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There is no doubt that Michigan desires to have at least one form of online gambling. Nevertheless, it remains uncertain if the impressive sales of Michigan iLottery in the previous year will extend to any other form of online gambling.
Michigan’s online lottery generated over $100 million in sales during the previous fiscal year. However, it does not necessarily indicate that the demand for iGaming or online sports betting is equally high in the state.
Why we shouldn’t read too much into record Michigan iLottery sales
Future iGaming and sportsbook operators in the state should not automatically get excited about these sales for one major reason – there is typically not much crossover. Individuals who purchase physical lottery tickets from retailers usually do not visit brick-and-mortar casinos as well.
The converse is generally true as well. It is not logical to anticipate significant deviations in people’s behavior solely due to the online nature of the products.
Even with the emergence of legal online sports betting and iGaming, it is expected that the majority of individuals who spent more than $116.3 million on iLottery games in Michigan between Oct. 1, 2018, and Sept. 30, 2019, will continue to engage with these games.
However, there is a specific subsection within iGaming that could potentially experience market translation, and this relates to packaging that is similar.
Online slots and iLottery: Too similar to distinguish?
When iGaming becomes available in Michigan, it is likely that some loyal iLottery players will be tempted to explore online slots due to the striking similarities between the two games.
The success of iGaming operators in attracting new customers for their products heavily relies on their marketing efforts. The ability to capture consumer attention and educate them about the product is crucial in pulling in new customers.
Online slots have the potential to cannibalize iLottery in the Wolverine State, but there is no certainty in this regard.
The state lottery has been present in the market for a significantly longer duration compared to online casinos, offering it distinct advantages. The outcomes from the previous fiscal year provide concrete evidence of the lottery’s remarkable success within the state.
Online casinos are unlikely to try to replace the lottery. Instead, they will focus on targeting a specific demographic that is more inclined to play their games.
The brick-and-mortar casinos should be more concerned about customer loss rather than the lottery, but it would be an added benefit if they manage to attract any iLottery customers.
State officials can find solace in the fact that the lottery’s popularity has soared to unprecedented heights.
Further details of the lottery’s latest financial report
According to the report, Michigan has achieved a new record with the lottery’s contribution surpassing $1.07 billion to the state’s School Aid Fund during the previous fiscal year.
However, it wasn’t just one record that was broken. The total sales skyrocketed to a staggering $3.9 billion, while the prizes paid out hit an all-time high of $2.3 billion. Additionally, the cut for brick-and-mortar retailers also reached a new milestone, amounting to an impressive $287.6 million.
The lottery aims to surpass those records soon, as it strives to boost ticket sales by an additional 2.1% in the present fiscal year.
In the event of such occurrence, Michigan stands to generate more than $4 billion in lottery sales during this period. However, uncertainties persist regarding the extent to which other gambling avenues, particularly through online platforms, can contribute to this overall figure.
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