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State lotteries and U.S. casinos appear to be on a collision course over online lottery games that commercial operators claim are too similar to online slot machines that should be within their domain.
A coalition of Pennsylvania casino operators has already taken legal action against the Pennsylvania Lottery’s iLottery games which it claims simulate casino games in violation of a 2017 state law, noted Eric Hausler, CEO of Parx Casino owner Greenwood Racing.
“For sure, some of the lottery games look very much like an online slot machine,” Hausler said.
States are constantly looking to raise more revenue from their lotteries and other forms of gaming, Hausler said during a September 22 panel discussion on the state of the gaming industry in the northeast region at the 25th annual East Coast Gaming Congress in Atlantic City.
“Unfortunately for us, that means you have to be very nimble about how you operate,” Hausler said.
Rob Norton, president of Cordish Gaming Group, recalled a conversation with John Martin, director of the Maryland Lottery and Gaming Control Agency, about online lottery games.
“Obviously they are just like any other business, they are looking for ways to grow their revenue stream,” said Norton, whose company operates Live! Casino near Baltimore.
“It can be done in a way that is beneficial to both sides if it is thought through really well and understood were the dividing line is,” Norton said of online lottery games.
“Because if you make everything look like a slot machine it is going to create problems down the road. There are ways an online lottery can be valuable and add value to the state without infringing upon casinos.”
The Pennsylvania Lottery began offering iLottery games in 2018.
Last May, a Pennsylvania judge dismissed the lawsuit filed by Greenwood, Penn Entertainment, Caesars and the owners of four other casinos, claiming the Pennsylvania Lottery uses games that are similar to slot machines.
The 2017 law authorized the lottery to offer electronic instant games online but prohibited it from offering games that simulate casino-style games.
Penn Entertainment CEO Jay Snowden expressed frustration with the Pennsylvania Lottery during a separate panel discussion on Thursday (September 22) that featured executives from Caesars, Mohegan Gaming & Entertainment, Entain and Genting Americas.
Snowden said Pennsylvania casino operators are simply asking for the lottery to “follow the letter of the law and exclude [online] games that simulate casino-style games.”
Neither Snowden nor Hausler discussed the state of any appeal of Commonwealth Court Judge Renee Cohn Jubelirer’s dismissal of their case.
During a separate East Coast Gaming Congress session, panelists discussing the future of state lotteries agreed there was no evidence so far that online lotteries were negatively affecting internet casino gaming.
Richard Weil, a seasoned lottery executive and consultant, said that in Pennsylvania and Michigan, where both iLottery and internet gaming are legal, the casinos have been able to grow their business both land-based and online.
“So clearly the lottery in a couple of states that are online has had very little impact on casinos,” he said.
Drew Svitko, executive director of the Pennsylvania Lottery, did not comment on whether internet lottery games were a threat to casino gaming.
“It’s a complicated question,” said Scott Bowen, government affairs specialist with NeoPollard Interactive and former commissioner with the Michigan Lottery. “Lotteries are not going away. They are going to offer all of their products online.”
Bowen reminded attendees that lotteries are responsible for generating as much money as they can for the “good causes” they support, from elder care to college scholarships.
“I don’t know if it is a zero sum game, when we are both going after the same entertainment dollar,” he said. “I don’t think that is true. The entertainment dollar is expansive, and we’ve seen that in lotteries for sure, that it is a growing business.”
Still, Bowen admitted he understood the gaming industry’s concern and “it’s not unfounded.”
“We are kind of in the same land fighting for the same person who wants instant gratification,” Bowen said. “But I don’t think it is anyone’s particular business. It’s not just casino business; it’s not just lottery’s business.”
