The Pennsylvania Lottery could become the first big winner produced by the state’s recently passed gambling expansion package, per a report published by the Pittsburgh Tribune-Review.
The article referenced an email exchange with lottery spokesman Gary Miller, who told the newspaper “‘iLottery’ games that can be played online or on a mobile device likely will hit the market this spring.”
Last October, following the passage of House Bill 271, Governor Tom Wolf signed off on an assortment of enhancements designed to stimulate the state’s gambling industry. And while the bill was built on making Pennsylvania the fourth state to legalize and regulate online gambling – including poker, casino games, and daily fantasy sports (DFS) – lawmakers included a provision allowing the lottery to get in on the action.
If plans for a spring launch are approved, the lottery would likely be the first entity to capitalize on iGaming legalization in Pennsylvania. Given the mandatory waiting periods and other regulatory red tape, the state’s 12 brick and mortar casinos are expected to launch their own online platforms in the second half of 2018.
Doug Harbach, a spokesperson for the Pennsylvania Gaming Control Board, told the newspaper that any projections of a spring launch are preliminary at best:
“We’re just talking with the (casino) companies that would be involved in online gaming and what’s being offered.
We have to put together regulations that will guide not only the games themselves, but also the licensing.”
During the runup to HB-271’s passage, Miller spoke with local media outlets to lay out the justification for iLottery sales:
“Our players have been asking for years for the convenience to play games online and, particularly, the multi-state jackpot games.”
The first iLottery games will be interactive instant games similar to the scratch-off games. (We’re) unsure if or when draw games such as Pick 2, 3, 4 or 5 or Cash4Life, will be added to the online game offerings.
We expect these two new product types to be an important step in building the Pennsylvania Lottery of the future.”
With Pennsylvania struggling to balance a $2.2 billion budget deficit, lawmakers turned their attention to the lottery. Despite generating more than $1 billion in annual revenue for the state in each of the last six years, sales dipped by $134 million during the 2016-17 fiscal year. That market contraction shaved $70 million from the state’s typical revenue haul, prompting lottery officials and lawmakers to explore online sales as a possible remedy.
In the same Pittsburgh Tribune-Review report cited above, Pennsylvania Department of Revenue spokesperson Jeffrey Johnson based the lottery’s need for online sales on the bottom line:
“Consumer tastes are changing, which is why the Lottery must modernize its 45-year-old business model.
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.”
That economic model has already been established throughout Canada – where all provincial lotteries maintain an online presence – along with Illinois, Michigan, Georgia, Kentucky, North Dakota, and North Carolina.
After becoming the first state to approve an iLottery back in 2012, Illinois generated nearly $20 million in online ticket sales last year.
Johnson alluded to a similar rate of growth when describing Pennsylvania’s iLottery plans:
“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.
Traditional games will remain our bread and butter, but it’s simply time to start giving our players new options.”