To date, only a handful of states in the US have legalized online gambling in some form or fashion. Some states offer online casino and poker while other have the lottery. In general, when states begin to look into the realm of online gambling, there are opponents to such efforts. For the most part, it is the land-based casinos that worry, having a fear that online gambling will tab into their revenues. In Michigan, it seems the state Lottery is in fear that online gambling will cut into what they are able to provide the state due to an online element.
The Michigan Lottery is fearful that their online ticket sales will plummet if players have access to similar style games or other casino options online. But is that fear warranted? It is really tough to say because there is not a state in the US that currently has an online lottery and online casino gaming. Pennsylvania has legalized both options but the online casino industry has yet to launch. If they had gotten started, Michigan might have a guide to look to in order to see just how the lottery online sales would be affected by online casing games.
There is no market to look to for projections so the budget office in Michigan had to speculate as to what would occur. The conclusion was that for every $6 spent in online casino gaming, $1 would be poached from online lottery sales.
The online lottery offers instant win games that are very similar to online slot games. It would really be difficult for an inexperienced gamer to tell the difference between the two types. So, this has raised concerns of lottery officials that the casinos will cannibalize their consumers.
The issue of cannibalization is nothing new. When New Jersey decided to legalize online gaming, there was worry that the iGaming would infringe upon the land-based venues. However, that is not what occurred. In fact, the online gaming option actually helped to bring in more revenues and boosted the land-based earnings.
Due to the issue, the Lottery is worried that if they lose sales, then the state will lose out on gaming revenues. Legislation detailing the online casino industry for the state has a lower tax rate than the lottery. Because of this, less money will be derived from online gaming. So if the state loses lottery totals and brings in a lower percentage of revenues from casino gaming, the actual loss of revenues could be pretty major.
For now, the way that online casino gaming will affect the lottery in the state is anyone’s guess. If the legislation that is currently being reviewed is passed into law, we shall see just how the two interact with each other.
Lottery players may continue to play their games online while the online casino industry will attract a different customer, perhaps the land-based gamers or those who enjoy the opportunity to win cash via mobile. Only time will tell just how the state will be affected by the addition if online gaming is approved.