States Expand Gaming to Close Budget Gaps

The ongoing recession has states scrambling for new sources of revenue. Many states are adding new lottery games and are also expanding casino gambling to keep gambling revenue rolling into state coffers. The Iowa and Illinois lotteries are considering the sale of online lottery tickets but confusing federal regulations are a hindrance to the implementation of online lottery ticket sales. In 2009 several lottery players who tried to use their credit cards to purchase lottery tickets had the lottery related transactions denied by the credit card companies. Credit card companies are justifiably skittish following the arrest of Neteller executives in 2008. The executives were arrested while changing planes in the US despite the fact that their business is perfectly legal in their home jurisdictions. Rising state deficits and the political unpopularity of tax increases have sent lawmakers in search of expanded gambling revenue. At the present time 18 states are looking into the possibility of expanded gambling including adding new lottery games and report that gaming revenues have declined 5 to 18% during the recession. Some politicians openly admit that states are addicted to gambling revenues. Iowa State Rep. Kraig Paulsen (R) stated, "Absolutely, we're addicted to gambling dollars. The current budget couldn't be close to being balanced without that money."

The recession has battered land based gambling hard. Even socially conservative states are considering expanded gaming putting gambling opponents in an awkward position. In most state capitals budget concerns have trumped objections to gambling. Casino revenues are down and players are not spending like they used to. Freda Lofthus a player at Prairie Meadows Racetrack and Casino near Des Moines said, "People don't have as much to spend. I spend about half of what I used to." Pennsylvania recently legalized casinos in an attempt to close state budget gaps. Pennsylvania now allows table games including blackjack, roulette, poker, and craps. At the Aqueduct Racetrack in Queens New York is placing 4,500 lottery terminals and Connecticut Gov. M. Jodi Rell has proposed allowing restaurants to offer keno to diners. Maryland Governor Martin O'Malleys pointed out that "As the recession became deeper, that expected (gambling) revenue became more important." Voters are in no mood for any kind of tax increases as was pointed out by a spokesman for Pennsylvania Governor Ed Rendell. Spokesman Gary Tuma stated, "There's no appetite in the Legislature for an even modest tax increase."

Most lottery experts say that online lottery tickets would immediately boost sales and attract tech savvy younger players. Using existing technology players could log on to the official lottery site, purchase an online lottery ticket and could be notified by email of any wins. Players could save both time and money using the online option. For now lottery players are keeping a close eye on Iowa and Illinois and their attempts to offer online lottery tickets to players.