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Kevin Smith

Illinois Gets Closer to Authorizing Internet Lottery Sales

25 April 2005

Illinois is taking steps toward becoming the first U.S. state to bring its lottery online. The state's Senate has passed a bill that would create a pilot program allowing state residents to purchase lottery tickets on the Internet.

SB0198, which passed by a 32-24 vote, would amend the Illinois Lottery Law as well as the Criminal Code of 1961.

The Department of Revenue would oversee the pilot program, which is aimed at increasing sales for a lottery that has lagged in recent years.

Additional revenue could be generated for the state through the licensing of vendors for the system, which would be a one-time fee of $25,000 and an annual renewal fee of $12,500 if the original language is kept in the bill.

The bill's main sponsor, Sen. John Cullerton, D-Chicago, says slumping sales are result of increased access in Illinois to land-based casinos as well as to Internet gambling.

"The bottom line is: It will make more money and help school funding," Cullerton said.

A hearing scheduled in the House Gaming Committee for Wednesday could be crucial to the bill's success; the committee could either kill the bill or recommend passing it before the full house.

While Illinois could be the first state to bring its Internet online, it certainly isn't the only state considering such a program.

"Every state is looking at it," Georgia State Rep. Terry Barnard told the Associated Press.

Barnard authored a similar bill that passed in the Georgia House but failed in the Senate, which has adjourned.

Most agree that one or two states legalizing Internet lottery sales would have a domino effect, and a lot will depend on the creators of multi-state lottery games like PowerBall and MegaMillions embracing the concept.

Charles Strutt, executive director of the Multi-State Lottery Association, which runs the Powerball lottery, believes it could happen soon.

"I've said for 10 years that Internet lottery sales are just around the corner," Strutt said, "and I may finally be proved right."

Forty U.S. states and Washington, D.C., have lotteries. Oklahoma will start one in October and is looking at online sales. North Carolina also is considering a lottery as well.

North American Association of State and Provincial Lotteries reports that lottery sales among its members were $49.4 billion in 2004. That translated to $15.1 billion in revenue for the states.

As to be expected, not everyone is ready to support Internet-based lottery ticket sales. The National Coalition Against Legalized Gambling, a key opponent to the bill, is concerned over the prospect of minors purchasing lottery tickets online.

Cullerton's answer to this is a provision in the bill requiring vendors to implement age verification systems and other security measures. The bill also calls for the state to bring in "outside experts" to test approved vendors' systems.

The other argument against the bill is that legalizing Internet lotteries would be an expansion of gambling, but Cullerton says there's a double standard.

"This is no more an expansion of gambling than putting a new lottery terminal in a convenience store," Cullerton said.

The Georgia bill would have limited sales to $5 per day and would not have allowed credit card purchases. (Debit cards would be used instead). Further, buyers would have to open accounts and show identification at terrestrial retail facilities before purchasing tickets over the Internet.

Cullerton said the Gaming Committee could vote on his bill on Wednesday or opt to schedule more hearings. If the bill makes it out of committee, it will be placed on the calendar for a full House vote, which could come within two weeks of being placed on the calendar.

The passing of SB0198 would mark the second time Illinois' Criminal Code has been amended to address Internet gambling. Senate Bill 0004 of 1999 amended the code to make all forms of Internet gambling illegal in the state.

Click here to view the full text of SB0198.

Illinois Gets Closer to Authorizing Internet Lottery Sales is republished from
Kevin Smith
Kevin Smith