On June 4, Pennsylvania launched a series of online lottery games that it called the PA iLottery. According to lottery officials, iLottery players wagered $21.6 million in the month of June.
Of the $21.6 million, the lottery paid out $18.7 million in prizes. So, in its first month of operation, the iLottery generated roughly $3 million in revenue.
All iLottery games are instant win games. With names like Big Money SLINGO, Super Cash Buster, and Volcano, the games have prizes as big as $250,000.
“PA iLottery games are a fun, new way to play and win from home or while on the go,” said Lottery Executive Director Drew Svitko, speaking to the Times Leader. “iLottery is a big part of our effort to meet our players where they already are, while generating new funds to benefit older Pennsylvanians.”
PA casinos not fans of the iLottery
For all the smiles from lottery officials, there are frowns and snarls from Pennsylvania casinos. Representatives from the 13 casino operators wrote a letter to the Pennsylvania Revenue Department.
In that letter, the casinos claimed that the iLottery was in violation of state law. Specifically, the offerings from the iLottery too closely resemble slot machines in both function and advertising.
The casinos then asked for the suspension of service on the games. The letter ended with a veiled threat, saying that a rejection of the request would lead them to “consider all options.”
In response, state officials forced the iLottery to change its advertising. No longer could the organization use phrases “slot-style” or “casino-style” to describe their games.
However, the gameplay has proceeded unabated throughout the casinos’ objection. It remains unclear whether the casino interests will deem themselves satisfied by the marketing change.
PA may want to reconsider casino treatment
With so much revenue in just the first month, it’s no surprise that the casinos are concerned. The last thing they want is to have to compete with a state agency for the same players.
As part of the Lottery official statements, they mentioned that approximately 45,000 new players signed up for iLottery play. There is no way to determine how many of those players would’ve spent that money in Pennsylvania casinos, but it’s likely a nonzero number.
The state has a bigger problem on its hands, though. Even though sports betting has been legal in the state for a month, no casino has applied for a sports betting license, which includes an online component. Nor has any casino turned in an application for online casino licenses.
The chief culprits for sports betting are the $10 million fee and the 36 percent tax rate that Pennsylvania regulations have ordered.
Online casinos have a $4 million fee and a 54 percent tax rate. Additionally, the casinos may feel their share of the market is already constrained from the space the iLottery has taken.
The fortunes of both government and casinos ride on each other. So, state officials may want to think about their various stances.
