October 20, 2017 COMMISSION REPORT

October 20, 2017 COMMISSION REPORT

Table of Contents Notice Of Public Meeting... 3 Commission Minutes September 22, 2017... 5 Agency Reports... 8 Retailer Of The Quarter... 8 Random Number Generator (Rng) Update... 8 Director s Presentation... 8 Marketing Presentation... 8 Products Presentation... 8 1 st Quarter Product & Sales Review No Presentation... 8 New Games Introduction... 8 New Business Item #1... 11 Vote For Commission Chair And Vice-Chair... 11 New Business Item #2... 12 Instant Scratch Game Profiles... 12 New Business Item #3... 13 Cash Adventure Second Chance Drawing Promotion Profile #83... 13 New Business Item #4... 14 Fast Play Game Profiles... 14 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 October 20, 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 September 22, 2017, Public Meeting Agency Reports 1. Retailer of the Quarter 2. Random Number Generator (RNG) Update 3. Director s Presentation 4. Marketing Presentation 5. Products Presentation 6. 1 st Quarter Product & Sales Review No Presentation New Business 1. Election of Commission Chair and Vice-Chair 2. Discussion and Action on instant scratch game profiles: Decade of Dollars ($1) #1142, Decade of Dollars ($2) #1143, Decade of Dollars ($5) #1145, Decade of Dollars ($10) #1146, 50X Cash #1147, and Extreme Crazy 8s #1155. 3. Discussion and Action on Cash Adventure Second Chance Drawing Promotion Profile #83. 4. Discussion and Action on Fast Play draw game profiles: Piggy Bank Bucks #100, Jackpot Party Progressive #101, Crazy 8s #102, and Cherry Twist Progressive #103. 3

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. Announcements The next Commission meeting will be held November 17, 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 16 th day of October, 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 September 22, 2017 PRESIDING Chair Jeff Weintraub COMMISSIONERS Debra Roth, Aimee Jolley LOTTERY GUESTS PUBLIC Gregg Edgar, Executive Director, Chris Rogers, Director of Products & Marketing; Raynie Hosto, Director of Sales, and Biju Kamaleswaran, Chief Financial Officer Kimberly Siddall, Karla Henriksen, Joe Letheim, Ivy Gilio, Valerie Hanna, Nikki O Shea, Shelby Alessi, Stacey Henderson, Luanne Mansanares, Robin Peters, Monica Godek, Hai Nguyen IGT Representatives: Russ Harben Scientific Games Representatives: Topper Wilson and Julio Dieppa Owens Harkey Representatives: Dawn Kemmer Attorney General Representative: Vineet Mehta Shaw None Call to Order Pursuant to the Public Notice date September 22, 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 August 18, 2017 public meeting; Commissioner Debra Roth made the motion, Commissioner Aimee Jolley seconded, all members voting aye, motion carried. Directors Report - Director Edgar presented the beneficiary spot light video of the month, which focused on the Department of Game and Fish. The new partnership gives the Arizona Lottery the opportunity to highlight this beneficiary with a specialized Lottery ticket in addition to the opportunity to expand retail locations within the Department of Game and Fish. Director Edgar also explained the integration of the Arizona Lottery s business intelligence. This will allow the programs to run more effectively, efficiently and timely. It will take approximately 18-20 months to integrate the new system. The Directors presentation is attached for the official minutes Mr. Biju Kamaleswaran provided an overview of the financials. The financial information is attached for the official minutes. Out-of-Stock Incentive Mr. Joe Leitheim provided an overview of the out-of-stock incentive that ran in June and July. Retailer Satisfaction Survey Results Ms. Stacey Henderson provided the results of the retailer satisfaction survey. The survey was available to retailers from May 22 nd to June 30 th. 5

Products Presentation Ms. Ivy Gilio provided a products update on games that were being presented to the Commission for approval. Ms. Karla Henriksen provided information on the new instant draw game Fast Play. New Business Chair Weintraub asked if any members of the public wanted to address the Commission regarding 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. 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: #1136, #1140, #1141, #1144, #1148. #1149, #1151 and #1154. Commissioner Roth moved; Commissioner Jolley seconded. All members voting aye, the motion carried. Chair Weintraub asked if any members of the public wanted to address the Commission regarding the Willie s Holiday Bonus Second Chance Promotion Profile. 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 Willie s Holiday Bonus Second Chance Promotion Profile. Commissioner Roth moved; Commissioner Jolley seconded. All members voting aye, the motion carried. Chair Weintraub asked if any members of the public wanted to address the Commission regarding the Mega Millions amended game Profile #2. 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 Mega Millions amended game Profile #2. Commissioner Roth moved; Commissioner Jolley 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 October 20, 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 10:57 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 6

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. 7

Agency Reports Report to Arizona Lottery Commission October 20, 2017 Retailer of the Quarter Random Number Generator (RNG) Update Director s Presentation Marketing Presentation Products Presentation 1 st Quarter Product & Sales Review No Presentation New Games Introduction The following games were introduced since the last commission meeting: White Elephant #1125, Feliz Navidog #1126, Candy Cane Crossword #1127, 7 #1128, Holiday Riches #1129, Gifts of Gold #1130, and I Love Crossword #1132. More information on these games is available by visiting the Scratchers section at ArizonaLottery.com The following games were approved to end consistent with the Instant Scratch Game Ending Policy. Players have 180 days from the game-ending date to claim prizes. Date Ended Price Point Game No. Game Name Beginning Inventory % Sold 10/3/17 $5 1057 Classic Blackout Bingo 3,015,000 97.3% 10/3/17 $2 1061 Crossword 15,369,000 99.6% 10/3/17 $10 1062 7's Super Ticket 1,822,500 83.5% 10/3/17 $10 1073 $100,000 Fortune 1,762,980 86.1% 10/3/17 $2 1083 Did I Win 1,510,500 77.9% 10/3/17 $5 1085 $50 Grand 1,511,100 85.7% 10/3/17 $1 1090 5X the Cash 3,015,000 88.7% 10/3/17 $2 1091 10X the Cash 2,752,200 82.3% 10/3/17 $10 1093 50X the Cash 1,761,720 93.4% 10/3/17 $3 1094 Crossword Connect 3,525,900 93.5% 10/3/17 $2 1097 Play Ball 1,466,400 77.9% 10/3/17 $1 1100 Super 9s 1,761,600 87.2% 10/3/17 $1 1104 Lucky 7 2,216,700 84.9% 10/3/17 $5 1118 Concert Cash Bash 1,249,980 48.9% 10/11/17 $2 1105 Lucky 7 Doubler 1,924,650 78.4% 8

