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New Jersey Goes for Online Lottery

By: Mark Freedman, Friday June 17th 2011
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Earlier this year New Jersey missed out on implementing a comprehensive online gambling law when its governor vetoed a bill that had been passed by both the state senate and house. It is now back with another attempt at online gambling, but is restricting itself to a limited and surer option of only online lottery. The bills under process seek to allow for the purchase of state lottery tickets over the Internet and on mobile phones.

Lotteries are not taboo. Every American state not only runs a lottery but generates a fair amount of revenue from it. However, the tickets are sold only in physical form at retail outlets. An article on the New Jersey website discusses the pros and cons of this new online gambling initiative.

Legislator Annette Quijano has introduced the bill in the state Assembly and the bill has already passed the Assembly gaming committee. The bill will allow New Jersey residents to buy state lottery tickets via the Internet, e-mail, text messaging or "other electronic means". The lottery commission would also pay winners through online lottery accounts or by direct deposit into their bank accounts.

The opposition to this proposal has come as expected from civil society groups. They have warned that selling lottery tickets online or through mobile phones could lead to underage gambling and increase the incidence of problem gambling. The proposed bill has some provisions to counter possible harmful social effects. Payments can only be made through debit cards and not through credit cards. This would exclude the possibility of purchasing lottery tickets without actually having funds. The bill also provides for online players to self-exclude themselves through the New Jersey Lottery Commission.

Opposition has also come from convenience store owners who claim that they would lose out on sales of food and coffee to customers who buy the lottery tickets from them. Sal Risalvato, executive director of the New Jersey Gasoline, Convenience, Automotive Association, said, "Online lottery sales will retard the sales of all items. We make a nickel on the lottery ticket but a dollar on the cup of coffee." Quijano's bill also counters this objection by proposing that 5% of online sales should go to lottery retailers to compensate for lost business.

The New Jersey Lottery Commission has yet to react to this proposal. The commission members are scheduled to meet this week and take a call. An identical bill, introduced by state Senator Raymond Lesniak, is pending in the Senate. Lesniak is the legislator who had earlier piloted the online gambling bill. In November 2011, Minnesota began offering online ticket subscriptions for its lotteries. New York and Maryland are considering similar proposals.

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