Paul’s Take2 Blog March 21, 2021

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Paul’s Take2 Blog

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Paul’s Take2

 

The week’s news seems to capture the trend-line for 2021.  The Virginia Lottery just launched online lottery games in July of last year.  In just these first eight months, revenue from iLottery has rocketed from zero to $436 million, making up 21.8% of the state lottery’s total $2 billion revenue during that period.  This launch happened in a unique time of social distancing and “shelter-in-place” lifestyles.  But still, this clearly reflects a pent-up demand for online lottery gaming, and sets a new bar for what can be achieved in the world of iLottery. 

 

Another story chronicles the 90th anniversary of the legalization of gambling in Las Vegas.  It’s a very interesting, even fun read.  But it’s all about looking back into the past when it was glamorous and exciting to actually get on a plane to travel to an exotic place that reveled in activities that were taboo everywhere else.  That changed long before the pandemic as casinos were built out across the U.S., making casino gaming easily accessible for almost everyone everywhere.  In response, and to its credit, Las Vegas has reinvented itself a number of times to stay relevant and attractive to vacationers in spite of wholesale changes to the competitive landscape.  Not only do I wish the best for Las Vegas, I am quite confident that it will continue to adapt to changing times and enjoy a long, healthy, and prosperous future.  The beauty of capitalism is that it thrives on chaos, on the disruption that becomes the foundation for new products and services to meet a latent demand or even create a market-place for whole new categories of consumer products.

 

There are three other stories that round out this picture.  First, the Biden administration is not likely to support a continuance of the U.S. Dept of Justice offensive against states’ rights to regulate gambling.  It seems less and less likely that the federal government will interfere with state legislatures which choose to regulate online lottery, casino-style gaming, and sports betting within their own borders.  That means that the breakneck pace of legislation authorizing new regulatory frameworks that enable iLottery, iGaming, and sports betting will likely continue.  Second, the AGA “March Madness” article seems to say that it won’t be long before 42 states regulate sports betting as it observes that “25 states and Washington, D.C. have legalized sports betting, with 21 legal markets operational. And 17 states currently have active or pre-filed legislation to legalize sports betting.”  It is an interesting anomaly that the momentum of iLottery is not quite as robust, but it appears that iLottery may well be swept up in the same regulatory trend towards legalization to protect the consumer and channel economic benefit back to society as opposed to prohibit and enrich criminal enterprises which prey on vulnerable consumers.  Hence, we see that the Connecticut Lottery is “congratulating” the Connecticut governor for “bringing Connecticut’s gaming legislation into the 21st century (by) allowing the Connecticut Lottery to modernize our business through online sales of some existing lottery games, and to grow our contribution to the state by introducing both online and retail sports betting.”

 

Legislators’ enlightened view of regulation is probably driven more by the prospect of profits generated by sports betting and the political love-fest of big business and government.  It’s OK though because the refusal to regulate economic activities that the consumer is engaging in already never made sense anyway.  Forcing consumers to play on websites operated by unregulated, illegal  (and therefore criminal) enterprises; and enriching those very same enterprises with a tax-free revenue stream, was never good public policy.  Further to that, converting the anonymous consumer base that plays lottery at retail (or slot machines at casinos) into a registered interactive player base is the most vital step towards an effective Responsible Gaming program. 

 

March is Responsible Gaming (RG) Month.  Instead of carrying on so much about “holiday gifting of lottery tickets” as if that is the root of all evil, I would respectfully submit that NCPG (National Council on Problem Gambling) challenge other game categories (e.g. casino and sports betting) to elevate their RG practices to the gold standard set by government lotteries.  NCPG should also do the responsible thing and promote iLottery (and the requisite registration of players) as the single most important RG initiative that legislatures can support.  “Holiday gifting of lottery tickets” seems to me to be a silly side-show that distracts from the real business of protecting consumers and promoting responsible play.