Across the nation, states under the thumb of oppressive debt look to new revenue streams to help assuage the need to raise taxes.

This year, legislators in Illinois and Georgia introduced controversial bills directing the states to consider selling lottery tickets online. No state in the union currently allows purchasing lottery tickets on the Internet, but the issue has been brought before the federal government on two occasions. Neither motion made it out of congressional committees.

The notion of selling lottery tickets online appears simple. In reality, anti-gambling activists, children's advocates, and a vague, 40-year-old federal law raise questions about the proposition's feasibility and legality.

The Bills

In the Georgia General Assembly, Rep. Terry Barnard, R-Glennville, introduced HB 346, which merely calls for the state to investigate selling lottery tickets online. The Illinois legislation, in contrast, mandates a pilot to test whether it will work. Both states are trying to determine if it's legal.

The legal question stems from the Federal Interstate Wire Act. Passed in 1961, the Wire Act bans the use of any "wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placement of bets or wagers on any sporting event or contest."

Advocates of online lottery ticket sales contend that the Wire Act pertains only to sports betting. Opponents, including some in the U.S. Department of Justice, believe the act applies to modern Internet communications, thus disallowing states from selling lottery tickets over the Internet.

"I had my Attorney General's Office take a look at the issue earlier in the year, and they're reporting that it's really unsettled," said Barnard. "It's unclear if Congress can regulate the Internet. Even though I think the Justice Department may take a broad look at the Wire Act, there is case law that agrees it pertains only to sporting events."

Barnard explained that his legislation is still preliminary. "The legislation is pretty narrow the way it's written," he said. "We're trying to devise a way to offer online access to residents of Georgia only. Obviously there are still a lot of questions out there as to interstate commerce and so forth. We're trying to develop a strategy so we might be able to offer residents the opportunity to purchase tickets online."

In the Illinois General Assembly, Sen. John Cullerton, D-Chicago, introduced SB 0198.

The Illinois legislation heads down a different path -- backers want to skip the consideration phase and move directly to testing. Cullerton said his intent is to motivate the Illinois Lottery and the state Department of Revenue to action.

"We would require the lottery department to do a pilot," Cullerton explained. "They don't actually need authorization. Under current Illinois law, they could do it right now. But they haven't, so we're kind of pushing them to do it with this bill."

Courtney Hill, Illinois Lottery spokesman, said his department was unable to comment on any details regarding the pilot.

Meanwhile, Cullerton said he wrote the legislation in broad terms to avoid micromanaging the Department of Revenue. "What I would recommend to [the Department of Revenue] is to have Internet sales limited to people from Illinois over 18, of course," said Cullerton. "That would be enforced because the only way to redeem any winnings would be in person."

Verification before or after play would restrict out-of-state play. Under Barnard's plan, a player in Georgia would have age and residency requirements verified before purchasing a ticket online.

"You would have to go to a retailer to get your authorization to play," Barnard explained. He said a player would register with a retailer and be given a code or PIN. The player would then be registered in a state database. "There

Chad Vander Veen  | 

Chad Vander Veen is the former editor of FutureStructure.