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Online Lottery Could Be Coming To A State Near You

Jan 24, 2012
Originally published on January 24, 2012 8:00 am

Several states — including Illinois and New York — are pushing forward with plans to offer lotteries on the Internet. That's in the aftermath of an opinion from the Justice Department that reverses a long-standing policy and says states are free to conduct online gambling within their borders.

The lottery issue came to the forefront when the two states, which were both moving forward with Internet lottery plans, asked the Justice Department for clarification. The answer came two days before Christmas, when federal authorities said the 1961 Wire Act — long considered a provision prohibiting all Internet gambling — only prohibits betting on sports.

"What that means is [that] states are now free to do just about anything they want," says gambling analyst and Whittier law professor I. Nelson Rose. Rose says the Justice Department opinion was a Christmas present from the Obama administration to cash-strapped states, which will be able to raise hundreds of millions of dollars.

"There's more than 44 lotteries in this country. They are all looking at 'Let's go online immediately if we can.' They are all looking at their state statutes," Rose says.

Illinois Lottery director Michael Jones says people in Illinois should be able to buy tickets online for the Lotto and MegaMillions games by early spring and for Powerball in the near future.

"The issue here is very simple. All the state Legislature wanted to do was to have the lottery mirror people's buying habits with the kind of retail channel everybody uses to buy plane tickets, books and concert tickets," Jones says.

With the need for revenue so great, states are also questioning whether the ruling means they can offer other games — like online poker. It has already been legalized in Washington, D.C., along with Internet bingo and blackjack.

University of Illinois professor John Kindt is against such expansion and calls the Justice Department opinion outrageous. He says gambling on the Internet will take away money from the consumer economy and is like pouring gasoline on the recession. It's a problem that will create bankruptcies, crime and new addicted gamblers, he says.

"This will put gambling in every living room, at every work desk and at every school desk," Kindt says. "People will literally be able to click their mouse, lose their house."

But Frank Fahrenkopf, CEO of the American Gaming Association, says protections can be put in place — and already have been in places like Great Britain and France, where Internet gambling is allowed.

"We've been able to see, with the regulatory reforms that they have put in, that it can be provided in a very safe way to protect underage kids from getting online and gambling, and you can provide, by tracking, great assistance for those who can gamble responsibly," Fahrenkopf says.

Farenkopf says it's no longer a question of if there will be Internet gaming in the U.S. but how.

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RENEE MONTAGNE, HOST:

Powerball, Pick 4, Little Lotto - just a few of the lottery games run by states across the country. Every day scores of lottery ticketholders wait to hear if it's their lucky day.

UNIDENTIFIED WOMAN: Here we go. First winning lotto number for tonight: 11. The second: 30...

MONTAGNE: Several states, among them Illinois and New York, are now moving forward with plans to offer lotteries on the Internet. That comes after an opinion by the Department of Justice reversing longstanding federal policy by saying that states are free to conduct online gambling within their borders. NPR's Cheryl Corley has more.

CHERYL CORLEY, BYLINE: It's snowy and late but people are still coming into this gas station in Chicago to buy a lottery ticket.

UNIDENTIFIED MAN: Hey, buddy, how are you?

CORLEY: Rihanna Smith(ph) is one of the customers who plays the lottery.

RIHANNA SMITH: Every day.

CORLEY: And she relishes the possibility of being able to play online.

SMITH: Yeah. Look at all this - yeah, I would.

CORLEY: Store clerk Wes Ali(ph) stands near the lottery machine as it spits out a strip of tickets. This is both a gas station and convenience store with shelves fully stocked with potato chips, milk and soda pop in the cooler. So he's a little worried about Internet gambling.

WES ALI: It's not a good idea. Everybody coming here, you know, play lottery, they buy other stuff too, especially when the jackpot is up.

CORLEY: The lottery issue came to the forefront when Illinois and New York, both moving forward with Internet lottery plans, asked the Justice Department for clarification. The answer came two days before Christmas, when the federal authorities said the 1961 Wire Act, long considered a provision prohibiting all Internet gambling, only prohibits betting on sports.

I. NELSON ROSE: What that means is states are now free to do just about anything they want.

CORLEY: Gambling analyst and Whittier Law Professor I. Nelson Rose says the Justice Department opinion was a Christmas present from the Obama administration, which will allow cash-strapped states to raise hundreds of millions of dollars.

ROSE: There's more than 44 lotteries in this country. They're all looking at let's go online immediately if we can. They're all looking at their state statutes.

CORLEY: Illinois lottery director Michael Jones says people in Illinois should be able to buy tickets for lotto and the MegaMillion games by early spring and Powerball in the near future.

MICHAEL JONES: The issue here is very simple. All the state legislature wanted to do was to have the lottery mirror people's buying habits with the kind of retail channel everybody uses to buy plane tickets and books and concert tickets.

CORLEY: With the need for revenue so great, states are also questioning whether the ruling means they can offer other games, like online poker. It's already been legalized in Washington, D.C., along with Internet bingo and blackjack. University of Illinois Professor John Kindt is against such expansion. He calls the Justice Department opinion outrageous and says the possibility of having all sorts of gambling on the Internet, taking away money from the consumer economy, is like pouring gasoline on the recession. Kindt says it's a problem that will create new bankruptcies, crime and new addicted gamblers.

JOHN KINDT: This will put gambling in every living room, at every work desk and at every school desk. People will literally be able to click their mouse, lose their house.

CORLEY: But Frank Fahrenkopf, the CEO of the American Gaming Association, says protections can be put in place - and already have been in countries like Great Britain and France that allow Internet gambling.

FRANK FAHRENKOPF: And we've been able to see with the regulatory reforms that they have put in that it can be provided in a very, very safe way to protect underage kids from getting online and gambling, and you can provide, by tracking, great assistance for those who can't gamble responsibly.

CORLEY: Fahrenkopf says it's no longer a question of if there will be Internet gaming in the U.S., but how. Cheryl Corley, NPR News, Chicago. Transcript provided by NPR, Copyright NPR.