Showing posts with label Lottery. Show all posts
Showing posts with label Lottery. Show all posts
July 15, 2024
Walmart to Enter the Lottery Sector & Launch iLottery App
Fiona Simmons July 15, 2024 3 min read
Fact-checked by Angel Hristov
Walmart to Enter the Lottery Sector & Launch iLottery App
Walmart’s exact plans are still unknown and may take time to come to fruition but, according to Lottery Geeks, the shift toward lottery gaming is already underway
A Walmart shop
Image Source: Shutterstock.com
Multinational retail giant Walmart revealed that it is preparing a lottery push, hoping to capitalize on the increased demand for lottery products. At its annual summit in April, the company told lottery vendors that it plans to offer lottery and iLottery products.
The summit was attended by companies such as IGT, NeoPollard and Scientific Games. While Walmart’s exact plans are still unclear, the company revealed a new slogan aimed at the lottery industry, “Be in it to Win it,” according to presentation materials from the summit.
Walmart’s exact plans are still unknown and may take time to come to fruition but, according to Lottery Geeks, the shift toward lottery gaming is already underway.
According to experts, Walmart’s lottery plans may seek to solve the “frustrating disconnect” between lottery point-of-sale systems and stores’ internal POS systems that other retail giants have been experiencing. This disconnect is effectively depriving retail companies of valuable online shopping data.
Lottery Geeks concluded that Walmart’s plan is to leverage its financial stability to solve this matter, gaining an edge over its competitors. However, the lottery news outlet did not receive confirmation from Walmart that this is the case.
Walmart Selects Lazlo as Its Lottery Developer
Considering Walmart’s size, its desire to expand into new verticals in a way that provides it with an edge over its competitors is not that surprising. Something that took the industry by surprise, however, was the retail giant’s choice of developer for its digital app.
As it turns out, Walmart selected Lazlo, an Alpharetta-based platform provider that “bridges the gap between brick and mortar and digital sales channels.” The choice perplexed analysts considering that Lazlo is a fairly small provider that isn’t as renowned as other companies in the sector.
In any case, Lazlo’s ability to deliver a robust and reliable app for Walmart is yet to be seen.
Walmart Changed Its Philosophy
Lottery Geeks also pointed out that Walmart’s lottery plans mark a shift in its direction. While the company previously tended to avoid the lottery sector as some people consider lottery gaming to constitute gambling, it has now seemingly changed its philosophy.
Walmart’s new direction is likely inspired by the rapid growth of iLottery gaming. Online lotteries are now available in 14 US jurisdictions and are poised for further growth.
An IGT representative previously pointed out that Walmart looks at the lottery sector in a different way and has a novel approach to automation.
Walmart, according to Lottery Geeks, could possibly revolutionize the market if it manages to find a way to operate as both a vendor dealing with the state and as a retailer that is selling lottery tickets. The lottery experts also guessed that Walmart could also form an alliance with the Mega Millions consortium.
In any case, if Walmart succeeds in aligning lottery and retail POS systems, it will be a true game changer that is likely to revolutionize the sector.
April 11, 2022
Sisal May Join Camelot in Contesting UKGC Lottery Operator Selection Process
A month has passed since Allwyn Entertainment has been awarded a license to operate the National Lottery, promising sweeping changes in the sector, and making sure that the lottery will be “resuscitated” and enjoy some significant advantages. Allwyn will reduce the minimum lottery ticket cost to £1 and add more games while ensuring better profitability and more money committed to good causes.
The bid is now contested by at least one entity with Camelot, the incumbent, revealing that it would seek to challenge the selection process and argue that the UKGC has not been entirely fair in pronouncing Allwyn Entertainment as the winner. Camelot has been the incumbent since the first lottery selection process in 1994 but this may now come to an end.
Now, the other bidder in the process, Sisal, may be looking to challenge the decision, joining a potential lawsuit by Camelot lodged with the High Court. Camelot contends that the UKGC has favored Allwyn Entertainment awarding it the new contract beginning in 2024. The regulator has denied wrongdoing and issued a rebuttal arguing that its process has been based on merit only.
However, Sisal and Camelot tend to disagree it seems, as a slight change in the tender rules may now give the pair legal grounds to challenge the outcome of the bid. Sisal has made no official move just yet, but it may try to do so. Flutter Entertainment, the company that acquired sisal for a total of £1.6 billion ($2.10 billion) in 2021, is eager to make its latest asset have a shot at one of the biggest lottery markets, hence why it might choose to challenge the move.
The UKGC has said that it’s confident that its selection process was based on transparent criteria that guided the entire process and expressed regret that Camelot had chosen to settle matters in a court of law. The regulator further added that it had been able to apply all prerequisites to ensure a level playing field. Therefore, its decision was predicated based on the individual merit of individual companies.
The UKGC may be challenged with some success, though, as it has just transpired over the weekend that the watchdog has taken money from good cause charities to meet a budget deficit.
November 13, 2019
Latvian Consumers Warned by Regulator Over Rogue Lotteries
The Latvian gambling regulator has issued a warning to customers about sham lotteries operating in the country. The Lotteries and Gambling Supervisory Inspection (IAUI) has cautioned any customer who is considering taking part to fully check out the operator online before parting with any cash.
Many of these rogue operators contact customers to claim they have winnings to pay out, and the Latvian regulator is keen to prevent unsuspecting individuals from handing over sensitive information.
Red flags to look out for
The IAUI has admitted that it is very hard to spot a fake lottery operator for certain as many do an excellent job as masquerading as the real deal. However by exercising caution and being watchful the regulator believes that it’s possible to avoid falling into their trap.
Before buying tickets, Latvian consumers should research the company to see if there is any evidence that they are running a legitimate lottery. No money should be handed over if there is no proof that the lottery operate is genuine with a proven track record.
It’s not just the purchase of the tickets that is a problem however as many rogue lottery providers are contacting consumers to tell them of a “win”. The IAUI said any email about a win for a lottery that players don’t remember entering should be viewed with extreme caution.
Fraudsters commonly make contact by telephone as well as by email. The lucky “winner” will be asked to cover the costs of opening an account and transferring the winnings. They are usually also told that they’ll need to pay tax on their windfall.
The regulator said that when contact is made through a public email server such as hotmail and gmail, there is a much higher risk that the email could be a fake. Other tell-tale signs include spelling or grammatical mistakes in the Latvian language; this suggests that a bot is responsible the correspondence and is once again, a scam.
Any individual who has taken part in a lottery and believes that the communication could be genuine should look for confirmation in the details provided. In cases where the winner is legitimate, the operator should provide the name of the individual and the winning ticket number in its response. The player can then check this information against their own ticket to verify the authenticity.
IAUI warned that no reputable lottery would ask for taxes or any other form of payment in order to pay out the winnings. Therefore any company that does should be treated as potentially suspicious.
Many of these rogue operators contact customers to claim they have winnings to pay out, and the Latvian regulator is keen to prevent unsuspecting individuals from handing over sensitive information.
Red flags to look out for
The IAUI has admitted that it is very hard to spot a fake lottery operator for certain as many do an excellent job as masquerading as the real deal. However by exercising caution and being watchful the regulator believes that it’s possible to avoid falling into their trap.
Before buying tickets, Latvian consumers should research the company to see if there is any evidence that they are running a legitimate lottery. No money should be handed over if there is no proof that the lottery operate is genuine with a proven track record.
It’s not just the purchase of the tickets that is a problem however as many rogue lottery providers are contacting consumers to tell them of a “win”. The IAUI said any email about a win for a lottery that players don’t remember entering should be viewed with extreme caution.
Fraudsters commonly make contact by telephone as well as by email. The lucky “winner” will be asked to cover the costs of opening an account and transferring the winnings. They are usually also told that they’ll need to pay tax on their windfall.
The regulator said that when contact is made through a public email server such as hotmail and gmail, there is a much higher risk that the email could be a fake. Other tell-tale signs include spelling or grammatical mistakes in the Latvian language; this suggests that a bot is responsible the correspondence and is once again, a scam.
Any individual who has taken part in a lottery and believes that the communication could be genuine should look for confirmation in the details provided. In cases where the winner is legitimate, the operator should provide the name of the individual and the winning ticket number in its response. The player can then check this information against their own ticket to verify the authenticity.
IAUI warned that no reputable lottery would ask for taxes or any other form of payment in order to pay out the winnings. Therefore any company that does should be treated as potentially suspicious.
July 05, 2018
Mystery Lotto winner claims $55m prize after almost six months
It took 175 days to claim the $55m prize but just hours for the funds to flow to a lucky lotto player’s bank account.
The money is due to reach the mystery winner on Thursday, almost six months after the Powerball draw brought up the numbers.
The enviable sum was just days from being sent to Victoria’s State Revenue Office for safekeeping when the ticket holder came forward on Wednesday.
He or she has chosen to remain anonymous, with lottery operators refusing to divulge the winner’s age, gender or even where the prize was claimed, ticket in hand.
“They should see the $55m in their bank account on Thursday morning,” said a Tattslotto spokesman, Matt Hart. “It’s all pretty straightforward now.”
After the winning numbers came up in the 11 January draw, there have been weird and wacky rumours about the delay in claiming the prize.
Sam Misiano’s Brunswick newsagency sold the ticket and he said he was relieved the search was over after many customers illegitimately tried to claim the prize.
“It has been a crazy few months but now we can relax knowing it has been claimed by the rightful winner,” he said.
The feeling of relief was mutual at lottery headquarters. “We’re relieved that it’s finally been claimed,” Hart said. “We’re in the business of making millionaires, not holding on to the money.”
The money is due to reach the mystery winner on Thursday, almost six months after the Powerball draw brought up the numbers.
The enviable sum was just days from being sent to Victoria’s State Revenue Office for safekeeping when the ticket holder came forward on Wednesday.
He or she has chosen to remain anonymous, with lottery operators refusing to divulge the winner’s age, gender or even where the prize was claimed, ticket in hand.
“They should see the $55m in their bank account on Thursday morning,” said a Tattslotto spokesman, Matt Hart. “It’s all pretty straightforward now.”
After the winning numbers came up in the 11 January draw, there have been weird and wacky rumours about the delay in claiming the prize.
Sam Misiano’s Brunswick newsagency sold the ticket and he said he was relieved the search was over after many customers illegitimately tried to claim the prize.
“It has been a crazy few months but now we can relax knowing it has been claimed by the rightful winner,” he said.
The feeling of relief was mutual at lottery headquarters. “We’re relieved that it’s finally been claimed,” Hart said. “We’re in the business of making millionaires, not holding on to the money.”
UK watchdog spanks Lottoland over PowerBall jackpot claim
The UK’s advertising watchdog has spanked online lottery betting operator Lottoland for misrepresenting the size of its potential US lottery payouts.
On Wednesday, the Advertising Standards Authority (ASA) upheld a complaint filed against the Lottoland.co.uk website for its July 2017 promotion of a “PowerBall £169 million” jackpot. The complainant felt the ad was misleading due to the jackpot’s value being contingent on whether the prize was paid in a lump-sum or by installments.
Lottoland defended its promo, saying that the options for taking either a lump-sum payment or a 30-year annuity, as well as the difference in ultimate monetary value, were clearly specified in the site’s FAQ and T&C’s.
The ASA acknowledged that the FAQ did indicate that Lottoland replicated the official US lottery payout rules, including the 38% tax provision, the fact that the lump sum represented 60% of the total annuity payout, as well as the rule about splitting the potential payout should the official PowerBall prize be divvied up among multiple winners.
