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The Ohio Lottery is poised to become the next state to institute a mobile component.
Last week during a House Finance Subcommittee on Primary and Secondary Education hearing, lottery officials said they hope to launch their iLottery product next year.
Pat McDonald, Ohio Lottery Director, said, “By allowing additional methods of purchasing existing context, the lottery can keep up with the way people have become accustomed to buying everything from music and books to their groceries.”
Here is more from McDonald:
“It is imperative that the lottery continues to adapt and simplify the players experience to match current consumer purchasing trends. Likewise, the agency will continue to make it convenient for retailers and consumers to win cash prizes.”
From McDonald’s comments, it appears the key is appealing to a younger generation of players. Currently, the Ohio lottery only offers draw, instant ticket, monitor and terminal-based games. They also regulate terminal-based games at the seven racetracks in the state.
Lottery officials are optimistic online lottery games can generate an extra $45 million a year in state revenue and $100 million annually within five years.
Ohio is the latest state to consider some sort of online lottery product; more than half a dozen states have iLottery already. The Michigan online lottery and Pennsylvania online lottery are the biggest of those.
Should Ohio move forward without any setbacks, they would become the ninth state to offer mobile and online games.
Neighboring states, Kentucky, Michigan and Pennsylvania are already in the online lottery business.
However, there are several roadblocks to overcome including brick-and-mortar retailers who are worried the iLottery would cut into their profits. Instant games in particular bear a pretty close resemblance to online slots in MI, KY and PA.
During the half hour hearing, Alex Boehnke, a lobbyist for the Ohio Council of Retail Merchants, said, “There are certainly some concerns about moving toward a mobile application. However, we’ll have to dig down into the fine details of any proposal before we take a position.”
McDonald reassured lawmakers, saying, online lottery sales in other jurisdictions did not “cannibalize” retail shops.
“Our research shows that other states that have iLottery saw increased brick-and-mortar store sales,” McDonald said.
Religious groups have also expressed their displeasure. According to Cleveland.com, Aaron Baer, president of Citizens for Community Values, said the move could be bad policy for the state.
“It’s a regressive tax in its truest form. There are plenty of other ways for us to fund education without exploiting impoverished people,” he said.
Lottery revenue is used to fund public K-12 education.
Although iLottery is still several months away from implementation, officials said they plan to seek proposals from companies that will help develop, launch and maintain their online platform.
Additionally, lawmakers are currently working through measures to legalize and regulate sports betting in the state. Since the legislative session continues throughout the year, these policy issues will not be going away anytime soon.