Virginia Lottery Online Games Commence July 1, Will Provide Relief as Sales Diminish

The Virginia Lottery will begin offering online games beginning July 1. It comes at a most critical time, as the lottery has seen its revenue decline during the COVID-19 pandemic.

Earlier this year, the Virginia General Assembly voted to repeal existing laws that prohibited the sale of lottery games over the internet. Gov. Ralph Northam (D) approved the change in March.

On July 1, Virginians will be able to purchase Mega Millions, Powerball, and Cash4Life tickets. All three games are multijurisdictional interstate draws. The Virginia Lottery will initially offer one instant game called Northern Wilds. Lottery officials say new instant online games will be added every few weeks.

IWG (Instant Win Gaming), an interactive lottery software developer, will supply the Virginia Lottery with its online games. IWG also provides Michigan and New Hampshire with its internet games. Rob Wesley, director of digital at the Virginia Lottery, said IWG has been a “helpful resource” in the lottery going online.

Virginia will become the ninth state to have an operational online lottery. The Commonwealth joins Georgia, Illinois, Kentucky, Michigan, New Hampshire, North Carolina, Pennsylvania, and Rhode Island.

Pandemic Sickens Sales

The coronavirus resulted in Northam ordering most nonessential businesses to close on March 25. The order ran through June 10.

Lotteries across the country have reported a sharp decline in revenue due to COVID-19. In March, the Virginia Lottery said its profits dropped 28 percent. State officials haven’t released profit reports for April and May, but say sales have greatly decreased.

Since 1989, when the Virginia Lottery commenced, more than $39.4 billion in tickets have been sold. After prizes ($22.7 billion), retailer compensation ($2.2 billion), and operating expenses ($2.2 billion), the lottery has won over $12.4 billion.

Proceeds from the Virginia Lottery support K-12 public education in the Commonwealth. The lottery is responsible for funding about 10 percent of the state’s annual education budget.

The Virginia Lottery has recorded three consecutive yearly increases in sales and proceeds. That streak will likely end this year.

Enter: Sports Betting

Virginia ended its long prohibition on commercial gambling earlier this year, when the General Assembly and Northam approved legislation that allows five casinos in economically-distressed towns. Local voters must still approve each venue during a ballot referendum in November. The bill additionally cleared the way for sports betting.

The Virginia Lottery will handle sports betting, and can issue as many as 12 sportsbook licenses. Each licensee will pay the state a $200,000 fee, and share 15 percent of their gross gaming revenue with the state.

Sportsbooks will be permitted to offer odds on professional and collegiate sports, but not on athletics involving Virginia colleges and universities.

The Virginia Lottery says the earliest sports betting will go live is likely in December. Lottery officials will next meet July 15 to discuss initial regulations to oversee the licensing process for interested sportsbook companies.

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