However, the ASA held that consumers were likely to assume from Lottoland’s big-type ad that the value indicated was what they stood to collect if they matched the right PowerBall numbers. As such, Lottoland’s promo was misleading because it quoted a prize value “that would never be paid.” Lottoland was ordered to be more upfront about its payout system in future ads.
The ASA also took exception to a SlottyVegas.com online promo that claimed “our games pay more.” SlottyVegas’ parent company NRR Entertainment claimed the statement was based on its Supercharged Wins feature that added extra funds to each winning round, thereby providing a higher payout than if the feature wasn’t applied.
The ASA wasn’t buying it, saying consumers were led to believe that they’d receive a higher payout from the games on the SlottyVegas site than from games on a rival operator’s site. The ASA found that SlottyVegas had provided no evidence to support this belief, making the promo misleading.
As if to prove that they’re not entirely joyless scolds, the ASA declined to uphold a complaint against a William Hill television spot promoting the company’s Bet Boost odds enhancer. The ad, which appeared in December 2017, featured a smartphone displaying odds for football matches scheduled for six months later. The complainant suggested these odds were misleading.
Hills defended the ad, saying that, while the odds displayed were roughly comparable to what the company were likely to offer on those matches, only a proper tool would presume these odds to be there for anything other than illustrative purposes. And the ASA, in its infinite wisdom, agreed.
On Wednesday, the Advertising Standards Authority (ASA) upheld a complaint filed against the Lottoland.co.uk website for its July 2017 promotion of a “PowerBall £169 million” jackpot. The complainant felt the ad was misleading due to the jackpot’s value being contingent on whether the prize was paid in a lump-sum or by installments.
Lottoland defended its promo, saying that the options for taking either a lump-sum payment or a 30-year annuity, as well as the difference in ultimate monetary value, were clearly specified in the site’s FAQ and T&C’s.
The ASA acknowledged that the FAQ did indicate that Lottoland replicated the official US lottery payout rules, including the 38% tax provision, the fact that the lump sum represented 60% of the total annuity payout, as well as the rule about splitting the potential payout should the official PowerBall prize be divvied up among multiple winners.
However, the ASA held that consumers were likely to assume from Lottoland’s big-type ad that the value indicated was what they stood to collect if they matched the right PowerBall numbers. As such, Lottoland’s promo was misleading because it quoted a prize value “that would never be paid.” Lottoland was ordered to be more upfront about its payout system in future ads.
The ASA also took exception to a SlottyVegas.com online promo that claimed “our games pay more.” SlottyVegas’ parent company NRR Entertainment claimed the statement was based on its Supercharged Wins feature that added extra funds to each winning round, thereby providing a higher payout than if the feature wasn’t applied.
The ASA wasn’t buying it, saying consumers were led to believe that they’d receive a higher payout from the games on the SlottyVegas site than from games on a rival operator’s site. The ASA found that SlottyVegas had provided no evidence to support this belief, making the promo misleading.
As if to prove that they’re not entirely joyless scolds, the ASA declined to uphold a complaint against a William Hill television spot promoting the company’s Bet Boost odds enhancer. The ad, which appeared in December 2017, featured a smartphone displaying odds for football matches scheduled for six months later. The complainant suggested these odds were misleading.
Hills defended the ad, saying that, while the odds displayed were roughly comparable to what the company were likely to offer on those matches, only a proper tool would presume these odds to be there for anything other than illustrative purposes. And the ASA, in its infinite wisdom, agreed.
February 01, 2018
Lottery winner dies weeks after cashing in $1 million scratch-off ticket
A New York man who struck it big with a scratch-off lottery ticket died just weeks after he claimed the prize.
It was a lucky start to 2018 for 51-year-old Donald Savastano, a Queens native who was living upstate in Sidney. He played the New York Lottery's "Merry Millionaire" game and won $1 million.
"This is going change our lives, to tell you the truth," Savastano said when he picked up his winnings.
The self-employed carpenter shared some plans he had in mind for how he was going to spend the money, saying most of it was going to fund his retirement.
"I'm probably going to go get a new truck and I don't know probably go on vacation," Savastano said.
The plans also included a trip to the doctor, because he couldn't afford to go previously.
"He was self-employed," said Danielle Scott, who works at the store where he bought the winning ticket. "He didn't have insurance, he hadn't been feeling good for a while, I guess, and when he got the money he went into the doctor."
The news wasn't good. He learned he had stage four cancer.
"He had a friend come and talk to me, and they told me that he was very sick and that he had brain and lung cancer and that he was in the hospital and they didn't think he was gonna make it," Scott said.
Savastano died Friday, 23 days after he won the lottery.
"I was hoping that the money was maybe going to save his life," Scott said.
Savastano's obituary said he was born in Queens and grew up on Long Island. He became a carpenter after working with and learning from his father as a child.
"He was known for his high-quality work and perfectionism. He always tried to reach out and help those he could by teaching them "the right way to do things," his family wrote in the obituary.
It was a lucky start to 2018 for 51-year-old Donald Savastano, a Queens native who was living upstate in Sidney. He played the New York Lottery's "Merry Millionaire" game and won $1 million.
"This is going change our lives, to tell you the truth," Savastano said when he picked up his winnings.
The self-employed carpenter shared some plans he had in mind for how he was going to spend the money, saying most of it was going to fund his retirement.
"I'm probably going to go get a new truck and I don't know probably go on vacation," Savastano said.
The plans also included a trip to the doctor, because he couldn't afford to go previously.
"He was self-employed," said Danielle Scott, who works at the store where he bought the winning ticket. "He didn't have insurance, he hadn't been feeling good for a while, I guess, and when he got the money he went into the doctor."
The news wasn't good. He learned he had stage four cancer.
"He had a friend come and talk to me, and they told me that he was very sick and that he had brain and lung cancer and that he was in the hospital and they didn't think he was gonna make it," Scott said.
Savastano died Friday, 23 days after he won the lottery.
"I was hoping that the money was maybe going to save his life," Scott said.
Savastano's obituary said he was born in Queens and grew up on Long Island. He became a carpenter after working with and learning from his father as a child.
"He was known for his high-quality work and perfectionism. He always tried to reach out and help those he could by teaching them "the right way to do things," his family wrote in the obituary.
July 27, 2017
El Gordo
IIn the early 2000s, Costis Mitsotakis of Greece met a Spanish girl named Sandra del Pozo. They fell in love, and not long after, bought a small RV, left Greece and headed to Spain. Their destination — Sodeto, a town in the northeast corner of the country, where Sandra’s grandmother lived.
Sodeto is one of about 300 little farming villages that the dictator Francisco Franco built in Spain in the 1950s, in an effort to bring people and agriculture to isolated places. All the towns built during this time look similar, and Sodeto is no exception — there’s a church in the center of town and one bar, which is also the one restaurant, which is also the one place to hang out. The houses are the color of sand, and each has a red-tiled roof. About 200 people live in the town.
Sodeto is not the kind of place that makes news. But all that changed in 2011 when almost everyone in this little village won a piece of the biggest lottery jackpot in Spain. By chance, Costis Mitsotakis had found himself in the luckiest town in the world.
In the United States, as far we know, an entire town has never won the lottery. Sometimes large groups do win together, but more often than not, lotteries jackpots in the U.S. are divided by just a few people.
In Spain, they do the lottery differently. First of all, it’s a country-wide obsession — about 75% of Spaniards buy a ticket. There’s more than one lottery in Spain, but the one that Spaniards are the most passionate about is “La Lotería de Navidad” (“The Christmas Lottery”). This lottery has taken place every year since 1812.
For better or worse, lotteries have long been considered by governments as useful ways to raise funds for public programs. But lotteries were, and still are, thought to be regressive taxes on the poor. Karl Marx called them a sinister instrument of the state, designed to dupe the poor into believing there was an easy way out of poverty. The church found lottery play to be blasphemous and superstitious. In 1826 the British outright banned the lottery for nearly a hundred years.
And in 1862, Spain responded to the criticisms as well: by re-designing their national lottery so that it wouldn’t take as much money from the poor. The government thought if the they set the price of tickets high, only rich people would buy them. But that’s not what happened. People began “syndicate” playing, or playing in groups. The lottery became more popular than ever.
In the Christmas Lottery, any number from 00000 to 99,999 can win. It’s very expensive to own an entire number, so organizations will buy a share of a number and then sell off even smaller shares to individuals — five euro shares, two euro shares, etc. Thousands of people may own small fractions of the same number. The smaller the share you have, the less you get of the total jackpot if your number should win.
Making it expensive to own a number outright has turned the lottery into a huge social event. Local organizations sell tickets at a markup for fundraisers. Most Spaniards end up with a stack of tickets — all different tiny shares of different numbers that they’ve been talked into buying.
The numbers go on sale in the summer for the drawing on December 22nd. It is held in Madrid, in the same theater and the same way every year. There’s a stage, holding two giant golden orbs, containing balls with the numbers and prize amounts. After the balls drop, two children sing the numbers and prize amounts in a kind of Gregorian chant. The whole event lasts for hours.
Everyone waits for the biggest prize of the day – “El Gordo” ( the fat one). The “El Gordo” prize is often worth close to a billion dollars. As soon as the El Gordo-winning number is announced, reporters scramble to find out in what part of Spain it was sold.
And on December 22, 2011, it was the people of Sodeto, Spain who held the winning number.
The winning tickets had been sold all over Sodeto by The Housewives Association — a group of women who host parties and activities in town. The association sold tickets, door to door, for six euros. Five euros for the lottery ticket, one euro for their fundraising.
Maria-Carmen Lambea from the Association had chosen the winning number. When she heard that they had won El Gordo, she started calling friends. No one could believe it. Soon everyone was gathered on the plaza. Each six euro ticket the house-wives had sold was worth 100,000 euros.
Ana, the bartender had won, Paco, the farmer, and his wife Marisol won. Rosa, the mayor of the town had won. It seemed that every single resident of the small town of Sodeto had won a piece of El Gordo. The people of Sodeto were not the only ones to win on the number 58,268 in 2011. A few thousand other people also had small shares of the number — mostly scattered around in towns nearby. The total jackpot that year for EL Gordo was about 750 million euros, but it was divided by thousands of people. In Sodeto – the people who bought more tickets got more money, and everyone got at least 100,000 euros.
Everyone, except one. Costis Miksotaksis. Somehow the housewives had missed him when they went knocking on doors.
Six years later, Costis still lives in Sodeto. He and Sandra have parted ways, but remain friends. When we asked if he felt any regret or jealousy, he laughs. “No, nothing,” he says — because Costis feels he got something that day too. He’s a filmmaker and he’s been documenting how the town has responded to this sudden wealth. He believes the town has become a little more insular since the win — more focused on the nuclear family and less on the community as a whole.
But Maria-Carmen doesn’t believe the town has changed that much. Sodeto is a town of farmers, and some of them installed new irrigation systems, or bought new tractors. Some people added modest additions to their homes, but nothing extravagant. It’s been a wonderful thing for everyone in this little working-class town, says Maria-Carmen, to live without the worry of debt.
And that’s the thing about this syndicate style lottery: unlike the Powerball Jackpot in the United States, which heaps hundreds of millions on one or two winners, the money from the Christmas Lottery gets divvied up among thousands of people.
The people who win El Gordo don’t generally win enough to buy mansions and yachts. They win enough to pay off their debts and buy a Honda civic. The lottery brings wealth to a whole geographic area, and distributes it relatively evenly, at least among those lucky enough to have a ticket.
Economists have long struggled to figure out why people play the lottery. It’s not a rational investment The odds of winning the big jackpots are terrible — worse than any other form of gambling. But in Spain, it’s pretty obvious why people play this lottery. It’s the social thing to do. You buy because you don’t want to be that one guy who doesn’t win. You don’t want to be Costis. The lottery organizers actually exploit this fear in their advertising each year.
