By John Vrooman Haskell
It seems that everything is going online these days: the newspaper, banking, even grocery shopping; so why not the lottery? One Massachusetts legislator aims to answer this question in 2017. Although only a few states currently permit the sale of online lottery tickets—Illinois, Georgia, and Minnesota—their returns have been fruitful. For example, in only the first week after introducing the sale of online lottery tickets in 2012, the State of Illinois saw a return on the sale of lottery tickets of $425,000. However, in the face of such an opportunity for massive fiscal returns to Massachusetts, many questions arise. The most important of which being: are the risks of such an easily accessible platform outweighed by the potential monetary return for the State?
Aptly named, the “Act Relative to Online Lottery” (“SD-6”), introduced by Massachusetts Senator Jennifer Flanagan in January of 2017, aims to “conduct a state lottery, including a lottery conducted online, over the internet or through the use of mobile applications.” While the bill itself would simply legalize the practice of such an industry, the real working pieces of SD-6, if it were to pass, would ultimately be decided by the Massachusetts Lottery Commission (“MLC”). Such decisions to be made by the MLC would include but not be limited to the types of games available, such as scratch-off tickets and daily or weekly drawings, the price of such lottery tickets, and the methods of payment to the winners of such online lotteries. As is the case with all lottery proceeds in the state traditionally, the proceeds from the sale of these tickets would go towards aiding Massachusetts cities and towns.
With rampant support from the head of the office of the Massachusetts State Treasure, Deborah Goldberg, SD-6 aims to create a “more modern, forward thinking product” for two reasons. First, SD-6 aims to target the young adult, or millennial crowd of Massachusetts citizens who conduct a large portion of their activities online. Second, according to Goldberg, because Cyber Monday saw greater returns than Black Friday in 2016, moving lotteries online creates a more modern product for savvy online shoppers who may be interested in purchasing lottery tickets.
However, as with the introduction of any new gambling opportunity in America (looking at you, DFS), opponents of gambling industries and the retailers of conventional lottery tickets are already up in arms at such an idea. Their most warranted complaints grounded in arguments of the need for proper age verification, the potential for playing these games with credit cards and unsolicited harm to the retailers of traditional paper lottery tickets. But, unlike such industries as DFS when it was in its nascence, SD-6 appears to cover all of the aforementioned issues in meaningful fashion.
For example, quickly answering the protests of the traditional retailers of lottery tickets, SD-6 contains multiple provisions promoting the sale of lottery tickets or games from traditional, licensed sales agents (i.e. retail stores). One such provision would be to allow retailers to sell prepaid gift cards that can be redeemed for online or mobile transactions in an online lottery. Additionally, to prevent the usage of credit cards in the online lottery industry, SD-6 sets forth that the MLC shall not accept credit card payments for any lottery transaction, opting instead for debit card of verified bank accounts as the only methods for purchasing tickets. Furthermore, answering those outcries citing the potential risk of underage gambling, the MLC is tasked with providing “reasonable” age verification measures to prevent underage access to the online lottery games.
Although the predecessor to SD-6, introduced in November of 2016, ultimately failed to be voted on by the Massachusetts House of Representatives, SD-6 provides a new and exciting opportunity for the Massachusetts State Legislature to increase lottery participation in the digital age. For a State whose lottery revenue decreased a whopping 16 percent from 2008 to 2015, taking their lottery online could be the shot of adrenaline this stagnant State industry needs to attract new customers and raise revenue returns for the State.
Student Bio: John is a Staff Member on the Journal of High Technology Law. He is currently a 2L at Suffolk Law. He holds a B.A. in History from Virginia Commonwealth University and is Secretary of the Real Estate/Trusts and Estates Association.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.