize the Director to issue the order regarding new instant scratch game profiles: #1134 and the new instant scratch game profile #1131. Commissioner Anderson moved; Commissioner Wilson seconded. All members voting aye, the motion carried. Chair Weintraub asked if any members of the public wanted to address the Commission regarding the discussion and action to amend the Retailer Sales Incentive on promotion profiles #28, #29 and #57. In accordance with A.R.S. 5-554 (C), Chair Weintraub entertained a motion to approve the order and authorize the Director to issue the order regarding retail sales incentive promotion profiles #28, #29 and #57. Commissioner Roth moved; Commissioner Anderson seconded. All members voting aye, the motion carried. Call to the Public Chair Weintraub invited members of the public to speak before the Commission. Announcements The next Commission meeting will be held September 22, 2017, at 10:00 a.m. Adjournment Chair Weintraub entertained a motion to adjourn, Commissioner Roth moved; Commissioner Wilson seconded. All members voting aye, the motion carried. Meeting adjourned at 10:43 a.m. Materials A copy of the agenda and background material provided to Commission members, which is not exempt by law from public inspection, is available for public inspection at least 24 hours in advance of the meeting at the Lottery Office located at 4740 East University Drive, Phoenix, Arizona. Notice Any amendments or additions to the agenda will be made available at least 24 hours prior to the meeting. 6

Agency Reports Report to Arizona Lottery Commission September 22, 2017 Director s Presentation Out-of-Stock Incentive Retailer Satisfaction Survey Results Products/Marketing Presentation New Games Introduction The following games were introduced since the last commission meeting: Precious Metals Super Ticket #1108, Red Hot 7s #1119, Diamonds & Pearls Doubler #1122, and Match 3 Tripler #1137. More information on these games is available by visiting the Scratchers section at ArizonaLottery.com The following game was approved to end consistent with the Instant Scratch Game Ending Policy. Players have 180 days from the game-ending date to claim prizes. Date Price Game Beginning Ended Point No. Game Name Inventory % Sold 8/22/17 $3 1099 Loteria Arizona 1,761,100 80.8% 7

ATTACHMENT A 8

Arizona Lottery Dashboard August 2018 Fiscal Year 2018

Arizona Lottery FY 2018 Sales versus Projections $1,000,000,000 Total Sales $900,000,000 $800,000,000 $700,000,000 $600,000,000 $500,000,000 $400,000,000 $300,000,000 $200,000,000 $100,000,000 $0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Actual Core Sales Projection Projection: 126,476,000 Actual Core: 166,629,964 Total Actual: 166,629,964 Difference: 40,153,964 % Difference: 31.7% * Total sales are currently 31.7% ahead of projections. * The Instant product line (Scratchers & Pull-tabs) at $109,373,534 are currently 19.5% ahead of projections. * Total draw game sales of $57,256,430 are currently 63.7% ahead of projections. * The Multi-State draw games are currently 87.6% ahead of projections; in-state games are 13.5% above projections. D - 1

Arizona Lottery FY 2018 Sales versus Projections $70,000,000 Instant Sales $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Scratchers Pull Tabs Projection Projection: 91,508,000 Actual: 109,373,534 Difference: 17,865,534 % Difference: 19.5% Total Draw Games $140,000,000 $120,000,000 $100,000,000 $80,000,000 $60,000,000 $40,000,000 $20,000,000 $0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Projection: 34,968,000 Actual 57,256,430 Difference: 22,288,430 % Difference: 63.7% In-State Multi-State Projection D - 2

Arizona Lottery FY 2018 Sales versus Projections $90,000,000 Multi-State Games $80,000,000 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Powerball Mega Millions Projection Projection: 23,688,000 Actual 44,449,658 Difference: 20,761,658 % Difference: 87.6% $9,000,000 In-State Games $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun The Pick Fantasy 5 Pick 3 All or Nothing 5 Card Cash Projection Projection: 11,280,000 Actual 12,806,772 Difference: 1,526,772 % Difference: 13.5% D - 3

Arizona Lottery FY 2018 versus FY 2017 Total Sales 150,000,000 130,000,000 110,000,000 90,000,000 70,000,000 50,000,000 30,000,000 10,000,000 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun FY 2017 FY 2018 FY 2018 166,629,964 FY 2017 130,301,098 % Change 27.9% * Total sales are currently 27.9% ahead of last year. * The Instant product line (Scratchers & Pull tabs) are currently 24.7% ahead of last year. * Total draw game sales are currently 34.3% ahead of last year. * Sales of the multi state games (Powerball and Mega Millions) are currently 38.0% ahead of last year. * Sales of the in state games are currently 23.0% ahead of last year. D 4

