Press Release

Pollard Banknote And NeoGames Selected To Provide Michigan Lottery’s iLottery Services

WINNIPEG, Manitoba, December 10, 2013 /CNW/ – Pollard Banknote Limited (TSX: PBL) (Pollard Banknote) is pleased to announce that the company—working together with NeoGames Network Limited (“NeoGames”), a leading global internet lottery provider with strong expertise in mobile offerings—has been selected to develop, implement, operate, and maintain a system to provide iLottery services to Michigan Lottery players. This selection was determined through a competitive procurement process and will be followed by contract negotiations. The contract is expected to include an implementation period plus four years of operations. A maximum of four additional one-year renewal options are also expected to be available. Pollard Banknote offered the Lottery both the lowest bid price and the highest overall rated submission after consideration of all factors. The initial four-year term of the anticipated contract has an estimated value of $23.2 million.

The Michigan Lottery’s iLottery services will allow Michigan residents to play their favorite existing lottery games through new distribution channels—over the Internet and on mobile devices. The introduction of iLottery services in Michigan will also allow for the cross-promotion of traditional paper products with digital channels and is expected to enhance and strengthen the Michigan Lottery’s existing retailer network. iLottery services are scheduled to launch in the fourth quarter of 2014 and are estimated to increase the revenues that the Michigan Lottery provides to the state’s schools by approximately $480 million over the next eight years. 

“The Michigan Lottery is excited to work with Pollard Banknote and NeoGames to bring iLottery services to the residents of Michigan,” expressed Tom Weber, Chief Deputy Commissioner, Michigan Lottery. He continued, “Pollard Banknote is a known, trusted, long-term instant game supplier that understands the gaming interests of Michigan’s population and knows how to appeal to those interests. It has also played a major role in introducing instant game apps to the Michigan market and has helped the Lottery leverage mobile technology and social media through its innovative products. Plus, NeoGames brings eight years of successful iLottery services experience to the table. We are confident that this is the right team to assist us in increasing revenues for Michigan schools through the use of modern digital channels while also enhancing our retail partnerships.”

“Being selected for this program is great news,” stated Doug Pollard, Co-Chief Executive Officer, Pollard Banknote. “We look forward to partnering with NeoGames to make iLottery services a resounding success for the Michigan Lottery and its players and to demonstrate the enormous possibilities for mobile and internet lottery gaming to all of North America.”

“We are excited to have this opportunity to enter the North American market with the Michigan Lottery,” commented Ilan Rosen, NeoGames’ Chief Executive Officer. “Our global iLottery services experience, along with Pollard Banknote’s expertise in instant ticket marketing and their strong partnership with the Michigan Lottery, means our combined team is well positioned to help create a successful iLottery services platform and ongoing games portfolio. This includes the mobile space, which is vital in order to continue to build the Michigan Lottery’s brand and revenues over time.”

Pollard Banknote and its predecessor companies have provided instant ticket services to the Michigan Lottery as its exclusive supplier since 1986. Pollard Banknote currently employs approximately 200 residents at its state-of-the-art ticket printing operation in Michigan, the center of its U.S. operations. The company expects to increase the number of Michigan-based employees and its in-state footprint with the establishment of a customer care center and other operational divisions to support iLottery services. 

The Michigan Lottery reported annual sales of $2.4 billion in fiscal 2012, and generated over $770 million in net revenue for the state’s School Aid Fund, which supports public education programs throughout the state. Since 1972, the Lottery’s total contributions to schooling have grown to exceed $17 billion.

About Pollard Banknote

Pollard Banknote is a leading lottery partner to more than 60 lotteries worldwide, providing high quality instant ticket products, licensed games, Schafer Systems and Fastrak retail merchandising solutions, and a full suite of digital offerings, ranging from world-class mkodo game apps to comprehensive player engagement and iLottery solutions, including strategic marketing and management services. The company is a proven innovator and has decades of experience helping lotteries to maximize player engagement, sales, and proceeds for good causes. Pollard Banknote also provides pull-tab tickets, bingo paper, and its Diamond Game and Oasis-branded electronic ticket machines to charitable and other gaming markets in North America. Established in 1907, Pollard Banknote is owned approximately 67.5% by the Pollard family and 32.5% by public shareholders, and is publicly traded on the TSX (PBL). For more information, please visit our website at www.pollardbanknote.com.

Forward-looking Statements

Certain statements in this press release may constitute “forward-looking” statements and information, which involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. When used in this document, such statements include such words as “may,” “will,” “expect,” “believe,” “plan,” and other similar terminology. These statements reflect management’s current expectations regarding future events and operating performance and speak only as of the date of this document. There should not be an expectation that such information will in all circumstances be updated, supplemented, or revised whether as a result of new information, changing circumstances, future events, or otherwise. -30-

For More Information

Doug Pollard
Co-Chief Executive Officer
dpollard@pbl.ca

John Pollard
Co-Chief Executive Officer
jpollard@pbl.ca

Rob Rose
Chief Financial Officer
rrose@pbl.ca