The Kentucky Lottery has expanded into online gambling, becoming the third state to offer lottery sales online after Michigan and Georgia. Minnesota implemented then banned online sales in 2015 after faith-based groups protested scratch-off sales.
The Kentucky Lottery expects about $7 million in online sales for the fiscal year 2017; for fiscal year 2016, total lottery sales of all types are expected to be $994.5 million.
As of last Sunday, players who register and deposit money can buy Powerball, Mega Millions and Kentucky Cash Ball tickets for as long as 13 weeks. At least five Instant Play scratch-off games, ranging from 50 cents to $3, are available, with more coming.
The lottery corporation board voted in March 2013 to start Internet sales and to launch Keno. Keno went live in November 2013. There are no plans to add online Keno games.
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Kentucky lottery officials have met with officials of Gov. Matt Bevin’s office and with lawmakers in Frankfort to keep them informed of progress in implementing the games, lottery spokesman Chip Polston said. Kentucky Treasurer Allison Ball is on the lottery board.
“It’s delivery of an existing product, just through a different channel,” Polston said. “We’re offering games we already have in retail, just through a different means.”
The move is seen as a way to draw younger customers who are used to online retail.
In Europe, where online lottery sales have been available for more than a decade, 70 percent of purchases of Internet lottery tickets are to players ages 18 to 35, Polston said. In Kentucky, only about 25 percent of people in that age range bought a lottery ticket in the past year, he said.
“Our customers are aging, and in order to maintain our business, we need to be more attractive to a younger demographic who are accustomed to conducting a majority of their retail purchases online,” Arch Gleason, president and CEO of the Kentucky Lottery, said in a news release. “This group is very mobile, and they expect brands to be accessible online and on their devices. We’re delivering what they want.”
Gleason said that online sales are expected help, rather than hurt sales at the 3,200 lottery retailers. In Michigan, store sales rose 6 percent once online sales started; in Georgia, retail sales rose 4 percent, Polston said.
Players can put money in accounts either directly with a credit card or at retail stores; retailers will get a 5 percent commission on the deposits, which are considered sales. The smallest amount that can be deposited is $10; the daily maximum is $200.
To help boost store sales, for at least the first six months of Internet lottery sales in Kentucky, players who put at least $20 in their accounts in a single transaction at a store will get an extra $5 in “bonus bucks” in their online account.
Players can’t remove funds they have deposited but can cash out winning either directly to a bank account or by requesting a check.
Kentucky Lottery officials said they have set controls designed by the National Council on Problem Gambling that safeguard players. Among them is a maximum deposit by a player of $500 a week and $1,000 a month. There also is a “play clock” visible on the screen, so players can see how long they have been playing at all times.
Adding the online games has not cost the state any extra money, Polston said. The existing lottery vendor, IGT, will get 16.99 percent of winnings after prizes are paid out. The bulk of the rest goes into college scholarships, grants and literacy programs, according to the lottery corporation.