Arizona Lottery FY 2018 versus FY 2017 $80,000,000 Total Instant Games $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun FY 2017 FY 2018 FY 2018 109,373,534 FY 2017 87,682,615 % Change 24.7% 90,000,000 Total Draw Games 80,000,000 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Powerball Mega Millions In State FY 2017 FY 2018 57,256,430 FY 2017 42,618,483 % Change 34.3% D 5

Arizona Lottery FY 2018 versus FY 2017 $80,000,000 Multi State Jackpot Games $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun FY 2017 FY 2018 FY 2018 44,449,658 FY 2017 32,205,366 % Change 38.0% $8,000,000 Total In State Games $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun FY 2017 FY 2018 FY 2018 12,806,772 FY 2017 10,413,117 % Change 23.0% D 6

9/11/2017 Arizona Lottery Sales by Product - FY 2018 Month M Scratchers Instant Tabs - Charitable Instant Tabs - Age Restricted Total Instants Powerball Mega Millions The Pick / EXTRA Fantasy 5 / EXTRA Pick 3 All Or Nothing 5 Card Cash Total Draw Games Total Sales July 54,102,309 503,820 114,480 54,720,609 7,373,038 4,742,504 2,979,004 1,548,405 948,219 225,010 260,752 18,076,932 72,797,541 August 54,009,113 559,572 84,240 54,652,925 26,634,663 5,699,453 4,056,539 1,320,770 954,599 243,364 270,110 39,179,498 93,832,423 September October November December January February March April May June YTD Sales 108,111,422 1,063,392 198,720 109,373,534 34,007,701 10,441,957 7,035,543 2,869,175 1,902,818 468,374 530,862 57,256,430 166,629,964 YTD Rtlr Commissions 7,027,242 212,678 12,917 7,252,838 2,210,501 678,727 457,310 186,496 123,683 30,444 34,506 3,721,668 10,974,506 % of Sales 64.9% 0.64% 0.12% 65.6% 20.4% 6.3% 4.2% 1.7% 1.1% 0.3% 0.3% 34.4% 100.0% Avg Mo Sales 9,009,285 531,696 99,360 9,640,341 2,833,975 870,163 586,295 239,098 158,568 39,031 44,239 4,727,131 13,885,830 D - 7

Annual Sales Trailing 12 Month Periods 925.0 900.0 900.0 875.0 850.0 (Millions) 825.0 800.0 775.0 750.0 Twelve Months Ending Actual Goal D - 8

9/11/2017 Arizona Lottery Transfers To Other State Funds Month Heritage Game & Fish Healthy Arizona State General Fund Mass Transit LTAF II * Homeless Shelters State General Fund II**** Arizona Commerce Authority Univ Capital Debt Service Dept of Gaming** Internet Crimes & Victims' Rights*** Internet Crimes & Victims' Rights*** Tribal College Dual Enrollment C.A.S.A. Total Transfers July 3,750,625 36,161 3,786,786 August 3,750,075 3,750,075 September **Approp Transfer October November December January February March April May June YTD Transfers 7,500,700 36,161 7,536,861 FY17 Transfers 10,000,000 20,701,600 84,150,000 11,529,000 1,000,000 15,490,000 3,500,000 39,926,998 300,000 100,000 900,000 250,000 3,965,599 191,813,197 Estimated cap based **Pursuant to Proposition 202 (Compulsive Gambling Treatment) ***Pursuant to HB2517 (Victims' Rights & Internet Crimes Against Chrildren) D - 9

Arizona Lottery Transfers To Other State Funds By Product - FY 20178 9/11/2017 Scratchers Powerball Mega Millions The Pick / EXTRA Fantasy 5 / EXTRA Pick 3 All Or Nothing 5 Card Cash Instant Tabs Charitable Instant Tabs Age Restricted Unclaimed Age Restricted Unclaimed Prizes Tribal Unclaimed Prizes C.A.S.A. Total Transfers July 2,789,275 451,600 182,400 138,800 81,300 49,000 12,700 16,400 28,600 36,161 3,786,236 August 2,789,275 451,600 182,400 138,800 81,300 49,000 12,700 16,400 28,600 3,750,075 September Gaming Department October November December January February March* April May June Final Profit Distribution YTD Transfers 5,578,550 903,200 364,800 277,600 162,600 98,000 25,400 32,800 57,200 36,161 7,536,311 Transfer % of Total Sales 3.3% 0.5% 0.2% 0.2% 0.1% 0.1% 0.0% 0.0% 0.0% 0.02% 4.5% YTD Sales 108,111,422 34,007,701 10,441,957 7,035,543 2,869,175 1,902,818 468,374 530,862 1,063,392 198,720 166,629,964 % of Sales by Product 64.88% 20.41% 6.27% 4.22% 1.72% 1.14% 0.28% 0.32% 0.64% 0.12% 100.00% % of Transfer by Product 5.16% 2.66% 3.49% 3.95% 5.67% 5.15% 5.42% 6.18% 5.38% 4.52% D - 10

