1. takeaways
TECHNOLOGY casestudy
Automated Lottery model for this reconciliation process,
albeit without the standard format.
Processes Pay Off “In order to operate in the 21st century,
retailers should look at ways to eliminate
costs. Take a simple business process
BY SUSAN J. HILASKI
within your organization like this recon-
ciliation and automate it,” he advises. “We
M
ost retailers recognize the strong specific auditor to lottery. This wasn’t have become more efficient and have more
impact of lottery on customer the case several years ago,” says Calfee accurate records because we took advan-
traffic, its opportunities to CIO Art Whetstone, who also serves tage of a free solution offered by PCATS.
cross-sell and improve ring. If you’re a as chair of the electronic business- There was no investment other than the
retailer selling lottery tickets, you should to-business (EB2B) Lottery Working time it took to create the programs.”
also recognize the advantage of reconcil- Group for PCATS.
ing lottery with automated processes. Whetsone adds, “By using the stan- The Benefits of Lottery Standards
dard, our lottery controls are greatly Industry leaders established the PCATS
Calfee Co. Hits the Jackpot improved. What’s more, we have EB2B Lottery Working Group for two
In 2003, Calfee Co. began using Georgia’s acclimated ourselves to using electronic reasons: to focus specifically on lottery
electronic version of the lottery invoice. documents in other business processes. solutions and to improve communication
The company operates 129 stores in Geor- As a result, our records are more timely between state lotteries and lottery retailers.
gia, Tennessee and Alabama under the and accurate, which gives us a measure The mission of the PCATS EB2B Lottery
trade name Favorite Markets. The invoice of control not possible with manual Working Group is “standards-based, real-
file was based on the standard processes.” time integration of lottery activity in the
developed by the Petroleum thegist Calfee Co. also receives retail channel.” This group works closely
Convenience Alliance for Tech- information electronically with the North American Association of
nology Standards (PCATS). k PCATS lottery control from the Tennessee lottery State and Provincial Lotteries (NASPL),
standards are paying
Prior to its automated recon- off for the Calfee Co. but in a nonstandard format, which represents 50 lottery organizations
ciliation process, Calfee received k Reconciliation time which renders the data more including those for Georgia and Tennessee.
a printed 350-page invoice from can shrink to about an difficult to analyze than it Last year, NASPL and PCATS com-
hour a week.
the Georgia lottery and used it is using the PCATS XML pleted a memorandum of understand-
to perform a manual reconcili- k Retailers injurisdiction standard. When Tennessee
one lottery
more than
ing that enables both parties to define
ation of the weekly electronic will get accounting launched the lottery in 2004, and achieve common goals. Through
funds transfer (EFT). This reports down to one a complete XML file was its NASPL Standards Initiative (NSI),
system.
reconciliation took several days not offered; thus, a text NASPL approved a standard for retail
to complete. Almost immedi- file was used for reconcili- accounting reports. The NSI Technical
ately, the time required for this task was ation. The XML version has recently Standards Working Group and Retail
reduced to about one hour per week. The become available and Whetstone is Council developed a common specifica-
file is quickly downloaded, extracted and converting to it. tion for lotteries, vendors and retail-lot-
reconciled using programs developed in “It is much more complete and gives tery agents. Both PCATS and NASPL
house. Calfee then compares the informa- us more control. It is also easier to work support the same standard for retail
tion received from the Georgia lottery to with since, after all, it is a standard,” accounting reports in the lottery industry,
the data reported by each of the 50 Calfee Whetstone explains. To compare the thereby reducing the cost of adapting to
stores in Georgia. Tennessee state lottery invoice and the unique jurisdictional reporting.
“We have 100-plus stores that sell data received by Calfee’s 54 Tennessee The NSI standard is based on the
lottery but no longer need to assign a stores, the company uses the Georgia PCATS-NAXML standard that was > 12
10 NACS MAGAZINE JUNE 2006 WWW.NACSONLINE.COM

2. takeaways
> 10 initially created by NACS to give
data to retailers in a format that can easily
casestudy
be incorporated into accounting systems.
NSI developed a best-practices guideline convenience store management to view
for lottery accounting and reconciliation an audit exception report and investigate
based on the PCATS lottery standard. the variances.
A single standard across the lottery Automation can assist in preventing
industry means that retailers operating theft because it may limit a manager from
in multiple lottery jurisdictions will be ordering tickets, activating them, destroy-
able to build applications that use just ing the invoice and stealing packs of
one format for lottery-retailer account- tickets. Often it takes several months for a
ing reports — regardless of the jurisdic- chain account to uncover theft by a man-
tion. This development will be especially ager. Moreover, many times that person is
beneficial for retailers operating in more no longer working there by the time the
than one state. theft is discovered. Time is critical in terms
of preventing and identifying lottery theft.
The timely arrest and prosecution of the
offender is greatly aided by the ability to
“PCATS lottery standards allow lottery retailers search the lottery back-office system for
the opportunity to experience cost and efficiency the date and time a pack is activated, deter-
mine where winning tickets were cashed
benefits no matter what their size.” and obtain store security videotapes.
— ART WHETSTONE, CALFEE COMPANY
Winning With PCATS
When it comes to addressing your lottery
challenges, consider the benefits of tech-
“PCATS lottery standards allow lottery nology standards — solutions that have
retailers the opportunity to experience been developed and tested by industry
cost and efficiency benefits no matter pioneers like Calfee Co. PCATS invites you
what their size,” Calfee’s Whetstone says. to become a leader in the area of lottery
“I cannot imagine my business without standards and learn from the experiences
PCATS lottery retail accounting reports. of your fellow convenience store opera-
Every lottery retailer should consider tors through the EB2B Lottery Working
using PCATS standards.” Group. This group now is addressing ways
to improve instant ticket management.
Lottery Security Is No Game PCATS is an open, nonprofit, standards
Having real-time information can help development organization comprised of
prevent internal theft by promoting an over 170 members who are both retailers
automated internal auditing process. The and suppliers to the convenience store and
timely transfer of lottery sales informa- petroleum marketing industry.
tion between lottery headquarters to retail
chain headquarters and independent Susan J. Hilaski is PCATS director of technology standards
retailers is critical for reducing account- implementation. For more information about PCATS certi-
ing and security issues — especially fication or to participate on PCATS standards committees,
when there is high turnover in conve- please e-mail info@pcats.org or visit www.pcats.org. You
nience store personnel. Integrating these may also contact EB2B Lottery Working Group Chair Art
standards with back-office systems allows Whetstone at (706) 226-4834, ext. 260.
12 NACS MAGAZINE JUNE 2006 WWW.NACSONLINE.COM