The gaming industry was buzzing over the long holiday weekend after a decision delivered by the Department of Justice on Friday seemingly paved the way for U.S. lotteries to offer their games via the Internet. Other games, such as poker, should also soon find their way online, as several states have already been moving in that direction. Poker has the most revenue potential, since history in other jurisdictions has shown that merely offering existing lottery games online provides an incremental sales increase, at best.
The opinion rendered Friday by Assistant Attorney General Virginia A. Seitz was in response to a request by Illinois and New York for clarification on whether the Wire Act prohibited the sale of lottery tickets through the Internet to in-state adults when out-of-state transaction processors are being used, as previous interpretations had declared. In her analysis, Seitz stated that “the text of the Wire Act and the relevant legislative materials support our conclusion that the Act’s prohibitions relate solely to sports-related gambling activities in interstate and foreign commerce. What remains for resolution is only whether the lotteries proposed by New York and Illinois involve ‘sporting event[s] or contest[s]’ within the meaning of the Wire Act. We conclude that they do not. The ordinary meaning of the phrase ‘sporting event or contest’ does not encompass lotteries.”
So there you have it. It would appear that the only thing really stopping lotteries from offering sales via the Internet now is a state’s own reservations about the subject. And clearly, several states have no qualms – Illinois and New York certainly, since they forced the question, and others which already sell lottery subscriptions through the Internet, including Minnesota, New Hampshire and North Dakota. Many others are eager to take the plunge as well. And of course, the District of Columbia is ready to launch Internet poker and other games, and that could be where the real potential lies.
Offering regular lottery games via the Net is seen not as a serious revenue generator for lotteries but rather as an important customer service tool. Simply put, lotteries need to be everywhere the consumer is, and more consumers than ever now shop online or through their mobile devices. With traditional products, there won’t be any dramatic increases in sales – the retail store will always be a lottery’s most important partner – but lotteries will use these new channels to remain relevant to today’s consumers in order to keep providing a growing revenue stream for good causes.