ATTACHMENT A 9

Arizona Lottery Dashboard September 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: 193,122,000 Actual Core: 235,540,801 Total Actual: 235,540,801 Difference: 42,418,801 % Difference: 22.0% * Total sales are currently 22.0% ahead of projections. * The Instant product line (Scratchers & Pull-tabs) at $161,581,990 are currently 15.6% ahead of projections. * Total draw game sales of $73,958,811 are currently 38.5% ahead of projections. * The Multi-State draw games are currently 47.5% ahead of projections; in-state games are 19.7% 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: 139,728,000 Actual: 161,581,990 Difference: 21,853,990 % Difference: 15.6% 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: 53,394,000 Actual 73,958,811 Difference: 20,564,811 % Difference: 38.5% 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: 36,170,000 Actual 53,346,788 Difference: 17,176,788 % Difference: 47.5% $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: 17,224,000 Actual 20,612,023 Difference: 3,388,023 % Difference: 19.7% 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 235,540,801 FY 2017 188,778,586 % Change 24.8% * Total sales are currently 24.8% ahead of last year. * The Instant product line (Scratchers & Pull-tabs) are currently 22.9% ahead of last year. * Total draw game sales are currently 29.0% ahead of last year. * Sales of the multi-state games (Powerball and Mega Millions) are currently 28.8% ahead of last year. * Sales of the in-state games are currently 29.5% 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 161,581,990 FY 2017 131,440,799 % Change 22.9% 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 FY 2018 73,958,811 FY 2017 57,337,787 % Change 29.0% Powerball Mega Millions In-State FY 2017 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 53,346,788 FY 2017 41,424,910 % Change 28.8% $9,000,000 Total 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 FY 2017 FY 2018 FY 2018 20,612,023 FY 2017 15,912,877 % Change 29.5% D - 6

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 51,598,544 486,792 123,120 52,208,456 6,127,599 2,769,531 4,089,551 2,304,103 935,189 226,506 249,902 16,702,381 68,910,837 October November December January February March April May June YTD Sales 159,709,966 1,550,184 321,840 161,581,990 40,135,300 13,211,488 11,125,094 5,173,278 2,838,007 694,880 780,764 73,958,811 235,540,801 YTD Rtlr Commissions 10,381,148 310,037 20,920 10,712,104 2,608,795 858,747 723,131 336,263 184,470 45,167 50,750 4,807,323 15,519,427 % of Sales 67.8% 0.66% 0.14% 68.6% 17.0% 5.6% 4.7% 2.2% 1.2% 0.3% 0.3% 31.4% 100.0% Avg Mo Sales 13,309,164 516,728 107,280 13,933,172 3,344,608 1,100,957 927,091 431,107 236,501 57,907 65,064 6,098,171 19,628,400 D - 7

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

10/11/2017 Arizona Lottery Transfers To Other State Funds By Product - FY 2018 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 3,750,075 36,161 3,786,236 August 3,750,075 54,624 3,804,699 September 3,801,700 7,865,700 24,529,350 8,017,400 225,000 159,216 669,982 45,268,348 **Approp Transfer October November December January February March April May June YTD Transfers 3,801,700 7,865,700 32,029,500 8,017,400 225,000 250,000 669,982 52,859,282 YTD FY17 Transfers 2,990,600 6,186,200 25,192,700 5,412,700 - - - - - - 63,600 250,000 1,081,417 41,177,217 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 cap based on prior year **Pursuant to Proposition 202 (Compulsive Gambling Treatment) ***Pursuant to HB2517 (Victims' Rights & Internet Crimes Against Chrildren) D - 9

