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// PUBLIC GAMING INTERNATIONAL // May/June 2016
T
he Michigan Lottery is an exemplary case study to examine the impacts of
online sales (“iLottery”) throughout an organization including its network
of retailers. After beginning with an unadvertised beta launch in the summer of
2014, iLottery has quickly grown to surpass $8 million in weekly sales during
March of 2016. Meanwhile, the retail business has set all-time records for sales,
profits and retailer commissions.
It is clear that retail channels have not been negatively affected since the launch
of online sales. In fact, a better argument can be made in support of iLottery
increasing overall player engagement and driving cross-channel sales. Programs
such as the Online Game Card, purchased at retail and redeemed online, have
helped to bridge the two channels while providing added traffic and commissions
to retailers.
The reality has been consistent with focus group results obtained prior to the
launch of iLottery in Michigan. During those interviews, many existing retail
players were opposed to the idea of registering online, didn’t like the requirement
to provide banking information, didn’t always trust that iLottery games would be
fair, and preferred the game play experience (i.e. scratching) of retail games over
their digital counterparts.
The most supportive evidence of player channel preference can be found when
examining categorical sales comparisons. Keno and instants were the only two cat-
egories of games sold online during the first fiscal year. During that time, online
instants accounted for two-thirds of iLottery sales, or roughly $98 million, while
online keno contributed $49
million. In parallel, retail in-
stants and retail keno reached
all-time records and grew by
more than $100 million and
$30 million respectively.
Perhaps the most compel-
ling indicator of player chan-
nel preference was observed
in the Keno “To Go” product
sold at retail. Players who purchase Keno “To Go” watch their drawings online
after buying in-store, and are literally a few clicks away from playing a Keno game
with improved prize returns, quicker play action and the supposed convenience
of avoiding a trip to the store. Yet this product was unaffected by the launch of
AN OMNI-CHANNEL SUCCESS STORY
Danny Bogus, Founder & Principal, Digital Gaming Group