States Considering Web Lottery Ticket Sales

Published in CSP Daily News

Texas, Illinois, Georgia mulling Internet purchases

AUSTIN, Texas -- A bill moving through the Texas Legislature could let Texas lottery players become the nation's first to buy tickets online and pay with a debit card. The legislation approved earlier this week by the House Appropriations Committee would also let players establish a Texas Lottery Commission account that would draw down as they buy tickets, said The Dallas Morning News.

North Dakota, Illinois and Georgia are considering similar legislation, although so far, no states offer online lottery sales, the report said.

Relieving strained state budgets will be the catalyst that makes online gambling the norm, some industry watchers predict, according to the report.

In Texas, new revenue generated from online sales is estimated at $100 million per year, according to the Legislative Budget Board's calculations. That does not account for the $175 million paid each year to retailers, or 5 cents for every $1 ticket sold, that potentially would be saved, Bobby Heath, a spokesperson for the Texas Lottery, told the newspaper.

Heath said it was unclear how online sales would be implemented or whether new administrative expenses would be incurred. And, he said, there appear to be two major impedimentsverifying that the ticket buyer is of age and overcoming federal law that prohibits interstate transmission of wagering information, known as the Wire Act of 1961. That means no out-of-state sales.

In Georgia, the proposal calls for making Internet accountholders to appear in person first at a licensed lottery retailer to prove they meet residence and age requirements, Heath said.

Some states also are considering capping ticket buyers' expenditures, whether on a daily, weekly or monthly basis, to serve as a safeguard against overspending, he said.

Heath said Texas Lottery Commission officials were concerned about handling the age and residency issues, but of course, if it was to increase revenues to the state and to education, we would feel like it's a good thing.

Lynton Allred, executive vice president for Texas Petroleum Marketers & Convenience Store Association (TPMCSA), acknowledged that online sales could mean a reduction in store profits. The difference is that many times the lottery situation does not create the traffic in our stores that is productive for the store, Allred tols the paper. We have been neutral on the issue. Lottery is not our favorite activity.

In Illinois, state lawmakers, desperate to close another billion-dollar budget gap, are eagerly eyeing the Illinois Lottery and all the money it might generate if people could buy tickets on the Internet, said the Associated Press.

"I'm just saying let's get more money into the pot," said State Senator John Cullerton (D), who is pushing an Internet lottery proposal in the General Assembly. "There's a whole new group of people who would buy lottery tickets."

Other lawmakers are advocating new scratchoff lottery tickets to support programs such as breast cancer research or veterans' assistance.

But while expanding the lottery might boost revenue, critics say it would create more problems than it solves, from gambling addiction to increased personal debt. This really isn't the way that we should be financing education or those things, said state Sen. Chris Lauzen (R). It's an unsanitized Band-Aid on a real problem.

If there's a big $100 million prize and there's 15 people in line at the gas station, I'm not going to wait, Cullerton said. But if I can go home and just punch one in, or every week put in my Social Security number and say I'm going to buy a lottery ticket, why not? There's a whole new group of people who would buy lottery tickets.

The Lottery Department still is reviewing proposals and currently has no official opinion on them. Until it's a bill that is signed and passed, it's just a work in progress, Lottery Superintendent Carolyn Adams said.

Cullerton's proposal would create a pilot project allowing Internet sales of lottery tickets in Illinois. It doesn't specify how players would pay for tickets or how officials could control who buys them; Cullerton said that would be left to lottery officials.

Some critics have questioned how minors would be prevented from buying tickets online. Cullerton says only adults would be able to collect winnings.

Convenience stores, the most popular place for lottery sales, oppose online lottery sales, saying they would cripple a key attraction for their businesses. We think we've earned it. We have been big backers of the lottery, said Bill Fleischli of the Illinois Association of Convenience Stores (IACS). To allow someone to come in with the Internet, I don't think it's fair or right.