Can You Play the Lottery Online?

by Michael Stevens
on August 9, 2018
9

Minute Read

Over the last two decades, the gambling industry has transitioned successfully into the digital age.

Today, Americans can legally play poker online through sites like WSOP.com and PartyPoker. If you enjoy table games like blackjack, craps, and roulette, dozens of online casinos operate from coast to coast. And sports bettors have platforms like Bovada and 5Dimes handy at all times thanks to online and mobile wagering.

But what about lottery enthusiasts?

While gambling has largely been embraced by the internet revolution, the lotto is a different story. A tangle of federal and state laws led many lawmakers to believe that selling lottery tickets through the internet violated either one of two federal statutes – the Interstate Wire Act of 1961, and the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006.

The Wire Act was passed over five decades ago to prohibit sports bettors from placing wagers via the telephone. The law remains in place today, and many legislators have interpreted the phrase “telephonic means” as extending to the internet as well. That tenuous connection was based on the old dial-up modem days, but the specter of the Wire Act has long clouded America’s online lottery sales debate.

As for the UIGEA, this law was passed during the “Poker Boom” era, when online poker rooms like PokerStars, PartyPoker, and Full Tilt Poker were growing exponentially. Unfortunately, the revelation that Full Tilt Poker executives were spending player funds on lavish dividend payments to themselves – turning the site into something akin to a Ponzi scheme – compelled Congress to act. By passing the UIGEA, federal lawmakers banned any business from providing online gambling services.

But in late 2009, authorities representing the New York State Division of the Lottery and the Office of the Governor of the State of Illinois requested clarification on how those two laws pertain to online lotto sales. Tasked with studying the minutiae of the laws, the United States Department of Justice (DOJ) spent two years sorting through the legal language before coming to a conclusion.

In a memorandum that has since gone down in gambling lore, the DOJ specified that the Wire Act’s scope is limited to wagers placed on a “sporting event or contest.” Furthermore, the DOJ found that the UIGEA does allow for electronic communication of data generated via legal lottery sales, even across state lines:

“You have asked for our opinion regarding the lawfulness of proposals by Illinois and New York to use the Internet and out-of-state transaction processors to sell lottery tickets to instate adults.

Having considered the Criminal Division’s views, as well as letters from New York and Illinois to the Criminal Division that were attached to your opinion request, we conclude that interstate transmissions of wire communications that do not relate to a “sporting event or contest,” 18 U.S.C. § 1084(a), fall outside of the reach of the Wire Act.

Because the proposed New York and Illinois lottery proposals do not involve wagering on sporting events or contests, the Wire Act does not, in our view, prohibit them.”

In one fell swoop, the Wire Act was ruled to be sports-specific, meaning industries like online casino, poker, and indeed, lotteries are perfectly legal.

In the intervening seven years, individual states have been free to set up their own online lottery ticket sale systems. Even so, with all but six states (Alabama, Alaska, Hawaii, Mississippi, Nevada, and Utah) in the country running lotteries of their own, the transition to online sales has been slow going.

As of today, just six states have passed legislation allowing for online lottery ticket sales:

  • Georgia
  • Kentucky
  • Illinois
  • Michigan
  • Minnesota
  • New Hampshire
  • Pennsylvania

But even with that slight progress being made, both Illinois and Minnesota have since suspended online ticket sales amidst legal challenges and regulatory hurdles.

One reason for the slow pace of online integration within the lottery industry is the role of brick and mortar vendors. Up until recently, the only way to purchase a lottery ticket was to visit your local convenience or grocery store, or perhaps the lotto headquarters. As such, the fine folks who own and operate gas stations and grocers nationwide have come to rely on lottery sales as a cash cow. People might come through the doors to play Powerball or The Pick, but once they arrive, they’ll usually purchase gas, a pack of cigarettes, or any other commodity on offer.

When the possibility of online lotto sales became a reality, trade organizations representing convenience stores and other land-based lottery vendors were up in arms. Just take a look at what Sal Risalvato – who serves as executive director for the New Jersey Gasoline, Convenience, Automotive Association – had to say when the Garden State began exploring the shift to online sales:

“Online lottery sales will retard the sales of all items.

We make a nickel on the lottery ticket but a dollar on the cup of coffee.

That is what is problematic to us.”

Opposition like this has been fierce and hard-fought, compelling many local lawmakers to drop the idea of online sales altogether, rather than risk angering a core constituency.

