With A Successful Online Lottery, Does Michigan Really Need Online Casinos?

Written By Martin Derbyshire on June 15, 2018 - Last Updated on March 25, 2022
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If it looks like Michigan lawmakers are dragging their feet on online gambling, it’s probably because they are.

Who could blame them? The legalization of privately-run internet gaming sites would end what amounts to a state online gambling monopoly. One that’s helped drum up record contributions for public education in the state.

In the final day of its legislative session this week, the Michigan House passed the Lawful Internet Gaming Act. But that doesn’t mean online poker sites, casinos and sports books are suddenly legal in the Great Lakes State. The act still requires approval from the state Senate. Plus, Gov. Rick Snyder‘s signature. Two things that won’t happen until at least the legislature’s Fall session.

The act would allow Detroit’s three commercial casinos to launch online gambling operations as early as next year. Just as long as each agrees to pay an $800,000 licensing fee and an eight-percent tax on all online gambling revenue.

23 tribal Michigan casinos could also get in on the game. As long as they are willing change existing compacts with the state, or create new ones.

Does Michigan already have online gambling?

The thing is: Michigan has already had state-run online gambling since 2014.

In August of that year, the Michigan Lottery soft launched online lottery sales. The state-run organization started advertising the online games in September. It officially launched the Michigan iLottery in November.

At first, it was just tickets for Instant Keno and electronic Scratch-Off game equivalents like Cashword and Pot O’ Gold.

By January 2015, lottery officials said approximately 87,000 players had registered for online lottery accounts. Plus, online sales generated $3.7 million for the state.

A month later, news organizations all over the state were spreading the story of one lucky online lottery player who won $1 million from a $20 online scratch-off ticket.

By May 2015, the number of players who had registered for online lottery accounts was up to 133,000. The Michigan iLottery was being hailed a huge success. In fact, the numbers showed over 300,000 instant-win tickets were being sold every day online.

By August 2015, the Michigan online lottery included Keno and 17 instant-win games. It now offers more than 30 instant-win games.

Instant-win games or online slots?

Anyone who thinks the games are anything but online gambling has another thing coming. Many of the games still share names with traditional instant win games like scratch-off and pull-tab tickets. The goal of matching symbols to win a prize is often the same as well. However, the electronic versions available online are really more akin to slot machines.

Players simply push a button to play, and can keep playing over and over again until they run out of money. Plus, the game’s animation and sounds are the same thing you find at video slots in a casino.

Draw game ticket sales for games like Powerball and Mega Millions were added in January 2016. The Michigan online lottery continued to be hailed a great success.

By the end of 2016, lottery consultant Digital Gaming Group released a report proving it. The report showed the Michigan online lottery passed $8 million in weekly sales in March 2016. At the same time, it showed lottery retailers posted record sales. Numbers that eased fears online lottery sales would hurt retailers.

The Pennsylvania Lottery dives in

Similar instant-win online lottery games launched in Pennsylvania in May of this year. The games were authorized as a part of a comprehensive gambling expansion bill approved by PA lawmakers in October 2017. A bill that also authorizes online gambling. Only Pennsylvania’s private online gambling operators are still bogged down by the state’s regulatory and licensing process.

The first privately run online gambling sites in PA won’t launch until at least the fourth quarter of 2018 or early 2019. A delay that gives what is essentially the state’s own online casino a huge head start over any privately run sites.

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The Michigan Lottery and public education

The Michigan Lottery contributes 28 cents of every dollar it takes in to the state’s School Aid Fund. In 2017, thanks to a continued boost from online sales, that amounted to a record $924 million. That’s close to $2.5 million a day.

In fact, for the past five years, four of which have seen numbers boosted by the online lottery, the state lottery’s total contribution to the School Aid Fund has reached $4.1 billion.

It’s a lot of money for a necessary cause. Money Michigan lawmakers are not willing to give up easily. Which could explain why they’re in no hurry to give competitors for the online gambling product that helped create the record contributions a green light.

Photo by Studio ART / Shutterstock.com

Martin Derbyshire Avatar
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Martin Derbyshire

Martin Derbyshire has more than ten years of experience reporting on the poker, online gambling, and land-based casino industries for a variety of publications including Bluff Magazine, PokerNews, and PokerListings. He has traveled extensively, attending tournaments and interviewing major players in the gambling world.

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