In the coming months, Pennsylvania and New Hampshire will soon join Michigan, Illinois, Kentucky, and Georgia as online lottery states.
If they want to maximize revenue, the two newcomers should take their cues from Michigan. The Wolverine State drastically outperforms the three other states currently selling lottery products online.
According to Eilers & Krejcik Gaming Lottery Tracker, in Q2 of 2017, the four states produced profits of:
Michigan’s offerings also grow by leaps and bounds year after year. Since its 2014 launch, the Michigan online lottery has produced revenue of:
- $18.5 million in net online profit in FY2014-2015 off of $146,189,761 in sales.
- $48 million in net online profit in FY2015-2016 off of $384,992,537 in sales.
- $97 million in net online profit in FY2016-2017 (sales numbers have yet to be reported).
Clearly, the Michigan Lottery is the one to emulate.
Why has Michigan’s online lottery thrived?
In an interview with Play Michigan, a Michigan Lottery spokesperson listed several factors as key to its success:
“Our focus from Day One has to been to provide players an excellent online experience with engaging and entertaining games and a system that’s easy for them to use.
Since the online games launched in 2014, we’ve used a data driven approach to adjust and refine it and add new games to attract new players and encourage return visits and repeat play from existing players.
Nearly 80 percent of our annual revenue stems from our retention efforts, which are supported by a platform that provides robust CRM and bonus capabilities.”
The lottery’s robust marketing efforts make for another crucial factor.
“The Michigan Lottery has a strong player retention plan and ongoing CRM promotions to keep players engaged,” the Lottery spokesperson said. “Email and SMS communications are broadly used, as well as more personalized, and targeted campaigns. Additionally, paid media, social, SEO, and earned media efforts are used to support player acquisition strategies and provide awareness of the online games program.”
Enter Income Access
Despite its internal marketing successes, the Michigan Lottery believes it’s only scratched the surface when it comes to online lottery’s potential.
To take its online lottery to the next level, the state has entered into an agreement that will see Income Access take over its affiliate program. The organization announced this first-of-its-kind deal in January.
“We identified an affiliate program as a cost-effective channel to complement the ongoing customer acquisition program for our online games,” the Lottery spokesperson told Play Michigan. “In particular, the affiliate program provides additional opportunities for our traditional retailers to benefit from the online program and earn revenue from online players. The affiliate program also allows us to promote our brand to customers who may not be familiar with the Michigan Lottery’s digital products and enhances our overall awareness efforts.”