Michigan online lottery has been a success, a model PA will try to replicate

Pennsylvania Aims For Springtime Launch Of Its Online Lottery

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Authorizing online lottery was one piece of the Pennsylvania legislature’s major gaming legislation last year.

The lottery expansion component was largely overshadowed by the bill’s big-ticket items, like online casinos and satellite casinos. But it appears the online lottery will beat both to the punch.

The Pennsylvania Lottery expects to have its online lottery offerings up and running by the spring, according to an unnamed lottery spokesperson who spoke with the Tribune-Review.

That’s welcome news for the state’s lottery.

After years of sustained growth, lottery revenue slipped by three percent in 2017. The decline, attributed to aging lottery customers, isn’t a Pennsylvania problem. It’s felt by states across the country.

Not surprisingly, Pennsylvania looks to “modernize” lottery offerings. How? By selling lottery tickets and products online.

How has online lottery performed in other states?

Full-service online lotteries currently exist in four other states (New Hampshire is expected to launch an online lottery in early 2018):

Results have been mixed.

The Michigan online lottery, which serves a state with around 10 million residents, generated $20 million in online sales in Q2 2017, according to the Eilers & Krejcik Gaming Lottery Tracker. “Sales” is a misnomer here, as state’s report net win (not ticket sales) as sales for online lottery products.

Illinois’ 13 million residents generated just $6.2 million during the same period. This, also according to E&K tracker.

Several factors contribute to these divergent numbers:

  • Instant games are almost equivalent to a legal online casino in MI, while the Illinois lottery lacks such options;
  • The state heavily markets its online lottery;
  • It offers incentives to open an online account; and
  • It provides a good return to players (RTP).

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What to expect from Pennsylvania’s online lottery

It’s unclear what type of RTP Pennsylvania will offer. But based on the games available, expect the Keystone State to perform more like Michigan than Illinois.

According to the Tribune-Review, Pennsylvania’s online lottery will offer even more games than Michigan’s:

  • Draw games
  • Instant win games
  • Keno
  • Virtual sports

The Pennsylvania online lottery will also be available in more places than Michigan’s. This includes mobile devices, as well as on video monitors at brick-and-mortar lottery retailers.

“The lottery is going to put three monitors on the wall here, and people will be able to play keno and sports betting; I’ll have a mini casino,” an excited Greensburg News owner Al Lydic told the Tribune-Review.

The state is banking on significant revenue from its online lottery. Like its gaming expansion package, the Pennsylvania Lottery is going all-in on online sales, both in terms of products and availability.

By adding online games, the state gives current players more options and likely refreshes its player base by attracting new, younger players.

Eilers & Krejcik Gaming believes Pennsylvania “has the potential to have the largest iLottery sales within a few years.”

- Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus for OPR is the developing legal and legislative picture for regulated US online poker and gambling.
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