Scratchers Powerball Mega Millions The Pick / EXTRA Arizona Lottery Transfers To Other State Funds By Product - FY 2018 State General Fund II 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 10/11/2017 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 54,624 3,804,699 September 19,416,250 13,545,600 4,391,600 3,727,600 1,699,900 923,800 225,000 248,400 36,000 45,200 179,800 159,216 669,982 45,268,348 Gaming Department October November December January February March* April May June Final Profit Distribution YTD Transfers 24,994,800 14,448,800 4,756,400 4,005,200 1,862,500 1,021,800 250,400 281,200 93,200 45,200 179,800 250,000 669,982 52,859,282 Transfer % of Total Sales 10.6% 6.1% 2.0% 1.7% 0.8% 0.4% 0.1% 0.1% 0.0% 0.019% 0.1% 0.11% 0.3% 22.4% YTD Sales 159,709,966 40,135,300 13,211,488 11,125,094 5,173,278 2,838,007 694,880 780,764 1,550,184 321,840 235,540,801 % of Sales by Product 67.81% 17.04% 5.61% 4.72% 2.20% 1.20% 0.30% 0.33% 0.66% 0.14% 100.00% % of Transfer by Product 15.65% 36.00% 36.00% 36.00% 36.00% 36.00% 36.03% 36.02% 6.01% 14.04% 22.16% 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 25.75% 25.27% 32.08% 80.35% 19.65% 0.03% 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 1,086,005-3,447,295 23.96% 6100 - Employee Related Expenditures 2,076,800 464,890-1,611,910 22.38% 6200 - Professional And Outside Services 386,800 147,686 247,602-8,488 102.19% 6500 - Travel - In-State 271,600 2,921-268,679 1.08% 6600 - Travel - Out-Of-State 16,800 4,299-12,501 25.59% 7000 - Other Operating Expenditures 903,200 171,532 441,360 290,308 67.86% 8100 - Capital Outlay - - - - 100.00% 8400 - Capital Equipment - - 128,410-128,410 100.00% 8500 - Non-Capital Equipment 50,000-18,717 31,283 37.43% 9100 - Transfers Out 220,000 187-219,813 0.09% - NOT ENTERED - - - - 100.00% Total: 8,458,500 1,877,519 836,088 5,744,892 32.08% 2. Advertising: 6200 - Professional And Outside Services - - - - 100.00% 7000 - Other Operating Expenditures 15,450,000 1,358,054 11,096,959 2,994,987 80.61% 8400 - Capital Equipment - - - - 100.00% 8500 - Non-Capital Equipment 50,000 - - 50,000 - - NOT ENTERED - - - - 100.00% Total: 15,500,000 1,358,054 11,096,959 3,044,987 80.35% 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 20,481,900 811,139 3,802,582 15,868,178 22.53% - NOT ENTERED - - - - 100.00% Total: 23,481,900 811,139 3,802,582 18,868,178 19.65% 4. Sales Commissions: 7000 - Other Operating Expenditures 60,549,000 18,000-60,531,000 0.03% - NOT ENTERED - - - - 100.00% Total: 60,549,000 18,000-60,531,000 0.03% 5. On-line Vendor Fees: 6200 - Professional And Outside Services 10,019,000 2,497,744 7,521,256-100.00% - NOT ENTERED - - - - 100.00% Total: 10,019,000 2,497,744 7,521,256-100.00% Grand Total: 118,008,400 6,562,457 23,256,886 88,189,057 25.27% 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 3.72 3.65 3.64 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 $19.2 $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 Sep FY2018 vs FY2017 FY2018 Jackpot FY2017 Jackpot Powerball Wed Sat Wkly Sales Wed Sat Wkly Sales 09/02/17 $53.0 $68.0 $1.37 $154.0 $170.0 $1.81 09/09/17 $83.0 $102.0 $1.46 $186.0 $205.0 $1.65 09/16/17 $115.0 $132.0 $1.53 $222.0 $244.0 $1.83 09/23/17 $40.0 $53.0 $1.26 $40.0 $50.0 $1.14 09/30/17 $66.0 $80.0 $1.30 $60.0 $70.0 $1.22 Total Monthly Sales $6,127,599 $6,379,839 FY2018 Jackpot FY2017 Jackpot Mega Millions Tue Fri Wkly Sales Tue Fri Wkly Sales 09/02/17 $45.0 $53.0 $0.62 $84.0 $92.0 $0.77 09/09/17 $61.0 $70.0 $0.63 $101.0 $111.0 $0.71 09/16/17 $76.0 $86.0 $0.65 $122.0 $133.0 $0.75 09/23/17 $94.0 $104.0 $0.73 $15.0 $20.0 $0.51 09/30/17 $15.0 $20.0 $0.53 $25.0 $30.0 $0.55 Total Monthly Sales $2,769,531 $2,839,705 FY2018 Jackpot FY2017 Jackpot The Pick Wed Sat Wkly Sales Wed Sat Wkly Sales 09/02/17 $6.5 $6.8 $0.90 $3.2 $3.3 $0.66 09/09/17 $7.0 $7.2 $0.91 $3.4 $3.5 $0.56 09/16/17 $7.4 $7.5 $0.91 $3.7 $3.8 $0.58 09/23/17 $7.8 $7.9 $0.93 $4.0 $4.1 $0.59 09/30/17 $8.1 $8.2 $0.97 $4.2 $4.3 $0.63 Total Monthly Sales $4,089,551 $2,479,920 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 $5.70 $4.47 $2.57 $2.40 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

ATTACHMENT B 10

1st Quarter Product and Sales Report The first section of this report focuses on individual product performance and is provided by the Products team. In the second section, Raynie Hosto, Director of Sales, has provided information on retailer sales and rankings in several different categories. Staff is available to answer any questions the Commission may have.

Arizona Lottery FY2018 Product Review 1 ST Quarter Review July 2017 through September 2017 As part of a quarterly review process, we report to the agency on the performance of the individual lottery products including both draw and instant games. The information contained in this report includes the following: General overview of the first quarter A top line review of sales performance of each product A summary review by price point for the instant scratch games A top down look at the top performing instant scratch games by revenue and tickets A review of new instant scratch game introductions and game endings General Overview Sales for the first quarter of FY18 reached $235,540,801, an increase of 24.8% over the same period last fiscal year. The breakdown by product is as follows: Mkt 1 st Quarter Share Scratchers 1 $159,709,966 67.8% Draw Games $73,958,811 31.4% Charitable Pull-Tabs $1,550,184 0.66% Age Restricted Pull-Tabs $321,840 0.14% Total $235,540,801 As indicated in the chart above, the Scratchers contribution to total sales in the first quarter of the year represented 67.8%. The market share for draw games started the fiscal year at 31.4% of sales, an increase over the same quarter last fiscal year. Pull-tabs, representing 0.80% of total sales, have had a slight increase so far this fiscal year. Sales detail by game is provided in Attachments A and B. 1 Scratchers is a registered service mark of the California Lottery.

Product Review Page 2 Charitable Pull-Tabs The charitable games program, first introduced in January 2011, continues to be strong with 138 organizations currently licensed and selling tickets. Sales so far this fiscal year have already surpassed the $1.55 million mark, 12.5% ahead of the same period last fiscal year. Age-Restricted Pull-Tabs The age-restricted games program began licensing retailers in February 2016. Currently there are 42 retailers licensed and selling tickets. Sales for the quarter reached $321,840. Scratchers Games Sales for Scratchers at $159.7 million are up 23.0% over the same period last fiscal year. Based on validations, players have earned more than $112.5 million in prizes. The prizes paid calculated against the sales revenues equate to an average payout of 70.6%. A total of 14 new games were introduced in the first quarter. Combined with the games carried forward, a total of 71 games contributed to the sales revenues. Price Point $1 $2 $3 $5 $10 $20 $30 # New Games 3 2 2 3 3 1 0 Carried Forward 9 13 5 15 12 2 1 During this same period 9 games were ended. Two of the games were ended because the last top prize had been redeemed. The remaining games were ended as part of the standard quarterly game ending process, either because the games were out of inventory or the intended sales period had expired. Sales by price point The total number of tickets at the $1, $2 and $3 price points continues to represent the largest volume of tickets sold with 53.8% but represent only 17.6% of the revenues. The $5, $10, $20 and $30 games accounted for 46.2% of the tickets sold and 82.4% of the revenues. With the introduction of the first $30 game, the higher price point games continue to increase in market share. The chart below shows the breakdown of tickets and dollars for FY18. The charts on Attachment C show a comparable breakdown across all price points for the most recent five years.