Arizona Lottery Financial Dashboard Overall Percent Spent by Appropriation Cash Balance by Fund Percent of Year Elapsed Percent Used 1. Operating: 2. Advertising: 3. Instant Printing: 3. Sales Commissions: 5. On-line Vendor Fees 18.36% 20.46% 22.95% 78.17% 0.26% 0.02% 100.00% Budget by Appropriation Type and Object Class Sales Goal: $900 Million Appropriation Object Class Budget Expenditures Encumbered Remaining % Used 1. Operating: 6000 - Personal Services 4,533,300 775,186-3,758,114 17.10% 6100 - Employee Related Expenditures 2,076,800 329,464-1,747,336 15.86% 6200 - Professional And Outside Services 386,800 24,800 195,944 166,056 57.07% 6500 - Travel - In-State 271,600 1,423-270,177 0.52% 6600 - Travel - Out-Of-State 16,800 2,348-14,452 13.98% 7000 - Other Operating Expenditures 903,200 49,529 434,120 419,551 53.55% 8100 - Capital Outlay - - - - 100.00% 8400 - Capital Equipment - - 128,410-128,410 100.00% 8500 - Non-Capital Equipment 50,000 - - 50,000-9100 - Transfers Out 220,000 187-219,813 0.09% - NOT ENTERED - - - - 100.00% Total: 8,458,500 1,182,937 758,474 6,517,089 22.95% 2. Advertising: 6200 - Professional And Outside Services - - - - 100.00% 7000 - Other Operating Expenditures 15,450,000 685,673 11,430,325 3,334,002 78.42% 8400 - Capital Equipment - - - - 100.00% 8500 - Non-Capital Equipment 50,000 - - 50,000 - - NOT ENTERED - - - - 100.00% Total: 15,500,000 685,673 11,430,325 3,384,002 78.17% Section Total Over/Under YTD Budget*** 3. Instant Printing: 6200 - Professional And Outside Services 3,000,000 - - 3,000,000 - - 6600 - Travel - Out-Of-State - - - - 100.00% Total: - 7000 - Other Operating Expenditures 20,481,900 56,745 3,438 20,421,717 0.29% - NOT ENTERED - - - - 100.00% Total: 23,481,900 56,745 3,438 23,421,717 0.26% 4. Sales Commissions: 7000 - Other Operating Expenditures 60,549,000 10,000-60,539,000 0.02% - NOT ENTERED - - - - 100.00% Total: 60,549,000 10,000-60,539,000 0.02% 5. On-line Vendor Fees: 6200 - Professional And Outside Services 10,019,000 547,077 9,471,923-100.00% - NOT ENTERED - - - - 100.00% Total: 10,019,000 547,077 9,471,923-100.00% Grand Total: 118,008,400 2,482,433 21,664,160 93,861,807 20.46% Beneficiary Transfer Goal: $201 Million Note: 1. Sales commissions capture only July through April. Sales commissions were approximately $5.2M in May. 2. $45M of the beneficiary transfer is pending to be transferred in April. D-11

Arizona Lottery Ticket Vending Machine Monthly Out of Stock Averages 7 6 5 4 3.7 3.7 3 2 July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 D - 12

Arizona Lottery Vending Machine Sales Instant Tickets $30.0 $25.0 $20.0 $20.2 $20.1 $15.0 $10.0 $5.0 $0.0 Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May June FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 D 13

