Paul's Wall July 9, 2012

Paul's Wall July 9, 2012

Congratulations to the German lotteries for their historic agreement to form a unified organization. Previous to July 1, the sixteen different lotteries were organized into two different associations, "SKL" in the southern region and NKL in the northern region. Now they have combined to form one umbrella organisation, Gemeinsame Klassenlotterie (GKL), in an effort to provide a more attractive alternative to private gaming. This is a vital step forward in making legalized forms of gambling more appealing to the consumer, to protecting the players from illegal operators and fraud, and towards preserving the legal framework that regulates the lottery industry in Germany. Without unified action on the part of the government lotteries, the likelihood that those public policy objectives would be achieved is very small. I would respectfully submit that holds true in all jurisdictions where there are different levels of governmental authority (for example, state and federal in the U.S., Australia and many countries all around the world; and member states and the EU Commission in Europe, etc.). It might not appear that the threat to our future is as imminent as it may have been in Germany, but the immense resources and influence of the commercial gambling industry have their guns squarely pointed at the goal of disenfranchising government lotteries. Unified action on the part of lotteries everywhere is needed to protect the interests of all government lottery stakeholders, especially the public services and good causes that depend on lottery funding.

There is an interesting story about the Alderney Gaming Control Commission (AGCC). After its licensee Full-Tilt Poker was the indicted in the U.S., the AGCC conducted a thorough investigation of Full-Tilt to make sure that the financial accounts of Full-Tilt were in order and secure and adequate to cover all players' funds that were on deposit. Upon completion of the investigation, AGCC assured the world, in a bold statement posted on its own AGCC website, that "There is no reason to believe player fund transactions are fundamentally threatened by any consequence of the US authorities' actions." How the AGCC has managed to retain even a shred of credibility as a regulator is astonishing. And yet they do, in a big way, with over 400 licensed e-gambling companies on an island that is 3 square miles in size. Perhaps this could be Exhibit A as to why the EU should empower the individual member states to have complete control over all matters of regulation and taxation; and why the U.S. Department of Justice's affirmation of states' rights to regulate and tax all forms of gambling (except sports-betting) is a sound and welcome policy clarification. In another related story, the Australian federal government recommends that the best, if not the only, way to stop the underground online gambling market from continuing to grow and thrive is for the government to regulate and tax it. And capture hundreds of millions in taxable revenues. It's true for Australia, true for the U.S. states, and true for most jurisdictions around the world. Sidebar: the former CEO of Full-Tilt flew from Ireland to New York to turn himself in to be arrested and formally arraigned in New York. Pled not guilty to fraud and operating a Ponzi scheme among other charges.

Check out the reports coming in from U.S. lotteries. Their fiscal year ended June 30, and so now they are reporting their annual 2011/2012 results. It has been a very good year for all of them, and the coming year promises to be even better. One of the drivers is their ability to work together to drive increasing sales in the multi-jurisdictional games. But the U.S. lotteries are really hitting their stride on all fronts to generate more funds for Education, Public Service, and other Good Causes.

For instance, New York Governor Cuomo joined the governors from Colorado, New Jersey, Delaware, and many other U.S. states in pushing hard for states to expand government gaming and gambling. As Gov. Cuomo points out, gambling is already widely available through Tribal gaming casinos, neighbouring states' casinos, and other venues, so it makes no sense for states to stay on the sidelines in this expanding market. And it's not just about casinos. The New York Lottery, for instance, is installing 500 "Quick Draw" video Keno terminals in bars and taverns throughout the state. Age-restricted facilities like that would seem to represent a huge market for lotteries to expand into faster-action games that would attract whole new consumer groups to lottery.

Thank you all for your support. I welcome your feedback, comments, or criticisms. Please feel free to e-mail me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Mark your Calendars (Oct. 22-25) for Lottery Expo 2012 in Miami. Click on www.PublicGaming.org for more info.