Product Review Page 3 Top 10 games The Crossword and Bingo style games continue to be strong in the market with more than $42.9 million in sales, representing 27% of total Scratchers sales. In terms of both dollars and tickets sold, four of the top ten games are Crossword or Bingo style games. The top performer of the first quarter with more than $29.8 million in sales was the $20 spotlight game, $200 Million Cash Explosion (#1080). This game represents 18.7% of the total Scratchers sales. It has been in market since August 2016 and to date has sold more than $145 million. The table below identifies the top 10 games in terms of sales revenue generated and total tickets sold through the first quarter. Top 10 games in sales revenue Game Top 10 games in tickets sold Game Sales Revenue Tickets Sold $20 1080 $200 Million Cash Explosion $29,789,440 $2 1111 Crossword 3,253,015 $30 1098 Ultimate Millions $23,412,270 $2 1060 Bingo 1,754,267 $10 1109 $100 Grand Crossword $9,906,080 $5 1088 Café Crossword 1,626,559 $5 1088 Café Crossword $8,132,795 $20 1080 $200 Million Cash Explosion 1,489,472 $10 1103 Willy Wonka Golden Ticket $7,580,080 $1 1107 Double Doubler 1,240,117 $2 1111 Crossword $6,506,030 $1 1104 Lucky 7 1,234,558 $10 1117 Money Clip $5,738,630 $5 1115 Lady Luck 1,125,319 $5 1115 Lady Luck $5,626,595 $2 1067 Red Hot 7's 1,007,590 $10 1101 Win It All $5,299,590 $10 1109 $100 Grand Crossword 990,608 $20 1113 $250,000 Crossword $5,183,900 $2 1116 Find $50 945,133 Draw Games Total sales of draw games for the first quarter reached $73,958,811, an increase of 29.0% over the same period last year. Draw Games Multi-State Powerball Sales through the first quarter of the year totaled $40,135,300, an increase of 48.2% over the previous year. The highest jackpot reached through the first quarter of the fiscal year was $700 million in late August. Mega Millions Sales through the first quarter of the year totaled $13,211,488, a decrease of 7.9% from the previous year. The highest jackpot reached through the first quarter of the fiscal year was $393 million in early August. Combined sales for the multi-state games are 28.8% over the previous year. Draw Games In-State Games The Pick Sales through the first quarter of the year totaled $11,125,094, an increase of 53.0% over the previous year. The Pick jackpot began the current jackpot run in March and continues to grow into the second quarter. The current jackpot is at $9.1 million. Fantasy 5 Sales through the first quarter of the year totaled $5,173,278, an increase of 23.5% over the previous year. The highest jackpot through the first quarter of the fiscal year was $487,000 at the end of September. Pick 3 Sales through the first quarter of the year totaled $2,838,007, an increase of 7.1% over the previous year. Sales for this game remain consistent with a slight increase year over year.

Product Review Page 4 5 Card Cash Sales through the first quarter of the year totaled $780,764, a decrease of 26.0% from the previous year. All Or Nothing Sales through the first quarter of the year totaled $694,880, a decrease of 6.7% from the previous year. Combined sales for the in-state games are 29.5% over the previous year.

ARIZONA LOTTERY QUARTERLY SALES BY PRODUCT Fiscal Year 2018 - July 2017 through September 2017 Month Powerball Mega Millions The Pick Fantasy 5 Pick 3 All Or Nothing 5 Card Cash Total Draw Games Scratchers Charitable Pull-Tabs Age Restricted Pull-Tabs Total Instant Games Total Market Share July $7,373,038 $4,742,504 $2,979,004 $1,548,405 $948,219 $225,010 $260,752 $18,076,932 $54,102,309 $503,820 $114,480 $54,720,609 $72,797,541 30.9% August $26,634,663 $5,699,453 $4,056,539 $1,320,770 $954,599 $243,364 $270,110 $39,179,498 $54,009,113 $559,572 $84,240 $54,652,925 $93,832,423 39.8% September $6,127,599 $2,769,531 $4,089,551 $2,304,103 $935,189 $226,506 $249,902 $16,702,381 $51,598,544 $486,792 $123,120 $52,208,456 $68,910,837 29.3% 1st Quarter $40,135,300 $13,211,488 $11,125,094 $5,173,278 $2,838,007 $694,880 $780,764 $73,958,811 $159,709,966 $1,550,184 $321,840 $161,581,990 $235,540,801 100.0% October November December 2nd Quarter January February March 3rd Quarter April May June 4th Quarter 2018 $40,135,300 $13,211,488 $11,125,094 $5,173,278 $2,838,007 $694,880 $780,764 $73,958,811 $159,709,966 $1,550,184 $321,840 $161,581,990 $235,540,801 Mkt Share 17.0% 5.6% 4.7% 2.2% 1.2% 0.3% 0.3% 31.40% 67.81% 0.66% 0.14% 68.60% 2017 $27,084,394 $14,340,516 $7,273,321 $4,189,695 $2,649,961 $745,120 $1,054,780 $57,337,787 $129,792,983 $1,377,906 $269,910 $131,440,799 $188,778,586 % of Change 48.2% -7.9% 53.0% 23.5% 7.1% -6.7% -26.0% 29.0% 23.0% 12.5% 22.9% 24.8% Attachment A

