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Blackhawk Network’s Lottery Category

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QuickTicket Introduction© Blackhawk Network Inc. Confidential and not for replication or distribution. 1
May 25, 2019
Blackhawk Network’s Lottery Category La Fleurs DC Conference
© Blackhawk Network Inc. Confidential and not for replication or distribution. 2
Blackhawk Operates a Massive Distribution Network…
20% of gift cards sold in the US come from Blackhawk Network
• Direct POS integrations with 60,000 locations in the US
• Partnered with 90% of grocery in the US
• 100M+ consumers visitors daily1
• $22B annual Total Dollar Volume2
1. Number of visitors across all of Blackhawk distribution channels; 2. Sales measured by prepaid card load value
© Blackhawk Network Inc. Confidential and not for replication or distribution. 3
Dedicated Lottery Team
• Dedicated team of over 20 professionals focused on delivering leading in-lane lottery products
• Recently joined by Tony Molica, someone who is a familiar face to many of you in this room, given his 34 year long lottery career, including serving as former director of CA and WA state lotteries
Demonstrated Experience
• Proven, relevant experience with the successful launch of Quick Ticket in Canada over a year ago
• Developed key learnings about promotions, consumer behavior and in-lane security considerations
Intellectual Property
• Pending Patents on a number of other features and enhancements
…and is Uniquely Positioned to Support Lottery in Lane
© Blackhawk Network Inc. Confidential and not for replication or distribution. 4
Massive Incremental Lottery Opportunity in Our Network
By Optimizing First For The Consumer…
Reach Casual Players • ~4% of lottery sales versus 25%–30% of the adult population
• Won’t make a dedicated trip or visit a kiosk/service desk
• Most likely to buy if already paying for other goods
• Open to buying when prompted
+
merchandising in-lane and other high traffic areas
• Allow for 1 step check out
• Create convenient lottery destinations
Eliminate Friction at Multi-Lane Retailers • Players don’t purchase because:
– Requires two checkouts
– Low awareness compare to C-stores
© Blackhawk Network Inc. Confidential and not for replication or distribution. 5
Massive Incremental Lottery Opportunity in Our Network
…And Optimizing For Retailers
Retailer Challenges • Today’s method for how
merchants sell and merchandise lottery does not allow for transformative growth
• Service desk and kiosk are a chokepoint and space is shrinking
• Labor and accounting procedures are a barrier
• Limited awareness in-store
where they are”
• Capture shopper data
Enhanced Retailer Support • Provide check lane presence: ‘Ocean
Front Property’
• Leverage data to drive greater consumer engagement
• Drive cross-marketing promotions outside of jackpot (holidays, gifting, etc.)
• Provide supplemental locations creating a destination to increase incremental sales (floor displays, shippers, towers)
+
© Blackhawk Network Inc. Confidential and not for replication or distribution. 6
“Ocean Front Property”—Creating a Lottery Destination
Free-standing Lottery Fixture
Checkout Counter Check Lane Approach App Offer
© Blackhawk Network Inc. Confidential and not for replication or distribution. 7
Frequency, Frequency, Frequency
70% CHANNELS USED ‘ALMOST EVERY TIME’ WHEN
SHOPPING FOR FOOD AND BEVERAGE Trips to a Grocery Store Per Week
Single Household
Source: FMI U.S. Grocery Shopper Trends, 2018
The dominance of Grocery in the US
© Blackhawk Network Inc. Confidential and not for replication or distribution. 8
Building on the Success in Ontario: QuickTicket 2.0
1. Source: Explorer Exit Interviews, Aug. 2017; 2. %s represents sales growth of 1H2018 vs 1H2017
Product Evolution Based on Success & Lessons Learned from QuickTicket in Ontario
• Majority of consumers preferred QuickPicks printed on ticket, instead of grocery receipt
• In US survey, 87% indicated a high interest in purchasing with over half saying they would purchase every week
28.3%
54.0%
19.3%
33.0%
Lotto 6/49 & Lotto MAX All Lottery
Success of QuickTicket in Ontario
VS.
26%
lift
in store
© Blackhawk Network Inc. Confidential and not for replication or distribution. 9
QuickTicket Consumer Flow
2
terminal.
5
1
Consumer checks if the ticket is a winner, at a
terminal, ticket checking app or any other method
4
3
© Blackhawk Network Inc. Confidential and not for replication or distribution. 10
Automatic Win Notification Feature
Scan the QR code to verify what draw you are entered in and enroll in automatic prize notifications
77% of survey respondents indicated that Automatic Prize Notification would make them even “more likely to purchase”
© Blackhawk Network Inc. Confidential and not for replication or distribution. 11
ScanActiv
BHN to activate the ScanActiv card
Consumer picks up a ScanActiv card at the
register or the Gift Card Mall
Consumer plays and unlocks instant
games—similar to a scratcher experience
—all from a mobile device
Consumers can use winnings to play
again or redeem in store for cash, PayPal
credit or an eGift
to reveal and scan the QR code
1 2 3 4 5
© Blackhawk Network Inc. Confidential and not for replication or distribution. 12
Additional Products
Print-On-Receipt (NASPL API)
• In addition to QuickTicket, Blackhawk will offer the Print-On-Receipt use case of for state lotteries and retailers who prefer that consumer experience
Non-Cash Redemption Opportunities
• Consumers prefer receiving higher tier winnings from participating retailers instead of having to travel to lottery office to collect winnings.
• Lottery officials wish to decrease labor demands by having retailers perform more higher-tier cashing
• Blackhawk can provide any retailer with the ability to pay out winners on a Visa Prepaid card, eliminating the retailers’ cash on hand challenges
© Blackhawk Network Inc. Confidential and not for replication or distribution. 13
Thank You
of 13/13
© Blackhawk Network Inc. Confidential and not for replication or distribution. 1 May 25, 2019 Blackhawk Network’s Lottery Category La Fleurs DC Conference
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