If there is one thing that state governments like, it’s lottery revenue that they can spend on all the social programs, education, health programs, government deficits, arts and more. State lottery revenue accounts for a major bulk of government dollars that they wouldn’t have to spend. Plus, all the jobs they create and in turn even more revenue from tax paying employees. The dollars and sense are starting to add up and more states are beginning to see the light not in just lotteries but in legislating online casino gaming as well. State lotteries combined in the US to bring in an estimated $68.8 billion in revenue for 2012. The biggest market in the US is New York with sales totaling $8.4 billion.
Nevada, New Jersey and Delaware have legalized online gaming and more are on the way. Even Illinois is taking a serious look at it now too. It all started back in 2011 when the federal government clarified their stand with online gaming and declared it was ok for state lotteries to sell tickets online and that the 1961 wire act only pertained to sports betting. Now even conservative Wyoming is looking at having a state lottery. Add that to the 43 other states that made profits combined in access of $19 billion dollars you’ve got a lot of extra cash in state coffers. Then add the additional profits states made from racetracks casinos and you’ve got some serious ongoing cash flow for governments to spend it where they see fit.
Let’s face it Americans love to gamble so why not take advantage of tax dollars that would otherwise go to offshore gaming companies. Nevada was the first state to jump on the legalization of online gaming with online poker, as they obviously know the revenue it would bring in and they wanted to recognize this and put their signature on where the industry is headed. Republican Gov. Brian Sandoval hailed his state’s new Internet gambling law as “the framework that will usher in the next frontier of gaming in Nevada.” They have also passed legislation to work with other states so operators can make the most of this expanding market.
Even though Wyoming is the 44th state to legalize a lottery, they are taking the cautious approach by not allowing scratch-off tickets and electronic video lottery games, which a lot of other state lotteries offer today. The Wyoming politician’s, who were working on getting the lottery legalized, knew that this was the only way to get it approved and passed, then signed into law. But, the issue could lose the Wyoming lottery critical revenue as it has been proven that scratch-off tickets are a major money generator for state lotteries. “The bulk of lottery revenues nationwide comes from instant scratch-off tickets, so that is an important restriction,” said Philip J. Cook, a Duke University economics professor who has studied lotteries. Most state lotteries that have them, and use them make up to 51% of their revenue on instant win tickets alone.
Even though the ruling by US Justice Department’s reversal on the ban of online gaming back in 2011 was major step towards allowing states to offer tickets online, it did not automatically open the gates for everyone. States by law must vote and pass legislation that would authorize them to proceed and set regulations required to make it available to the public. There are still many states that don’t even have lotteries and that includes: Hawaii, Alabama, Mississippi, Utah and even Nevada. It’s now the high profile Powerball lottery that joins many states into a pool with a massive jackpot that have been making American lottery history over the last few years. With such huge amounts, it’s becoming a spectacle on who will win and then finding out who won and what they are going to do with all that money. Now even California Lottery will be joining in the Powerball frenzy and that could make for some even bigger totals.
This expansion in the lottery business for many states begs the question as to when they will include other forms of online gaming and which states will take a serious look at it beyond the ones who are already offering it. It will be interesting to see if Illinois offers online gaming as they are currently debating it now. They are looking at presenting it as a “stand-alone” bill; that means it will not be introduced as a package or attached to another gambling expansion bill that would include broader issues. Either way in the coming years more state lotteries will be reviewing how the other states are doing with their gaming operations and it will be just a matter of time before the feds come on board and pass a federal bill that allows them all to do exactly what and how they offer it on a country wide basis.
Read our previous articles about Nevada, New Jersey and Delaware online gaming: