Modernizing Lottery Sales

K ansas Lottery Executive Director Terry Presta probably owned a miniature train set when he was little because he loves to use them for an analogy—that is, the history of how America built its coast-to-coast railway system in the 19th century.

Right now the North American lottery industry is laying the tracks to build the 21st century infrastructure to sell lottery tickets—just like the 1860s were famous for building the first Transcontinental Railway linking the eastern U.S. with the Pacific Coast.

The reason for his passion is, as the head of the NASPL Retailer Modernization committee and a former convenience store owner—he knows the importance of making it easier for retailers to sell lottery tickets.

“The API effort through NASPL has been ongoing. In 2018, there are a few beta tests planned to prove out the API,” he said.

Presta said the lottery is working with a regional grocery chain, operating in multiple states, willing to go down this track in Kansas. In June, Kansas Lottery and Abacus Solutions International Group (ABACUS) announced that the lottery had decided to implement lottery sales in-lane in supermarkets using the ABACUS Fusion platform.

Using NASPL’s API, the ABACUS Fusion platform will be integrated with the Kansas Lottery’s new, advanced central gaming system from Scientific Games, to enable in-lane sales of Kansas Lottery games in supermarkets throughout the state.

“We can’t predict when we deploy due to [the retailers’] electronic point of sale (EPOS). We get updates from Abacus. It is complex. If it was easy, it would have been done 20 years ago.”
By selling through retailers’ point of sale, it doesn’t matter which vendor—whether IGT, INTRALOT or Scientific Games—runs a lottery’s system. “It will be tied to the retailer,” said Presta. “It will work with all three vendors.”

Presta acknowledged that the pilot is the tough part. “What is beautiful is if it works in Kansas, they’ll go to the next states. After you expose your system to the API, you can get all the stores up and running. You can go into another state and turn it on.”

There are implications for national retailers. “It will give competitive advantages,” predicted Presta. “When folks are standing in line waiting, they buy candy and magazines. It is all an impulse deal. So now customers can say give me $10 in Powerball tickets.”

The opportunity is gigantic in Kansas where the lottery is not permitted to sell through self-service lottery devices.

“We don’t have ITVMs here,” said Presta. “A player has to go to the cage to buy a lottery ticket at the grocery store. If 17 or 18 stores sell, it will be like opening up 100 stores because we go from 5-7% to 100% of folks who come in contact with the product. So we get more distribution at no extra cost.”

Canadian Experience

Across the border in Canada, there are two different in-lane systems currently running. The B.C. Lottery Corp. (BCLC) launched its Lotto Express system in 2012 (see “BCLC: Lotto Express 2.0”, La Fleur’s Magazine, September/October 2016). Players use a Lotto Express bet slip to purchase their Lotto 649 or Lotto Max Quick Pick ticket at the cash register. BCLC uses an Epson printer to print the bet slip. BCLC is working closely with other Canadian lotteries and national retailers to expand Lotto Express sales to other jurisdictions. This supports the national retailer strategy by giving retailers an integration point for selling lottery tickets across jurisdictional boundaries.

For instance, Loblaw, a Canadian grocery chain, is now expanding its test of the Lotto Express system to Ontario. “We have a partnership with BCLC,” said Adam Caughill, Director, Lottery Business Development, OLG. “We will eventually be in over 400 Loblaw stores. We are in the midst of our rollout. We are currently in about 100 stores.”

In addition, OLG launched its own in-lane solution. Currently, there are 250 Metro & Food Basics stores selling OLG lottery tickets in-lane. On average, there are 10 lanes per store. “Last June we launched our Blackhawk QuickTicket solution with the second largest grocery retailer in Canada,” said Caughill. “Technology wise, it’s going fantastic. The major benefit of having all those POS integrations already in place through Blackhawk is a major benefit and major efficiency. We have rolled out to all the Metro banner as well as the discount banner Food Basics. And it’s remarkable how turnkey it has been.”

Other than its new jackpot signs, OLG can rely on the Blackhawk technology already in place which Caughill said “has been a real coup for us. There are no additional IT integrations required as we roll out to new retailers. As long as they’re Blackhawk retailers, they’re pretty much ready to sell QuickTickets.”