ARIZONA LOTTERY QUARTERLY SALES BY PRODUCT Fiscal Year 2018 - July 2017 through September 2017 Pull-Tabs 0.8% Multi-State Games 22.6% Multi-State Games - Powerball Mega Millions In-State Games 8.8% Scratchers 67.8% In-State Games - The Pick Fantasy 5 5 Card Cash Pick 3 All Or Nothing Attachment B

Arizona Lottery 5-Year Review by Price Point Based on Dollars Sold 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 8.8% 14.7% 12.9% 22.2% 29.6% 27.2% 23.1% 29.4% 26.9% 25.5% 24.7% 24.1% 30.9% 27.7% 24.0% 20.0% 20.8% 3.7% 3.5% 4.2% 3.9% 3.3% 11.5% 12.2% 13.9% 15.9% 19.4% 2.5% 2.7% 3.1% 4.0% 3.8% FY 2018 FY 2017 FY 2016 FY 2015 FY 2014 $30 $20 $10 $5 $3 $2 $1 FY 2018 FY 2017 FY 2016 FY 2015 FY 2014 $1 $3,995,911 $17,230,930 $18,183,806 $21,852,857 $20,900,842 $2 $18,425,456 $77,080,640 $82,257,128 $86,110,390 $92,970,362 $3 $5,628,579 $26,348,367 $23,323,455 $17,793,777 $15,624,093 $5 $31,940,020 $131,823,090 $141,578,675 $150,203,925 $153,051,335 $10 $39,454,150 $152,231,750 $150,398,690 $145,784,060 $140,218,320 $20 $36,853,580 $172,393,320 $174,963,960 $120,285,280 $61,130,860 $30 $23,412,270 $55,673,280 Total $159,709,966 $632,781,377 $590,705,714 $542,030,289 $483,895,812 Based on Tickets Sold 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2.8% 1.6% 2.6% 6.6% 7.4% 7.3% 5.0% 12.0% 12.0% 14.1% 13.1% 12.6% 22.8% 22.6% 23.8% 6.7% 7.5% 6.5% 32.9% 33.0% 34.5% 24.7% 25.2% 4.9% 5.0% 35.4% 39.7% 14.3% 14.8% 15.3% 18.0% 15.4% FY 2018 FY 2017 FY 2016 FY 2015 FY 2014 $30 $20 $10 $5 $3 $2 $1 FY 2018 FY 2017 FY 2016 FY 2015 FY 2014 $1 3,995,911 17,230,930 18,183,806 21,852,857 20,900,842 $2 9,212,728 38,540,320 41,128,564 43,055,195 46,485,181 $3 1,876,193 8,782,789 7,774,485 5,931,259 5,208,031 $5 6,388,004 26,364,618 28,315,735 30,040,785 30,610,267 $10 3,945,415 15,223,175 15,039,869 14,578,406 14,021,832 $20 1,842,679 8,619,666 8,748,198 6,014,264 3,056,543 $30 780,409 1,855,776 Total 28,041,339 116,617,274 119,190,657 121,472,766 120,282,696 Attachment C

Arizona Lottery FY2018 1 st Quarter Retailer Sales Review Vending Machine Sales (Chart E) Total sales through vending machines during the first quarter of FY18 were $64,197,438 a 27.3% increase over FY17 sales of $50,392,583. The average per unit is $74,045 compared to $60,062 the same period last year. Vending machine sales accounted for 27.5% of total sales. Out-of-stocks in vending machines declined to 3.67% from 3.9% in FY17. Corporate Account Review (Chart F) Major retail chains represent 58.1% of all lottery accounts. Convenience stores represent 44.4% of total accounts while chain food stores represent 13.8%. Major retail chains comprise 75.0% of the total market share at the Lottery with convenience stores and food stores accounting for 49.3% and 25.7% respectively. Fry s food stores continue to lead with the highest per store average of $230,132 a significant increase of 27.4% over FY17. QuikTrip, Safeway, and Albertsons follow with per store average sales of $190,318, $154,210 and $129,236 respectively. This ranking remains the same from the previous fiscal year. Business Classification Review (Charts G and H) Collectively, chain and independent convenience stores account for 72.9% of total Lottery accounts and 68.2% of the market share in sales. Chain and independent grocery stores account for 15.7% of total Lottery accounts and 26.9% total sales. These figures remain consistent with the previous fiscal year. County Review (Charts I and J) The overall estimated per capita weekly sales for the first quarter of FY18 were $2.63, which represents an increase from the same period in FY17 when the per capita was $2.25. Maricopa and Pima counties held a market share of 75.8% of total sales. The remaining counties represent 24.2% of sales. Mohave County posted the highest weekly per capita sales at $4.60, followed closely by La Paz at $4.09, and Greenlee at $4.07.

Arizona Lottery Gemini FY 2018 # of Per Unit Average Units Game Instant Draw Total Per Unit Out-of-Stock (Qtly Avg) Capacity Sales Sales Sales Average Percentage 1st Quarter Total 867 $ 59,471,496 $ 4,725,942 $ 64,197,438 $ 74,045.49 3.67% % of Lottery Sales 37.2% 6.4% 27.5% Gemini 24 $ - #DIV/0! 2nd Quarter Total $ - $ - $ - % of Lottery Sales #DIV/0! #DIV/0! #DIV/0! Gemini 24 $ - #DIV/0! 3rd Quarter Total $ - $ - $ - % of Lottery Sales #DIV/0! #DIV/0! #DIV/0! Gemini 24 $ - #DIV/0! 4th Quarter Total $ - $ - $ - % of Lottery Sales #DIV/0! #DIV/0! #DIV/0! Total Gemini $ 59,471,496 $ 4,725,942 $ 64,197,438 Total Fiscal Year $ 59,471,496 $ 4,725,942 $ 64,197,438 % of Total Sales 37.2% 6.4% 27.5% Chart E

