Tuesday’s action by the State Administrative Board finalized the iLottery services contract with Pollard Banknote, which already provides ticket printing and other services to the Michigan Lottery.
The iLottery services are scheduled to be available to players in the fourth quarter of 2014. Increased sales from the iLottery services are projected to increase the Michigan Lottery’s contributions to the state School Aid Fund by about $480 million over the next eight years.
In the 2013 fiscal year, the Michigan Lottery provided $734.3 million to the state School Aid Fund. The 2013 contribution pushed the Lottery’s support for public education since 1972 to more than $18 billion. About $3.7 billion of those contributions, more than 20 percent, have come in the past five years.
“More and more consumers are choosing digital channels for business and entertainment and that includes Lottery players. Providing iLottery services as an option for players helps the Michigan Lottery stay competitive in the entertainment marketplace and keeps our offerings up to date. The Michigan Lottery is constantly changing and evolving to meet the demands of its players as part of its efforts to increase revenues and provide additional funding to the state’s schools,” said Tom Weber, the Lottery’s chief deputy commissioner.
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.
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.
Pollard Banknote employs more than 200 people in Michigan and operates a state-of-the-art lottery ticket printing facility in Ypsilanti. The contract calls for Pollard Banknote to open a customer call center in Michigan to serve players using iLottery services. That is expected to create more jobs, although the number hasn’t been determined yet.
The contract is expected to have a value of about $23.2 million for the first four years.
That estimate is based on Pollard Banknote receiving 19.6 percent of the gross profits from projected sales through the digital channels.
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. In the 2013 fiscal year, the contribution to schools was $734.3 million. Since it began in 1972, the Lottery has contributed more than $18 billion to education in Michigan.
Pollard Banknote Limited is one of the world’s leading full-service lottery vendors and is a major supplier to North America’s charitable gaming industry. The company manufactures instant lottery tickets and provides related programming, design, and marketing support. Established in 1907, Pollard Banknote currently serves more than 50 lotteries worldwide, including some of the largest and most respected lotteries in the United States, Canada, Europe, Asia, and Central and South America.