Lottery Lowdown: Inside the workings of a money-making industry

WWMT shows you rarely seen places and people who make the lottery happen on a daily basis. The I-Team uncovers uncovers the inner workings behind this money making industry.

Inside an unassuming office building in Lansing, there is a room that to some, might resemble a casino.

It’s actually the gaming control and testing lab for the Michigan Lottery, inside the Michigan Lottery headquarters.

“These are the terminals that you see at stores, and these are coming out next year,” Lottery Commissioner Aric Nesbitt said as lottery staff put the machines and other potential games through the paces.

Almost 45 years after the first Michigan Lottery ticket was sold, the I-Team took a look inside the Michigan Lottery headquarters, with rare access to the people and places that make help the state’s lottery operation run.

“It’s all about maximizing revenue to the school-aid fund,” Nesbitt said while showing the I-Team around the testing facility.

In 2016, the Michigan Lottery helped to generate $889 million for the Michigan School Aid Fund.

There are critics, however, including the Mackinac Center for Public Policy, who point out the Michigan Lottery actually generates less than 7 percent of the School Aid Fund revenue, behind property and income taxes.

Nesbitt said the lottery also helps to keep burdens away from taxpayers across the board.

“If we didn’t have the lottery, the sales tax in Michigan would have to be higher, so the lottery is a voluntary, fun option, and it’s very different from having to pay an additional tax that could be out there,” he said.

The Michigan Lottery is always looking to test new games to keep the lottery exciting for players, Nesbitt said. The I-Lottery, Michigan’s online lottery website, has provided a jolt of energy since its debut in 2014.

Nesbitt addressed concerns raised by some that the online lottery play would enable those who are prone to gambling addictions.

“We’re the first state or province to have both our I-Lottery and retail lottery certified by a national council on problem gambling,” he said, noting that the Michigan Lottery can lock out people from playing online if they show signs of gambling problems.

“We have approximately 100 people who are not allowed to play right now,” he said. “We can lock people out forever, or cool them down if they’re playing too much.”

With cyber-security in the spotlight for many corporations and government organizations, Nesbitt said the Michigan Lottery did a new internal check to ensure that the Michigan lottery maintains security and game integrity.

“There’s no way of cheating the lottery, and there’s no way of knowing what the winning ticket numbers are,” he said.

Nesbitt also addressed concerns stemming from a recent incident in Iowa, where CBS News reported that a lottery security employee somehow installed software onto a lottery laptop and was able to win millions of dollars before getting caught and prosecuted.

“How he did it and what he did could not happen here in Michigan,” he said. “Where Iowa had one or two levels of security, we have six levels of security, our internet and cyber-security systems are safe.”

In Detroit, the I-Team had a first-hand look at security on display for a recent lottery drawing, where the drawing room is kept double locked, along with a drawing manager and independent auditor present for each drawing.

As for the multiple laptops used during the drawing at any given time, none of those laptops are connected to the internet, leaving a possible breach of security highly unlikely.

There’s also the ubiquitous lottery balls that are used for some of the drawings – there are actually 14 different sets that are selected at random and kept in locked boxes.

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