ARIZONA LOTTERY CORPORATE ACCOUNT REVIEW Fiscal Year 2018 July 2017 through September 2017 Total Draw Games Scratchers All Products Combined Commission # of % of Market Per Store Market Per Store Market Per Store Earned Accts Accts Sales Share Average Sales Share Average Sales Share Average To Date 4 Sons 9290/9814 21 0.7% $858,219 1.2% $40,868 $1,222,040 0.8% $58,192.38 $2,080,259 0.9% $99,060 $135,217 7-Eleven 8706 63 2.2% $1,235,148 1.7% $19,606 $3,583,534 2.2% $56,881 $4,818,682 2.1% $76,487 $313,214 Carioca 8821 35 1.2% $626,744 0.8% $17,907 $1,265,518 0.8% $36,158 $1,892,262 0.8% $54,065 $122,997 Circle K 8037 579 20.2% $16,560,572 22.4% $28,602 $41,098,875 25.7% $70,983 $57,659,447 24.7% $99,585 $3,747,864 Cobblestone 11 0.4% $274,419 0.4% $24,947 $401,159 0.3% $36,469 $675,578 0.3% $61,416 $43,913 CST Brands 9662 63 2.2% $2,231,336 3.0% $35,418.03 $4,933,515 3.1% $78,310 $7,164,851 3.1% $113,728 $465,715 Quik-Way Retail 8028 24 0.8% $128,397 0.2% $5,349.88 $181,800 0.1% $7,575 $310,197 0.1% $12,925 $20,163 Giant 8243 88 3.1% $1,687,663 2.3% $19,178 $4,227,396 2.6% $48,039 $5,915,059 2.5% $67,217 $384,479 Jackson's Food Stores 8021 12 0.4% $518,767 0.7% $43,231 $695,515 0.4% $57,960 $1,214,282 0.5% $101,190 $78,928 Loves 9800 12 0.4% $212,668 0.3% $17,722 $384,810 0.2% $32,067.50 $597,478 0.3% $49,790 $38,836 Maverik 9905 19 0.7% $722,467 1.0% $38,025 $1,229,081 0.8% $64,688 $1,951,548 0.8% $102,713 $126,851 Pilot Travel Centers 9926 12 0.4% $203,094 0.3% $16,925 $487,481 0.3% $40,623 $690,575 0.3% $57,548 $44,887 Quik Mart 8375 26 0.9% $548,884 0.7% $21,111 $1,264,393 0.8% $48,631 $1,813,277 0.8% $69,741 $117,863 QuikTrip 9849 112 3.9% $6,494,072 8.8% $57,982.79 $14,821,558 9.3% $132,335 $21,315,630 9.1% $190,318 $1,385,516 Shay's 8938 19 0.7% $373,210 0.5% $19,643 $879,120 0.6% $46,269 $1,252,330 0.5% $65,912 $81,401 Superpumper 8025 13 0.5% $546,518 0.7% $42,040 $950,396 0.6% $73,107 $1,496,914 0.6% $115,147 $97,299 Terribles 8004 8 0.3% $122,329 0.2% $15,291.13 $278,195 0.2% $34,774 $400,524 0.2% $50,066 $26,034 Woody's 8607 17 0.6% $184,307 0.2% $10,842 $413,594 0.3% $24,329 $597,901 0.3% $35,171 $38,864 Good 2 Go 8024 17 0.6% $253,759 0.3% $14,927 $528,555 0.3% $31,091 $782,314 0.3% $46,018 $50,850 Safeway Gas 8128 31 1.1% $516,938 0.7% $16,675.42 $1,019,503 0.6% $32,887 $1,536,441 0.7% $49,563 $99,869 Fry's Gas 8052 92 3.2% $1,004,697 1.4% $10,921 $2,432,727 0.6% $11,082 $3,437,424 1.5% $37,363 $223,433 Convenience Total 1274 44.4% $35,304,208 47.7% $27,711 $79,866,038 50.0% $62,689 $115,170,246 49.3% $90,401 $7,486,066 Albertson's 8027 34 1.2% $1,867,685 2.5% $54,931.91 $2,526,340 1.6% $74,304 $4,394,025 1.9% $129,236 $285,612 Bashas' 8011 48 1.7% $2,196,744 3.0% $45,766 $3,609,999 2.3% $75,208 $5,806,743 2.5% $120,974 $377,438 Bashas' Food City 46 1.6% $297,041 0.4% $6,457 $1,884,075 1.2% $40,958.15 $2,181,116 0.9% $47,416 $141,773 Fry's 8052 123 4.3% $10,567,728 14.3% $85,916 $17,738,569 11.1% $144,216 $28,306,297 12.1% $230,132 $1,839,909 Los Altos Ranch Market 8026 7 0.2% $58,741 0.1% $8,392 $440,832 0.3% $62,976 $499,573 0.2% $71,368 $32,472 Safeway 8128 108 3.8% $6,637,066 9.0% $61,454 $10,017,614 6.3% $92,756 $16,654,680 7.1% $154,210 $1,082,554 Walmart 8022 30 1.0% $594,008 0.8% $19,800 $1,614,521 1.0% $53,817 $2,208,529 0.9% $73,618 $143,554 Food Store Total 396 13.8% $22,219,013 30.0% $56,109 $37,831,950 23.7% $95,535 $60,050,963 25.7% $151,644 $3,903,313 Major Chains 1670 58.1% $57,523,221 77.8% $34,445 $117,697,988 73.7% $70,478 $175,221,209 75.0% $104,923 $11,389,379 All Stores 2872 $73,958,811 $25,752 $159,709,966 $55,609 $233,668,777 $81,361 $15,188,471 Do not print below: Chart F

