States Prepare To Roll Out Internet Lotteries
This week, Michigan officials announced that the state intends to launch an online lottery system called iLottery where bettors can purchase lotto tickets on the Internet. On Wednesday, Governor Rick Snyder sought more than $3 million from the Michigan State Legislature to fund the gaming initiative.
Last year, cash-strapped Illinois – which faces over $2 billion in unpaid bills to vendors in 2014 – became the first state in the United States to launch an online lottery system. However, passage of such legislation is expected to be much harder in Michigan.
Gov. Snyder and his staff are facing significant opposition in both the state House and Senate. Many members view Internet-based lottery as a precursor to more widespread licenses for online gambling and casinos.
Secondly, retailers in Michigan are lobbying against any bill that would legalize Internet-based lotteries due to fears that it will drive many stores out of business. Players who purchase lottery tickets at convenience stores often buy multiple items such as groceries and snacks.
Lottery purchases at bricks-and-mortal stores are also accompanied by impulse shopping. Thus, enabling gamblers to buy tickets online is being viewed by the retail industry as a move that will lead to lower overall sales.
In 2012, about 11,000 stores in Michigan were selling lottery tickets which generated $172 million from gambling-related revenue. That amount is derived from 6 percent commissions on total lotto sales in the state of $2.4 billion.
California, Delaware, and Mississippi are considering similar proposals to make lottery tickets available online. On the west coast, Engage:BDR recently launched an online lotto portal in California. Ted Dhanik, CEO of the marketing firm, said in an interview earlier this week that LottoGopher lets consumers “buy lotto tickets legally in California”.Continued on the next page