Launched Only Months Ago, Michigan’s Online Lottery Is Now Selling Over 300,000 Instant Tickets Per Day

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The Michigan Lottery launched its online operations on August 11, 2014. It was not advertised at first, and only visible to players on a tab in the menu of the Michigan Lottery website.

“We wanted to let players discover it and assess how it operated and make sure the systems functioned as they were designed to do and provide players with an excellent experience,” Jeff Holyfield, Director of Public Relations for the Michigan Lottery, told OPR.

The early results were promising.

By Labor Day, the Michigan iLottery began advertising and rolled out a player rewards program. The full internet operations were live by mid-November.

To say the games have proven popular would be an understatement. Michigan iLottery players have created more than 133,000 online accounts, according to Holyfield, with over 300,000 instant tickets sold daily for the state’s online games.

His numbers echo those provided by Michigan Lottery Director Scott Bowen at GiGse in April, who reportedly estimated $500,000 in daily online sales.

Online lottery sales have created 30 jobs, according to Holyfield. About half of those jobs are dedicated to the 24-hour support center.

Michigan iLottery not cannibalizing traditional sales

The Michigan Lottery projects that it will generate $480 million during the first eight years of online games.

The internet games have not cannibalized sales from retailers.

“There is no indication that the online games are affecting sales at our 11,000 retailers,” said Holyfield. “In fact, we continue to see sales growing in all channels.”

One reason for this increase in sales is the acquisition of players that may have previously deposited at offshore sites. The Michigan Lottery discovered that offering games over the Internet may draw players away from unregulated online casinos. This revenue directly benefits the state’s residents.

“Online gambling was already available in Michigan and the state received no benefit,” Holyfield told OPR. “We wanted to capture some of the dollars that were going to other countries to support public education in Michigan.”

Land-based sales remain strong

Sales of instant games at traditional lottery retailers, commonly referred to as scratch off tickets, increased about 10 percent in 2014 over the previous fiscal year. Instant games sold through these businesses account for 36.3 percent of total sales for this fiscal year.

Club Keno is spread at participating retailers. This game deals a new keno drawing every 3.5 minutes. Club Keno accounts for 21.1 percent of sales this fiscal year.

The Michigan iLottery accounts for less than 10 percent of total sales for the entire state lottery. The product is still its infancy, while at the same time shows every sign of being a successful, complimentary product to traditional lottery sales.

Problem gambling important issue for Michigan Lottery

“Since the Michigan Lottery launched in 1972, we have been dedicated to responsible gambling,” said Holyfield. “This is why we included a strong responsible gambling component in our Internet games.”

The lottery is a member of the Michigan Association on Problem Gambling and offers a variety of tools for online players:

  • The default loss limit per week is $500. Players can lower that to any amount instantly. It can only be increased after a 48-hour waiting period.
  • Players can opt out of the Michigan iLottery. This can be done temporarily as a cooling off period or permanently. Exclusion from online games does not carryover to sales at lottery retailers.
  • The software has backend features that help the Michigan Lottery identify players that may have a gambling problem. These players are encouraged to exercise the problem gambling features available within the platform.
  • Customer support is available around the clock.

Inside Michigan’s online lottery product

Unlike Internet lottery operations in other states, Michigan does not sell tickets to multi-state lotto drawings online. Internet ticket sales for lotto drawings will launch during the fourth quarter of 2015, according to Holyfield.

Available games

The Michigan iLottery spreads 18 games:

  • There are 17 instant games. These are best described as online scratch off tickets.
  • The other game is keno. This game operates identical to a video lottery terminal. Players may choose anywhere between one and ten numbers from the 80 available on the card. The online keno game then picks 20 number balls. Each game lasts a few seconds.

The variance is lower in Michigan iLottery keno compared to live versions of the game. For example, a player’s bet is returned on three numbers out of ten. Players must hit four or five numbers out of ten in a standard video or live keno game to win any money. This has helped make keno the number one game offered by the Michigan Internet Lottery.

Who can play

The Michigan iLottery requires its online customers to be residents of the state. Players are located within the Michigan state line through geolocation technology that is standard in the online gaming industry. A player that cannot be identified within the state is rejected for real money play.

Players must submit personal information to create an account. The Michigan Lottery only requires the last four digits of a player’s Social Security Number for account verification. This is typically enough information to identify an individual and an important policy for acquiring players.

Regulated gaming sites in New Jersey that require the full Social Security Number have identified that as a friction point where players are lost during the account creation process.

Play money games are spread on the platform. Play money games mimic the real money counterparts.

Michigan iLottery deposit options

There are a variety of deposit options available to Michigan iLottery players. The Online Game Card is available for purchase at the state’s 11,000 lottery retailers. Other deposit options include Visa, Mastercard, Discover, Neteller, and electronic check.

Convenient deposit options aren’t the only financial benefit Michigan iLottery players enjoy over offshore sites. Players that do win (including one that managed a $1 million win through the Michigan iLottery) have the peace of mind of knowing that their cash is safe with the state lottery, as opposed to an unregulated site located in another country.

- John is a writer for multiple online poker publications and is the author of the popular Online Poker Payment Processing Report. Read more from John by following @John_Mehaffey on Twitter.
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