Good performance from online gaming in Michigan

Michigan Lottery spokesman Jeff Holyfield told local media this week that the Lottery’s sally into the online gaming sector last year has so far proved to be a success, with 87,000 players opening online gaming accounts and encouraging sales of tickets via mobile and internet channels.

The system, launched with minimal fanfare in August last year and expanded in November, allows players to buy tickets for games like Instant Keno, Cashword and Pot O’ Gold using desktop and mobile devices.

Holyfield emphasised that the Lottery was still in the initial stages of the online project, which presently constitutes only 1 percent of the lottery’s business, but it was clear that the new channel appealed to a significant number of state residents.

He said that the roll-out had been deliberately carried out in a low-key manner to ensure that the system was working efficiently before wider promotion was undertaken; this will now be triggered with radio promotions in February, and the Lottery will eventually make draw games, such as Mega Millions or Powerball, available for play online.

The iLottery service has so far generated $3.7 million for the state after payouts, Holyfield revealed.

“The whole system has functioned as we expected,” the Lottery spokesman said. “We’ve got players out there who are liking it and playing. Last week we had our first big winner – $75,000 for a player in Oakland County. We’re starting to see those.”

The lottery contracted with Canadian-based Pollard Banknote Ltd. and NeoGames to build and manage the system at an estimated cost of $23.2 million over four years. The state agency expects online gaming to generate $480 million over eight years for the School Aid Fund.

The online project has not been without drama; at one stage the state legislature declined to fund the online gaming expansion in the budget and lawmakers in both the House and Senate introduced unsuccessful standalone bills seeking to stop implementation (see previous reports).

Holyfield observed that the lottery’s experience has been in line with recent research that has found there are no strong associations between online gambling and problem gambling, and he emphasised that the iLottery online technology allows for safeguards that aren’t available in other formats.

Addressing concerns by convenience store owners that online ticket sales might discourage punters from visiting their shops, Holyfield said that online gaming appeals to casual players who might not otherwise frequent stores.

In addition, some games have “second chance” options encouraging players to visit retailers, and players can get bonus cash by buying online game play cards in participating stores.

“We want the brick-and-mortar retailers to have every opportunity to benefit from these online games,” Holyfield said.