The Housewives Association, now officially called the “Women’s Association,” continues to choose a number each year for the Christmas Lottery.
The women used to knock on doors for months to sell the tickets, but now the people come to them, and tickets sell out in a few days. “They were lucky once and they could be again,” people say, and no one wants to be left out.
Sodeto is one of about 300 little farming villages that the dictator Francisco Franco built in Spain in the 1950s, in an effort to bring people and agriculture to isolated places. All the towns built during this time look similar, and Sodeto is no exception — there’s a church in the center of town and one bar, which is also the one restaurant, which is also the one place to hang out. The houses are the color of sand, and each has a red-tiled roof. About 200 people live in the town.
Sodeto is not the kind of place that makes news. But all that changed in 2011 when almost everyone in this little village won a piece of the biggest lottery jackpot in Spain. By chance, Costis Mitsotakis had found himself in the luckiest town in the world.
In the United States, as far we know, an entire town has never won the lottery. Sometimes large groups do win together, but more often than not, lotteries jackpots in the U.S. are divided by just a few people.
In Spain, they do the lottery differently. First of all, it’s a country-wide obsession — about 75% of Spaniards buy a ticket. There’s more than one lottery in Spain, but the one that Spaniards are the most passionate about is “La Lotería de Navidad” (“The Christmas Lottery”). This lottery has taken place every year since 1812.
For better or worse, lotteries have long been considered by governments as useful ways to raise funds for public programs. But lotteries were, and still are, thought to be regressive taxes on the poor. Karl Marx called them a sinister instrument of the state, designed to dupe the poor into believing there was an easy way out of poverty. The church found lottery play to be blasphemous and superstitious. In 1826 the British outright banned the lottery for nearly a hundred years.
And in 1862, Spain responded to the criticisms as well: by re-designing their national lottery so that it wouldn’t take as much money from the poor. The government thought if the they set the price of tickets high, only rich people would buy them. But that’s not what happened. People began “syndicate” playing, or playing in groups. The lottery became more popular than ever.
In the Christmas Lottery, any number from 00000 to 99,999 can win. It’s very expensive to own an entire number, so organizations will buy a share of a number and then sell off even smaller shares to individuals — five euro shares, two euro shares, etc. Thousands of people may own small fractions of the same number. The smaller the share you have, the less you get of the total jackpot if your number should win.
Making it expensive to own a number outright has turned the lottery into a huge social event. Local organizations sell tickets at a markup for fundraisers. Most Spaniards end up with a stack of tickets — all different tiny shares of different numbers that they’ve been talked into buying.
The numbers go on sale in the summer for the drawing on December 22nd. It is held in Madrid, in the same theater and the same way every year. There’s a stage, holding two giant golden orbs, containing balls with the numbers and prize amounts. After the balls drop, two children sing the numbers and prize amounts in a kind of Gregorian chant. The whole event lasts for hours.
Everyone waits for the biggest prize of the day – “El Gordo” ( the fat one). The “El Gordo” prize is often worth close to a billion dollars. As soon as the El Gordo-winning number is announced, reporters scramble to find out in what part of Spain it was sold.
And on December 22, 2011, it was the people of Sodeto, Spain who held the winning number.
The winning tickets had been sold all over Sodeto by The Housewives Association — a group of women who host parties and activities in town. The association sold tickets, door to door, for six euros. Five euros for the lottery ticket, one euro for their fundraising.
Maria-Carmen Lambea from the Association had chosen the winning number. When she heard that they had won El Gordo, she started calling friends. No one could believe it. Soon everyone was gathered on the plaza. Each six euro ticket the house-wives had sold was worth 100,000 euros.
Ana, the bartender had won, Paco, the farmer, and his wife Marisol won. Rosa, the mayor of the town had won. It seemed that every single resident of the small town of Sodeto had won a piece of El Gordo. The people of Sodeto were not the only ones to win on the number 58,268 in 2011. A few thousand other people also had small shares of the number — mostly scattered around in towns nearby. The total jackpot that year for EL Gordo was about 750 million euros, but it was divided by thousands of people. In Sodeto – the people who bought more tickets got more money, and everyone got at least 100,000 euros.
Everyone, except one. Costis Miksotaksis. Somehow the housewives had missed him when they went knocking on doors.
Six years later, Costis still lives in Sodeto. He and Sandra have parted ways, but remain friends. When we asked if he felt any regret or jealousy, he laughs. “No, nothing,” he says — because Costis feels he got something that day too. He’s a filmmaker and he’s been documenting how the town has responded to this sudden wealth. He believes the town has become a little more insular since the win — more focused on the nuclear family and less on the community as a whole.
But Maria-Carmen doesn’t believe the town has changed that much. Sodeto is a town of farmers, and some of them installed new irrigation systems, or bought new tractors. Some people added modest additions to their homes, but nothing extravagant. It’s been a wonderful thing for everyone in this little working-class town, says Maria-Carmen, to live without the worry of debt.
And that’s the thing about this syndicate style lottery: unlike the Powerball Jackpot in the United States, which heaps hundreds of millions on one or two winners, the money from the Christmas Lottery gets divvied up among thousands of people.
The people who win El Gordo don’t generally win enough to buy mansions and yachts. They win enough to pay off their debts and buy a Honda civic. The lottery brings wealth to a whole geographic area, and distributes it relatively evenly, at least among those lucky enough to have a ticket.
Economists have long struggled to figure out why people play the lottery. It’s not a rational investment The odds of winning the big jackpots are terrible — worse than any other form of gambling. But in Spain, it’s pretty obvious why people play this lottery. It’s the social thing to do. You buy because you don’t want to be that one guy who doesn’t win. You don’t want to be Costis. The lottery organizers actually exploit this fear in their advertising each year.
The Housewives Association, now officially called the “Women’s Association,” continues to choose a number each year for the Christmas Lottery.
The women used to knock on doors for months to sell the tickets, but now the people come to them, and tickets sell out in a few days. “They were lucky once and they could be again,” people say, and no one wants to be left out.
January 20, 2017
How Lottoland is making millions by cornering a new gambling market
One Tuesday around this time last year, businessman Luke Brill was riding the bus on his way to work with his earphones in, half-listening to Triple J, when he heard something that made him pay attention.
The station’s breakfast presenters were talking about the upcoming US Powerball jackpot — a multi-billion dollar lottery draw that was set to break records and become the biggest cash giveaway of all time.
What they didn’t mention, and what no one knew at the time, was that the draw would also lead to the launch of a massive business which in 12 months’ time would be on the way to revolutionising the gambling industry in Australia while raking in more than a million dollars a week.
That business is Lottoland, and Mr Brill is its managing director.
You’ve probably heard of the online lottery betting company by now — its branding is everywhere. The Gibraltar-owned business’s Australian arm has taken out advertising space across television networks in prime-time periods and secured significant sponsorship deals with major sporting events.
But a year ago, no one had heard of its gambling model, and for good reason — it didn’t exist.
Lottoland had been operating in Europe and the UK for three years but the timing of its launch in Australia was a bit of an accident.
“We got the licence to operate on Christmas Eve the year before and had planned on launching around February, but when I heard that this was going to be the largest jackpot in history, we spent the day rushing through things to get ready to launch, rushed out a press release and it just caught fire,” Mr Brill told news.com.au.
“We had no clients to begin with on the Tuesday. Zero. The Powerball draw was on the Thursday and by then we had 250,000 [clients]. It was the best possible start but it took us all by surprise and we weren’t really ready. We spent the rest of January playing catch-up and working out what our strategy was. It would usually happen the other way around.”
The brand didn’t invest in advertising at the time and it didn’t need to. More than a dozen TV and radio spots were devoted to explaining what Lottoland was all about — and there was a lot of explaining to do.
The business was unusual in the gaming and gambling industry operating in Australia at the time, and it still is. It involves betting on lottery outcomes rather than entering the lottery itself.
Players bet on the results of the biggest lotteries around the world, and now local draws too, and using an insurance-based model Lottoland is able to match the prize money offered in those jackpots.
So taking the US Powerball example, Australians weren’t able to buy a ticket for the $2.3 billion jackpot, but through Lottoland they could pay $10.50 to bet that the numbers they would have selected, had they been able to enter, would be picked. Just like buying multiple tickets, players could enter as many times as they liked, and the prize on offer was the same as that of the actual Powerball draw.
The Powerball jackpot sold itself, but without resulting in any major wins for Aussie entrants, it wasn’t great for Lottoland’s customer retention.
“That first 250,000 were almost like Melbourne Cup punters — most of them you’ll never see again” Mr Brill said.
“The initial push for us was ‘play the Powerball’, but that was just one hit, there wasn’t a great understanding of what our product was other than a way to get in on that one jackpot, so after that our advertising and marketing was about trying to educate our customers.”
Lottoland’s entry wasn’t welcomed by competitors who took legal action ahead of its launch which was settled out of court.
Gambling experts have also criticised it saying making lotteries more frequent increases users’ chances of developing a gambling problem.
Senator Nick Xenophon was among its most vocal critics. The anti-gambling politician blamed laws in the Northern Territory, where the company is registered, for allowing it to operate for profit unlike most other lotteries which are run by governments to pay for public services.
“Lottoland has turned into a legal no man’s land and we need to close the loophole,” he told news.com.au at the time of its launch.
“It’s also causing a haemorrhaging of local territories including state-owned ones. We will miss out on money for hospitals and schools because it will bleed government revenue.”
Lottoland says it’s trying to appease some of those critics by “looking for a charity to support”, but the main focus is building its customer-base.
Lottoland is now trying to get across the message that it’s not just US Powerball. It offers betting on other major international jackpots, and regular, local lottery draws as well.
But the main point of difference with existing lottery providers in Australia, as well as its offering of bigger prizes — “why play for a million dollars when you could play for a billion?” — is the online element.
“You can play on your mobile, there’s no real reason to go down to the newsagent. We know a lot of people don’t want to do that. Particularly young people — they don’t do that,” Mr Brill explained.
“People used to go to the bookies, to the TAB to have a bet, now they play on their Sportsbet or Ladbrokes app. The message we’re getting out is why are people going to the newsagent to buy their lottery ticket every week when they can play with us.”
Mr Brill says Lottoland is offering innovation in an area that has been stagnant.
“We are grabbing that younger audience,” Mr Brill said. He added that its customer bases skews towards women.
The company has signed up around 400,000 Australian users and by Mr Brill’s estimate has taken about one per cent share of Australia’s $2 billion lotteries market.
Though the company wouldn’t release its overall revenue for the year, Mr Brill said it was making “in excess of a million a week”.
Lottoland has paid out about $6 million in prizemoney to Australians since its launch, but is yet to declare a major win for one of its players and prove that it has the capacity to play it out.
“That would be the real prize for us,” Mr Brill said.
“We’re hoping for a big winner. Once we’ve paid out, say, $100 million, all those questions about is it legit, are people going to get paid out, they’re all answered.”
The station’s breakfast presenters were talking about the upcoming US Powerball jackpot — a multi-billion dollar lottery draw that was set to break records and become the biggest cash giveaway of all time.
What they didn’t mention, and what no one knew at the time, was that the draw would also lead to the launch of a massive business which in 12 months’ time would be on the way to revolutionising the gambling industry in Australia while raking in more than a million dollars a week.
That business is Lottoland, and Mr Brill is its managing director.
You’ve probably heard of the online lottery betting company by now — its branding is everywhere. The Gibraltar-owned business’s Australian arm has taken out advertising space across television networks in prime-time periods and secured significant sponsorship deals with major sporting events.
