A growing number of states are turning to online lottery products
Online Poker Report

Online Lottery Is Starting To Spread Across The Northeast

Online lottery spreading copy

Legislation to legalize online casino games and online poker grabs most of the headlines. But it’s another online gaming product that has rather quietly made the most progress in the United States: online lottery.

The OLC opinion and online lottery

Inquiries from New York and Illinois made the spread of online lottery possible. The two states asked the Department of Justice for legal clarity regarding their online lottery subscription services.

Those inquiries led to the 2011 legal opinion issued by the DOJ’s Office of Legal Counsel. But the OLC opinion did more than just rubber-stamp subscription sales.

It opened the door for multiple forms of intrastate online gaming. Plus, it’s been a point of contention for the anti-online gaming crowd.

The opinion found that the scope of the 1961 Wire Act was limited to sports betting, meaning states could legalize and regulate online casino games, lottery and/or poker.

Online lottery available

To date, six states have authorized online lottery sales. A seventh, Minnesota, revoked online sales in 2015. The six include:

  1. Illinois
  2. Michigan
  3. Georgia
  4. Kentucky
  5. Pennsylvania
  6. New Hampshire

Further, online subscription services are available in five other states:

  1. New York
  2. North Dakota
  3. Maine
  4. Virginia
  5. North Carolina

On the other side of the ledger, only four states legalized online casino and/or poker games during that same period of time:

  1. Nevada
  2. Delaware
  3. New Jersey
  4. Pennsylvania

Online lottery first movers

Online lotteries not only outnumber online casinos but also predate the launch of Nevada’s online poker industry by a full year.

The first states to go beyond the subscription model and sell lottery tickets online were Illinois and Georgia. Their sales began in March and November 2012, respectively.

Two more states joined the parade in 2014: Minnesota in February (online sales in Minnesota have since been revoked) and Michigan online lottery in August. In addition to selling draw tickets, Minnesota and Michigan also sold online instant win tickets.

A fifth state, Kentucky, launched online lottery sales in April 2016.

Based on the first-mover states, online lottery looked like it was a Midwest and Southeast phenomenon. That’s no longer the case.

Major progress in 2017

Two Northeast states passed online lottery legislation in 2017: New Hampshire and PA. In addition to those states, 2017 also saw New Jersey authorize online courier services.

The courier service isn’t a traditional online lottery, but the basic mechanics of the ticket sales and redemption options make it a de facto online lottery.

More to come in 2018?

Several other Northeast states could join the growing list of states in 2018: Massachusetts, Connecticut and Rhode Island.

In fact, it’s not out of the question that online lottery will be legal in all three of these states by year’s end.

Massachusetts

Massachusetts has been courting online lottery sales since 2014, but after several engagement proposals, the state is still waiting for a definitive “yes” before it can set a wedding date.

This might be the Bay State’s year. Here’s why:

Massachusetts has several high-profile online lottery supporters, including Treasurer Deb Goldberg, whose office oversees the Massachusetts Lottery. The state has also cited concerns that if it doesn’t take its lottery online it will be at a competitive disadvantage with other states in the region.

Last year, Massachusetts Lottery Executive Director Michael Sweeney told the Lottery Commission:

“We’re facing a lot of different types of pressure as a lottery and New Hampshire being more aggressive and receiving more empowerment from their state legislature will have an impact on us, and clearly a negative impact as revenue goes.”

Massachusetts’ northern neighbor passed online lottery legislation last year, and both its southern neighbors have already introduced legislation this year.

If that doesn’t push Massachusetts across the finish line, I’m not sure what will.

Connecticut and Rhode Island enter the conversation

Both Connecticut and Rhode Island are taking their first cracks at online lottery this year. Despite their newness to the issue, both states already have pending legislation.

Online lottery is one of a number of potential gaming expansions Connecticut is exploring. A bill was introduced on Feb. 28, placing it on the legislative agenda alongside sports betting and perhaps online gambling.

Like Connecticut, Rhode Island isn’t taking anything off the table when it comes to gaming expansions. An online lottery bill introduced in January is modeled after New Hampshire’s legislation.

That’s an indication online lottery authorization in the region could very well be a catalyst for legislation in other states.

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Steve Ruddock
- Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus for OPR is the developing legal and legislative picture for regulated US online poker and gambling.