Page 40 - Public Gaming International September/October 2017

OVERCOMING OBSTACLES ON

THE JOURNEY TO iLOTTERY

Lotteries Look to Join Retail World with Online Sales

Jim Acton, Lottery Industry Consultant and PGRI Editorial Contributor

n January 2017, Virginia Lottery direc- same committee. “It’s bad for business,” internet. And their activities have delayed,
tor Paula Otto appeared before Virginia’s said Chuck Duvall, a lobbyist representing altered and, in some cases like Virginia,
House General Laws subcommittee to 7-Eleven. “Customers don’t just buy lottery stalled lotteries’ efforts to expand their busi-
Imake the case for expanding iLottery tickets. They buy cigarettes. They buy soft nesses and, ultimately, increase revenues for
in Virginia, which currently allows only drinks. And sometimes they buy beer. And good causes.
subscriptions. Director Otto noted that all of those are higher markup items than the The National Association of Convenience
the Virginia Lottery has been selling online lottery ticket. So if we don’t have that body Stores (NACS) has been particularly forceful
for ten years, but that an expansion could in the door, we are probably not in this fight, on both the federal
increase revenue for the Commonwealth by going to sell those other products.” and state levels. Locally, they send
an estimated $25 million for education over Despite the overwhelming representatives to testify at legisla-
five years. Otto cited successes in other evidence that the lobbyist’s claims tive hearings and publish scathing
states and presented details of how brick- are not borne out by experience, op-eds in newspapers. Federally,
and-mortar retailers would be included in elected officials sided with the their lobbyists are fighting the
the program. retailers and the iLottery bill was Department of Justice’s interpre-
But a coalition, led by convenience store overwhelmingly defeated by the tation of the Wire Act to weaken
owners, sounded the alarms in front of the subcommittee. lotteries’ role in online gaming.
“It was disappointing but we So far, four states offer same
gave it our best shot,” Otto said. day/single-ticket online lottery
“Clearly, we need to continue to games:
work with our traditional retailers to assure Illinois (March 2012)
them that we are interested in attracting new Georgia (November 2012)
players, not taking away their current ones.” Michigan (August 2014)
For the past five years, Virginia’s strategic Kentucky (April 2016)
plan has focused on growing the player base These lotteries will be joined by New
as a responsible way to grow revenues. Hampshire in 2018 as NH Governor Chris
“Lotteries need to keep pushing for Sununu signed legislation in June allowing
additional platforms on which to sell our the lottery to sell its products online.
products,” she continued. “The market has A number of other states, like Virginia,
changed. Our strategy for long-term sales, offer subscriptions only.
profit and player growth includes digital
innovation with the goal of creating an OPPONENTS FIGHT BACK WITH
omnichannel delivery system. We believe DUBIOUS RESEARCH
this strategy complements digital efforts New Hampshire’s success in passing
underway at the most successful traditional iLottery legislation came at a time when its
brick-and-mortar retailers. iLottery is just southern neighbor, Massachusetts, has strug-
one component of our digital strategy.” gled against fierce opposition. Opponents of
The trend of a small number of coalitions online gaming have resorted to the distri-
banding together to fight U.S. lotteries as bution of self-created, erroneous “research.”
they search for additional sources of reve- Case-in-point – the attempt to move along
nue has grown during the past few years. iLottery legislation in Massachusetts. Each
Associations as diverse as the National year for several years, iLottery legislation
Association of Convenience Stores and the has been introduced only to fall apart. In
Virginia Assembly of Independent Baptists 2017, thanks to countless meetings with key
have joined forces to thwart the move to the legislators and information dissemination,

40 // PUBLIC GAMING INTERNATIONAL // SEPTEMBER /OCTOBER 2017