But a year ago, no one had heard of its gambling model, and for good reason — it didn’t exist.
Lottoland had been operating in Europe and the UK for three years but the timing of its launch in Australia was a bit of an accident.
“We got the licence to operate on Christmas Eve the year before and had planned on launching around February, but when I heard that this was going to be the largest jackpot in history, we spent the day rushing through things to get ready to launch, rushed out a press release and it just caught fire,” Mr Brill told news.com.au.
“We had no clients to begin with on the Tuesday. Zero. The Powerball draw was on the Thursday and by then we had 250,000 [clients]. It was the best possible start but it took us all by surprise and we weren’t really ready. We spent the rest of January playing catch-up and working out what our strategy was. It would usually happen the other way around.”
The brand didn’t invest in advertising at the time and it didn’t need to. More than a dozen TV and radio spots were devoted to explaining what Lottoland was all about — and there was a lot of explaining to do.
The business was unusual in the gaming and gambling industry operating in Australia at the time, and it still is. It involves betting on lottery outcomes rather than entering the lottery itself.
Players bet on the results of the biggest lotteries around the world, and now local draws too, and using an insurance-based model Lottoland is able to match the prize money offered in those jackpots.
So taking the US Powerball example, Australians weren’t able to buy a ticket for the $2.3 billion jackpot, but through Lottoland they could pay $10.50 to bet that the numbers they would have selected, had they been able to enter, would be picked. Just like buying multiple tickets, players could enter as many times as they liked, and the prize on offer was the same as that of the actual Powerball draw.
The Powerball jackpot sold itself, but without resulting in any major wins for Aussie entrants, it wasn’t great for Lottoland’s customer retention.
“That first 250,000 were almost like Melbourne Cup punters — most of them you’ll never see again” Mr Brill said.
“The initial push for us was ‘play the Powerball’, but that was just one hit, there wasn’t a great understanding of what our product was other than a way to get in on that one jackpot, so after that our advertising and marketing was about trying to educate our customers.”
Lottoland’s entry wasn’t welcomed by competitors who took legal action ahead of its launch which was settled out of court.
Gambling experts have also criticised it saying making lotteries more frequent increases users’ chances of developing a gambling problem.
Senator Nick Xenophon was among its most vocal critics. The anti-gambling politician blamed laws in the Northern Territory, where the company is registered, for allowing it to operate for profit unlike most other lotteries which are run by governments to pay for public services.
“Lottoland has turned into a legal no man’s land and we need to close the loophole,” he told news.com.au at the time of its launch.
“It’s also causing a haemorrhaging of local territories including state-owned ones. We will miss out on money for hospitals and schools because it will bleed government revenue.”
Lottoland says it’s trying to appease some of those critics by “looking for a charity to support”, but the main focus is building its customer-base.
Lottoland is now trying to get across the message that it’s not just US Powerball. It offers betting on other major international jackpots, and regular, local lottery draws as well.
But the main point of difference with existing lottery providers in Australia, as well as its offering of bigger prizes — “why play for a million dollars when you could play for a billion?” — is the online element.
“You can play on your mobile, there’s no real reason to go down to the newsagent. We know a lot of people don’t want to do that. Particularly young people — they don’t do that,” Mr Brill explained.
“People used to go to the bookies, to the TAB to have a bet, now they play on their Sportsbet or Ladbrokes app. The message we’re getting out is why are people going to the newsagent to buy their lottery ticket every week when they can play with us.”
Mr Brill says Lottoland is offering innovation in an area that has been stagnant.
“We are grabbing that younger audience,” Mr Brill said. He added that its customer bases skews towards women.
The company has signed up around 400,000 Australian users and by Mr Brill’s estimate has taken about one per cent share of Australia’s $2 billion lotteries market.
Though the company wouldn’t release its overall revenue for the year, Mr Brill said it was making “in excess of a million a week”.
Lottoland has paid out about $6 million in prizemoney to Australians since its launch, but is yet to declare a major win for one of its players and prove that it has the capacity to play it out.
“That would be the real prize for us,” Mr Brill said.
“We’re hoping for a big winner. Once we’ve paid out, say, $100 million, all those questions about is it legit, are people going to get paid out, they’re all answered.”
January 14, 2016
Winning Powerball Tickets Sold in at Least 3 States for Nearly $1.6B Jackpot
The winning Powerball numbers were drawn Wednesday night: 8, 27, 34, 4, 19 and the Powerball of 10.
California lotto officials tweeted almost immediately after that a winning ticket was sold in the state. Later, California Lottery spokesperson Russ Lopez said there were two more winning tickets sold, one in Tennessee and one in Florida.
The California Lottery also tweeted that it sold 12 tickets that matched five of the six numbers.
California lottery officials said the winning ticket was sold at the 7-Eleven on Chino Hills Parkway.
The jackpot, which reached record levels after 20 drawings without a winner, was estimated to be nearly $1.6 billion. According to the Texas Lottery, the cash equivalent was $983.5 million.
This Powerball jackpot first started at $40 million on Nov. 7, 2015.
According to Texas lottery officials earlier today, there was an 85.8 percent of the possible number combinations had been sold.
California lotto officials tweeted almost immediately after that a winning ticket was sold in the state. Later, California Lottery spokesperson Russ Lopez said there were two more winning tickets sold, one in Tennessee and one in Florida.
The California Lottery also tweeted that it sold 12 tickets that matched five of the six numbers.
California lottery officials said the winning ticket was sold at the 7-Eleven on Chino Hills Parkway.
The jackpot, which reached record levels after 20 drawings without a winner, was estimated to be nearly $1.6 billion. According to the Texas Lottery, the cash equivalent was $983.5 million.
This Powerball jackpot first started at $40 million on Nov. 7, 2015.
According to Texas lottery officials earlier today, there was an 85.8 percent of the possible number combinations had been sold.
December 07, 2015
Bearded Bucks: Minnesota Lottery Goes Hipster with Artist Chuck U
Bearded Bucks scratch-off cards from the Minnesota Lottery represent the peak of hipster state lottery operations. Not only can players win $10,000 by scratching off the beard of a lumbersexual to find craft beers and bird silhouettes but losers can also enter that card to win an art print signed by hipster artist favorite Chuck U.
Minneapolis-based ad agency Olson pitched the idea “and worked with the artist on the design of the ticket, which is unique and, given the number of bearded, plaid-wearing men in Minnesota this time of year, undeniably on-trend,” said Vicki Holets, Minnesota Lottery Marketing Manager
The Lottery is well aware it is satirizing Minnesota’s many hipsters. Its dedicated Bearded Bucks page begins, “Ladies and gentleman, hipsters and dudes, it’s time to get your beard on!” And, of course, there is the winning bird silhouette.
Why a bird, those unfamiliar with hipster icons might ask? Because, “putting a bird on it!” is what hipsters do. Kind of the same way craft beer is hipster. Speaking of craft beer…
And to promote Bearded Bucks, the Lottery went on a Tour De Beards that included craft breweries across Minneapolis-St. Paul. It also started a “Chancetaker” series, featuring Minnesotans like the co-founder of craft beer brewery Tin Whiskers, which also held a Lottery-sponsored beard contest in October.
And then there are the recent TV commercials best described as a combination of Wes Anderson scenes, Tumblr memes and Geico commercials.
“Customers have liked Bearded Bucks,” said Holets of the game’s reception. “The game is performing slightly above average for a $2 ticket, which we attribute to regular players liking the game and new customers trying out an eye-catching product.”
Hipster themes in state lottery communications are not new—18 months ago, New York flirted creatively with hipster stereotypes for its “Bejeweled” game.
But being a true hipster means being able to say you were into it before it was cool—and the Oregon Lottery can brag that it was doing hipster lottery back before it was cool. It even put a bird on it.
The Lottery is well aware it is satirizing Minnesota’s many hipsters. Its dedicated Bearded Bucks page begins, “Ladies and gentleman, hipsters and dudes, it’s time to get your beard on!” And, of course, there is the winning bird silhouette.
Why a bird, those unfamiliar with hipster icons might ask? Because, “putting a bird on it!” is what hipsters do. Kind of the same way craft beer is hipster. Speaking of craft beer…
And then there are the recent TV commercials best described as a combination of Wes Anderson scenes, Tumblr memes and Geico commercials.
“Customers have liked Bearded Bucks,” said Holets of the game’s reception. “The game is performing slightly above average for a $2 ticket, which we attribute to regular players liking the game and new customers trying out an eye-catching product.”
Hipster themes in state lottery communications are not new—18 months ago, New York flirted creatively with hipster stereotypes for its “Bejeweled” game.
But being a true hipster means being able to say you were into it before it was cool—and the Oregon Lottery can brag that it was doing hipster lottery back before it was cool. It even put a bird on it.
Nonetheless, the Minnesota Lottery has no intention of giving up on hipsters—Holets says it will “absolutely” do more “hipster” lottery promotions. “We had a blast promoting this game at craft breweries and other plaid-friendly locations, so we are working on new products that will appeal to that audience.”
Meanwhile lottery hipsters will have to vie with the lottery undead. Oregon Lottery’s latest theme is trendy zombies.
Not so fast Oregon, the student has become the master. Minnesota Lottery’s got its own zombie-themed lottery game. This one is a partnership with AMC’s The Walking Dead.
Meanwhile lottery hipsters will have to vie with the lottery undead. Oregon Lottery’s latest theme is trendy zombies.
September 02, 2015
North Carolina will Introduce BBQ Scratch and Sniff Lottery Tickets
In the never-ending effort to make buying a lottery ticket new and fun, the N.C. Education Lottery has come up with this: Tickets that smell like barbecue when you scratch them.
Lottery officials will unveil their new BBQ Bucks scratch-off tickets Tuesday at Clyde Cooper’s Barbecue in downtown Raleigh and at Queen City Q in Charlotte. The $2 scratch-and-sniff tickets will bring a chance to win up to $25,000 and to enter a secondary drawing for one of 10 prizes of 100 pounds of pork and a Big Green Egg to grill it on.
It’s the first scented scratch-off game for the North Carolina lottery, as the state joins a growing number selling tickets with what are meant to be appealing aromas. Colorado began selling tickets with coffee, chocolate and bouquet scents as far back as 2008. Texas, Florida and Missouri have offered chocolate tickets, too, while Nebraska unveiled Sriracha-scented scratch tickets at its state fair over the weekend.
But pig products appear to be the hot thing in lottery tickets this year, with New Hampshire, Colorado and Indiana all introducing bacon-scented tickets. In Indiana, players of the Bringin’ Home the Bacon game can enter a separate drawing for a chance to win $250 worth of bacon each year for 20 years.
North Carolina lottery officials say their tickets will smell like “smoky BBQ,” side-stepping the issue of whether it is eastern or western style.
“I can tell you that there was intention to make sure the ticket’s scent didn’t try to live up to the real thing, which the lottery is content to leave to BBQ experts, like the folks at Cooper’s,” said lottery spokesman Chris Bushnell. “That’s why we went with a smoky scent.”
The odds of winning at BBQ Bucks, including break-even prizes, are 1 in 4.55, and odds of claiming one of the $25,000 top prizes are 1 in 888,000. The first tickets will be available at Cooper’s Barbecue on Wilmington Street from 11 a.m. to 1 p.m. Tuesday.
The state sold nearly $2 billion in lottery tickets in the fiscal year that ended June 30, providing more than $500 million for a variety of education programs. Many legislators want to goose those sales by increasing advertising for the lottery and making a version of instant tickets available on the Internet or smartphones.
