Paul’s Take2 Blog March 14, 2021

in Lottery

Paul’s Take2 Blog

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The Internationalization of Powerball®

Even though there have been no official distribution or licensing agreements with other jurisdictions to legally sell Powerball outside of the U.S., the internet has enabled online operators to mis-appropriate the Powerball brand to sell lottery tickets, and other companies to simply buy Powerball tickets in the U.S. and upcharge and re-sell them to consumers outside of the U.S.  This has been going on for many years.  This method of unregulated, untaxed distribution is detrimental to Powerball and to the lottery industry for many reasons.  Some online operators use the Powerball brand to sell their own lottery games and do not even buy Powerball tickets, in which case the owners of Powerball (and the good causes which benefit from the funds generated by Powerball sales) receive no economic benefit.  In the case of online operators who buy tickets in the U.S. and re-sell them outside of the U.S., they are selling Powerball tickets into jurisdictions without proper authorization from those jurisdictions, thus denying those jurisdictions the economic benefit of the sale of lottery tickets to their citizens.  Enabling this online re-selling model also introduces the possibility for an untaxed underground market for lottery tickets to be implemented in the U.S. just as it is in the rest of the world, a situation that would cause severe harm to U.S. lotteries and their stakeholders.  And in all these different scenarios, control over the brand is wrested from the true owners of Powerball (the members of MUSL, the Multi-State Lottery Association), incurring a multitude of other undesirable outcomes.   The owners of Powerball did not ask for this unacceptable situation to happen.  Pursuing enforcement of brand-marks outside of the U.S. and other legal remedies to curtail this activity has proven to be ineffectual. 

Given the fact that Powerball has been sold outside of the U.S. for years, continues to happen and is in fact growing; and given that online re-sellers are not complying with the laws of at least some of the jurisdictions in which they operate (thereby impugning the integrity of brand Powerball), the best course of action is for the owners to get control over the globalization of Powerball.  Constructing agreements with jurisdictions outside the U.S. for Powerball to be legally regulated and sold in those jurisdictions would appear to be an effective remedy to ensure gaming regulations and laws are no longer being violated, to ensure that the consumer is properly protected from illegal online merchants who may or may not adhere to the consumer protection and responsible gaming standards expected of brand Powerball, to ensure that the promise of the brand to pay the winners is fulfilled, and to ensure that the rights of the owners of Powerball and the beneficiaries supported by Powerball are not otherwise compromised.

Imposing control over the manner and methods of globalization is a profoundly difficult issue.  Operators in a dynamic free-market system do not always obey the rules, especially where there are gray areas of law and international differences as to how to apply the law.  The internet has compounded this problem exponentially, providing a platform for the underground economies to flourish, for criminals to even more easily avoid laws that were already difficult to enforce in a globalized environment.  The solution, or at least one part of an efficacious pathway forward, is for countries all around the world to work together to enforce laws and reduce criminality.  This is especially true in the world of online betting and lottery where the “product” is intangible which makes online commerce even easier to conduct.