Draw Games Advertised Jackpot Comparisons Aug FY2018 vs FY2017 FY2018 Jackpot FY2017 Jackpot Powerball Wed Sat Wkly Sales Wed Sat Wkly Sales 08/05/17 $261.0 $286.0 $2.36 $40.0 $52.0 $1.34 08/12/17 $307.0 $356.0 $4.28 $67.0 $82.0 $1.34 08/19/17 $430.0 $535.0 $8.56 $94.0 $110.0 $1.41 08/26/17 $700.0 $40.0 $10.98 $127.0 $142.0 $1.41 Total Monthly Sales $26,634,663 $6,341,897 FY2018 Jackpot FY2017 Jackpot Mega Millions Tue Fri Wkly Sales Tue Fri Wkly Sales 08/05/17 $303.0 $323.0 $1.58 $25.0 $30.0 $0.61 08/12/17 $350.0 $393.0 $2.46 $38.0 $45.0 $0.61 08/19/17 $15.0 $20.0 $0.77 $52.0 $61.0 $0.63 08/26/17 $25.0 $37.0 $0.75 $69.0 $76.0 $0.60 Total Monthly Sales $5,699,453 $2,811,227 FY2018 Jackpot FY2017 Jackpot The Pick Wed Sat Wkly Sales Wed Sat Wkly Sales 08/05/17 $5.1 $5.2 $0.77 $2.3 $2.5 $0.53 08/12/17 $5.5 $5.6 $0.86 $2.6 $2.7 $0.52 08/19/17 $5.8 $5.9 $0.97 $2.8 $2.9 $0.51 08/26/17 $6.2 $6.3 $1.04 $3.0 $3.1 $0.52 Total Monthly Sales $4,056,539 $2,416,011 Jackpot and weekly sales amounts are in millions High jackpot for the period D 14

Arizona Lottery Average Wager Transactions By Game In State Scratchers Powerball Mega Millions Draw Games July $5.82 $4.56 $2.91 $2.27 Aug $5.57 $5.78 $2.88 $2.25 Sept Oct Nov Dec Jan Feb Mar Apr May June Average $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June Scratchers Powerball Mega Millions In State Draw Games D 15

New Business Item #1 Instant Scratch Game Profiles Report to Arizona Lottery Commission September 22, 2017 This report has been provided to the Lottery Commission regarding instant scratch game profiles planned for Arizona Lottery instant scratch games. The Commission is requested to approve these game profiles. After Commission approval, staff will commence with plans for printing, distribution, and sales of these games. NEW GAME PROFILES Attached for the Lottery Commission's action are new instant scratch game profiles: Cash Adventure #1136, Bingo #1140, Spicy Hot Crossword #1141, Crossword Connect #1144, Triple Red 7 s #1148, Wild Jokers #1149, High 5 #1151, and $250,000 Crossword #1154. Cash Adventure #1136. This $5 game has a top prize of $50,000 and will be printed at a quantity of approximately 1.2 million tickets. Bingo #1140. This $2 game has a top prize of $10,000 and will be printed at a quantity of approximately 5.6 million tickets. Spicy Hot Crossword #1141. This $10 game has a top prize of $100,000 and will be printed at a quantity of approximately 2.1 million tickets. Crossword Connect #1144. This $3 game has a top prize of $20,000 and will be printed at a quantity of approximately 4.6 million tickets. Triple Red 7 s #1148. This $10 game has a top prize of $100,000 and will be printed at a quantity of approximately 1.8 million tickets. Wild Jokers #1149. This $2 game has a top prize of $10,000 and will be printed at a quantity of approximately 1.9 million tickets. High 5 #1151. This $5 game has a top prize of $50,000 and will be printed at a quantity of approximately 1.4 million tickets. $250,000 Crossword #1154. This $20 game has a top prize of $250,000 and will be printed at a quantity of approximately 1.2 million tickets. Attachments (Commissioners only) 9

New Business Item #2 Willie s Holiday Bonus Second Chance Promotion Profile #82 Report to Arizona Lottery Commission September 22, 2017 This report has been provided to the Lottery Commission regarding the Willie s Holiday Bonus Second Chance Promotion Profile. In October 2017, the Arizona Lottery will introduce six holiday games. Players can enter their non-winning tickets for a chance to win instant cash prizes as well as enter into the second chance drawings. There will be three second chance drawings with prizes from $10,000 to $25,000. The Commission is requested to approve the attached profile. 10

New Business Item #3 Mega Millions Amended Game Profile #2 Report to Arizona Lottery Commission September 22, 2017 This report has been presented to the Commission to amend the Mega Millions Game Profile. The following are changes to the game: $2 game: The price point has changed from $1 for a single wager to $2. This is the first price adjustment since the first ticket was sold in 2002, over 15 years ago. New Prize Structure: Players can win larger prize amounts and the odds of winning the second prize level of $1 million have been improved. These revisions should yield higher average jackpots with faster rolls, creating more player excitement and engagement. New Game Matrix: The number of white balls has decreased from 75 to 70 and the number of gold balls has increased from 15 to 25. Larger starting jackpots: The starting jackpot will more than double. At a $2 price point, jackpots for the revised game will now start at $40 million. The current Mega Millions jackpot starts at $15 million. The revisions to the game are scheduled to begin Saturday, October 28, 2017. The Commission is requested to approve this amended game profile. Staff will be available to answer any questions. 11