Lottery officials will unveil their new BBQ Bucks scratch-off tickets Tuesday at Clyde Cooper’s Barbecue in downtown Raleigh and at Queen City Q in Charlotte. The $2 scratch-and-sniff tickets will bring a chance to win up to $25,000 and to enter a secondary drawing for one of 10 prizes of 100 pounds of pork and a Big Green Egg to grill it on.
But pig products appear to be the hot thing in lottery tickets this year, with New Hampshire, Colorado and Indiana all introducing bacon-scented tickets. In Indiana, players of the Bringin’ Home the Bacon game can enter a separate drawing for a chance to win $250 worth of bacon each year for 20 years.
North Carolina lottery officials say their tickets will smell like “smoky BBQ,” side-stepping the issue of whether it is eastern or western style.
“I can tell you that there was intention to make sure the ticket’s scent didn’t try to live up to the real thing, which the lottery is content to leave to BBQ experts, like the folks at Cooper’s,” said lottery spokesman Chris Bushnell. “That’s why we went with a smoky scent.”
The odds of winning at BBQ Bucks, including break-even prizes, are 1 in 4.55, and odds of claiming one of the $25,000 top prizes are 1 in 888,000. The first tickets will be available at Cooper’s Barbecue on Wilmington Street from 11 a.m. to 1 p.m. Tuesday.
The state sold nearly $2 billion in lottery tickets in the fiscal year that ended June 30, providing more than $500 million for a variety of education programs. Many legislators want to goose those sales by increasing advertising for the lottery and making a version of instant tickets available on the Internet or smartphones.
February 16, 2015
Powerball lottery: The states where you can't win $563m
According to US lottery officials there were three winning tickets sold for Wednesday night's Powerball jackpot, with an estimated total payout of $563m (£366m).
That was the fifth-largest prize in Powerball history, and it had created the kind of buzz that only the (minuscule) chance to win incomprehensible sums of money can generate.
The winning tickets were sold in Texas, North Carolina and Puerto Rico, and customers lined up all over the US in the days leading up to the drawing to take their shot at a piece of the big prize. All over, that is, except for six states.
Alabama, Alaska, Hawaii, Mississippi, Nevada and Utah don't participate in Powerball. In fact, they have no state-run lottery whatsoever.
A look at the list of states reveals that there's no one explanation for their reluctance. It all comes down to local concerns - fiscal, moral and geographical.
In Nevada, casino interests dominate state politics, and the prospect of a government-run gambling enterprise operating alongside the Mirages and MGM Grands of the Las Vegas Strip is a non-starter.
What's more, the Nevada government already gets a cut from the state's gambling industry, says Mark Hichar, chair of the gaming law practice group at the law firm Hinckley Allen.
"The government revenues from gambling are such that they don't see the need to have a lottery competing with those commercial interests," he says.
The same goes for Mississippi, where riverboat gambling and Biloxi-based casinos are a popular - and influential - industry that has successfully joined with anti-gambling religious institutions that hold greater sway in the Deep South "Bible Belt" to keep the lottery at bay.
Those Christian ethical concerns are even more dominant in Mississippi's neighbour, Alabama, and Mormon-heavy Utah.
"The Church of Jesus Christ of Latter-day Saints is opposed to gambling, including lotteries sponsored by governments," the church writes on its website. "Gambling is motivated by a desire to get something for nothing. This desire is spiritually destructive."
Of course the lack of locally sold lottery tickets isn't much of an obstacle for residents who are able to drive to a neighbouring state that participates.
The prospect of losing money across the state line has been an often-cited reason for why states have ended up adopting their own lottery.
According to Terry Rich, president of the Iowa Lottery Authority, the cross-border traffic was a prime reason why his state adopted the lottery in 1985 - and the lure of winning millions is still at play in the non-lottery states.
"A lot of the folks in Utah are heading to Idaho today," he says, "and Nevada people are all heading to California."
It's not a challenge faced by two of the states that don't participate, however - isolated Alaska and Hawaii.
In Hawaii one of the state's political giants - Senator Daniel Inouye - was adamantly opposed to gambling of any kind, arguing it would harm his home-state tourism industry. Gambling, he said, will attract a "different type of people" - "it will not be the type you no see now with their young children, young folks spending their honeymoon."
Inouye died in 2012, but his state's opposition lives on.
In Alaska, on the other hand, the lack of a lottery seems to have less to do with moral questions and more to do with oil. The state generates so much revenue from drilling that it operates with a budget surplus and gives a dividend of nearly $2,000 back to each of its residents every year.
Where states like Georgia, Colorado and Texas use lottery revenues to fund college scholarships, environmental programmes and public schools, Alaskans see no such fiscal urgency.
The numbers involved in the US lottery industry are inarguably massive, however. According to the North American Association of State and Provincial Lotteries, US lottery revenue in 2014 was $70bn. Powerball alone accounted for $4.81bn.
For comparison's sake, the combined 2014 gross revenue for professional American football, baseball and basketball was only $23.6bn.
It's a booming business that 44 states have found impossible to resist.
That was the fifth-largest prize in Powerball history, and it had created the kind of buzz that only the (minuscule) chance to win incomprehensible sums of money can generate.
The winning tickets were sold in Texas, North Carolina and Puerto Rico, and customers lined up all over the US in the days leading up to the drawing to take their shot at a piece of the big prize. All over, that is, except for six states.
Alabama, Alaska, Hawaii, Mississippi, Nevada and Utah don't participate in Powerball. In fact, they have no state-run lottery whatsoever.
A look at the list of states reveals that there's no one explanation for their reluctance. It all comes down to local concerns - fiscal, moral and geographical.
In Nevada, casino interests dominate state politics, and the prospect of a government-run gambling enterprise operating alongside the Mirages and MGM Grands of the Las Vegas Strip is a non-starter.
What's more, the Nevada government already gets a cut from the state's gambling industry, says Mark Hichar, chair of the gaming law practice group at the law firm Hinckley Allen.
"The government revenues from gambling are such that they don't see the need to have a lottery competing with those commercial interests," he says.
Those Christian ethical concerns are even more dominant in Mississippi's neighbour, Alabama, and Mormon-heavy Utah.
"The Church of Jesus Christ of Latter-day Saints is opposed to gambling, including lotteries sponsored by governments," the church writes on its website. "Gambling is motivated by a desire to get something for nothing. This desire is spiritually destructive."
Of course the lack of locally sold lottery tickets isn't much of an obstacle for residents who are able to drive to a neighbouring state that participates.
The prospect of losing money across the state line has been an often-cited reason for why states have ended up adopting their own lottery.
According to Terry Rich, president of the Iowa Lottery Authority, the cross-border traffic was a prime reason why his state adopted the lottery in 1985 - and the lure of winning millions is still at play in the non-lottery states.
"A lot of the folks in Utah are heading to Idaho today," he says, "and Nevada people are all heading to California."
It's not a challenge faced by two of the states that don't participate, however - isolated Alaska and Hawaii.
In Hawaii one of the state's political giants - Senator Daniel Inouye - was adamantly opposed to gambling of any kind, arguing it would harm his home-state tourism industry. Gambling, he said, will attract a "different type of people" - "it will not be the type you no see now with their young children, young folks spending their honeymoon."
Inouye died in 2012, but his state's opposition lives on.
In Alaska, on the other hand, the lack of a lottery seems to have less to do with moral questions and more to do with oil. The state generates so much revenue from drilling that it operates with a budget surplus and gives a dividend of nearly $2,000 back to each of its residents every year.
Where states like Georgia, Colorado and Texas use lottery revenues to fund college scholarships, environmental programmes and public schools, Alaskans see no such fiscal urgency.
The numbers involved in the US lottery industry are inarguably massive, however. According to the North American Association of State and Provincial Lotteries, US lottery revenue in 2014 was $70bn. Powerball alone accounted for $4.81bn.
For comparison's sake, the combined 2014 gross revenue for professional American football, baseball and basketball was only $23.6bn.
It's a booming business that 44 states have found impossible to resist.
January 30, 2015
Minnesota Lottery online scratchers targeted by new legislation
The Minnesota Lottery’s first-in-the-nation online scratch tickets appear headed for a fall after state legislators advanced bills intended to bring the lottery offline. On Wednesday, the House Commerce and Regulatory Reform committee approved two bills that would kill the online scratchers and scuttle another lottery program allowing ticket sales at automatic teller machines and gas station pumps.
Neither bill would affect the Lottery’s ability to sell online tickets for draw games such as Powerball or MegaMillions. But state pols believe the online scratchers, which debuted last February, represented an overreach by lottery officials. Rep. Tim Sanders, who authored one of the bills, said the online launch was the result of a “lottery-gone-wild” and those damnned uppity officials “need to have authorization” in order to offer new products.
Lottery director Ed Van Petten has always maintained that launching the scratchers was within his mandate. But he struck a more conciliatory tone on Wednesday, telling legislators his office had “learned our lesson” and that he wanted to “work with this legislature” to avoid future squabbles. Van Petten proposed alternative language that would require legislative okay for future launches of new products.
But Van Petten remains opposed to ending the online experiment, saying cancelling the online scratchers would cost the state sorely needed revenue. There’s also the issue of compensation for technology provider Scientific Games Corp, who have said they would likely sue for over $4m in unrealized revenue if the state prematurely scrapped the scratchers.
Van Petten said online sales accounted for about 1% of total lottery sales, while the ATM and gas pump options have brought in less than $50k. There are 135 locations offering ATM sales and 58 gas stations currently pumping out lottery tickets.
Politicians passed similar legislation by wide majorities last year but Gov. Mark Dayton vetoed the bill once the legislative session had concluded, leaving politicians with no recourse but to wait until 2015. Dayton believed Van Petten deserved the opportunity to prove his case that the online scratchers were a promotional tool that would boost, not cannibalize, retail sales. Shortly before Christmas, Van Petten offered evidence that backed up his predictions, but legislators aren’t listening and Dayton is powerless to stop them this time.
Minnesota is one of just four US states currently offering some form of online sales. Illinois went first, followed by Georgia, while Michigan went live last year. Kentucky is promising to launch its own iLottery this year.
Neither bill would affect the Lottery’s ability to sell online tickets for draw games such as Powerball or MegaMillions. But state pols believe the online scratchers, which debuted last February, represented an overreach by lottery officials. Rep. Tim Sanders, who authored one of the bills, said the online launch was the result of a “lottery-gone-wild” and those damnned uppity officials “need to have authorization” in order to offer new products.
Lottery director Ed Van Petten has always maintained that launching the scratchers was within his mandate. But he struck a more conciliatory tone on Wednesday, telling legislators his office had “learned our lesson” and that he wanted to “work with this legislature” to avoid future squabbles. Van Petten proposed alternative language that would require legislative okay for future launches of new products.
But Van Petten remains opposed to ending the online experiment, saying cancelling the online scratchers would cost the state sorely needed revenue. There’s also the issue of compensation for technology provider Scientific Games Corp, who have said they would likely sue for over $4m in unrealized revenue if the state prematurely scrapped the scratchers.
Van Petten said online sales accounted for about 1% of total lottery sales, while the ATM and gas pump options have brought in less than $50k. There are 135 locations offering ATM sales and 58 gas stations currently pumping out lottery tickets.
Politicians passed similar legislation by wide majorities last year but Gov. Mark Dayton vetoed the bill once the legislative session had concluded, leaving politicians with no recourse but to wait until 2015. Dayton believed Van Petten deserved the opportunity to prove his case that the online scratchers were a promotional tool that would boost, not cannibalize, retail sales. Shortly before Christmas, Van Petten offered evidence that backed up his predictions, but legislators aren’t listening and Dayton is powerless to stop them this time.
