Massachusetts Treasurer Supports Online Lottery Ticket Sales

Friday, March 8th, 2019 | Written by April Bergman
Massachusetts Treasurer Supports Online Lottery Ticket Sales

Massachusetts Treasurer Deborah Goldberg called on the commonwealth’s lawmakers to pass online lottery sales legislation. Goldberg said online lottery sales would modernize the state’s lotto industry, while also tapping hundreds of millions of dollars in revenues every year.

In her remarks, the Massachusetts state treasurer said that “sports betting will happen this session.”

In those same remarks, though, Deborah Goldberg said that lottery would need to advertise more, due to competition from sports betting and daily fantasy sports.

The new competition is the key reason advertising is needed — especially if online lottery tickets are not sold.

Goldberg said, “This is an operating company that needs to modernise, and what we are seeing across the world is a cannibalisation of sales and the disruption caused for bricks-and-mortar companies by the internet. And particularly, there are only so many entertainment dollars in total, so Lottery for a very long time was a predictable, terrific business, but it had no competition.”

Finance Secretary Supports Online Lottery

The Massachusetts Administration and Finance Secretary Michael Heffernan backed the state treasurer. Heffernan said, if done right, lottery sales and sports betting should not cannabilize each other’s customer bases.

Michael Heffernan said, “We’re supportive of the treasurer’s move to online lottery. It seems to be a different demographic from the folks that play in sports betting so we think it is not a reallocating of the same pie, it actually is growing the pie of revenues to the state versus cannibalising another form of gambling.”

New Hampshire Lottery Sues DOJ

Even if the Massachusetts legislature approves online lottery ticket sales, though, obstacles might not be cleared to launch an online gaming portal. Last month, the New Hampshire Attorney General sued the U.S. Department of Justice over its publishing of a new opinion on the 1961 Federal Wire Act and the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA).

In January, the US Justice Department’s Office of Legal Counsel announced it was reversing a 2011 DOJ opinion on the legality of online casinos and poker sites. The Trump DOJ now views all forms of interstate online gambling as illegal. Online casino and poker betting in New Jersey, Pennsylvania, Delaware, and Nevada are therefore at risk under federal law.

Multi-State Internet Gaming Association at Risk

In particular, the Multi-State Internet Gaming Association (MSIGA), better known as the interstate poker compact, is considered a violation of federal law now. While single-state online poker and casino gaming is legal (for now), shared player liquidity between Nevada, New Jersey, and Delaware therefore is banned.

The states with online lottery sales are concerned about the new DOJ opinion. New Hampshire filed a case in the 1st federal district court to challenge the DOJ opinion. While New Hampshire limits its gaming to sales within the state, anytime an online lottery purchase crossing state boundaries to servers in another state, it would be considered a violation of federal law under the current system.

Will DOJ Ban Online Lottery Sales?

New Hampshire could spend money and resources to assure none of its sales cross state boundaries to servers elsewhere, but the New Hampshire Lottery does not want a Sword of Damocles hanging over its head. Far better to sue the federal government on the basis of state’s rights — an argument the US Supreme Court upheld in the PASPA repeal case.

To launch its own online lottery ticket sales portal, Massachusetts would likely have to wait until the New Hampshire lawsuit plays out. Massachusetts might join the lawsuit, as it would have standing.

The Department of Justice’s opinion banning online gambling could cause a bigger backlash than the Office of Legal Counsel believe. Several red states have substantial online lottery ticket sales. The Georgia Lottery, for example, was on the cutting edge of the online lotto sales. Because the Georgia Lottery is tied to the HOPE Scholarship Fund, lottery betting is popular in the otherwise gambling-skeptical state. Banning online lottery sales could hurt the HOPE Scholarship Fund, which likely would elicit a strong response from Georgia lawmakers and lottery officials.