Charlie McIntyre – who serves as executive director of New Hampshire Lottery, and also leads the government relations committee for the North American Association of State and Provincial Lotteries – summed up the stalemate situation thusly:

“It wasn’t a floodgate like most people thought it would be.

It was more like a trickle gate. States move at a very slow and deliberate pace.”

States will come online, but it will be slow. The states are never going to do something that will hurt sales by brick-and-mortar stores.”

Despite the lingering doubts, however, studies by the American Gaming Association (AGA), Ontario Lottery and Gaming (OLG), and a slew of other industry trade groups have revealed a crucial need for technological progress. According to the latest data compiled by the OLG, only 7 percent of the crucial 18-35 age demographic regularly play the lotto – a far cry from the 45 percent play rate among the 35 and older crowd.

With state lottery operators realizing that their most loyal customers are aging, and as is inevitably, dying off, they’re increasingly coming around to the idea of selling tickets online. As the argument goes, members of the “Millennial” generation simply don’t patronize brick and mortar establishments like their parents and grandparents.

In an age when books, electronics, and even food can be ordered and delivered directly from the internet, brick and mortar lottery vendors risk losing the younger crowd.

For that reason, several states have taken the plunge by legalizing online lotto ticket sales. Below you’ll find information on each of those states, including links to their online portal, information on available games and prizes, and quotes from interested stakeholders on both sides of the divide:

States Where You Can Play the Lottery Online

The following five states currently offer online lottery ticket sales.

Georgia

Georgia approved online lotto sales in the summer of 2012, and the industry went live in November of that year – making Georgia the second state to do so after Illinois launched a few months earlier.

Under the purview of the Georgia Lottery Corporation, the state sells tickets for draw games like Fantasy 5, Mega Millions, and Powerball through its Buy Now website. Players will also find additional online games like Keno and Diggi Games – a blend of crossword puzzle and bingo.

Powerball is obviously the main attraction, as the nationwide lotto network creates massive jackpots that regularly reach hundreds of millions of dollars – all for just $2 per ticket. In fact, the Powerball was responsible for the largest lottery jackpot ever recorded, a $1.6 billion payout that was collected by a California couple in 2016.

Mega Millions is another multi-state lottery product, with tickets priced at only $1 and jackpot seeds starting at $40 million.

Fantasy 5 is a jackpot drawing game based on 42 numbers. Tickets cost $1 each and the jackpot begins with $125,000 up for grabs.

Debbie Alford – who serves as president and chief executive officer for the Georgia Lottery Corporation – offered the following motivation for bringing the state’s lotto online:

“We believe that the convenience and timeliness of the Internet channel will facilitate incremental growth for the Georgia Lottery and maximize revenues to enhance educational funding.”

Georgia Governor Nathan Deal has also offered his support for online integration:

“I think that is a useful area to explore.

It does open the participation up to a generation of younger citizens of our state who might not take the time to go to a store to physically purchase a ticket.”

But as one of the nation’s leading sellers of lotto tickets already, anti-gambling groups like the conservative Georgia Family Council have expressed their opposition to any industry expansion:

“The fact that our state government runs the lottery and encourages gambling among those who can least afford it is contrary to the very purpose of government, which is to protect people, not to take advantage of them.”

Despite the opposition, Georgia has moved to steadily expand the state’s selection of online lotto products.

According to their latest financial disclosure forms, the Georgia Lottery Corporation launched the multistate Cash for Life game in 2016, followed by the in-state Print and Play game one year later. Between these new product lines, Georgia added $23.2 million in revenue (2017 fiscal year) to state coffers.

Kentucky

Kentucky moved to allow online lotto ticket sales in 2013, but it took three years to craft regulations and launch a website. By 2016, however, everything was up and running through the Kentucky Lottery’s Play Now program.

Players in Kentucky can play the usual suspects like Powerball and Mega Millions, along with in-state games such as Kentucky Cash Ball 225 and Lucky for Life.

Winners of the Lucky for Life game are just that, as they receive a $1,000 payout every single day for the rest of their lives.

The Kentucky Lottery also sells “instant games” – the online equivalent of scratch cards – including the following products:

  • Dazzling Diamonds
  • Silver Stars
  • Astro Cash
  • Match 4
  • Super Cash Spectacular
  • Crossword
  • Lightning Keno

Arch Gleason – who serves as president and chief executive officer for the Kentucky Lottery – explained the need for online integration when the industry went live three years ago:

“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.

