Michigan prepares online lottery launch with Pollard & NeoGames

26th November 2013 10:09 am GMT

The Michigan Lottery will launch a range of its existing games through digital channels next year, which it expects to generate approximately $480m during the first eight years of operation.

Following a Request for Proposal earlier this year, the lottery has confirmed that it has selected Pollard Banknote and NeoGames to provide iLottery services that will allow players to take part in their favourite games over the internet and on mobile devices.

The iLottery services are scheduled to be available to players in Q4 2014, with increased sales from the services projected to increase the lottery’s contributions to the state School Aid Fund by about $480m over the next eight years.

Tom Weber, the Michigan Lottery’s chief deputy commissioner said: “The Michigan Lottery is continually changing and evolving to meet the demands of its players and stay competitive in the entertainment marketplace.

“In today’s society, more and more consumers want to do business online and that includes Lottery players. Adding iLottery services as an option for players keeps the Michigan Lottery offerings up to date and supports its efforts to increase its revenues and provide additional funding to the state’s schools.”

Last year, the lottery contributed a record $778.4m to the state School Aid Fund. The lottery expects that offering its existing games through digital channels will result in incremental sales growth of up to $120m over the next four years and another $360m in the four years after that.

The projections are based upon the performance of online lottery services in other states and countries, including the UK, Australia, Italy, Norway, Belgium, and Mexico.

The iLottery services offered by the lottery will include a number of responsible gaming safeguards including age verification and identity solutions, daily spending limits and self-exclusion tools. Players must also be within the state to take part in online games.

The lottery said that it will have strong mechanisms in place to maintain the security of players’ financial information and to protect their privacy.

The selection of Pollard Banknote and NeoGames caps a Request for Proposal process that began in January and attracted submittals from five companies.  

An internal committee evaluated the proposals and determined that the proposal from Pollard Banknote and NeoGames would offer the most flexibility and value for players and the lottery. After reviewing the committee’s work, lottery executives agreed with the recommendation.

The other companies that submitted proposals were notified Monday of the lottery’s decision. There is a five-day period for them to challenge that decision.

If the decision is challenged, the lottery will analyze the points raised and determine if it should revise or reaffirm its decision. Once the decision is determined to be final, the lottery will begin contract negotiations. The proposed contract developed through those negotiations will then be submitted to the State Administrative Board for review and approval.

The contract is expected to have a value of approximately $23.2m for the first four years, based on Pollard Banknote and NeoGames receiving 19.6 per cent of the gross profits for the iLottery games and projected sales through the digital channels.

In its proposal, Pollard Banknote committed to opening a customer call center in Michigan to serve players using iLottery services. Pollard Banknote already employs more than 200 people in the state of Michigan. The company has a state-of-the-art lottery ticket printing facility in Ypsilanti and provides ticket printing and other services to the lottery.

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