24 PUBLIC GAMING INTERNATIONAL • SEPTEMBER/OCTOBER 2023 More than a decade ago, gaming industry watchers began discussing the “convergence” of the lottery and gaming industries, driven in part by the move toward internet and mobile (collectively, “online”) lottery and gaming. Since then, lotteries and gaming operators have indeed competed, but the intervening years have also brought significant cooperation between them. Many of the opportunities for cooperation have existed in regard to sports betting. For example, in New Hampshire and Oregon, DraftKings operates the online sports betting systems for the state lottery,1 and in Rhode Island, Bally’s casinos host Rhode Island Lottery-operated video lottery terminals, casino gaming and sports betting (retail and online).2 In other jurisdictions (e.g., Maryland, Virginia, West Virginia and the District of Columbia) the lottery is responsible for licensing and regulatory oversight of sports betting operators (and in Maryland and Virginia, casinos as well).3 As casino gaming and lotteries converge, however, and in particular in states where online lottery (“iLottery”) and licensed commercial online gaming (“iGaming”) coexist, disputes have arisen as to the difference between “lottery” games and slot/ casino-style games. In general, most states consider a “lottery” to be an activity involving “consideration,” “chance” and a “prize” – i.e., an activity in which one gives “consideration” for an opportunity to win a “prize,” where winning is determined by “chance” (in most states “predominantly” by chance even though some skill may be involved). Thus, under this very general view, many casino games are “lotteries.” 4 However, in states which have authorized iLottery and iGaming, the difference between the types of games is not clear, even where an attempt to distinguish them is set forth in the applicable law. In Pennsylvania, for example, a law was enacted in 2017 (the “2017 Act”)5 authorizing the Pennsylvania Lottery and licensed commercial gaming operators to offer games online. When the Pennsylvania Lottery offered online games with similar features as casino games, licensed slot machine operators in the State brought suit, arguing that the iLottery games simulated slot machines in violation of the 2017 Act.6 The 2017 Act authorized the Pennsylvania Lottery to offer “iLottery games,” including “internet instant games.” These were defined as A lottery game of chance in which, by use of a computer, tablet computer or other mobile device, a player purchases a lottery play, with the result of play being a reveal on the device of numbers, letters or symbols indicating whether a lottery prize has been won according to an established methodology provided by the lottery.7 However, the law excluded from the definition “games that represent physical, Internet-based or monitor-based interactive lottery games which simulate casino-style lottery games, specifically including poker, roulette, slot machines or blackjack.”8 Pursuant to the 2017 Act, slot machine licensees were authorized to offer “interactive gaming.” An “interactive game” was CLARIFYING THE DIFFERENCE BETWEEN ILOTTERY GAMES AND ONLINE SLOTS/CASINO-STYLE GAMES By Mark Hichar, shareholder of Greenberg Traurig, LLP, resident in its Boston office, and By Ed Winkofsky shareholder of Greenberg Traurig, LLP resident in its Chicago office, and Chair of the firm’s Global Gaming Group.
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