This group is very mobile, and they expect brands to be accessible online and on their devices. We’re delivering what they want.”

And as it turns out, Gleason’s prediction proved to be eerily prescient. Over the 2017 fiscal year, the Kentucky Lottery sold more than $1 billion worth of tickets – shattering the previous record.

Michigan

Online lotto ticket sales in Michigan began on a limited basis in 2014, with only Instant Keno and electronic scratch cards on offer.

By 2016, however, the success of that trial run prompted the Michigan Lottery to expand online ticket sales to include the following draw games:

  • Powerball
  • Mega Millions
  • Fantasy 5
  • Lotto 47

Fantasy 5 is a multi-state draw game offering jackpots seeded at $200,000 for just $1 per ticket.

Lotto 47 offers an opportunity to win a minimum jackpot of $1 million on a $1 purchase.

The following scratch card games sold by the Michigan Lottery provide players with a bonus code good for online discounts:

  • Gold Rush Series ($2, $5, $10)
  • $4,000,000 Mega Bucks ($30)
  • Lucky 7’s Series ($2, $5, $10)
  • 2016 Holiday Instant Games ($2, $5, $10)
  • Hit Series ($2, $5, $10)

When the legislature was still considering online ticket sales back in 2014,Michigan Lottery spokesman Jeff Holyfield told local media why the state should embrace the internet age:

“Our players, especially our younger players, more and more, they want to interact with us over the Internet, and it’s really one of those things.

You only have to look at the music business to see how the marketplace has changed.”

Kurt Weiss – who serves as spokesman for Governor Rick Snyder – spoke withWWJ Newsradioto offer the executive branch’s support:

“This is part of the overall goal of having the Lottery continually evolving its product to meet the demands of its players, and continually adapting to the current technology to meet those needs.”

Of course, the support was hardly unanimous, as evidenced by the scaremongering tactics employed by state senator Rick Jones (R-Grand Ledge), who was unsuccessful in his bid to block online lotto:

 “Gambling addiction is a serious problem, and allowing people to gamble online or from their cell phone can potentially ruin lives.

We could have cases where people gamble away their home without ever leaving it.”

It’s a good bet that Jones and his compatriots in the anti-lotto movement have come to their senses since then. By March of 2016, the Michigan Lottery reported over $8 million in online ticket sales per week – a number that has only grown over the last two years.

In a report published by the Digital Gaming Group, the Michigan Lottery was praised for fully embracing online sales, providing a template for other states to follow in the process:

“The Michigan Lottery’s success story should be a page in the book of every lottery looking to convince its stakeholders of the value, certainty and complementary nature of this new sales channel.

It is clear that retail channels have not been negatively affected since the launch of online sales.

In fact, a better argument can be made in support of iLottery increasing overall player engagement and driving cross-channel sales.”

New Hampshire

Governor Chris Sununu signed a bill authorizing online lotto ticket sales in June of 2017.

At the time, New Hampshire Lottery Commission executive director Charlie McIntyre told local media outlets why the state should embrace the digital transition:

“For us, it’s just an evolution of how we do business.

We’re not really selling anything new. We’re just doing it in a different way.”

As of today, however, the online component has yet to launch. Regulators and lawmakers in New Hampshire are still ironing out the details, and the industry is expected to go live at some point in 2018.

Pennsylvania

Governor Tom Wolf signed a sprawling gambling expansion bill into law in October of last year.

On May 29 of this year, the following online lotto products went live in Pennsylvania:

  • Big Money SLINGO®
  • Bigfoot
  • Cash Buster Towers
  • Cash in the Lamp
  • Crossword Cash
  • Foxin’ Wins
  • Monster Wins
  • Robin Hood
  • Super Cash Buster
  • Super Gems
  • Volcano Eruption

Lottery Executive Director Drew Svitko issued a press release celebrating the launch of Pennsylvania iLotto:

“PA iLottery games are a fun, new way to play and win from home or while on the go.

iLottery is a big part of our effort to meet our players where they already are while generating new funds to benefit older Pennsylvanians.”

Conclusion

While residents of almost every state can play some form of the lottery, most of them can’t legally play it online. While other forms of gambling are widely available online, lottery games haven’t become as available quickly. Look for more lottery opportunities online in the future.

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