Chris Liu explains how this state agency worked with legislators and educators to create an environment where everyone wins.

X By 2005, the Washington State Lottery’s revolving door was spinning wildly—it had seven directors in seven years, each with a different vision for the state agency. When Chris Liu came on board two and a half years ago, he interviewed his seven predecessors to learn why the agency veered and find a way to get it back on track.

“I decided that the lottery needed to concentrate on three things: relationships, communication, and financials,” said Liu, who explained that the lottery lacked strong relationships with the state legislature and the state’s education community, the primary beneficiary of the lottery’s funds. “I saw a lot of discontent with what the lottery was saying and how it was saying it.”

Liu, a believer in the power of simple conversation, began discussions with legislators—but he didn’t do much talking. “In the beginning, you just have to listen. You have to go through the emotional stage first, where you learn what is bothering the other party and why. Once the air is clear, you can work together to find a solution.” During this process, Liu learned that dealing with the state’s legislature took special skills and knowledge that he did not possess, so he hired a legislative liaison to keep channels of communication open.

Chris Liu

“The DVD was inexpensive to put together, but the return on investment has been tremendous. We take it to all our public meetings and give it to anyone who wants a copy.”

Through research, Liu found that legislators weren’t always given the correct information about the lottery, so he asked them to call him directly with questions. “I made myself and my staff available to them,” said Liu. “Doing so has helped our relationships with legislators because it demonstrates that we have nothing to hide and are there to provide facts. My job is not to influence legislation as far as the vote is concerned, but to give the correct information and the context from which that information was gathered.”

Educating educators
Liu took the same approach with the state’s education community, principally made up of the League of Education Voters, school superintendents, and the Office of the Superintendent for Public Instruction. After a few intense conversations, Liu learned that the education community wasn’t displeased with how the lottery operated—it was displeased with its messaging.

Previous advertisements had been misunderstood—the education community thought the lottery was trying to take credit for all education funding. “Farthest thing from the truth. The state’s education budget for the year is $12 billion to $13 billion, and our contribution to the Education Construction Fund is $102 million
per year.”

The education community requested to produce a 30-second commercial to explain the lottery’s role in funding education in the state, but soon realized that the message could not be disseminated in 22 seconds, as every eight seconds of commercial produced by the lottery is disclaimer. Print media was a better fit, but limited space was still an issue.

“We went through several ideas, but eventually, we drew a red school house with a bell tower on a piece of paper. We circled the bell tower and wrote, ‘I thought lottery funds took care of education. This is what the lottery takes care of,’” said Liu. The image was printed on the back of coupons that reached 91% of homes in the state. If people wanted further information, they were directed to the lottery’s Web site, and those who requested it received a free DVD. The campaign ran for about a year and a half, and the lottery subsequently produced five supplementary mailings.

“Since then, whenever we launch a new campaign, we communicate with the education community, informing them of our plans ahead of time. And, they have helped us understand issues in education and how we can address them in our general advertising. Simple communication has greatly improved our relationships with all of our stakeholders,” Liu said.

Research based gaming
As a conservative state, Washington has specific restrictions on gaming (for instance, it doesn’t allow electronic gaming), and in the past, the lottery’s leadership had been stumped as to how to improve the agency’s financial standing given such tight parameters. “But the statutes really do offer some leeway—we just had to get creative,” said Liu.

Previously, the lottery presented off-the-shelf games to the public, and it was hit or miss, but this past year, Liu has introduced the concept of research-based games that cater to Washing-tonians’ preferences. He created an R&D department that designs games within the parameters set by the state that appeal to all player levels.

“Our R&D division surveys people to learn what they like and dislike about the lottery and get a glimpse into their lifestyles—all the traditional steps any other consumer-oriented company would take,” said Liu.

To design appropriate games, the agency asked consumers what they considered winning, and to 70% of respondents, that simply meant making back the money they spent on a lottery ticket. To the agency’s surprise, consumers wanted to see more winning, regardless of the amount.

Armed with this valuable information, the Washington State Lottery designed Hit 5, which is based on a 5x39 matrix. Compared to another lottery game, Qunito, which is based on a 5x52 matrix, the odds of winning Hit 5 are much higher. However, the jackpot for Hit 5 starts at $100,000, as opposed to Quinto’s jackpot, which starts at $300,000. Hit 5 has been on the market for about six months, and Liu estimates that 25 people have walked away with between $100,000 and $530,000, whereas five to six people a year win Quinto. “The amount of money is not life changing, but it certainly makes life a little easier,” said Liu.