iGB North America magazine IGBNA Aug/Sep | Page 28

Feature

Have you found any evidence of
cannibalization of retail revenues,
and how did you go about reassuring
physical retailers and getting their
buy-in before ramping up marketing
for online?
Absolutely none. When this project first
began a few years ago, the retailers here were
not familiar with what has been happening
worldwide with the industry. Their view
of it very much was, “Why are you taking
business away from me?”

that we would work with them to find
opportunities for them to benefit from the
online games, with the Online Game Cards
being a prime example of that commitment.
They earn a standard commission (6%) on
the cards and the sales of the cards also
count toward instant game incentives, which
provide an additional 1% commission. We
are also looking at introducing a coupon
for pre-existing instant games which have a
second chance component, allowing onlineregistered players to go back to their retailer

“For less than 1% of our business, we are not
going to jeopardise our relationship with the
retailers who are at the foundation of our
success for the other 99%.”
So we made a steady outreach effort
with the retailers. Obviously we have large
chains of stores with which we deal, and
there’s also a very strong trade group called
the National Association of Convenience
Stores, which also includes gas stations, and
the Michigan Retailers Association, we have
been working with. We have emphasized
the following to all these stakeholders. First,
based on the experience in other countries
that have instituted online games, we expect
the online games option to raise public
awareness and public interest in all lottery
games. Second, we told our 11,000 retailers

and get another ticket for free.
Another commitment we have made is
that we won’t put Daily 3 and Daily 4 games,
which account for 25% of sales via two
draws a day (midday and then in the evening)
on the online games platforms.
So our focus with retailers has been on
how are going to maintain that store traffic,
because in Michigan, the typical lottery player,
when they go into a retailer, average $3-$4 in
sales other than lottery products.
We’ve given them those assurances,
because for less than 1% of our business
[$2.6bn in total sales last year] we are not

28 | iGamingBusiness North America | Issue 20 | August/September 2015

going to jeopardise our relationship with the
retailers who are at the foundation of our
success for the other 99%.
As we move into the fourth quarter of our
fiscal year, we see strong sales across our
portfolio of games, including a nearly 10%
increase in instant game purchases by players.
So there is zero indication that the online
games have diminished sales of other games.
Which of the newer types of online
lottery products, such as instant
win games and scratchcards, are
performing particularly well?
The instant keno games are very popular
among players. They are making about 40%
of the revenue. We have 21 games launched,
and two of them are keno.
How has going online changed how
you approach and implement your
responsible gambling strategy? Do
you find this has made it easier to
identify, track and intervene over
problem gambling behaviours?
We designed the online games to include
responsible gaming safeguards that no other
form of gaming in Michigan offers. First of
all, the default deposit limit for players is
$500 a week. Players may lower that limit
at any time and the change is immediate. If
they wish to increase it, there is a 48-hour
“cooling off” period before the higher limit
takes effect. Also, players my self-exclude