2012 may the year of widespread Internet lottery ticket sales
WASHINGTON, D.C. — The Justice Department has reversed its long-held opposition to many forms of Internet gambling, removing a big legal obstacle for states that want to sanction online gambling to help fix their budget deficits.
The legal opinion, issued by the department's office of legal counsel in September but made public on Friday, came in response to requests by New York and Illinois to clarify whether the Wire Act of 1961, which prohibits wagering over telecommunications systems that cross state or national borders, prevented those states from using the Internet to sell lottery tickets to adults within their own borders.
(See Related Links at end of news story to see the full text of the Justice Dept. legal opinion.)
Although the opinion dealt specifically with lottery tickets, it opened the door for states to allow Internet poker and other forms of online betting that do not involve sports. Many states are interested in online gambling as a way to raise tax revenue.
New York has offered an online subscription service since 2005 that allows state residents to enter a string of Lotto or Mega Millions drawings.
The director of the New York Lottery, Gordon Medenica, said Saturday that the lottery had built a broader online gaming system for New York, but that the contractor that put the system together was wary about moving forward because it feared it could get into legal trouble.
"We've been waiting for a couple years," Mr. Medenica said in a telephone interview. "We're thrilled that this ruling has now come down and confirmed that our legal analysis was correct all along."
As a result of the new policy, New York Lottery officials said they planned to add two additional jackpot games, Powerball and Sweet Million, to its current online lottery subscription service, and would allow New York residents to buy single-draw tickets online for the first time.
Mr. Medenica said it would take several months for the lottery to finalize the new offerings, and he said officials would "take a very cautious initial approach" in rolling out additional online options.
Michael Jones, the superintendent of the Illinois Lottery, said the request for clarification was prompted by research the state commissioned several years ago that indicated online sales could drive up participation. "When you look at the Internet, which is what everybody uses these days to buy everything, it seemed like a very, very logical thing to use the Internet to increase the player base," Mr. Jones said. "States were in dire financial problems — the ability to use the lottery to raise revenue in a nontax way was a significant thing for states to do."
He also said that online sales would enable the lottery to regulate purchases. "Right now we can't guard against someone walking into a lottery retailer and buying too many tickets and behaving excessively," Mr. Jones said. "Now with credit card purchases, we can guard against excessive play."
Illinois could begin selling lottery tickets online in as soon as three months, he said.
The District of Columbia and Nevada have both approved limited forms of Internet gambling, and New Jersey has been considering legislation allowing sports betting and other forms of Internet gambling.
Steven Grossman, the Massachusetts state treasurer and the chairman of the state's Lottery Commission, called the opinion a "turbocharged opportunity to engage new markets."
"This will put additional pressure on Congress and others to allow online poker and other Internet gambling," Mr. Grossman said.
Estimates of the size of the online gambling industry vary widely, from as low as $6 billion to as high as $100 billion. But even at the lower end, Mr. Grossman said, "that's tens of billions of dollars that goes offshore."
In a separate request in July, Senators Harry Reid, Democrat of Nevada, and Jon Kyl, Republican of Arizona, asked the Justice Department to clarify its position on Internet gambling, seeking either to affirm that federal law prohibits gambling over the Internet or to make sure that Congress has a role in drafting any expansion of online betting.
In a reply letter that was also issued Friday, the Justice Department said that while the new policy "differs from the department's previous interpretation of the Wire Act, it reflects the department's position in Congressional testimony at the time the Wire Act was passed in 1961."
The new policy merely reverses the Justice Department's longstanding position that all forms of online gambling are illegal in the United States. It does not necessarily pave the way for national rules governing online gambling.
But experts in gambling law said Saturday that the new policy does imply that states can band together to allow gambling across state borders. The exception would be online sports betting, which is explicitly prohibited under federal law.
"The next step," said Mark Hichar, a partner and head of the gaming law group at the law firm Edwards Wildman in Boston, "could be for states to enter into compacts with each other to have interstate Internet wagering," as some do now for horse racing.
The decision was cheered by states that have been contemplating gambling for the first time. But some gambling interest groups, like the American Gaming Association, which represents casino operators and makers of gambling equipment, said the opinion makes clear the need for a federal law establishing consistent regulatory standards.
"This is quite a Christmas present," said I. Nelson Rose, a distinguished senior professor at Whittier Law School and a consultant to gambling companies and governments. "It says, 'Keep it in your state and it's legal.' Given the continuing budget crisis, and so many states looking for ways to raise money, it's really a major decision."
Virginia A. Seitz, an assistant attorney general in the Justice Department's office of legal counsel, wrote in the opinion that the prohibition in the Wire Act of using interstate communications for gambling applies only to betting on a "sporting event or contest."
As long as the gambling operator and the customer are within the same state, the opinion says, and the betting activity does not include sporting events, a state's own laws apply. Another federal law, the Unlawful Internet Gambling Enforcement Act of 2006, made it illegal for financial institutions to process payments for online wagers.
Taken together, the two laws allowed the Justice Department to invoke its authority over interstate communications as a means of blocking all Internet gambling.
