New iLottery Deal May Add $480M in State School Aid Over 8 Years

Increased lottery ticket sales under an iLottery contract approved Tuesday are expected to increase the Michigan Lottery’s contributions to the state school aid fund by about $480 million over the next eight years.

The iLottery services contract with Pollard Banknote approved by the State Administrative Board will allow players to their favorite games from the personal computer or mobile devices, according to a news release. The iLottery services will be available in the fourth quarter of 2014.

About 97 cents of every dollar spent on Lottery tickets is returned to the state in the form of contributions to the state School Aid Fund, prizes to players and commissions to retailers.

The Michigan Lottery provided $734.3 million to the state school aid fund in fiscal year 2013, pushing the Lottery’s support for public education to more than $18 billion since 1972. About $3.7 billion of that – 20 percent – was generated from ticket sales over the past five years.

Tom Weber, the Lottery’s chief deputy commissioner, said making iLottery sales available responds to demands of an increasingly digital society.

“More and more consumers are choosing digital channels for business and entertainment and that includes Lottery players,” Weber said.

He also said the move helps the Michigan Lottery remain competitive. Illinois and Georgia already offer iLottery services. Nevada, Delaware and New Jersey offer online gaming via casinos. Many other states, including Virginia, Minnesota and New York, now offer subscription ticket purchases over the Internet.

The iLottery services will include responsible gaming safeguards that no other form of gaming in Michigan offers. Among those key safeguards:

• The Lottery will set spending limits for all iLottery services
• Players may set lower spending limits for themselves
• Players also may choose to exclude themselves completely from iLottery services

The Lottery also will have strong mechanisms in place to maintain the security of players’ financial information and to protect their privacy.

The contract, valued at about $23.2 million for the first four years, calls for Pollard Banknote to open a customer call center in Michigan to serve players using iLottery services. Pollard Banknote will receive 19.6 percent of the gross profits from projected sales through the digital channels.

The call center is expected to create more jobs, although the number hasn’t been determined yet. Pollard Banknote, which already provides ticket printing and other services for the Michigan Lottery, currently employs more than 200 people in Michigan and operates a state-of-the-art lottery ticket printing facility in Ypsilanti.