As lotteries across America saw upwards of 25% of their lottery retailer network deactivated and deemed “non-essential businesses,” the reality became strikingly clear. Risks of infections and executive “shelter in place” orders gave preference to a dedicated online channel where players could purchase their lottery tickets. Now as states grapple with huge budget deficits and the threat of a second COVID-19 wave in the fall, online sales become an insurance policy that the $91 billion U.S. lottery industry can deliver needed funds for good causes.
La Fleur’s Magazine surveyed lottery executives in mid-May to glean if interest was heightened to reexamine the legalization of online commerce for state lottery agencies as a result of the pandemic. The roundup follows below:
ARIZONA: “The Arizona Lottery would love to expand our products online. We have been working closely with compact negotiators in the Governor’s office to present the opportunity that exists. The prohibition is a specific line within our enabling statutes that would have to be removed.”—Gregg Edgar, Executive Director, Arizona Lottery
COLORADO: “We will not seek special permission to sell online during the pandemic. While online sales are part of our development plan, our focus right now is on supporting our retailers, and giving players the games and service they expect and deserve. Selling effectively online would mean allowing the Lottery to accept credit cards for purchase, which is prohibited by law. A statute change would be required for this. I think it would be perceived as opportunistic for us to pursue this type of change under the chaotic circumstances of the pandemic. When we do pursue a law change it will be done as part of our long range business plan, not because there may be a ‘crack in the door.’”—Tom Seaver, Director, Colorado Lottery
CONNECTICUT: “Legislation authorizing the CT Lottery to sell some games online has been introduced for the last four years, either by the CT Lottery Corp. or the Administration. The pandemic has not changed our effort, but it may cause some to be more supportive. Online lottery sales is specifically prohibited in statute, so language is needed to change that restriction.”—Gregory Smith, President & CEO, Connecticut Lottery Corp.
INDIANA: “The Hoosier Lottery’s statute grants sufficient authority for our Lottery to introduce online games. For the past two fiscal years, The Hoosier Lottery’s vendor, IGT Indiana, has been working on a comprehensive evaluation of both interactive products and monitor games to determine what products might be appropriate for the Hoosier Lottery market and best contribute to our mission in a responsible way. We look forward to entertaining their recommendation on these two product offerings in the second quarter of FY21.”—Sarah Taylor, Executive Director, Hoosier Lottery
IOWA: “A change in state law would be required for all Iowa Lottery products to be sold online, and that remains a policy decision for our lawmakers.”—Mary Neubauer, Vice President, External Relations, Iowa Lottery
KANSAS: “The Kansas Lottery recognizes the importance of moving part of its sales to an online space, especially in the wake of this worldwide pandemic. Moving online is a natural progression of every other business on earth, so it is only natural that lotteries will end up there eventually. It would be a significant step forward for the Kansas Lottery and the four state casinos in Kansas, as we must be conscious of their needs as well, particularly tied in with sports wagering, iLottery, and iCasino elements. However, for this to happen, the Kansas Lottery Act, which currently does not allow for the online sale of lottery products, would require a legislative change. There have been bills in the Kansas Legislature, but those have not yet been ratified. When there are changes, we will implement those to the best of our ability.”—Stephen Durrell, Executive Director, Kansas Lottery
LOUISIANA: “Louisiana currently has a broad statute—LA RS 14:90.3 Gambling by Computer—that prohibits any form of gambling involving a computer unless it takes place at an “establishment.” Therefore, we have been prohibited from hosting any part of the sale of our product or prize delivery online.
That could change soon, however! Louisiana State Rep. Joe Stagni’s House Bill 369, introduced in the current legislative session, would allow the sale of lottery tickets online. Although the author voluntarily deferred the bill in committee, he intends to bring it back during a special session. I am very optimistic because Rep. Stagni has committed to working with all parties, including the video poker and convenience store interests, to remove any lingering objections and reach consensus.
The case for iLottery in our industry was already strong before the pandemic. Online, we can better administer responsible gaming controls while also appealing to a digitally-minded consumer base. I think it took realities of COVID-19, namely the blow to state revenue and an abrupt shift to ecommerce, to bring the issue to the front burner for legislators. In these times of crisis, it is encouraging that all parties seem to be willing to come together.”—
Rose Hudson, President & CEO, Louisiana Lottery Corp.
