On Tuesday, the Michigan Lottery announced that a Wayne County woman won $100k gambling online, the latest impressive jackpot for the roughly five-year-old online lottery program.
The gambler, who chose to remain anonymous, was playing the Michigan iLottery’s Diamond Payout instant game. The iLottery’s instant games can award a prize up to $500k. There are 79 online gambling offerings in total, according to the Lottery’s website. Seventy-five of them are instant games. The other four are draw games, including the prominent multi-state Powerball and Mega Millions games.
In a presser announcing the $100k winning jackpot, the Lottery said that it has more than 1 mm online lottery registrants, which it has accumulated since the first online games launched in 2014. The Lottery said that in FY 2018 alone it paid out more than $676 mm to online lottery players. That was about 30% of the total prize payouts.
Online offerings have helped the Michigan Lottery reach new heights. According to a 2018 financial report from the Lottery, total sales in FY 2018 were nearly $3.6 billion, up from the prior record of $3.3 billion set in FY 2017. Online instant games accounted for $93.7 mm in net win, up from $78 mm the year prior.
“The Lottery’s goal is to increase online wagers by 9% in FY 2019,” said the state report.
In FY 2018, the Lottery contributed just under $941.3 million to the School Aid Fund. That fund is a central component to the ongoing online casino gambling and sports betting debate in Lansing. For comparison, the three Detroit casinos paid about $117 mm to the state for public education in 2018.
The Michigan Lottery returns about 60% of its revenue to gamblers in the form of winnings.
Negotiations with the governor
Gov. Gretchen Whitmer, a Democrat, is concerned that online casino gambling, especially internet slots, would pour cold water on the iLottery’s recent success. However, proponents of online casino gambling and sports betting point out that Lottery players and casino players aren’t overlapping demographics.
State Rep. Brandt Iden, the Republican backer of the online gambling legislation, says he’s willing to direct all state tax revenue from online gambling to the School Aid Fund. Whitmer is also requesting a much higher tax rate than what the online casino bill currently proposes, which is 8%. Whitmer wants a tiered tax rate structure for online poker and table games (no slots).
- Up to $2.5 mm: 8%
- More than $2.5 mm, up to $4 mm: 16%
- More than $4 mm, up to $8 mm: 32%
- More than $8 mm: 40%
As for sports betting, she wants a 15% rate for both retail and online/mobile sports betting revenues.
The governor said in a primary debate last year that she thinks Michigan should regulate sports betting, so it’s no surprise that her position on taxing sports betting is less complicated and more industry-friendly. Whitmer’s position on online casino gaming, however, has thrown a wrench in the yearslong effort to legalize online slots, table games, and poker.
Sports betting legalization for Michigan has been on the table for a much shorter period of time, thanks to the federal prohibition falling just last year. Backers of sports betting regulation are in the process of drafting the legislation. The most recent draft was made public in June.