Make Some Room, Michigan: Two More States Legalize Online Lottery

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Lost in the hullabaloo surrounding the legalization of online poker and casino games was another part of Pennsylvania’s sweeping gaming reform package: the Pennsylvania Lottery will take its products online.

In doing so, Pennsylvania became the second state to legalize online lottery sales this year  — New Hampshire is the other — and the sixth overall:

  1. Illinois
  2. Georgia
  3. Kentucky
  4. Michigan
  5. New Hampshire
  6. Pennsylvania

Michigan’s online lottery is a true success story

Both states can only hope their online lotteries perform as well as Michigan’s lottery, which has been a boon for the state.

In the 2015 fiscal year, the state generated $146.2 million from online lottery sales, less $127.7 million in prize awards. Ultimately, Michigan raised $18,528,092 from online lottery sales in FY 2015.

In FY 2016, the state generated $385 million from online lottery sales, less $337 million  in prize awards. That comes to $48,033,251 from online lottery sales in FY 2016.

Furthermore, as we’ve documented many times, the revenue from online sales appears to be incremental.

A 2016 study conducted by Digital Gaming Group concluded:

“Multi-channel growth has been observed across the globe where iLottery is present and the industry is finally obtaining domestic evidence as well.

“Perhaps not too far ahead, as the trends continue to take shape, iLottery will be viewed universally as one of the safest bets to achieve incremental growth.”

Or as director of public relations for the Michigan Lottery Jeff Holyfield told Online Poker Report in 2015: “There is no indication that the online games are affecting sales at our 11,000 retailers. In fact, we continue to see sales growing in all channels.”

Holyfield reiterated his comments to the Boston Globe, saying, “There is zero indication that the online games have taken away sales from others; the indication is that it’s exactly the opposite.”

The toothpaste is not going back in the tube

Pennsylvania’s action could also put an end (finally) to any legitimate talk of a federal online gambling ban.

The federal ban idea has always been a long shot, but with this year’s expansion efforts in Pennsylvania and New Hampshire, it’s safe to say the Restoration of America’s Wire Act, or more broadly, Sheldon Adelson’s efforts to enact a federal online gambling prohibition, are dead and buried.

Adding Pennsylvania and New Hampshire, more than 50 million US residents (16 percent of the total population) live in states where it’s legal to purchase lottery tickets online.

Add the 13 million residents of New Jersey, Nevada, and Delaware (only Pennsylvania has legalized online lottery and online gambling), and the percentage of the US population with access to some form of legal online gambling rises to 27 percent.

Online gaming opponents will almost certainly continue to spout their talking points. But with a quarter of the nation having legal online gaming, calls to action are going to fall on deaf ears.

Steve Ruddock

About

Steve Ruddock is a veteran of the poker and online gambling media. A contributor to OnlinePokerReport.com, PlayNJ.com, USA Today, and a variety of other industry publications both online and off, Steve is based in Massachusetts.