Online Lottery News – State by State Tracker

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The widespread legalization of online gambling has not yet extended to online lotteries. This is surprising because an online lottery under the auspices of the state is the most direct way for the state to profit from the expansion of gambling. At this point, six states have legalized online lotteries and several more states are trying to do so. However, there is no groundswell to legalize online lotteries as there is for sports betting, although this is starting to change. Currently, the movement towards online lotteries is outpacing the movement towards online casinos, although the two may now find themselves locked in a zero-sum game.

Online Lottery by State

Most US states currently have an online lottery website. The main purpose of online websites is to see winning numbers, find locations, and contact information. However, there are a handful of online lotteries that are expanding their service offerings and offering instant games. Instant games are casino-type games that you can place bets on. You can play Instant Games on the web and mobile apps where available.

California Online Lottery
Florida Online Lottery
Michigan Online Lottery
Ohio Online Lottery
Pennsylvania Online Lottery
Texas Online Lottery
Virginia Online Lottery
Tennessee Online Lottery

The road to online lotteries

Prior to 2011, states avoided online lotteries due to the legal interpretation that they were prohibited by the Wire Act. In 2011, New York and Illinois asked the Department of Justice to rule on whether the Wire Act was limited to sports betting. Specifically, the states were seeking an opinion that selling lottery tickets online to customers within their state borders did not violate the Wire Act. The Department of Justice responded with a legal opinion stating that the Wire Act did not prohibit these proposed online lottery sales. Specifically, he said interstate transmissions of wire communications that were not related to sporting events were not prohibited. Also, since these sales take place within state borders, the UIGEA is not meant to prohibit them as well. Although there is no explicit federal law on this point, nothing prohibits online lotteries either.

Since federal law that prohibits interstate sales or communications is not applicable in this case, online lotteries became a matter of state law that states were free to decide. The only prohibition that would result from federal law is a ban on interstate online lottery sales. In other words, Ohio residents could not play on michiganlottery.com or use any of the Michigan Lottery Promo Code. Other than that, states are free to adopt their own regulatory regimes if they choose to legalize online lotteries. It is important to note that this lack of federal prohibition applies to both online lottery games and online lottery ticket sales.

Online Lottery Status Bill Tracker

State Games available Legalization date Link to law
Pennsylvania Poewrball and Mega Millions 10/2017 HB 271
Michigan Powerball, Mega Millions, Loto 47, Fantasy 5 11/2014 Operating under existing laws over 30 years ago.
Georgia Fantasy 5, Mega Millions, Powerball 11/2012 https://www.galottery.com/content/dam/portal/pdfs/georgia-benefits/20190529-lottery-for-education-act-2019.pdf
Illinois Powerball, daily lottery games, instant games 3/2012 Illinois Lottery Law
New Hampshire Mega Millions and Powerballs 7/2017 HB 517
Kentucky Jackpot, daily draw games, instant play 4/2016 Statue of Kentucky 154A
Virginia Mega Millions, Powerball, Cash 4 Life and Instant Games 01/07/2020 https://law.lis.virginia.gov/vacodepopularnames/state-lottery-law/

There are currently six states that offer online lottery games. In addition, five states allow online subscription services. The very first mover in this space was Illinois. The state online lottery is mostly limited to the sale of lottery tickets for daily and jackpot games.

Georgia quickly followed Illinois in online lotteries, which was surprising given that Georgia was one of the last states to legalize a physical lottery. Legalization overcame opposition from anti-gambling forces in the state. Georgia allows both the sale of lottery tickets online and the ability to play certain lottery games electronically. The state sold a large number of tickets electronically.

The state that set the standard for online lottery success is Michigan. The state offers both the ability to purchase jackpot game tickets as well as electronic scratch cards which are available exclusively online. Surprisingly enough, online lottery sales contributed to total state lottery revenue instead of siphoning off physical lottery revenue. In fact, less than 18 months after the online lottery launched in Michigan, weekly sales topped $8 million. At the same time, the retail lottery continues to set sales records. Studies have shown that some players are more likely to play the lottery if they don’t have to leave their homes and go to the store.

Kentucky was the fourth state to launch its own online lottery. It took the state three years after approving online lotteries to begin operations. The state offers both the ability to purchase physical lottery tickets as well as online games. As will be detailed below, Kentucky offers a wide variety of online games.

Pennsylvania recently offered an online lottery. Its lottery attempted an ambitious menu of gaming offerings that brought it into conflict with its casinos. It remains to be seen how the online lottery will fare in a state that has recently added poker, sports betting and online casinos.

The Virginia Lottery has been live since January 2021 and the state is making solid progress so far.

Future legalization of the online lottery

Several northeastern states are seeking to legalize online lotteries. First, New Hampshire joined the list of states that now have lotteries, legalizing online lottery last summer. In addition to purchasing lottery tickets, New Hampshire offers e-Instant games that can be played from a smartphone, tablet, or desktop computer. Additionally, there are a trio of northeastern states that are in various stages of trying to legalize an online lottery. These states are Massachusetts, Rhode Island and New Jersey.

As mentioned above, all states that have online lotteries allow the purchase of jackpot draws. In addition, states also sell daily lottery tickets. Keno has also proven to be a popular online offering as customers no longer need to stand in a store waiting for numbers to be drawn. State lotteries also offered popular virtual scratch games. For example, Georgia offers a wide variety of Diggi games broken down into a variety of prizes and themes. Michigan also offers a wide variety of games, with tickets that can be purchased for as low as a penny. Low-cost entry points help boost the enduring popularity of the Michigan Lottery.

Competition with online casinos

Lotteries must be careful not to be too creative in the type of games they offer, lest they clash with casinos operating in the state. For example, in Pennsylvania, the state lottery attempted to offer iLottery interactive games. These games are casino-like and, unlike other online lottery games, offer big jackpots. These jackpots can reach a quarter of a million dollars. These games are not the typical lotteries or scratch games offered by other online lotteries. Some of these games mimic casino games in that they are blackjack and roulette type offerings.

Online casinos in Pennsylvania considered this an encroachment on their territory. Online casinos in Pennsylvania pay high license fees to the state and are required to pay a high rate of tax. This allows casinos to expect not to have competition from the state to which they pay these license fees and taxes. Additionally, online lotteries gain a competitive edge over casinos since lotteries are open to players aged 18 or older, unlike casinos, whose eligibility age is three years older.

Pennsylvania is the only state where iLottery competes with online casinos and so far the two have struggled to coexist. New Jersey is also another crowded gambling market considering online lotteries. There is speculation that online casinos may object to this decision given the experience of neighboring Pennsylvania. New Jersey has experimented with selling lottery tickets by courier, but this does not require the purchase of new tickets. Pennsylvania is likely to prove a cautionary tale for other states looking to have both an online lottery and online casinos, unless the online lottery promises to have a limited reach. While there is room for casinos and states to increase their revenue, at some point the two begin to compete for the same piece of the pie. The only advantage casinos have over lotteries is that many lotteries prohibit credit card sales, while casino accounts can be funded with a credit card.

In some cases, the presence of a successful online lottery may mean that online casinos may not have the chance to operate in a state. For example, Michigan has had little incentive to offer online casinos since its online lottery became so successful. Allowing online casinos to operate in the state may mean that Michigan must share revenue with casino operators who are currently its exclusive territory. Michigan can continue to expand its own lottery offerings to a program resembling Pennsylvania’s iLottery without legalizing online casinos.

Who can play?

As stated above, online lottery players can start playing at age 18. Online lottery ticket sales are limited to those physically present in the state. This is to avoid violating the Wire Act.

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