GPWA Times - Issue 21 - May 2012

Lotteries offer winning ticket By Lorien Pilling T he most remarkable feature about the March MegaMillions jackpot in the U.S. was not the fact that the rollover had reached a record $640 million but rather that U.S. lottery players still had to queue round the block to buy their tickets. For an economy that is home to Silicon Valley and Apple, which has revolutionized mo- bile commerce with its iPhone, the sight of people waiting in line for their 1-in-176 million chance of winning the jackpot was incongruous. Around the world, many state lotteries simply have not exploited to the full the opportunities afforded by Internet and mobile technologies. There might be some reasons for this – regulatory con- straints, executive reticence or concern about of loss of retail sales – but they are becoming less and less valid in the cur- rent economic age and with the technol- ogy that is available. Globally, lotteries account for 28 percent of all gambling revenues. But in the inter- active sector – Internet and mobile – state lotteries account for less than 10 percent of revenues. These figures show clearly that interactive channels are not currently being used to their full extent by lotteries. From the affiliate’s perspective the two numbers should present an opportunity because they demonstrate that there is a lot of room for growth. Of course, some state lotteries have em- braced the Internet. Austrian Lotteries, for example, has its win2day.at website, which offers an extensive range of games including lottery draw games, casino games and poker tournaments. Similarly the Scandinavian state lotteries were among the first to start selling lottery tick- ets over the Internet. And there are signs that other lotteries are waking up to the possibilities of interactive sales as regula- tions change. Many European state lotteries have been very involved in the process of creating In- ternet gambling regulations precisely be- cause they are monopolies which the gov- ernments are trying to protect. In France, for example, La Française des Jeux is a key source of revenues for the government. When preparing to open its Internet gam- bling market in 2010, the French govern- ment wanted to make sure that the lottery monopoly was well placed to benefit from new regulations and certainly not harmed by them. When Internet gambling regula- tion is introduced it is not uncommon for Internet lottery games to remain the sole preserve of the state lotteries. In the United States the legal opinion is- sued just before Christmas last year was seen as a decisive moment in expanding the methods by which state lotteries can sell their tickets. For decades the U.S. Department of Justice (DOJ) has insist- ed that federal law prohibits gambling of any kind on the Internet as a result of the 1961 Wire Act, which states that no infor- mation about sports betting could cross state lines through any wired commu- nication. This view consequently deter- mined the individual states’ attitude to- ward Internet gambling, including their own state lotteries. The DOJ’s reversal on its legal opinion came in response to two critical questions of law related to proposals by the states of Illinois and New York to sell lottery prod- ucts over the Internet. The problem was that the Illinois and New York plans entailed sending data across state lines, even though their lot- Cartoonresource / ShutterStock 40 Lotteries offer winning ticket