ARIZONA LOTTERY BUSINESS CODE REVIEW Fiscal Year 2018 July 2017 through September 2017 Total Draw Games Scratchers All Products Combined Commission Business # of % of Market Per Store Market Per Store Market Per Store Earned Business Classification Code Accts Accts Sales Share Average Sales Share Average Sales Share Average To Date Shopping Malls 01 3 0.1% $34,279 0.0% $11,426 $39,414 0.0% $13,138 $73,693 0.0% $24,564 $4,790 Smoke/Gift Shops - Newstands 02 76 2.6% $464,884 0.6% $6,117 $1,615,711 1.0% $21,259 $2,080,595 0.9% $27,376 $135,239 Chain Supermarkets 03 398 13.9% $22,467,043 30.4% $56,450 $38,224,464 23.9% $96,041 $60,691,507 26.0% $152,491 $3,944,948 Independent Supermarkets 04 53 1.8% $579,665 0.8% $10,937 $1,538,951 1.0% $29,037 $2,118,616 0.9% $39,974 $137,710 Chain Convenience Stores 05 1118 38.9% $33,252,451 45.0% $29,743 $78,020,745 48.9% $69,786 $111,273,196 47.6% $99,529 $7,232,758 Independent Convenience 06 824 28.7% $12,070,780 16.3% $14,649 $29,661,196 18.6% $35,997 $41,731,976 17.9% $50,646 $2,712,578 Liquor Stores 07 91 3.2% $473,309 0.6% $5,201 $2,073,069 1.3% $22,781 $2,546,378 1.1% $27,982 $165,515 Drug Stores 08 2 0.1% $5,914 0.0% $2,957 $15,488 0.0% $7,744 $21,402 0.0% $10,701 $1,391 Auto/Gas Stations 09 151 5.3% $1,932,146 2.6% $12,796 $4,486,496 2.8% $29,712 $6,418,642 2.7% $42,508 $417,212 Truck Service Centers 10 41 1.4% $721,494 1.0% $17,597 $1,423,690 0.9% $34,724 $2,145,184 0.9% $52,322 $139,437 Bars/Restaurants 11 39 1.4% $802,601 1.1% $20,580 $937,959 0.6% $24,050 $1,740,560 0.7% $44,630 $113,136 Spec Non-Grocery 12 58 2.0% $797,174 1.1% $13,744 $967,717 0.6% $16,685 $1,764,891 0.8% $30,429 $114,718 Check Cashing Centers 13 0 0.0% $0 0.0% #DIV/0! $0 0.0% #DIV/0! $0 0.0% #DIV/0! $0 Bowling Centers 14 4 0.1% $15,058 0.0% $3,765 $70,323 0.0% $17,581 $85,381 0.0% $21,345 $5,550 Mass Merchandise 16 8 0.3% $18,749 0.0% $2,344 $75,475 0.0% $9,434 $94,224 0.0% $11,778 $6,125 In-House & Promotional 99 6 0.2% $323,264 0.4% $53,877 $559,268 0.4% $93,211 $882,532 0.4% $147,089 $57,365 Total 2872 100% $73,958,811 100% $25,752 $159,709,966 100% $55,609 $233,668,777 100% $81,361 $15,188,471 Summary Recap Chain/Indpt Supermarkets 451 15.7% $23,046,708 31.2% $51,101 $39,763,415 24.9% $88,167 $62,810,123 26.9% $139,269 $4,082,658 Total Convenience Stores* 2,093 72.9% $47,255,377 63.9% $22,578 $112,168,437 70.2% $53,592 $159,423,814 68.2% $76,170 $10,362,548 Other Classifications 328 11.4% $3,656,726 4.9% $11,149 $7,778,114 4.9% $23,714 $11,434,840 4.9% $34,862 $743,265 Total All Classifications 2,872 100% $73,958,811 100% $25,752 $159,709,966 100% $55,609 $233,668,777 100% $81,361 $15,188,471 *Includes chain/independent convenience stores and stores whose business is primarily gas with convenience Chart G

Other Classifications 5% Draw Game Sales ARIZONA LOTTERY BUSINESS CODE REVIEW Fiscal Year 2018 July 2017 through September 2017 Other Classifications 5% Scratchers Sales Chain/Indpt Supermarkets 31% Chain/Indpt Supermarkets 25% Total Convenience Stores* 64% Total Convenience Stores* 70% Other Classifications 5% All Products Combined Chain/Indpt Supermarkets 27% Total Convenience Stores* 68% Chart H

ARIZONA LOTTERY COUNTY SALES REVIEW Fiscal Year 2018 July 2017 through September 2017 Total Draw Games Scratchers All Products Combined Estimated # of % of Market Per Store Market Per Store Market Per Store Per Capita County Code Accts Accts Sales Share Average Sales Share Average Sales Share Average Wkly Sales Apache 1 12 0.4% $143,344 0.2% $11,945 $311,183 0.2% $25,932 $454,527 0.2% $37,877 $0.48 Cochise 2 74 2.6% $1,360,457 1.8% $18,385 $4,214,250 2.6% $56,949 $5,574,707 2.4% $75,334 $3.34 Coconino 3 96 3.3% $1,597,082 2.2% $16,636 $3,437,314 2.2% $35,805 $5,034,396 2.2% $52,442 $2.72 Gila 4 40 1.4% $628,617 0.8% $15,715 $1,670,817 1.0% $41,770 $2,299,434 1.0% $57,486 $3.26 Graham 5 19 0.7% $227,871 0.3% $11,993 $1,059,311 0.7% $55,753 $1,287,182 0.6% $67,746 $2.59 Greenlee 6 7 0.2% $96,045 0.1% $13,721 $455,494 0.3% $65,071 $551,539 0.2% $78,791 $4.07 La Paz 15 33 1.1% $343,107 0.5% $10,397 $787,580 0.5% $23,866 $1,130,687 0.5% $34,263 $4.09 Maricopa 7 1619 56.4% $45,890,738 62.0% $28,345 $102,782,037 64.4% $63,484.89 $148,672,775 63.6% $91,830 $2.76 Mohave 8 143 5.0% $5,984,593 8.1% $41,850 $6,311,526 4.0% $44,137 $12,296,119 5.3% $85,987 $4.60 Navajo 9 52 1.8% $901,290 1.2% $17,333 $2,243,215 1.4% $43,139 $3,144,505 1.3% $60,471 $2.19 Pima 10 403 14.0% $9,084,833 12.3% $22,543 $19,349,348 12.1% $48,013 $28,434,181 12.2% $70,556 $2.16 Pinal 11 135 4.7% $3,241,198 4.4% $24,009 $7,941,469 5.0% $58,826 $11,182,667 4.8% $82,835 $2.08 Santa Cruz 12 20 0.7% $539,550 0.7% $26,978 $859,277 0.5% $42,964 $1,398,827 0.6% $69,941 $2.13 Yavapai 13 115 4.0% $2,662,876 3.6% $23,155 $5,260,360 3.3% $45,742 $7,923,236 3.4% $68,898 $2.77 Yuma 14 104 3.6% $1,257,210 1.7% $12,089 $3,026,785 1.9% $29,104 $4,283,995 1.8% $41,192 $1.51 Total 2872 100% $73,958,811 100% $25,752 $159,709,966 100% $55,609 $233,668,777 100% $81,361 $2.63 Summary Recap Maricopa and Pima Counties 2022 70.4% $54,975,571 74.3% $27,189 $122,131,385 76.5% $60,401 $177,106,956 75.8% $87,590 $0.66 All Other Counties 850 29.6% $18,983,240 25.7% $22,333 $37,578,581 23.5% $44,210 $56,561,821 24.2% $66,543 $0.65

