Published: September 18, 2020

Pandemic Pushes Lotteries Online

The switch to digital lotteries is a tough sell in the U.S. but is taking hold in other countries. 

September 18, 2020

BASEL, Switzerland—Across the globe, the coronavirus pandemic has shifted grocery and foodservice ordering online, and lotteries are not far behind, the World Politics Review reports. Luca Esposito, executive director of the World Lottery Association (WLA), noted that the industry had sustained revenue hits as lockdowns shuttered stores where players bought tickets.

However, the global lottery industry has begun to recover as it makes a switch to digital in several regions and countries. “This is a bona fide transformative moment: There will be no going back to ‘business as usual,’” wrote Esposito in an April blog post. “The pandemic has forced upon us a profound change in the way in which we understand the world. Let’s hope that it is a lasting change for the better.”

However, not everyone’s thrilled with online lotteries. Some critics contend that expanded online play will encourage more gambling, while others fear governments will sell players’ data. “I don’t think it’s any of their business,” said Dawn Nettles of Lotto Report website. “They’re desperate for information. It’s an intrusion [on] a player’s right to privacy.”

David Gale, executive director of the North American Association of State and Provincial Lotteries, said that lotteries have had “to evaluate how best to operate—not just during the pandemic, but in the future as well.” In the United States, all 45 state lotteries continued to be sold in person at convenience stores, while online play soared in Michigan, New Hampshire and Pennsylvania.

Online lotteries have been a tough sell overall in the United States. A fourth of U.S. lotteries have some sort of online play option currently. State lawmakers have been reluctant to expand lotteries online, with one major reason being to protect stores selling tickets, who could lose ancillary sales.

There remains some uncertainty as to the legality of online lotteries in the United States. On November 2, 2018, the Office of Legal Counsel of the Department of Justice issued a legal opinion clarifying that the Wire Act covers, and thereby bars, online lotteries and internet gambling on casino games. The opinion reversed an Office of Legal Counsel opinion issued in 2011 that had reinterpreted the Wire Act to limit its application to sports wagering only.

Following public release of the new opinion in 2019, the New Hampshire Lottery Commission and NeoPollard Interactive filed suit in Federal District Court in New Hampshire to effectively overturn the opinion. The trial court judge in the case, New Hampshire Lottery Commission, et al. v. Barr, held for the New Hampshire Lottery.

The Justice Department appealed the decision to the First Circuit, which held a hearing on June 18, 2020, and is considering the case. NACS filed amicus briefs with the trial and circuit courts in support of the Justice Department position.

Lottery ticket sales generate substantial in-store foot traffic and sales at U.S. convenience stores. Lottery customers typically purchase additional items that are essential to the health of c-stores. In fact, on 95% of their store visits, lottery customers purchase at least one other product in addition to their lottery purchases, according to NACS.

Meanwhile, lottery sales in the United States have picked up as people begin to get out more. In Texas, Montana, Minnesota and Arkansas, lottery tickets have rebounded, although some states still have lower revenue than expected.

Coronavirus Resources

NACS has compiled resources to help the convenience retail community navigate the COVID-19 crisis. For news updates and guidance, visit our coronavirus resources page.

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