MARYLAND: “We’re focused on sports betting first, and the next step in that process is the referendum that will be on the November 3 ballot. Assuming it’s approved, I believe it will pave the way for online lottery sales. The Maryland General Assembly enacted a law in 2017 that prohibits us from online sales, but once sports betting is operating, it seems likely that everyone will become more comfortable with betting via mobile devices. Adding lottery sales should be a relatively easy transition.”—Gordon Medenica, Director, Maryland Lottery & Gaming
MASSACHUSETTS: “Our top priority during this pandemic is the health and safety of all residents of the Commonwealth. We remain committed to working with the legislature to ensure the continued viability and success of the Lottery and its ability to provide essential unrestricted local aid for all 351 cities and towns. The pandemic has further accelerated the digital process across all industries. Retail businesses that have been unable to open their physical locations have had to rely exclusively on e-commerce platforms. Many businesses that have been able to remain open have either been required to or have chosen to conduct all transactions in a frictionless manner. For consumers, cashless payments are no longer solely a matter of convenience, they are also a matter of personal health and safety. As retail commerce continues this rapid shift to online, mobile, prepaid and cashless transactions, it is vital that the Lottery be able to sell products using these methods to keep pace with consumer preferences and demands.”—Michael Sweeney, Executive Director, Massachusetts Lottery
MISSISSIPPI: “Online sales are prohibited in Mississippi. It would require a legislative change.”— Tom Shaheen, President, Mississippi Lottery
NEBRASKA: “The Nebraska Lottery will not seek approval to sell online draw games or eInstants at this time. Being able to sell online would require a change in the State Lottery Act, which is unlikely for the foreseeable future. Developments in other fields of gaming such as casinos, sports betting or fantasy sports could set the stage for changes to the State Lottery Act, but such considerations are not presently underway.”—Brian Rockey, Director, Nebraska Lottery
OKLAHOMA: “We are indeed discussing such possibilities, but more in relation to ongoing discussions about sports betting, rather than a reaction to the corona virus. Our laws have to be changed to allow us to do that. We are not anticipating a law change this year, but will continue to advise policymakers about the potential for such a change.”—Rollo Redburn, Executive Director, Oklahoma Lottery
SOUTH CAROLINA: “We have no plans to seek permission to sell our games online.”—Hogan Brown, Executive Director, South Carolina Education Lottery
SOUTH DAKOTA: “Although the pandemic showed that selling online helped temper the initial decline in lottery sales, I don’t think it changed the appetite for policy makers in SD. South Dakota never did have a shelter place in order. Players were able to go to most all lottery retailers. Instant ticket sales and video lottery net machine income has recovered very well the past few weeks. Authorization from Governor and Lottery Commission would be required to go online.”—Clark Hepper, Deputy Director, South Dakota Lottery
WASHINGTON: “While Washington’s Lottery recognizes the long-term benefits of online sales with respect to changing demographics, it has no plans at this time to take a proactive role in advocating for online sales given the political climate in our state. However, we will be taking advantage of this opportunity to provide information to policy makers on the benefits of online sales and also be prepared to demonstrate how we can add value by raising additional revenue for our beneficiaries through online sales as they evaluate options on filling funding gaps in the state’s budget. Our laws have to be changed to allow us to do that. We are not anticipating a law change this year, but will continue to advise policymakers about the potential for such a change. In Washington, a 60% affirmative vote of both houses of the legislature would be needed for any type of digital interaction or play of lottery games as well as final approval by the Governor.”—Marcus Glasper, Director, Washington’s Lottery
WISCONSIN: “I think the pandemic has definitely brought the need for a thorough, thoughtful discussion as to how to keep our players and retailer staff safe. Selling online is one of those ways. Where these discussions may lead is too premature for me to say. We do know pursuing online sales would involve many stakeholders. At this time, it’s too premature to say what would all be required to go online.”—Cindy Polzin, Director, Wisconsin Lottery
WYOMING: “We do not intend to seek permission for online games. Online gaming in Wyoming would likely require a change in statute, and we would have to gain a high volume of support from a legislature that is against online gaming. Much of the Wyoming Legislature is made up of Mormon members, and these are the same members who were against the creation of a lottery back in 2013. Many of these same members remain against gaming expansion. While the legislature has changed a bit, and opinion on lottery has certainly improved, there would still be fairly wide-spread resistance to online gaming as it is viewed as a step toward what is sometimes labeled, ‘hardcore” gaming’ or ‘Vegas- style gaming.’ The Wyoming Lottery has many supporters and we enjoy a wonderful partnership with our legislature, governor, citizens and many others stakeholders and supporters. The general feeling amongst citizens and retailers is that the lottery is a very positive presence and a welcome contributor to the Wyoming economy. Having said this, however, many of these same people have openly expressed that they do not want to see gaming ‘take-over,’ or expand too much across the state, nor do they want to overly rely on gaming revenue. Scratch products would be welcome, as would KENO and perhaps even sports wagering. VLTs, multiple casinos, online gaming etc., would fall into a category of gaming that most Wyoming citizens would find to be ‘out of step’ with Wyoming future.”— Jon Clontz, CEO, Wyoming Lottery