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Michigan Online Lottery Doing Well; Will iGaming Affect Earnings?

Online gambling is coming to the state of Michigan after a full-scale bill was signed into law in 2019. While the industry is legalized, it will still be some time before the online casino, poker and sports betting options will be live. For now, the state is enjoying a solid online lottery industry, with digital games and tickets selling at a rapid rate. Due to the lottery’s success, many are wondering if online gambling will harm the revenues once it is operational.

Lottery Figures

The online lottery products in Michigan earned $18.5 million in its first full year of operation and then swelled to $48 million the next. The growth trend for the industry is in the double digits percentage wise as players continue to buy tickets and play games in record numbers.

For 2019, the total ticket sales came in at $3.9 billion. This was a nice increase from the $3.6 billion from the previous year. From that amount, the lottery paid $2.36 billion in prize money. Once the figures for commissions among retailers as well as other expenses are added up, the profit for the agency came in at just over $1 billion.

This was the first time the industry brought in over $1 billion and most of the money went to the School Aid Fund. A small portion of the funds was dedicated to the general fund of Michigan as well as Health & Human Services.

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Online Gaming Coming

Along with online lottery gaming, the state will soon welcome online casino games, sports betting and poker options. The new online gaming sites in the state most likely will not launch until 2021. However, with the lottery doing well, there is already concern that the online gambling games will affect the number of players enjoying online lottery games as there will be something new to experience.

In general, when online gambling is being considered in a state, the concern is the online games will cannibalize the land-based venues. However, in this case, the argument is that the online lottery will be affected. There is no real comparison as to how a lottery will be affected by such games as most states do not offer online lottery gaming.

In the US, only Kentucky, Pennsylvania, Illinois, New Hampshire and Georgia offer such options via the lottery. Of those states, only Pennsylvania offers online casino, poker and sports betting, but that industry only started in the summer of last year, so it is still relatively new.

There is no data to show how the state’s lottery was affected. The fiscal year for the state begins on July 1st, so we will still have to wait some time before such details will be provided.

On a positive side, when looking at Michigan, one could suggest that the appeal of online lottery games shows that players want access to iGaming in general. We may see the lottery as well as online gambling industry thrive as players have more choices instead of any type of issues between the two, once the iGaming industry is up and running.

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