The focus of how the new Wire Act opinion will affect Pennsylvania has been how it will impact the new PA online gambling market.
However, another group is on its toes in the wake of the change — the Pennsylvania Lottery.
PA online lottery could be a target
The online lottery is something the Lottery needs to carefully examine now that the new opinion is out. After all, the 2011 DOJ opinion on the Wire Act was something online lottery advocates pushed to happen.
One thing the PA Lottery does have going for it is that it does not sell tickets to multistate draw games like Powerball and Mega Millions. Nonetheless, it does operate online instant games, which are online gaming transactions.
A spokesperson for Pennsylvania Lottery provided the following statement to PlayPennsylvania regarding how it will proceed:
“We are in the process of reviewing the opinion to determine what affects it might have on the Pennsylvania Lottery and the critical senior programs that the Lottery funds throughout Pennsylvania.”
PA Lottery is big business
PA Lottery games generate about $4 billion in sales a year. Of that, roughly a billion go to senior programs for Pennsylvania residents.
If the DOJ chooses to prosecute aggressively based on this new opinion, even traditional lottery games could be at risk because parts of the sales transactions inevitably take place across state lines.
In a webinar presented by ICE North America, Maryland Lottery Director Gordon Medenica summed up the issues with the lottery and the new opinion. Technology providers rearranging servers to adhere to intrastate transactions is both time consuming and incredibly expensive.
The Unlawful Internet Gambling Enforcement Act (UIGEA) established that if a transaction begins and ends in the state, it counts as an intrastate transaction. However, as part of the new opinion, the DOJ states that the UIGEA did not change the parameters of the Wire Act.
Given how much money state lotteries bring in to the budget, states would probably be quick to take action if the DOJ starts coming after state lotteries for draw games ticket sales. If the federal government comes after what amounts to billions of dollars of state budget money, it probably would not be a good look for the DOJ either.
In reality, most of the PA Lottery offerings should be fine. The broader interpretation could have an impact, but the online lottery is more likely to face a legal challenge.
For now, the PA Lottery can’t do much but review its existing regulations and games, and then wait and see what the DOJ chooses to prosecute. Taking steps like shutting down programs when they bring in so much money for the state simply does not make financial sense.