Online gambling has been a focus in the Justice Department for years, but it burst into public view in April, when federal prosecutors charged the operators of three of the most popular online poker sites with fraud and money laundering.
The three sites, Full Tilt Poker, PokerStars and Absolute Poker, are based in Antigua and the Isle of Man, where online gambling is legal. That had made it difficult for American authorities to crack down on the operations, which had millions of United States customers.
But the Justice Department charged that the companies had used United States banks to process their transactions, violating the 2006 law that governed payment processing.
Those payment restrictions do not apply to transactions within a single state, however. With the ruling that the Wire Act applies only to sports betting, the way is clear for in-state online poker and other games.
Some gambling experts believed that the Justice Department's position that the Wire Act prevented any Internet gambling conflicted with a federal appeals court decision, and therefore the new opinion simply confirmed what was already law.
But states have been reluctant to rely on the appeals court decision, handed down in 2002 by the United States Court of Appeals for the Fifth Circuit in New Orleans, because, in addition to the Justice Department's continued crackdown, other federal and state court opinions offered conflicting directions.
The Justice Department previously tried to crack down on Internet gambling by going after companies that facilitated advertising for the gambling sites. In December 2007, Microsoft, Google and Yahoo paid a combined $31.5 million to settle federal charges that they promoted illegal gambling by serving ads for the gambling operations to other Web sites.
So if i am understanding this right this is basically only going to allow you to buy tickets online to your own state lottery unless all states agree together to allow cross boarder purchases?
Yep..I think it is about time that US lotteries start having online play. It makes sense. Now if they will just clarify the banking part..I will be ready to go..
The quicker, the better.
being able to buy just lottery tickets on line is hardly a significant breakthrough. what was it difficult to go out and buy them in the normal fashion. does anybody care if the pools are higher because of this. i don't think so. you should have to make an effort to play the lottery with cash only. people will get into too much trouble if allowed to buy them with a credit card. the credit card issuers aren't going to like it at all when the defaults start to pile up. there will be snafus galore when someone claims they bought a winning ticket on line and didn't print it, or didn't buy it before drawing closed or some other type of mistake on their part or the sellers computer malfunction. it is working the way it is, why change it. if you're too lazy to go out and buy one you shouldn't be allowed to win it.
You act like folks are going to go crazy buying lottery tickets online. That is just plain silly. Lottery tickets are sold online in other countries and this one should let folks buy them online also. If your weekly play is just 5-10.00 I am sure most intelligent folks can manage that. Credit card companies have tightened their qualifications so a lot of folks won't be eligible to get one anyway. Besides if I don't stop by the bank to get my cash and use one of those "other" atms..it still costs me 4-5.00 to make a withdrawal. (total). why should I pay that when I could be playing online with no extra cost.
Everyone is different. Some people like to play small, some people like to play big, playing online is convenient for most people.. Time change, people change, technology change, get use to it! Faber, if you're fine with going to the store spending $2 - $5 a week winning $40 to $80 then that's your business. The majority rules, and I believe most people would prefer to play online. LETS DO IT!!!
I'm ready -I'm ready ; let's get ohio: ohio-michigan, ohio-indiana, ohio-kentucky, ohio-ny, OHIO - TRI STATE, I'm Ready.
Faber- that is a pretty dumb post my friend, and it is people like you that try and keep this thing from getting off the ground. Just because some people may not have control it should not ruin it for everyone, there are bad drivers out there..should we ban driving? And also it is not about being lazy, if you would pay attention there is some money to be made on this site except most peoples numbers work with all states and not just your own.
i dont like this because when people buy tickets at the store they also will buy other things an it helps out the small business owner. i dont own a business but i think its good for the economy and my community. sure i can buy lottery tickets online an save money on gas but u have to think of the bigger picture.
Why won't our government admit we're living in a police state and get it over with already? We're the most controled "free" country ever, can't even spend our hard earned cash freely.
The states have a vested interest in keeping all gambling within their borders.
We the lottery players have a vested interest in playing the best games where ever they may be, whether they are lowest odds, two tickets for a dollar games or highest jackpot.
The positives with online play is saving gas and more days to play without a trip to the store.
OPEN UP ALL THE GAMES TO US ! ! !
BobP
Good morning everyone....I hope ya'll had a great
holiday weekendYEAHHHHHHHHHHHHHHHH!!!
In total agreement with you on this note BobP.....I would like to purchase tickets in any state for any game if I so choose.
As it should be,I rather play any state than here,so would other Tennesseans..I want to play Kentucky Or Georgia,,,,why do I have to play here if I dont want to.????????????
Well I guess I will keep driving to those states,but that is allowed.
If States want to fix their budgets.... they should STOP spending money they don't have. Government is always looking for a way to find more revenue because they can't stop borrowing for things that they do not have any business being involved with. Instead of finding more ways for revenue, they should find more ways to be less intrusive in the lives of the people instead of viewing us as a resource that can be tapped at will for their failure.