OLG uses Pollard Banknote’s preprinted tickets for the Quick Ticket transaction. They hang in-lane. “You simply grab one, hand it to the cashier and he/she swipes it and it is now a live ticket,” said Caughill. The cash register receipt shows the lottery transaction on the customer’s bill. Currently, players can only purchase a single-draw Lotto 649 with Encore (spiel add-on) for $4 or a Lotto Max ticket with Encore for $6.

Why two separate solutions? “Loblaw wanted one solution across the country,” said Caughill. “They already committed to the solution in BCLC. They decided to roll it out in Ontario.”
Caughill added that the other Canadian lotteries are actively watching the Quick Ticket solution rollout in Ontario. He also emphasized that it was not a pilot. “We are going full blast. We have more major retailers onboard and ready to go,” said Caughill.

According to research conducted by Explorer Research, 62% (Metro) and 50% (Food Basics) customers found it very easy to understand and 32% (Metro) and 43% (Food Basics) customers found it somewhat easy to understand. “QuickTickets perform strongly on key metrics—comprehension, reliability and purchase intent,” said Caughill.

In terms of the sales impact from the two in-lane solutions, Caughill said OLG is not sharing any sales information right now. “But we can say that—in addition to the significant incremental sales in-lane—we are seeing 10% to 15% increases at the lottery kiosks as well. We attribute it to having a jackpot sign in every lane. With both of the in-lane solutions, there is a Carmanah jackpot sign in every lane.”

The Lottery Card™

Linq3 and Blackhawk are working together to offer the Lottery Card™ in-lane solution for U.S. lotteries. The Ohio Lottery launched its pilot on July 15. Georgia Lottery Corp. also launched its pilot in July. It will run for at least one year.

In Ohio, 480 retailers are participating in the initial pilot. “These locations should have product and merchandising in place within the first 90 days. Outlets include Kroger, Target, Giant Eagle, and Buehler’s,” said Dennis Berg, Executive Director, Ohio Lottery. “Lottery gift card purchases, just like any other gift card, can be purchased through the stores’ normal point of sale counters with all of the customers’ other purchases.”

Merchandising the Lottery Card is critical to raise awareness with current, lapsed and non-lottery players. “During the first 30 days, marketing was limited while the Lottery Card was being placed on racks,” said Berg. “More marketing and merchandising is rolling out now. Under Linq3/Blackhawk/OLC guidance, each store has taken their own approach to highlight the product in their stores.”

Naturally, it is critical for Linq3 and Blackhawk to do the best merchandising at the checkout to attract current and new lottery players as it gives a new face to lottery at new retail points. “Any new product needs to include player education on where the product is available, how it’s played, etc.,” stressed Berg.

The Lottery Card solution is agnostic in terms of the working with the systems vendor. For example, IGT supplies the system to the Georgia Lottery Corp. while INTRALOT is the systems provider for the Ohio Lottery.

“Any vendor connection to the gaming systems requires programming and testing,” said Berg. “In addition, MUSL conducted an independent review for the Powerball transactions.”
There is no sales data available for the Lottery Card pilot. “We have no estimates,” said Berg. He also stressed that “as consumer spending habits become more diverse, our expectations for new product availability should be reasonable. We expect that the program will evolve over the next year as we identify the best outlets and the consumers’ preferred products.”
The Kentucky Lottery will launch the Lottery Card by October 15. “Right now we are working with their marketing people to set it up,” said Tom Delacenserie, President & CEO, Kentucky Lottery Corp. He was particularly pleased with the tactical multi-point merchandising strategy which includes an independent kiosk, POS at the checkout and clip strips at gift card center.

Mobile App

In 2018, the Virginia Lottery is implementing a three-phase mobile app program to expand how lottery tickets are sold. Phase 1 was implemented in July 2018. The lottery introduced Virginia’s first mobile app, a convenience app, to its players. There are no wagering features or sign-in. The app provides game information, check-a-ticket feature, winning numbers and digital play slip capability. IGT is the lottery’s vendor.