Minnesota is one of just four US states currently offering some form of online sales. Illinois went first, followed by Georgia, while Michigan went live last year. Kentucky is promising to launch its own iLottery this year.
November 24, 2014
April 25, 2014
Minnesota looks to kill state Lottery’s “online crack” scratch-off tickets
Minnesota’s pioneering use of online lottery scratch-off tickets could be headed for the ash-heap of history after a state House committee voted to ban the product. The Minnesota State Lottery made history in February by becoming the first US state lottery to offer online scratch-off tickets. While other state lotteries had offered online ticket sales – Illinois even offers a mobile app to purchase tickets – Minnesota pushed the envelope in February by offering an online version of their Spicy 7’s scratch-off tickets, which critics believe mimic slot machine gambling.
The Spicy 7’s have produced $170k in sales since their Feb. 6 online debut. Outraged politicians accused the Lottery of overstepping its mandate yet director Ed Van Petten insisted that the online scratchers were more of a promotional tool and pointed to increased sales at the state’s 3,100 lottery retailers as proof that the plan was working. Van Petten was also keenly aware that the average lottery player was skewing older and that changes were needed to keep the Lottery relevant in a digital age.
Unconvinced, legislators in both the House and Senate introduced legislation to take Spicy 7’s offline. The House Tax Committee held a hearing on Tuesday which featured a representative of the Joint Religious Legislative Coalition taking a page out of Las Vegas Sands VP Andy Abboud’s book by holding up his smartphone and suggesting voters didn’t want to see it transformed into a lottery terminal. The not at all hysterical Rep. Greg Davids took this argument to its illogical conclusion, saying; “This is not the online lottery, this is online crack.”
Van Petten told the committee that he remains convinced the Lottery was within its legal mandate to launch the product while reminding everyone that killing the product could cost the state $2.5m if a key lottery vendor launched a breach-of-contract suit. An unsympathetic Rep. Ann Lenczewski, who chairs the Committee and sponsored the House legislation to kill off the Spicy 7’s, suggested that any financial damages wouldn’t be the state’s liability. “The lottery can eat that.”
On Thursday, the House Commerce Committee voted in favor of the legislation banning the online scratchers. The bill, which also seeks to shut down online sales of national lottery tickets as well as the Lottery’s ‘pay at the pump’ gas station pilot program, now heads to the House rules committee. Assuming it passes muster there, the next stop is a vote on the House floor.
Similar legislation is pending in the Senate and Majority Leader Tom Bakk has expressed confidence that it will pass. Gov. Mark Dayton has expressed concerns that legislators may be micromanaging the Lottery’s operations but has yet to express a firm opinion one way or the other on the issue.
On a cheerier note, last week marked the 25th anniversary of the Lottery’s birth. To celebrate, the Lottery unveiled a new logo, the first revamp the logo has undergone since its 1989 debut. The new logo features a variation of the loon on the old logo, but given the attitudes of state legislators, perhaps a whole bunch of certifiable loonies would have been more appropriate.
The Spicy 7’s have produced $170k in sales since their Feb. 6 online debut. Outraged politicians accused the Lottery of overstepping its mandate yet director Ed Van Petten insisted that the online scratchers were more of a promotional tool and pointed to increased sales at the state’s 3,100 lottery retailers as proof that the plan was working. Van Petten was also keenly aware that the average lottery player was skewing older and that changes were needed to keep the Lottery relevant in a digital age.
Unconvinced, legislators in both the House and Senate introduced legislation to take Spicy 7’s offline. The House Tax Committee held a hearing on Tuesday which featured a representative of the Joint Religious Legislative Coalition taking a page out of Las Vegas Sands VP Andy Abboud’s book by holding up his smartphone and suggesting voters didn’t want to see it transformed into a lottery terminal. The not at all hysterical Rep. Greg Davids took this argument to its illogical conclusion, saying; “This is not the online lottery, this is online crack.”
Van Petten told the committee that he remains convinced the Lottery was within its legal mandate to launch the product while reminding everyone that killing the product could cost the state $2.5m if a key lottery vendor launched a breach-of-contract suit. An unsympathetic Rep. Ann Lenczewski, who chairs the Committee and sponsored the House legislation to kill off the Spicy 7’s, suggested that any financial damages wouldn’t be the state’s liability. “The lottery can eat that.”
On Thursday, the House Commerce Committee voted in favor of the legislation banning the online scratchers. The bill, which also seeks to shut down online sales of national lottery tickets as well as the Lottery’s ‘pay at the pump’ gas station pilot program, now heads to the House rules committee. Assuming it passes muster there, the next stop is a vote on the House floor.
Similar legislation is pending in the Senate and Majority Leader Tom Bakk has expressed confidence that it will pass. Gov. Mark Dayton has expressed concerns that legislators may be micromanaging the Lottery’s operations but has yet to express a firm opinion one way or the other on the issue.
On a cheerier note, last week marked the 25th anniversary of the Lottery’s birth. To celebrate, the Lottery unveiled a new logo, the first revamp the logo has undergone since its 1989 debut. The new logo features a variation of the loon on the old logo, but given the attitudes of state legislators, perhaps a whole bunch of certifiable loonies would have been more appropriate.
April 22, 2014
Why more governments should offer their citizens a one-in-a-million chance to win
People love lotteries. Almost half of Americans play at least once a year; Spain’s annual national lottery has been going strong for more than a century; and in China the national welfare lottery has collected $167 billion since it began in 1987. This love is unrequited: The odds of winning are abysmal, which can turn them into a tax on the poor.
But that’s why some economists love lotteries, too. They demonstrate a great way to trick people into doing things they ought to be doing anyhow.
Take Slovakia: Like some of its fiscally-troubled European brethren, the government finances itself through a value-added tax, which it’s having some trouble collecting, since businesses are not reporting their sales for VAT-collection. How do you change that? The government there recently started a new lottery that citizens could enter with a receipt from any purchase of more than €1. That turned the country’s lottery-loving citizenry into a corps of internal revenue inspectors, demanding receipts from merchants and, according to the finance minister, increasing VAT collections.
Their eagerness comes from a quirk of human psychology which, when documented, helped win Daniel Kahneman and Vernon Smith the 2002 Nobel Prize in economics. Their research found that rational decisions about costs and benefits were distorted by how people framed them in their minds: People tend to embrace risk when there is a potentially large gain, and avoid it when there is potential for even a small loss. That’s why someone who will pay $5 for an infinitesimal chance to win a huge jackpot might not put away $5 they could spend today in a bank to save for the future.
That’s been a long-time message of Peter Tufano, an economist and dean of Oxford’s Said Business School. His non-profit, D2D Fund, promotes a number of programs to build financial assets for the poor that take advantage of this facet of human behavior. One of the most effective is known as the save to win fund. Consumers are encouraged to enter a “lottery” which is actually a savings account. The money they spend to enter is saved, and they become eligible for a cash prizes drawn from the combined interest earnings.
This is behavioral economics at work: While people won’t save money for the guaranteed-but-small return of interest on a certificate of deposit, they will pay for a tiny chance of a large return. Tufano’s pilot programs in the United States have led to $72.2 million in savings (pdf) for more than 40,000 account holders between 2009 and 2012. The lottery is a bonus, Tufano says—what’s important is that they are saving rather than spending or gambling their principal in the first place, making them more resilient to financial shocks.
Fans of these methods have been encouraging policymakers to use them more often. Four years ago, Harvard Business Review floated a proposal that would enter US taxpayers in a lottery as a way to encourage accurate and timely filing. But despite president Obama’s much bally-hooed “nudge”-friendly policy team, that plan hasn’t been implemented.
There are those that might object to lotteries as a nudge toward wise choices. Several religious faiths are skeptical, seeing gambling as sinful. Some governments, from China to many US states, are already using lotteries to fund social welfare or arts programs, and might not like to see competition from savings-building programs. And maybe it all feels a bit manipulative.
But if sweepstakes like these can be more widely useful, maybe we need a lottery that gives an entry ticket to every lawmaker who votes for smart social policies like these. After all, everything is about incentives.
September 19, 2013
European Lotteries President welcomes adoption of unfair operator principle
On Tuesday September 10 in Strasbourg, the European Parliament adopted with an overwhelming majority the online gambling report prepared by the Internal Market and Consumer Protection Committee.
While the report does not call for harmonization of the online gambling sector at EU level, it highlights the need for co-operation amongst member states and urges a high level of protection for consumers.
European Lotteries, the umbrella organization of national lottery operators, welcomed the European Parliament resolution that confirms the European Commission’s approach to not propose a sectoral harmonization directive for online gambling.
Friedrich Stickler, President of European Lotteries, commented: "The European Parliament has spoken out very clearly that a sectoral online gambling Directive is not desirable: gambling is not an ordinary economic activity. We are pleased that the threat for consumers from illegal gambling offerings is taken seriously. This Resolution takes a clear stance on the need for law enforcement at the national level and cooperation between the Member States: we welcome in particular the adoption of the ‘unfair operator principle’: online gambling companies that violate the laws of one Member State should lose their license in other Member States."
The texts adopted by the the European Parliament elaborated on 5 different topics: specific nature of the online gambling sector and consumer protection, compliance with EU law, administrative cooperation, money laundering and integrity of sports, but Bookmakers Review could not find any specific mention of the adoption of the so-called ‘unfair operator principle’.
If anything the European Parliament noted the need for more coherent EU policies in order to address the cross-border nature of online gambling.
European Lotteries also welcomed the European Parliament strong stance on the need for a broad set of measures to fight illegal operators, although we hope and believe MEPs do not consider illegal bookmakers licensed in the Isle of Man, a British Crown Dependency.
Earlier this year, while speaking during the CEO panel at the World Gaming Executive Summit, the President of European Lotteries labeled as 'illegal operator' SBOBET, an online bookmaker present in Asia and Europe with licenses in First Cagayan (Philippines) and the Isle of Man.
The sensation that day of July was that Mr Stickler considers illegal all online bookmakers based in offshore jurisdictions and that he would have probably bashed Gibraltar-licensed BWIN had the company's Co-CEO not been present in the same panel.
While the report does not call for harmonization of the online gambling sector at EU level, it highlights the need for co-operation amongst member states and urges a high level of protection for consumers.
European Lotteries, the umbrella organization of national lottery operators, welcomed the European Parliament resolution that confirms the European Commission’s approach to not propose a sectoral harmonization directive for online gambling.
Friedrich Stickler, President of European Lotteries, commented: "The European Parliament has spoken out very clearly that a sectoral online gambling Directive is not desirable: gambling is not an ordinary economic activity. We are pleased that the threat for consumers from illegal gambling offerings is taken seriously. This Resolution takes a clear stance on the need for law enforcement at the national level and cooperation between the Member States: we welcome in particular the adoption of the ‘unfair operator principle’: online gambling companies that violate the laws of one Member State should lose their license in other Member States."
The texts adopted by the the European Parliament elaborated on 5 different topics: specific nature of the online gambling sector and consumer protection, compliance with EU law, administrative cooperation, money laundering and integrity of sports, but Bookmakers Review could not find any specific mention of the adoption of the so-called ‘unfair operator principle’.
If anything the European Parliament noted the need for more coherent EU policies in order to address the cross-border nature of online gambling.
European Lotteries also welcomed the European Parliament strong stance on the need for a broad set of measures to fight illegal operators, although we hope and believe MEPs do not consider illegal bookmakers licensed in the Isle of Man, a British Crown Dependency.
Earlier this year, while speaking during the CEO panel at the World Gaming Executive Summit, the President of European Lotteries labeled as 'illegal operator' SBOBET, an online bookmaker present in Asia and Europe with licenses in First Cagayan (Philippines) and the Isle of Man.
