Online Lottery Ticket Sales Expected to Start Next Year, Boost Sales

By Megan Poinski,

The Maryland State Lottery Agency hopes to make more money, get more exposure, and have more people playing when it takes ticket sales online, said Lottery Director Stephen Martino.

According to its fiscal 2013 budget, the Lottery anticipates $2.2 million in additional revenue through tickets for games and drawings that may be purchased online. Martino said that online sales could start in about 12 months.

“This is where we are going. It’s where society is going,” Martino told the Senate Budget and Taxation’s Subcommittee on Education, Business and Administration at his agency’s budget hearing Tuesday.

Online lottery games were long thought to be illegal by a federal statute. In December, the U.S. Justice took another look at the 1961 law and ruled that it only dealt with betting on sports games; online lottery sales were permissible. According to a report by the State Lottery Agency, no new legislation would be needed to authorize online sales.

Maryland is a prime market for online lottery sales, Martino said. The percentage of people who use the Internet is 82%, higher than the national average. Three-quarters of Marylanders already shop online for goods and services.

Not only does Maryland have a lot of computer savvy residents, it also has a relatively small number of people playing lottery games. Only half of Marylanders bought a lottery ticket in the past year, Martino said. In most nearby states, 70% of people played the lottery in the past year.

One of the problems with lottery games is that some people don’t understand the way that they work, Martino said. These people may be intimidated by the prospect of going to a store and asking a clerk to explain the games to them. With a website that can explain the game, that barrier can be eliminated.

“We believe strongly that by introducing the lottery to a new segment of customers, that later on in a brick and mortar store, they would be much more likely to play,” Martino said.

Martino said that about a third of people who currently don’t play lottery games would use a website to buy a Powerball or MegaMillions ticket at least once a year.

Web sales also shouldn’t hurt the current brick and mortar lottery retailers. Martino said that 85% of the people who currently play the lottery are happy with the way they purchase the tickets. In the places with online ticket sales that Martino studied, store sales also increased – possibly because more people liked to play.

Once the federal law was reinterpreted, Martino said that many states started looking at the Internet as a way to sell tickets and increase the reach of games. Illinois, New York, Delaware and West Virginia are all looking at online lottery sales, and Washington, D.C. will be implementing online casino-style games later this year.

Martino could not estimate how much it may cost to start the program because it has not been done anywhere else in the United States. He has budgeted $500,000 for a consultant to set up the system, plus $167,119 for three new employees to manage the program’s launch.

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