Internet sales being contemplated
SPRINGFIELD, Ill. — Hoping to squeeze more money out of the state lottery, Illinois Senate President John Cullerton wants to sell tickets online and hire a private company to manage and market the games.
Cullerton thinks new technology and fresh ideas could help Illinois — facing what could be a $9 billion hole in next year's budget — dramatically boost lottery revenues.
"I would venture to say you could potentially even double it," the Chicago Democrat said in a recent interview with The Associated Press.
But lottery experts are skeptical, noting Internet sales could raise legal questions and might not attract many new customers because lottery tickets already are so easy to buy.
And changing lottery management would make little difference in sales, they say, unless Illinois also changed the kinds of games and marketing it allows. Would video lottery terminals, similar to slot machines, be allowed? Could the lottery be advertised aggressively without allegations of exploiting the poor?
"It really comes down to whether a lot of strings are attached," said Sen. Dave Syverson of Rockford, the top Republican on the Illinois Senate's gambling committee.
No U.S. lottery sells individual tickets online. A handful of states let people go online to buy long-term subscriptions, where customers sign up in advance to play the same numbers week after week. However, even that has been complicated by credit card companies classifying the subscriptions as a gambling purchase instead of a government service, triggering additional fees and red tape for customers.
Cullerton, D-Chicago, said he would like to sell online tickets to the state's major game, Lotto. He predicted that would attract impulse buyers who hear of a huge jackpot but don't want to stand in line at a convenience store. Then there would be even bigger jackpots.
"Buy it online, the jackpot goes up dramatically. Then you have the effect of more and more people buying," Cullerton said, estimating it might increase Lotto sales by $300 million a year.
Lotto sales for the past fiscal year totaled $113 million. Sales for the multistate "Mega Millions" game were $221 million.
Lottery experts say it's not clear whether Internet sales would be allowed under federal law.
I. Nelson Rose, a professor at California's Whittier Law School, said he thought it would be permitted so long as the computer system barred purchases by anyone outside of Illinois.
"It certainly would be successful, even if they limited it to Illinois. Most of the lotteries of the world sell a significant percentage of their tickets online," Rose said. But, he added, "It would be an incremental increase. To some extent, you're going to cannibalize what you've already got."
Other experts said the law is far from clear.
"I think it's an issue of not clearly understanding what exactly the rights are of the state in this issue," said David Gale, executive director of the North American Association of State and Provincial Lotteries.
Even if legal, Internet ticket sales would raise sensitive policy questions.
Randy Miller, executive director of the lottery in North Dakota, where they allow online subscription purchases, said he would worry about gambling addicts maxing out their credit cards. "That's going to facilitate impulse-buying for problem gamblers," he said.
Cullerton said Illinois could see even more benefits from private management of the lottery.
He rejects the idea of selling the lottery or leasing it for decades to a private company, an idea former Gov. Rod Blagojevich had pushed. Instead, Cullerton suggests maintaining ownership but letting someone else manage and market the lottery.
He offered no specific predictions but said it might be possible to double sales, which totaled nearly $2.1 billion last year, up 2.8 percent from the year before.
"The private sector can manage the lottery much better than it's been managed. The lottery's trying to sell to the same people instead of marketing to new people," Cullerton said.
Others, however, say it's unlikely private management would make a dramatic difference unless the state's lottery laws changed, too.
Could private managers offer video lottery machines or keno, a popular Las Vegas game? Would they be allowed to sell tickets everywhere, including stores that sell pornography? Would they face any repercussions for advertising seen as targeting the poor and encouraging people to bet money they can't afford to lose, something that has happened in the past?
"One of the problems with this idea is, it still would be the state lottery. Even if it were privately run, I think you still wouldn't see them selling outside of welfare offices," Rose said. "Traditionally, lotteries have been fairly conservative because of the fear of political backlash."