Will Legal Online Poker Hurt State Lotteries

Apparently not, claims a new study commissioned by legalization action body. One of the more serious concerns of states contemplating the legalization of online poker is whether it will have an adverse impact on the revenues of state lotteries.

The group commissioned the independent and widely respected Christiansen Capital Advisors, LLC to assess a prior and negative study by the Public Gaming Research Institute on the likely impact of legalized online poker on state lottery revenues.

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The CCA study, titled “An Evaluation of the Effects of Online Poker on State Lotteries,” concludes that lotteries and poker are different products with different consumers. “While the PGRI report assumes a broad introduction of legal Internet gambling games, our evaluation focuses on the impact, if any, of online poker legalization on State lotteries, consistent with the current debate about pending Federal legislation that would regulate online poker only,” CCA points out.

Internet poker and lottery games are fundamentally different products. Playing lotteries and playing poker are fundamentally different consumer activities.

“The PGRI report should not be used as the basis for any public policy decisions, particularly those related to the legalization of online poker.”

CCA reports that enforcement actions after the Unlawful Internet Gambling Enforcement Act became law in late 2006 reduced U.S. spending on Internet poker by an estimated $600 million but were not accompanied by an upward spike in U.S. lottery sales.

“Were online poker a substitute for State lottery games, reductions in Internet poker playing by Americans related to changes in law and/or enforcement actions should have been accompanied by demonstrable increases in State lottery sales. The data do not indicate such substitution. In
fact, the data suggest that there is no linkage between Internet poker and lotteries,” CCA asserts.

The study concludes that online poker is unlikely to impact lottery sales for a number of reasons, among them the fact that Internet gambling games of all kinds are already easily available and any substitution effect would already have been experienced by state lotteries.

Tom Ridge, a spokesman for Fair Play USA, commented: “This study will be an important tool in Fair Play USA’s ongoing efforts to educate and create public momentum for effective law enforcement, consumer protections and regulation surrounding the legalization of online poker.”

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