Opponents stoke fears over problem gambling behaviors
By Kate Northrop
A bill allowing the digital sale of lottery tickets by the Hoosier Lottery has passed an Indiana House committee vote 9-2 and will advance in the current legislative session.
House Bill 1432, authored by Representative Ethan Manning, would legalize the sale of lottery tickets for draw games and eInstant games online by the Hoosier Lottery.
The bill outlines core changes to current legislation that would allow Indiana to join other states in offering online lottery games while creating a framework to compensate traditional retailers impacted by the digital shift and address where lottery revenue is directed.
If passed, it would also require the lottery commission to adopt rules concerning the bulk purchase of lottery products, a nod to the $95 million Lotto Texas jackpot "buyout" that occurred in April 2023. All the same, the lottery agency may also authorize and regulate courier services as they see fit, giving hope to butler ticket services eyeing Indiana as another base of operations.
Traditional brick-and-mortar retailers have generally voiced their concerns over the rise of online ticket sales in the past. Store owners argue that it detracts from profits by way of reduced lottery commissions and cross-selling opportunities, such as when a player decides to buy a bag of chips during a visit intended for a lottery purchase.
However, multiple state lotteries have asserted that retail brick-and-mortar sales have only increased since adopting online sales. Just a couple of examples, New Hampshire lottery retailers saw a record year of income after the addition, and North Carolina Lottery commissioners reported findings that retailers in states where online instant games are available actually outpaced other physical stores located in states that did not offer digital instant games.
"This new delivery channel actually attracts new players, increases awareness of lottery products and increases brick-and-mortar sales as well," Hoosier Lottery Director of External Affairs Jared Bond said during a committee hearing.
Indiana's latest online lottery bill still attempts to acknowledge the possibility for impacted retail sales and would thus require the creation of the digital lottery retail incentive program fund. The fund would require the Hoosier Lottery commission to deposit 2% of the net digital lottery sales each quarter into the fund, which would be used to directly compensate retailers that participate in the promotion of digital lottery games.
Lottery revenue in Indiana is used to pay out prizes, cover operating costs, and make required transfers to state funds, such as the pension relief fund. After those requirements are met, surplus revenue, which includes money generated by online sales, would be distributed to counties without riverboat casinos.
While the Hoosier Lottery has recorded $7.4 billion in transfers to the state since its inception 35 years ago, it's facing "challenges to maintain and grow our revenue and player base into the future," unlike other "mature" state lotteries, Bond attested.
Critics of the bill argue that the increased digital access to online gaming poses risk for problem gambling behaviors.
"I've heard a lot of people say, 'My husband or my wife is bankrupting my family, and I could do nothing about it,'" Representative Matt Lehman said.
The Lottery pledged to devote $500,000 per year into the responsible gambling program, which offers treatment resources and self-exclusion programs. For example, a participant may voluntarily enroll in a ban from casinos and other legal gambling establishments.
However, the program only allows self-reporting. During a hearing, Lehman called for a beefed-up version of the responsible gambling program that would also allow Indiana residents to submit their addicted spouses to the exclusion program.
Following the 9-2 House committee vote in favor, the bill was recommitted to the House committee for additional fiscal review, which is typical for complex bills that involve state revenue.
If the bill is passed, Indiana would join 14 other states that offer online lottery sales, Bond said.
So Governor Braun has to sign off this right? Not sure if he would or not, he came into office with guns blazing.
In 2015 they authorized the many riverboat casinos to go on land. Perhaps this will pass too!
Meanwhile here in NJ the assembly passed a bill barring the NJ Lottery from selling tickets online because it would harm brick and mortar sellers yet state-registered courier services can continue to operate in the state. What a joke.
All states wrestle with that same issue, not just New Jersey. It's one of those things where different states have different local sensitivities. For example, some states like NJ might have a very strong convenience store lobby due to the politics of NJ, so legislators in the state might get funded by groups that are against online sales. In other states with different politics an online bill might not face the same political pressures so it can go through easier. There is no "one size fits all" for this stuff.
Note that I have gone through lengths to describe the issue without making this a political discussion. The only salient point is that politics can make this easier or harder in a state.