U.S. Economy: States Can Ill Afford to Lose Their Lotteries
In this time of serious economic crisis in the U.S. another fear began emerging this past week. States could lose money from their lotteries - not because citizens aren't willing to buy up lottery tickets - but rather because THEY CAN'T.
The New Hampshire state lottery it appears is among the first victims of the poorly thought out Unlawful Internet Gambling Enforcement Act (UIGEA, which was drafted to prevent some forms of online gambling while ensuring state lotteries would not be impacted, but the banking institutions were not provided with the tools to distinguish between "good" and "bad" online gambling. As a result, local stores in New Hampshire are having a tough time processing lottery tickets and this trend may spread to other states.
"What is New Hampshire's problem today will likely be New York's problem tomorrow, Texas and Florida's problem next week, and so on," expressed Payton O'Brien, Senior Editor of Gambling911.com.
The Manchester Union Leader reported the problem was isolated to credit- and debit-card purchases of the popular Powerball and Tri-State Megabucks lottery game subscriptions. Said New Hampshire State Lottery Commission Executive Director Rick Wisler, "We could end up losing some significant revenue from this. It can amount to a million dollars a year or more to the lottery if credit cards are not allowed; we're caught in the cross-hairs of over-regulation".
Wisler said the problem is definitely affecting lottery sales in the past week.
In a telephone interview with a VISA USA executive who wished to remain un-named, he said, "The transactions are coded electronically and pass through the data centre with a generic source coding range of numbers. There is a specific range of codes that identifies it as coming from a gambling entity. The receiving institution has a filter set up to automatically bounce these back to the requesting merchant(s)."
"This is an extremely serious problem that is going to get worse if the UIGEA is not repealed," a source within the credit card industry told Gambling911.com Sunday. "The irony is that the so-called ‘bad' online gambling businesses have found means of getting around the coding issue, and it's taken over two years. Good luck to the states!"
A lottery is defined as "gambling" though many politicians refuse to acknowledge this fact. But state lotteries are considered essential.
Blake Hart and Jonathan Sofley of the International Social Science Review, Vol. 79, 2004, expressed even five years ago that "The current economic climate in the United States has adversely affected almost every corner of the marketplace. With most sectors of the work force experiencing layoffs and hiring freezes, less money is coming into households, and, as a consequence, states and local communities are receiving less revenue."
Lotteries are typically used to fund education and construction projects.
An editorial appearing in the state's Union Leader newspaper expressed just how dangerous over-reaching federal laws will be on the state of New Hampshire.
"This time it is New Hampshire public education that is going to take it on the chin. Gov. John Lynch had better help the New Hampshire Lottery Commission with this problem or his state budget deficit is going to grow even as he tries to shrink it."
The editorial led to several readers commenting.
One reader commented: "Were missing the gravy train here let people buy lottery with any payment they wish to use and make internet gambling legal we will all benefit from it."
Christopher Costigan, Gambling911.com Publisher
