Published: January 7, 2018

Pennsylvania Lottery may be first to benefit from state's gambling expansion law

There's not an app for that just yet, but players may be able to take a bet on the Pennsylvania Lottery online soon.

The 45-year-old state lottery is poised to be first to claim the fruits of the massive gambling expansion state lawmakers approved last year.

A lottery spokesman said "iLottery" games that can be played online or on a mobile device likely will hit the market this spring.

That's well before Pennsylvania casinos are likely to be able to tap provisions of the law that allow them to offer online gambling to state residents.

"We're just talking with the (casino) companies that would be involved in online gaming and what's being offered," said Doug Harbach, spokesman for the Gaming Control Board. "We have to put together regulations that will guide not only the games themselves, but also the licensing."

He said there is no timeframe for the regulatory process.

The General Assembly approved the massive gambling expansion in the fall in an effort to generate revenue to fill a growing state budget deficit.

Online casino and lottery sales were among several provisions of the law that included provisions permitting satellite casinos, truck stop gambling, fantasy sports and sports betting and airport betting.

The vast majority of new gambling revenue will be funneled to the state's general fund.

But new lottery proceeds will go directly to the lottery, which underwrites tax and rent rebates as well as prescription drug subsidies and other benefits to eligible senior citizens.

A state Revenue Department spokesman said the provision that permits online lottery sales adds a much-needed market for the 46-year-old state lottery, which has funneled more than $1 billion a year for the last six years to programs designed to serve older Pennsylvanians.

Like the retail world, where Amazon changed consumer shopping habits, the gambling world has been affected by consumers' preferences for digital options.

"Consumer tastes are changing, which is why the Lottery must modernize its 45-year-old business model," spokesman Jeffrey A. Johnson said in an email. "We are facing growing competition from other forms of entertainment and must act to increase our market share, because older Pennsylvanians are relying on our support for vital benefit programs."

Indeed, records show state lottery sales slipped about 3 percent last year after a 35 percent increase in sales between 2010 and 2016.

Johnson said iLottery games also will be available on monitor-based games, including keno and virtual sports.

Greensburg News owner Al Lydic can't wait for the new games.

"The lottery is going to put three monitors on the wall here, and people will be able to play keno and sports betting. I'll have a mini casino," the newsstand owner said, as he did a brisk business in Mega Millions and Powerball ticket sales Friday afternoon.

Lottery officials believe the new games will add to the take rather than diminish revenues from traditional games.

"Over the first five years, we predict these new categories could generate up to $250 million in new profits to support benefits for older adults," Johnson wrote. "Traditional games will remain our bread and butter, but it's simply time to start giving our players new options."

Officials have yet to decide which games will be for sale online.

Pennsylvania won't exactly be breaking new ground.

According to the North American Association of State and Provincial Lotteries, all of the Canadian lotteries and various games in Illinois, Michigan, Georgia, Kentucky, North Dakota and North Carolina are available online within state borders to players of legal age.

The Illinois Lottery, which pioneered online sales in 2012 and limited such sales to Powerball, Mega Millions and Lotto, pulled in $19.7 million in online sales last year, according to a trade magazine.

And Michigan, which saw total lottery sales increase 7 percent last year, reported more than $90 million in online sales.

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