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Pennsylvania casinos are up in arms when it comes to some of the PA lottery’s new online offerings, and the conflict is escalating.
At the center of the controversy is the PA online lottery instant win games. The casinos claim the online instant win games are nothing more than online slot machines by another name.
In a letter sent to Revenue Secretary Daniel Hassell back in early July, Pennsylvania’s 13 casinos called on the state to cease offering the games, and implied legal action was on the table if the online instant win games weren’t discontinued.
In the letter the casinos allege:
“In virtually every way imaginable, Lottery’s iLottery program mimics a casino operation offering simulated casino-style games in direct contravention of (the law’s) express prohibition on Lottery offering ‘interactive lottery games which simulate casino-style games.’
“Moreover, Lottery has been heavily marketing its casino-style games, free play and rewards program through direct mail, email, and television advertising.
“Overall, the games essentially have the same backbone as a slot machine; an outcome that is determined by a random number generator with animated graphics and computer operations used to provide a visual depiction of that outcome.”
After a review, the lottery decided to continue offering the online games, but it did stop advertising them as slot-style games.
Seven of the state’s 13 casinos have since banded together and filed a lawsuit against the Pennsylvania Lottery.
The casinos are:
The case is more nuanced than most people believe.
The law that legalized online lottery products states:
“[Does] not include games that represent physical, Internet-based or monitor-based interactive lottery games which simulate casino-style lottery games, specifically including poker, Roulette, slot machines and Blackjack.”
A layman’s reading of the law makes it seem like an open and shut case for the casinos. But, the case will hinge on just one word of that paragraph: simulate.
Did the legislature mean online lottery games cannot look like slots? Or, was it using the strict legal definition of slot machines?
The latter is more likely than the former.
+1. Lawmakers and casinos all knew the difference, and the same distinction exists in tons of markets. That obv doesn't mean the courts won't be influenced by their bad advertising, but if they purely view the product itself honestly, the lotto should win.
— Matt Kaufman (@KaufmanPoker) August 22, 2018
The initial complaint was legitimate. As the casinos noted, the online instant win games not only look like slot machines, but they were advertised by the lottery as slot-style games.
Unfortunately, the casinos (perhaps rightly suspecting their case is on shaky ground) have decided to take some other swipes at the state lottery.
In an op-ed on behalf of the casino coalition, David La Torre, the president and CEO of La Torre Communications wrote, “Not only is the Pennsylvania Lottery breaking the law by providing games that are set aside for casinos, but anyone can play the games by simply indicating they’re 18 or older.”
Setting aside the legal age to gamble on different products — something that varies by product and jurisdiction — the attack is unrelated to the crux of the lawsuit. Further, it’s very misleading, and will hurt all forms of legal online gambling going forward.
LaTorre is correct, you can demo the games by clicking a button that indicates you’re 18, but to actually purchase plays you’ll need to register an account. That process includes verifying your identity through your Social Security number.
The casinos should be very careful about this, because the PA Lottery is using the same player verification that Pennsylvania casinos will use when they offer online games. It’s the same process in place in New Jersey, and the same process if you want to apply for a credit card online.
If that wasn’t bad enough, the age verification process to play the online lottery’s free-play demos is similar to the age verification process at the free-play social casinos offered by virtually every Pennsylvania casino operator. The only age verification feature at social casinos is clicking a box that says you’re 21.
The casinos might think that by muddying the waters and implying the PA Lottery is using lax player verification methods they’re scoring points. What they’re actually doing is undermining the procedures they will soon be touting.
Don’t think for a second that anti-gambling and anti-online-gambling aren’t going to turn them around and use the casinos arguments against the lottery against the casinos online games.