These States and their budget woes make my blood boil. It demonstrates the waste of what government has become. I'm NOT advocating abolishing government, I'm advocating a return to sane, sound, smaller, less powerful, less intrusive, less violative and last but not least, a government who has the up most respect for OUR INALIENABLE RIGHTS... Rights that are not even mentioned, let alone defended, but never the less, rights that are supposed to be NON violative!
I don't know about most of you on this board. But as time goes on, I feel less and less free. Someone from the government is always there asking for more and more of us, financially! When the role of government is to preserve Liberty, not to be one of the biggest violators of it, they sure are doing an awesome job at destroying our Liberty all in the name of security! Government produces nothing yet soaks up resources of such a behemoth quantity! Money that was taken by force all in the name of providing what? Good government! Far far far from it!
As Benjamin Franklin stated:
"Anyone who would give up any Liberty for any temporary security, deserves neither Liberty nor security and will ultimately loose both!"
I happen to agree with that!
If Liberty is the purpose of govermnet, i'd say it has failed at it's purpose. And I blame us the people for that failure.
Daniel Webster, the son of Noah Webster stated on June 1, 1837 stated the following:
“I apprehend no danger to our country from a foreign foe . . . Our destruction, should it come at all, will be from another quarter. From the inattention of the people to the concerns of their government, from their carelessness and negligence, I must confess that I do apprehend some danger. I fear that they may place too implicit a confidence in their public servants, and fail properly to scrutinize their conduct; that in this way they may be made the dupes of designing men, and become the instruments of their own undoing. Make them intelligent, and they will be vigilant; give them the means of detecting the wrong, and they will apply the remedy.”
So, in closing, anyone who thinks government needs more money to "solve" a budget crisis needs to have their head examined! Government is the largest abuser of Financial Liberty out there. There's a fine for everything now a days! Government needs to stop doing more and start doing less. Our lives, Our Liberty and our Financial well being depends on government doing less! And like I said, if Liberty is the end game, the government is doing an extremely poor job, and we only have ourselves to blame for the incompetence of those "officials" who "claim" to represent us. They more so represent tyranny than Liberty, that's a no brainer. And as James Madison has pointed out, "Knowledge will forever govern ignorance: And a people who mean to be their own Governors, must arm themselves with the power which knowledge gives."
It's a PLUS in certain ways like:
if you're snowed
if you're out in nowheresville
if you're not going to meet the cutoff
being able to buy online is definately a PLUS
Hate to be Mr. negative but it is stupid to just legalize your own state only. But from what i read it is possible to play cross boarder but this is going to be up to the states themselves.
Yeah i agree, I think if they only plan to let you buy at your own state it is a waiste but if they allow all states then I am all for it.
Apparently ftdns is talking about a ruling by the Justice Department https://www.lotterypost.com/news/240464 and it's about online gambling casino and poker type games. It's possible a few state lotteries might group together and form a poker site, but the ruling was on a state lottery selling subscriptions for lotto games.
If horse racing off track betting is legal in your state than you can already legally bet tracks all over the world online.
As for the impact of selling any lottery game tickets online to area economics, for years lotteries have provided future play on all their online games. Even though the price of gas has settled around $3.25 a gallon, people are still doing one or two stop shopping so online lottery sales will have little or no affect on area economics.
They want more taxes!
Personaly,I don't trust the internet enough to spend my money online.If others wish to,thats their business,but I'll remain old fashioned and just trot down to the corner store or gas station and buy my lottery tickets.I feel like its a much safer option.
I am not sure that I want an electronic record of my lottery purchases. I am sure that they would track down every win, no matter how small!
Im definitely I i can buy tickets from other states. Especially when their jackpot is high.
This is silly too. People go to the store to buy those other things..they don't necessarily go to the store to buy lottery tickets. I am sure if they continue to sell beer, gas, milk, sodas, bread and cigaerettes they won't go out of business. That is where they make their money ..they only get about .05 for each ticket they sell.
I don't know what all of the opposition is about. I am looking at the BIG picture..Billions of US dollars are going outside of our country each year to pay for gambling at offshore betting places. If the US would open up online betting for its citizens, then maybe we could cut those billions going outside the country by more than half. They need to find a way to keep our money in our country.
The easiest way to keep money on shore is to cut taxes. The Mellon Tax cuts of the 1920's did just that. Most people don't understand the law of diminishing returns as it applies to taxes!
Government is most often the cause of economic problems, not the solution!
I agree 100 percent with both of you as well. I made a statement a while back about this. If people can bet on horse races from other states, then the same should apply to state lotteries. I personally would play other jackpot games than what is offered here in Pennsylvania. New York's Sweet Millions or Win For Life would be some of my picks. Give the people what they want.
For those against this idea just keep in mind that this is just another option to buy tickets. I play no matter what.
When something is "the only game in town" it usually sucks, big time.
Yawwwwwwnnnnnnn...
This is a big yawwnner for me. As far as I'm concerned, if I cant buy tickets from other states, this is no big deal.
If I am in a state that is in the Megamillions pool or a in a state that is in the Powerball pool then I should be able to buy ANY kind of tickets I want from those other multi-state pool members online.