RIZONA LOTTERY NTY SALES REVIEW Fiscal Year 2018 July 2017 through September 2017 Chart I Draw Game Sales Scratchers Sales All Other 26% All Other 24% Pima 12% Maricopa 62% Pima 12% Maricopa 64% All Products Combined All Other 24% Pima 12% Maricopa 64% Chart J

New Business Item #1 Vote for Commission Chair and Vice-Chair Report to Arizona Lottery Commission October 20, 2017 Pursuant to Arizona Revised Statute 5-552(A) the commission members are required to elect a new Commission Chair. In addition, the commission members may elect a Vice-Chair. The Chair and/or Vice-Chair may serve more than one term. The term of office will be Fiscal Year 18 (July 1, 2017 through June 30, 2018). The Commission is requested to take this action at the meeting. 11

New Business Item #2 Instant Scratch Game Profiles Report to Arizona Lottery Commission October 20, 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: Decade of Dollars ($1) #1142, Decade of Dollars ($2) #1143, Decade of Dollars ($5) #1145, Decade of Dollars ($10) #1146, 50X Cash #1147, and Extreme Crazy 8s #1155. Decade of Dollars #1142. This $1 game has a top prize of $500 a month for 10 years and will be printed at a quantity of approximately 7.4 million tickets. Decade of Dollars #1143. This $2 game has a top prize of $1,000 a month for 10 years and will be printed at a quantity of approximately 6.1 million tickets. Decade of Dollars #1145. This $5 game has a top prize of $2,500 a month for 10 years and will be printed at a quantity of approximately 4.6 million tickets. Decade of Dollars #1146. This $10 game has a top prize of $5,000 a month for 10 years and will be printed at a quantity of approximately 2.9 million tickets. 50X Cash #1147. This $20 game has a top prize of $500,000 and will be printed at a quantity of approximately 1.2 million tickets. Extreme Crazy 8s #1155. This $5 game has a top prize of $80,000 and will be printed at a quantity of approximately 1.4 million tickets. Attachments (Commissioners only) 12

New Business Item #3 Cash Adventure Second Chance Drawing Promotion Profile #83 Report to Arizona Lottery Commission October 20, 2017 This report has been provided to the Lottery Commission regarding the Cash Adventure Second Chance Promotion Profile. The Arizona Lottery will introduce game #1136 Cash Adventure in conjunction with the Arizona Game and Fish Department. This game will have second chance drawings in which players will have the chance to win a fishing boat, camping gear, fishing poles, fishing licenses, and range passes. The Commission is requested to approve the attached profile. 13

New Business Item #4 Fast Play Game Profiles Report to Arizona Lottery Commission October 20, 2017 This report has been provided to the Lottery Commission regarding Fast Play game profiles planned for Arizona Lottery Fast Play games. The Commission is requested to approve the four attached game profiles. After Commission approval, staff will commence with plans for game development, launch and subsequent sales of the games listed below. On February 11, 2018, the Arizona Lottery will introduce four Fast Play games. Fast Play is a new style of instant game that gives players a chance to win a cash prize instantly, independent of any drawing. These instant-style games can be played through Arizona Lottery terminals or vending machines. NEW GAME PROFILES Attached for the Lottery Commission's action are the following Fast Play game profiles: Piggy Bank Bucks #100, Jackpot Party Progressive #101, Crazy 8s #102, and Cherry Twist Progressive #103. Piggy Bank Bucks #100. This $1 Fast Play game has a top prize of $1,000. A total of seven numbers are generated and used to identify whether a particular ticket is a winner of one or more instant prizes. A player may win up to five times on a single ticket. Jackpot Party Progressive #101. This $2 Fast Play game includes a jackpot starting at $2,000. A total of 25 play symbols are generated and used to identify whether a particular ticket is a winner of one or more instant prizes. A player may win up to five times on a single ticket. A progressive jackpot is a jackpot that increases each time a ticket is sold but the jackpot is not won. When the progressive jackpot is won, the jackpot for the next ticket is reset to $2,000 and resumes increasing under the same rule. Crazy 8s #102. This $5 Fast Play game has a top prize of $50,000. A total of 19 numbers are generated and used to identify whether a particular ticket is a winner of one or more instant prizes. A player may win up to 16 times on a single ticket. Cherry Twist Progressive #103. This $5 Fast Play game includes a jackpot starting at $5,000. A total of 30 play symbols are generated and used to identify whether a particular ticket is a winner of one or more instant prizes. A player may win up to eight times on a single ticket. A progressive jackpot is a jackpot that increases each time a ticket is sold but the jackpot is not won. When the progressive jackpot is won, the jackpot for the next ticket is reset to $5,000 and resumes increasing under the same rule. Attachments (Commissioners only) 14