Internet Gaming vs. Internet Lottery. Which Will Win Out in 2015?

LandscapeMost Americans know the United States forefathers embodied strong religious principles. Naturally, these principles were wrought with implicit values condemning gambling of any kind.

However, a number of English colony leaders allowed one gambling custom—the game of lottery. In fact, lotteries helped finance colonial projects. For example, the proceeds funded prestigious universities, including Harvard, Yale and Princeton.

Ease and entertainment insured that lotteries filtered down through history as a popular idea for civic leaders and gamblers. Each state has enacted their own legislation and applied their own rules, for or against.  However, in September 2011, the Fifth Circuit Court of Appeals ruled that the “Federal Wire Act of 1964” prohibited transmitting wagers for sports betting only, and not on any other form of online gambling. Therefore, lottery enthusiasts can purchase tickets online, rather than physically having to been within state borders. The ruling allowed state lotteries to add their fingerprint to the inexperienced online gaming landscape and has created the fastest growing gambling market on the internet.

A Grecent study found that the Internet lottery game market is expanding much faster than the Internet casino gaming market. Last year, Georgia, Michigan and Minnesota began selling online tickets, while more than a dozen other states participate in Internet lotteries. GamblingCompliance North American Research Director Chris Krafcik expects Kentucky to add their name to the list. Krafcik confirms lottery expansion, “Currently, there are four times as many states offering some form of Internet lottery as there are offering Internet casino gaming.”

Meanwhile, there may be a regression in online casino games, complicated by lower revenues than predicted. Nevada, New Jersey and Delaware are the only states offering online casino games. Krafcik doesn’t expect any more states to enter the market this year, though the debate continues in almost a dozen other states. In addition, Mississippi and Washington have discontinued interest in online poker ventures.

Also, New Jersey didn’t come close to Chris Christie’s $1 billion forecast. Instead, revenues for 2014 reached only $122.8 million.  In Nevada, Stations Casinos ceased operation of their Ultimate Poker operation in November 2014 after only 19 months.

As far as the lottery, brick and mortar stores still win out. Internet lottery ticket sales accounted for only one percent of the $70.15 billion lottery revenue in 2014. However, despite the fact that states move legislation slowly and deliberately, success appears imminent, and a trickle will become a creek and then a river–at least for now. 2015 and 2016 will see more legislative efforts for and against Internet gambling in all its forms.

Interestingly enough, there is now change on the horizon that will connect Internet lottery interests to Internet casino gaming interests—lottery companies GTECH and Scientific Games Corporation have acquired IGT, the world’s largest slot and poker machine manufacturer.internet-gaming-poker-table

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Jared Bates

I have been working in, and with different casinos for over twenty years, and as such I have seen many things happen to gambling online and offline. From Vegas to Atlantic City, and small places in between, my passion lies with games where I can win money.

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