The sensation that day of July was that Mr Stickler considers illegal all online bookmakers based in offshore jurisdictions and that he would have probably bashed Gibraltar-licensed BWIN had the company's Co-CEO not been present in the same panel.
March 22, 2013
Illinois Lottery Fines Northstar Group $20m For Missing Revenue Target
New Jersey is currently contemplating privatizing the management of its state lottery, which posted a record $2.7b in sales in 2012 and is the state’s fourth largest revenue stream. Gov. Chris Christie has been accused of exercising unnecessary secrecy in his privatization plans, so on Monday a suspicious state Senate passed legislation requiring both houses of the state legislature to sign off on any contract Christie might strike with lottery operators.
It’s not clear whether Christie will be willing to sign the bill and thus surrender his autonomy, but perhaps it would be better than to have the contract ripped up after the fact, similar to what happened recently in neighboring Pennsylvania. State treasury officials insist Christie would have the power to cancel the 15-year, $120m contract at any time should the operator prove incapable of increasing lottery revenue for two years. (This is what we call foreshadowing.)
As in Pennsylvania, there has been just one bidder for the New Jersey lottery contract, a consortium of GTECH, Scientific Games (SGMS) and a Canadian pension fund called OMERS, all of which is grouped under the banner of Northstar New Jersey. Northstar is also the name of the joint venture GTECH and SGMS entered into to operate the Illinois Lottery. Illinois was the first state to privatize management of its lottery in 2011, but the venture has yet to live up to its advance billing.
True, the Illinois Lottery increased sales from $2.27b to $2.68b and earned record revenue of $757m in 2012, the first full year of the 10-year Northstar contract, but that was $94m short of its promised $851.2m revenue target. Northstar quibbled about the revenue target figure, eventually convincing the state to reduce it to $822.8m, but that still left Northstar down nearly $66m. Northstar is also arguing that its total revenue tally was closer to $781m, but even that would leave it nearly $42m shy of its goal. (Nice try, guys, but unless you’re willing to claw back the odd jackpot or two, the two ends of this rope ain’t ever gonna meet.) As such, the Illinois Lottery Department is preparing to withhold monthly payments to Northstar until it has recouped a $20m penalty as stipulated under the terms of the management contract. Northstar earned $85m in management fees last year.
It’s not clear whether Christie will be willing to sign the bill and thus surrender his autonomy, but perhaps it would be better than to have the contract ripped up after the fact, similar to what happened recently in neighboring Pennsylvania. State treasury officials insist Christie would have the power to cancel the 15-year, $120m contract at any time should the operator prove incapable of increasing lottery revenue for two years. (This is what we call foreshadowing.)
As in Pennsylvania, there has been just one bidder for the New Jersey lottery contract, a consortium of GTECH, Scientific Games (SGMS) and a Canadian pension fund called OMERS, all of which is grouped under the banner of Northstar New Jersey. Northstar is also the name of the joint venture GTECH and SGMS entered into to operate the Illinois Lottery. Illinois was the first state to privatize management of its lottery in 2011, but the venture has yet to live up to its advance billing.
True, the Illinois Lottery increased sales from $2.27b to $2.68b and earned record revenue of $757m in 2012, the first full year of the 10-year Northstar contract, but that was $94m short of its promised $851.2m revenue target. Northstar quibbled about the revenue target figure, eventually convincing the state to reduce it to $822.8m, but that still left Northstar down nearly $66m. Northstar is also arguing that its total revenue tally was closer to $781m, but even that would leave it nearly $42m shy of its goal. (Nice try, guys, but unless you’re willing to claw back the odd jackpot or two, the two ends of this rope ain’t ever gonna meet.) As such, the Illinois Lottery Department is preparing to withhold monthly payments to Northstar until it has recouped a $20m penalty as stipulated under the terms of the management contract. Northstar earned $85m in management fees last year.
April 06, 2012
Mega Millions Lottery Fever Shows the Hypocrisy over Gambling
With the Mega Millions lottery reaching over $600 million, the American public went lottery crazy. Citizens who rarely played the lottery waited in long lines and dreamed about a life changing win despite knowing full well they had a better chance of being hit by an asteroid than picking the winning Mega Millions numbers. And it wasn’t just ordinary citizens playing the lottery. Newscasts featured pictures of rich celebrities plunking down hundreds of dollars in hopes of winning more than even they could dream of earning. But the newscasts also showed pictures of politicians puffing out their chests and telling the public how fabulous the interest for the lottery is because the state proceeds from the lotteries has been earmarked for everything from children’s clinics to amateur sports to education. What the politicians didn’t say is that it’s for that exact reason that many states are currently opposing online gambling.
Tracing the history of the lottery in the United States it’s clear that the lottery was always viewed as a way to raise needed revenue. Prior to independence, lotteries were used as a means to finance colonization and when the country was created all 13 colonies had their own lotteries. In fact playing the lottery was actually seen as a civic responsibility. The country didn’t have income taxes so the lottery was a means to pay for infrastructure and to build institutions like universities and hospitals. The public enjoyed it and saw it as a win-win for themselves and the colony. More importantly the proceeds from the lotteries were clearly earmarked for set purposes. So in the colony of Massachusetts for example, the public understood that lottery proceeds would be used to build Harvard, Yale etc. Over time, the lottery lost favor in the U.S. as the puritans started having a larger influence but eventually it gained interest again, primarily in the old west. The interest in lotteries came and went and illegal lotteries like the Irish Sweepstakes gained popularity, but it was only in the mid 1960s that states started sponsoring lotteries. The public was weary of increasing taxes and state politicians viewed the lottery as a hidden tax without the risk of upsetting voters. The northeastern states were the first to offer lotteries but it later spread throughout the U.S. Today only 8 states do not have a lottery and Utah is the only state that has never expressed an interest in creating one, likely because it is forbidden under Mormon rules. Yet as mentioned earlier most of the money that is generated from lotteries is earmarked for preset purposes such as education, healthcare or amateur sports. Only a small portion in a few states is put aside for general revenue and that according to some is the real issue.
I spoke to a former legislator in New Jersey who asked that he not be named in this article but he was happy to express his views on why so many states are currently opposing online gambling and it all falls back to the lottery.
“States are currently starving for money,” the legislator told me, “and they don’t want to make the same mistakes they did with the lottery. When the lottery was introduced in the 1970s and 1980s the states didn’t believe the citizens would accept it unless they were told exactly how the revenues from the lottery would be used, so most states apportioned the majority of revenues for items that citizens would approve.
That was fine with the states because most were doing quite well and they never envisioned the financial mess most are in now. They also could never have imagined how much revenue the lottery was actually going to bring in. Also, many states allowed Indian nations to open casinos starving themselves of that revenue and now they are regretting that decision. But with online gambling they know exactly what it brings. Before the gambling law a few years back was passed (the UIGEA), U.S. citizens were betting upwards of $6 billion a year offshore and estimates are that legal regulated U.S. based online gambling would bring more than double that. So politicians want to make sure that the revenues go to them in the form of general revenues to pay down debt and use as they see fit, not earmarked for some purpose which they won’t be able to touch.”
The legislator specifically pointed to California where he believes an online poker network if implemented properly could almost wipe out their debt. But he was also clear that California won’t move forward unless the Governor and state treasurer are assured the money will go directly towards state debt and not to the tribes or special interests. And he was certain other states in the same boat are willing to wait it out until they have those assurances. Even in his own state of New Jersey he is confident that Governor Christie is waiting for a rule that clearly outlines how the state will get the majority of the revenue to use for debt and infrastructure before moving forward with online gambling and sports betting. The horse racing industry in New Jersey is terrified that online poker will cannibalize betting at the tracks and is prepared to sue the state should legalized state-sanctioned online poker overtake horse racing in popularity. And Atlantic City casinos want assurances that any online casino and poker products will be managed by them and they will get the revenues to supplement their dying land based product. But the legislator believes that Christie, Lesniak and others in New Jersey just want their share of the revenue and could care less who runs it.
“Whichever company or organization that can generate the most revenue will be given the license to run the online gambling in New Jersey,” the legislator said. “Obviously the state wants to ensure that the horse racing industry and casino owners are treated fairly and are given some of the revenue to offset any losses that occur as a result of online gambling but the vast majority of revenues must go to the state. And this revenue has to be undesignated.” As for sports betting if and when it is legalized in New Jersey, the legislator believes that will be tendered out and probably go to an offshore company like Ladbrokes or Betfair which has the experience and software already available. But in the end the state will want projections and the bid will go to the company that can guarantee the most revenue with the least risk.
As for the lottery, the legislator said that the long lineups all last week is proof that Americans are tired of living as they are and just want the chance at success and happiness. “It’s the American dream after all,” the legislator said.
“People in the U.S. love to gamble. It’s in our blood and everyone wants the chance to win it big. The country was founded on gambling and every time some politician has tried to stop it, the activity just went underground. Most states have now accepted that and simply want to ensure they can maximize their revenues from the activity plus they want to limit competition. It was illegal for Full Tilt Poker to advertise but land based poker rooms advertise all the time. State lotteries tell you to dream about living a life of luxury but the state justice department also tells you that you are abetting a crime if you get involved in a numbers racket. But Americans don’t care. If you tell them that they have a shot of winning a million dollars for a one dollar bet they’ll do it. Unfortunately, the lottery also encourages those who can’t afford the dollar to play because it’s their one chance to escape poverty but we can’t make laws and decisions because of how it will affect the very minority. Heck I’m fairly wealthy but I bought 100 tickets.”
The legislator also said that he has a real problem with the government’s stance of promoting land based casinos and lotteries but condemning offshore wagering.
“It’s very hypocritical. That’s why when I had some influence I urged the Governor to legalize all gambling and to also take bets from everywhere. Telling Americans that they’re doing a service to the state by betting at a local casino but also telling them that they are committing a crime by wagering at a website that is legal in another country is just selling them snake oil. And Americans aren’t buying it. Even with all the websites that were closed down, Americans have found other websites that are happy to take their action. Those websites are just more cunning on how they disguise payments. I always believed that instead we should have agreements with other countries that allow them to bet at American websites and Americans can bet at foreign websites. In the end I’m confident far more foreigners would play with American websites than the other way around and the U.S. would be far better off. People in Canada, Australia and even Hong Kong would almost certainly play at a Caesars or Trump online casino but I doubt many Americans would seek out G’day Mate poker if they can wager online with Caesars.”
The Mega Millions lottery was proof that Americans are gambling hungry and the fact that so many websites still take U.S. action is proof that the UIGEA is ineffective. If states and the federal government did as the legislator suggested and opened U.S. gambling websites with reciprocal agreements with jurisdictions like the EU and Australia, the U.S. would clearly come out ahead. Unfortunately that reality still seems to be lost on the majority of politicians, and states will continue to go further into debt until the Governors take their heads out of the sand.
Tracing the history of the lottery in the United States it’s clear that the lottery was always viewed as a way to raise needed revenue. Prior to independence, lotteries were used as a means to finance colonization and when the country was created all 13 colonies had their own lotteries. In fact playing the lottery was actually seen as a civic responsibility. The country didn’t have income taxes so the lottery was a means to pay for infrastructure and to build institutions like universities and hospitals. The public enjoyed it and saw it as a win-win for themselves and the colony. More importantly the proceeds from the lotteries were clearly earmarked for set purposes. So in the colony of Massachusetts for example, the public understood that lottery proceeds would be used to build Harvard, Yale etc. Over time, the lottery lost favor in the U.S. as the puritans started having a larger influence but eventually it gained interest again, primarily in the old west. The interest in lotteries came and went and illegal lotteries like the Irish Sweepstakes gained popularity, but it was only in the mid 1960s that states started sponsoring lotteries. The public was weary of increasing taxes and state politicians viewed the lottery as a hidden tax without the risk of upsetting voters. The northeastern states were the first to offer lotteries but it later spread throughout the U.S. Today only 8 states do not have a lottery and Utah is the only state that has never expressed an interest in creating one, likely because it is forbidden under Mormon rules. Yet as mentioned earlier most of the money that is generated from lotteries is earmarked for preset purposes such as education, healthcare or amateur sports. Only a small portion in a few states is put aside for general revenue and that according to some is the real issue.