Phase 2 will launch in late October 2018. It will have a single sign-on so a player who already has a Virginia Lottery account for promotions or online subscriptions will have the same user ID and password. The app will then offer the ability to scan tickets to enter second chance and promotional programs.

The Phase 3 “tethered wagering” pilot will begin December 9. The statewide launch is scheduled for January 7. “Customers can purchase draw games and mobile-only games from their phone connected via Bluetooth technology at retail,” said Rob Wesley, Director, Digital, Virginia Lottery. This means that retailers can sell lottery games in their locations without a paper interaction at a lottery terminal.

These mobile-only games are new digital instant win games. “Since we don’t allow internet sales by law, the purchase actually takes place at retail, in existing retailers or in a ‘new’ retail type for us, e.g. bars and restaurants,” explained Wesley. “When the customer is within Bluetooth range at a lottery retailer, they can purchase right from their phone. They must be registered to do this. We will not allow anonymous play through the app.”

Tethered wagering will permit the lottery to sell all its draw games, except Print ‘N Play. The mobile-only games can only be purchased through the app. It is not an online bet because the purchase takes place at retail. “Think of it as making the smartphone a lottery vending machine/self-service terminal—just everything is digital,” said Wesley.
In terms of engagement, the app will offer push notifications, the ability to enter promos/second chance, bonus capabilities and more. Currently, the Virginia Lottery offers its eXTRA chances program andother second chance games through its MyGameRoom registered customer database.

Conclusion

While the lottery business doesn’t have names like Erie Railroad, New York Central and Central Pacific, there are a lot of companies chugging along to build the retail network to sell in-lane or through retailers’ POS. It is a thrilling time for North American lotteries to champion its own version of the transnational lottery railroad.

“This is the marketing mainstreaming and distribution points we’ve been missing for so long,” concluded Delacenserie. “If we can get this and the API to work in-lane and expand to trade styles we’re not it, the best days for lottery are clearly ahead.”

 

Linq3 & Blackhawk Debut Mobile-Enabled Lottery Card™ In Ohio

Linq3 announced its new mobile-enabled Lottery Card™ is now available in select Ohio grocery and retail stores statewide. It allows Ohio consumers to buy and play Powerball and Mega Millions in a new, convenient and fun way. Ohio is among the first state lotteries to debut this digital lottery option, which allows players to enter these draw games on their phones. The Lottery Card is available for purchase by adults 18+ at Buehler’s Fresh Foods, Giant Eagle and Kroger stores in Ohio. Linq3 stated the Lottery Card will become available in additional states later this year, subject to applicable state lottery approval.
Lottery Cards are available for Powerball and Mega Millions. They cost $10 for five plays and $20 for 10 plays. Consumers are charged the card’s cost plus $0.89 for Mobile Play Benefits. To play, consumers simply purchase the Lottery Card at a retailer. When ready to enter the next lottery drawing, the player texts in the Lottery Card’s unique code to a specified number, provides their name and confirms their location to complete a one-time card enrollment. The player then receives a picture message with the quick pick numbers, draw date and other transaction information. Winners are notified via text and picture message and most winnings are paid automatically via PayPal. After enrolling, players can reuse their Lottery Card.

The Lottery Card is the result of a collaboration between Linq3 and Blackhawk Network. Linq3 is an innovation and technology company that designs, builds and markets state-of-the-art solutions that make it easier and more fun to play the lottery. “Lottery players, like all consumers, want convenience and a great user experience. The Lottery Card provides both. It’s a product designed to fit with consumers’ increasingly busy and digital lifestyles,” said Tom Spiegel, Linq3 Chairman and Chief Executive Officer.
Blackhawk is a global financial technology company and leader in connecting brands and people through branded value solutions, including gift cards. “We are proud to pair Linq3’s innovative technology with our robust retail network to bring the Lottery Card to market in Ohio,” said David Tate, SVP, Sales & Marketing, Blackhawk. “The Lottery Card represents an innovation in both the gift card and lottery industries, and is a great gift option for those accustomed to living a more digitally-enabled lifestyle.”

2018-09-18T16:02:20-05:00