Thirteen casinos in Pennsylvania have called for the suspension of the state-run lottery program.

Pennsylvania’s state-operated iLottery platform allows people in the state to take part in the lottery and to play a variety of scratch and draw games in an online setting. Recently, however, the 13 casinos in the state have called on the administration to suspend the new platform, alleging that it is an illegal incursion on their own version of online games, which have not yet been launched.

iLottery platform details

The Pennsylvania state iLottery platform was launched in May 2018 following the introduction in October 2017 of laws that expanded the scope of gambling in the state. Pennsylvania was the 4th state in the country to have legalized online gambling.

One of the goals of the platform is to make up for a significant deficit in the state budget. While the existing state lottery program – in operation since 1972 – largely contributed towards social causes, this latest lottery will be used to help with state finances.

The original Pennsylvania lottery has a rule whereby at least 27% of its revenues must go towards funding certain public programs, while at least 40% of revenues must go towards the prize pool. The state has managed to contribute nearly $28bn (￡21bn) to senior citizens programs since the lottery first started.

Governor Tom Wolf believes the introduction of the new iLottery platform will see the state earn as much as $75m (￡57m) over the course of the next five years. However, it now has stern opposition in the form of the 13 casinos in the state.

Details of this objection

The 13 casino operators in the state have asked the Wolf administration to suspend the newly introduced iLottery platform, alleging that it is an illegal and direct incursion on their online games, which have not yet been launched.

They are calling upon the Department of Revenue – the overseers of the Pennsylvania lottery – to work alongside them in order to have a “lawful iLottery program” introduced.

The casino group has stated that if – by July 3 – its request is not met by a positive response from state officials then the casinos will have the right to pursue further legal action.

The main issue here is that the 2017 gambling law allowed casinos to offer online games once they paid a licensing fee of $10m (￡7.6m), and so far, none of the 13 casinos have even submitted an application for a license. The reason for this is largely down to the 54% taxation rate placed on land-based and online slots.

The iLottery platform currently offers 11 different games. However, the 2017 gambling expansion law stipulates that the lottery is not allowed to offer games that “simulate casino-style lottery games”.

The casinos claim that many of the iLottery titles are virtually identical to those offered by the casino slot machines – all of the games are based on the use of a random number generator.

The iLottery games allow players to play in dime or penny denominations, which though common in casinos, is not typical of lottery products. The casinos are also alleging the marketing material of the iLottery offerings are illegal as they, allegedly, promote “casino-style” and “slot-style” games.

Finally, in Pennsylvanian, the minimum age for playing lottery games is 18, whereas players must be at least 21 before they are allowed to partake in casino floor games.

The Wolf administration has made no comments on the issue, but it is certainly a significant case being made. This could put a damper on the state’s plans to use the iLottery platform to help make up the deficit in their state budget in the coming years.