Michigan Lottery plans to offer online ticket sales in late 2014 November 26, 2013 | By Ann Zaniewski
Michigan residents will be able to buy tickets for some of their favorite lottery games on their smartphones and computers beginning late next year, state lottery officials said Monday, despite concerns raised by a trade group and some lawmakers.
The Michigan Lottery also announced that it has picked two vendors — Pollard Banknote Limited and NeoGames — to provide iLottery services in the state.
Offering games through digital devices will give a boost to the School Aid Fund and appeal to tech-savvy consumers, lottery officials said.
The decision came five months after lottery officials indefinitely halted their plans because lawmakers rejected Gov. Rick Snyder’s more than $3-million funding request to launch the online lottery. Legislators, however, did not prohibit the Lottery Bureau from spending existing money in its budget to offer Internet tickets and games on computers and mobile devices.
Increased sales from the iLottery system are expected to raise the lottery’s contributions to the School Aid Fund by $480 million over the next eight years. In the 2012 fiscal year, the Michigan Lottery contributed $778.4 million to the fund.
“In today’s society, more and more consumers want to do business online, and that includes Lottery players,” Tom Weber, the lottery’s chief deputy commissioner, said in a news release Monday.
Auday Arabo, president and CEO of Midwest Independent Retailers Association, a trade association that has 4,000 members in Michigan and Ohio, said Michigan Lottery Commissioner M. Scott Bowen has agreed not to include the Daily 3 and Daily 4 games in the iLottery services. Those games make up the bulk of lottery sales, Arabo said.
Still, Arabo said he’s concerned about iLottery’s impact on brick-and-mortar stores.
“One thing we’re worried about is the customer count in the stores. We’re worried that this may dilute the customer count,” he said. “We need the folks coming in purchasing their lottery tickets, and also purchasing a bottle of pop and some chips.”
Retailers receive a 6% commission on the lottery tickets they sell, Arabo said. They can also get bonuses for selling winning tickets.
State Sen. Rick Jones, R-Grand Ledge, said online lottery sales will make it easier for people to become addicted to gambling. He fears that personal debt will skyrocket.
“I think what we’re going to end up with, literally, is people losing their homes from their couch,” he told the Free Press.
In the spring, Jones introduced legislation that would prohibit online lottery sales. But there’s never been a committee hearing on it, he said.
Lottery officials say various safeguards will be put in place, such as the requirement that iLottery players will have to verify their age and identity. All play must occur within the state. Additionally, the Michigan Lottery will set daily spending limits, and players will be able to lower their own spending limits.
The iLottery is expected to start in the fourth quarter of 2014. The Michigan Lottery had wanted to launch iLottery early next year but suspended its plans after legislators blocked funding over worries about increased gambling addiction and a hit to retailers.
Michigan will become the third state with an iLottery since the U.S. Justice Department released an opinion nearly two years ago saying states can offer Internet gambling as long as it does not involve wagering on sports.
The Associated Press contributed to this report.