I spoke to a former legislator in New Jersey who asked that he not be named in this article but he was happy to express his views on why so many states are currently opposing online gambling and it all falls back to the lottery.
“States are currently starving for money,” the legislator told me, “and they don’t want to make the same mistakes they did with the lottery. When the lottery was introduced in the 1970s and 1980s the states didn’t believe the citizens would accept it unless they were told exactly how the revenues from the lottery would be used, so most states apportioned the majority of revenues for items that citizens would approve.
That was fine with the states because most were doing quite well and they never envisioned the financial mess most are in now. They also could never have imagined how much revenue the lottery was actually going to bring in. Also, many states allowed Indian nations to open casinos starving themselves of that revenue and now they are regretting that decision. But with online gambling they know exactly what it brings. Before the gambling law a few years back was passed (the UIGEA), U.S. citizens were betting upwards of $6 billion a year offshore and estimates are that legal regulated U.S. based online gambling would bring more than double that. So politicians want to make sure that the revenues go to them in the form of general revenues to pay down debt and use as they see fit, not earmarked for some purpose which they won’t be able to touch.”
The legislator specifically pointed to California where he believes an online poker network if implemented properly could almost wipe out their debt. But he was also clear that California won’t move forward unless the Governor and state treasurer are assured the money will go directly towards state debt and not to the tribes or special interests. And he was certain other states in the same boat are willing to wait it out until they have those assurances. Even in his own state of New Jersey he is confident that Governor Christie is waiting for a rule that clearly outlines how the state will get the majority of the revenue to use for debt and infrastructure before moving forward with online gambling and sports betting. The horse racing industry in New Jersey is terrified that online poker will cannibalize betting at the tracks and is prepared to sue the state should legalized state-sanctioned online poker overtake horse racing in popularity. And Atlantic City casinos want assurances that any online casino and poker products will be managed by them and they will get the revenues to supplement their dying land based product. But the legislator believes that Christie, Lesniak and others in New Jersey just want their share of the revenue and could care less who runs it.
“Whichever company or organization that can generate the most revenue will be given the license to run the online gambling in New Jersey,” the legislator said. “Obviously the state wants to ensure that the horse racing industry and casino owners are treated fairly and are given some of the revenue to offset any losses that occur as a result of online gambling but the vast majority of revenues must go to the state. And this revenue has to be undesignated.” As for sports betting if and when it is legalized in New Jersey, the legislator believes that will be tendered out and probably go to an offshore company like Ladbrokes or Betfair which has the experience and software already available. But in the end the state will want projections and the bid will go to the company that can guarantee the most revenue with the least risk.
As for the lottery, the legislator said that the long lineups all last week is proof that Americans are tired of living as they are and just want the chance at success and happiness. “It’s the American dream after all,” the legislator said.
“People in the U.S. love to gamble. It’s in our blood and everyone wants the chance to win it big. The country was founded on gambling and every time some politician has tried to stop it, the activity just went underground. Most states have now accepted that and simply want to ensure they can maximize their revenues from the activity plus they want to limit competition. It was illegal for Full Tilt Poker to advertise but land based poker rooms advertise all the time. State lotteries tell you to dream about living a life of luxury but the state justice department also tells you that you are abetting a crime if you get involved in a numbers racket. But Americans don’t care. If you tell them that they have a shot of winning a million dollars for a one dollar bet they’ll do it. Unfortunately, the lottery also encourages those who can’t afford the dollar to play because it’s their one chance to escape poverty but we can’t make laws and decisions because of how it will affect the very minority. Heck I’m fairly wealthy but I bought 100 tickets.”
The legislator also said that he has a real problem with the government’s stance of promoting land based casinos and lotteries but condemning offshore wagering.
“It’s very hypocritical. That’s why when I had some influence I urged the Governor to legalize all gambling and to also take bets from everywhere. Telling Americans that they’re doing a service to the state by betting at a local casino but also telling them that they are committing a crime by wagering at a website that is legal in another country is just selling them snake oil. And Americans aren’t buying it. Even with all the websites that were closed down, Americans have found other websites that are happy to take their action. Those websites are just more cunning on how they disguise payments. I always believed that instead we should have agreements with other countries that allow them to bet at American websites and Americans can bet at foreign websites. In the end I’m confident far more foreigners would play with American websites than the other way around and the U.S. would be far better off. People in Canada, Australia and even Hong Kong would almost certainly play at a Caesars or Trump online casino but I doubt many Americans would seek out G’day Mate poker if they can wager online with Caesars.”
The Mega Millions lottery was proof that Americans are gambling hungry and the fact that so many websites still take U.S. action is proof that the UIGEA is ineffective. If states and the federal government did as the legislator suggested and opened U.S. gambling websites with reciprocal agreements with jurisdictions like the EU and Australia, the U.S. would clearly come out ahead. Unfortunately that reality still seems to be lost on the majority of politicians, and states will continue to go further into debt until the Governors take their heads out of the sand.
April 03, 2012
Why Nevada offers just about every type of gambling possible — except a lottery
Watching Nevadans form long lines across the California border last week, hoping to strike it rich gambling, would seem akin to Idahoans emigrating for potatoes or Wisconsinites taking a road trip for cheese. Gambling is, more than anything else, supposed to be Nevada’s franchise.
But California offers something Nevada doesn’t: lottery tickets.
Record lottery ticket sales of $1.5 billion last week for a jackpot of $640 million once again raises the question of why Nevada doesn’t participate in a lottery.
“Nevada is sending people out of state to gamble,” said Assemblyman Paul Aizley, D-Las Vegas, who authored a resolution in 2009 to change the state’s constitution. “That, to me, is crazy.”
Casinos see it differently. A lottery in Nevada would be, in their mind, competition.
The Nevada Constitution has prohibited lotteries since it was ratified in 1864. Over the past 30 years, efforts to change that have been squashed by the gaming industry at the Legislature. (Voters did change the constitution in 1990 to allow charitable groups and not-for-profits to hold small lotteries — think church raffles.)
Since 1975, the Legislature has considered a lottery resolution almost every session to start the ball rolling on a five-year process to amend the constitution. It has yet to pass.
A lottery in Nevada would bring in between $30 million and $50 million a year, according to one Legislative analysis done in 2005. Another study, by the Governor Kenny Guinn’s Task Force on Tax Policy, estimated in 2002 that it would net the state $40 million to $70 million a year.
Considering that the state has cut its budget four times since 2008, that money would by no means solve the state’s budget problems.
And gaming lobbyists said that it would cut into their business.
During a 2009 hearing, when Aizley’s proposal was in front of the Assembly, lobbyists articulated their opposition.
“It would directly compete with our business,” said Michael Alonso, a lobbyist representing Terrible Herbst, according to minutes of the hearing. “We do not think the state should be directly competing with its largest industry.”
Lesley Pittman, a lobbyist representing Station Casinos, also pointed to the government competition. “Now is not the time for the state Legislature to make a conscious choice to make it more difficult for our gaming industry to regain its financial health,” she told the committee.
Lawmakers asked if there wasn’t a way that the local operators could figure out how to make money from lottery sales.
But that math would be difficult.
Retailers in California get 6 percent of lottery ticket sales. Education gets about 50 percent to 55 percent, according to a spokesman for California Lottery.
In Nevada, the gaming tax on its largest casinos’ gambling wins is 6.75 percent.
Gov. Brian Sandoval opposes a state lottery.
“It’s not appropriate for the state to compete with our No. 1 industry,” his spokeswoman said.
MGM Resorts International Chairman and CEO Jim Murren told KSNV Channel 3 last week that he also opposes a lottery. His company creates jobs, he said.
“How many jobs does a lottery create?” he asked.
Lottery business on the other side of the border, meanwhile, is doing just fine.
Forty-three states participate in lotteries, generating $17 billion in revenue for those states.
The convenience store just across the California border at Primm is consistently the top seller of lottery tickets in California.
“And it wasn’t close,” said Alex Traverso, spokesman for California Lottery.
Aizley said he doesn’t like to see Nevada money going to buy California lottery tickets and helping fund their schools. But he has given up.
“It just doesn’t pass,” he said. “It’s not a winner for me.”
But California offers something Nevada doesn’t: lottery tickets.
Record lottery ticket sales of $1.5 billion last week for a jackpot of $640 million once again raises the question of why Nevada doesn’t participate in a lottery.
“Nevada is sending people out of state to gamble,” said Assemblyman Paul Aizley, D-Las Vegas, who authored a resolution in 2009 to change the state’s constitution. “That, to me, is crazy.”
Casinos see it differently. A lottery in Nevada would be, in their mind, competition.
The Nevada Constitution has prohibited lotteries since it was ratified in 1864. Over the past 30 years, efforts to change that have been squashed by the gaming industry at the Legislature. (Voters did change the constitution in 1990 to allow charitable groups and not-for-profits to hold small lotteries — think church raffles.)
Since 1975, the Legislature has considered a lottery resolution almost every session to start the ball rolling on a five-year process to amend the constitution. It has yet to pass.
A lottery in Nevada would bring in between $30 million and $50 million a year, according to one Legislative analysis done in 2005. Another study, by the Governor Kenny Guinn’s Task Force on Tax Policy, estimated in 2002 that it would net the state $40 million to $70 million a year.
Considering that the state has cut its budget four times since 2008, that money would by no means solve the state’s budget problems.
And gaming lobbyists said that it would cut into their business.
During a 2009 hearing, when Aizley’s proposal was in front of the Assembly, lobbyists articulated their opposition.
“It would directly compete with our business,” said Michael Alonso, a lobbyist representing Terrible Herbst, according to minutes of the hearing. “We do not think the state should be directly competing with its largest industry.”
Lesley Pittman, a lobbyist representing Station Casinos, also pointed to the government competition. “Now is not the time for the state Legislature to make a conscious choice to make it more difficult for our gaming industry to regain its financial health,” she told the committee.
Lawmakers asked if there wasn’t a way that the local operators could figure out how to make money from lottery sales.
But that math would be difficult.
Retailers in California get 6 percent of lottery ticket sales. Education gets about 50 percent to 55 percent, according to a spokesman for California Lottery.
In Nevada, the gaming tax on its largest casinos’ gambling wins is 6.75 percent.
Gov. Brian Sandoval opposes a state lottery.
“It’s not appropriate for the state to compete with our No. 1 industry,” his spokeswoman said.
MGM Resorts International Chairman and CEO Jim Murren told KSNV Channel 3 last week that he also opposes a lottery. His company creates jobs, he said.
“How many jobs does a lottery create?” he asked.
Lottery business on the other side of the border, meanwhile, is doing just fine.
Forty-three states participate in lotteries, generating $17 billion in revenue for those states.
The convenience store just across the California border at Primm is consistently the top seller of lottery tickets in California.
“And it wasn’t close,” said Alex Traverso, spokesman for California Lottery.
Aizley said he doesn’t like to see Nevada money going to buy California lottery tickets and helping fund their schools. But he has given up.
“It just doesn’t pass,” he said. “It’s not a winner for me.”
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