Illinois Lottery Internet Pilot Program, Illinois Lottery, 2012
A Mandate fromthe Illinois Legislature
In 2009, the Illinois Legislature passedamendments to the Lottery Law mandatingan Internet Pilot Program to launch the sale o Mega Millions and Lotto on the Internet to mirrorthe buying habits o consumers in Illinois.
On December 23, 2011, a U.S. JusticeDepartment decision confrmed the legality o Internet sales o lottery products, paving theway or state lotteries to sell lottery tickets onthe Internet and opening the door or the IllinoisLottery’s Internet Pilot Program.
When the Legislature passed the law mandatingInternet sales o lottery products, the IllinoisLottery had not yet begun to oer Powerball,a multijurisdictional game like Mega Millions. Additional legislation is pending to addPowerball to the Internet Pilot Program.
The Impact on the Lottery’s Retail Partners
Internet MM/PB Play is Likely to Expand the Number o RetailLottery Players; Retail Revenue Impact May Be Neutral
Cross-Channel Lottery Purchasing in Illinois
3 in 4 Potential Internet Lottery Players Say They WouldBuy Tickets at Retailers as Well as on the Internet
Number of Retail Players5.25M
5.70M (+9%)Retail Revenue$275M
$282M (+2%)*Internet Only or Internet & RetailReasons for Not Purchasingat Recent Large Jackpots
The Internet Pilot Program will not remove any products rom theretailer network. Lottery retailers remain the primary sales channelwhere players will have access to the ull portolio o Lotteryproducts. Retail is and will continue to be the key channel inthe Lottery’s growth strategy. Adding new channels such as theInternet will strengthen the overall sales platorm.Research conducted in February 2012 ound that the Internet PilotProgram will increase sales at retail locations throughout the stateby +2% ($275 million to $282 million) and players at retail locationsare orecasted to increase rom 5.25 million to 5.70 million or 9%. These increases in sales will allow or even greater contributionto proft in the range o $22.5 million to $40 million including onlyMega Millions. Adding Powerball, the additional proft will increasean estimated $13.5 million.
More than 1,000 new Lottery retailers havebeen licensed in the past nine months.
IGR Research has shown that InternetMega Millions and Powerball play is likelyto increase million to $282 million.
Instant games (retail locationsonly) represent more than 60%o Illinois Lottery sales (growingat an annual rate o 30%) and
will not be
included in the pilot. The number o retail playerswill increase rom 5.25 millionto 5.70 million, or about 9%.
ContinuingRetailOnly3.69 MContinuingRetail &Internet1.23 M
NewRetail OnlyPlayers+0.27 MNewRetail &InternetPlayers+0.51 MWill PlayInternet Only-0.33 M
ContinuingRetailOnly$201 MContinuingRetail &Internet$151 M
NewRetail OnlyPlayers+$9 MNewRetail &InternetPlayers+$28 MWill PlayInternet Only-$11 M
* If “Retail & Internet”Players do 40% of theirspending at retail and60% on the Internet.
Will Play onInternet Only
Will Play atRetail & on Internet
Source: IGR 2012Source: IGR 2012
In addition, Internet-basedsales and marketing o Lottery games will draw newconsumers and grow salesat retail by creating a newunderstanding o and newdemand or Lottery products. To urther the Internet-retailconnection, the Illinois Lotterywill co-promote across thechannels, oering a varietyo integrated promotions thatengage social media and Webtechnology to drive consumersinto retail locations.
Meant to play,but orgotNot convenient tobuy a ticketDidn’t have the moneyI was out o stateDidn’t know the jackpot was that high Ticket price went upI only play at higher jackpotsDecided to play a dierentlottery gameI limit how open I play
Why didn’t you buy anyPowerball tickets or the$170M/$200M/$250M/$325Mdrawing?