The Michigan Lottery had a big fiscal year 2020, despite a pandemic that wreaked havoc on the state.
According to a financial report from the lottery, the fiscal year that ended Sept. 30, 2020, saw $4.25 billion in total operating revenue, a 9.2% increase from $3.89 billion the previous fiscal year. That increase was larger than the 8.5% year-over-year increase between FY 2018 and FY 2019.
The Michigan online lottery’s instant games accounted for $219.1 million of the revenue, still a tiny fraction of the lottery’s overall business, but the iLottery win was up 88.4% compared to FY 2019. Michiganders gambled on the online scratch-offs more than ever before during the COVID-19 pandemic.
Scratch-offs purchased through retail locations totaled $2.038 billion, a new record and an increase of 23.1% compared to the prior fiscal year’s total of $1.655 billion. The FY 2019 total was up 11.2% over FY 2018.
One very unfortunate aspect of the lottery is problem gambling, common across all types of gambling.
While there’s no state data on problem gambling rates in the fiscal year recap, one accounting item can shed some light on a potential increase in addiction: unclaimed winnings. Unclaimed winnings of $56.4 million were up 39% in fiscal year 2020, according to state figures. That increase was actually less than the 84% year-over-year increase to $40.5 million seen between FY 2018 and FY 2019.
Still, the $56.4 million is significantly more than years prior. The increase in unclaimed prizes was steeper than the increase in revenue growth. Unclaimed winnings were on the decline prior to the past two fiscal years.
The lottery gives winners one year to claim winnings. Forfeited winnings go to the state’s education pot.
The lottery provided a very brief explanation for the increase:
“Unclaimed prizes for the fiscal year ended September 2020 increased by $15.9 million compared to September 2019 and increased by $18.5 million for the fiscal year ended September 2019 compared to September 2018. The increase in unclaimed prizes can be attributed to the expiration of a higher number of instant games each fiscal year, as well as a higher number of instant and draw-based game prizes $1.0 million and greater that went unclaimed.”
The $56.4 million was 2.1% of the total prizes in FY 2020, up from 1.6% of total prizes in FY 2019. Unclaimed winnings were under 1% of total prizes in FY 2018.
It appears the pandemic can’t be credited with the increasing rate of unclaimed winnings, as this trend was appearing prior to COVID-19. However, the pandemic didn’t do much if anything to slow the trend of people winning money and not claiming it.
Unclaimed winnings, of course, don’t necessarily mean problem gambling. Some winners who leave their winnings unclaimed may not be problem gamblers, and probably a high percentage of problem gamblers claim their winnings. Still, not claiming winnings could indicate compulsive purchasing where people either are not even checking their tickets or don’t claim them due to mental health reasons.
There’s another reason why a winner might not want to claim: Concern that the government becomes aware of you and your lottery play. All sorts of reasons could explain this dynamic.