PA Lottery Director Urges Lawmakers to Oppose Legalization of Internet Poker

Bill Could Diminish Profits that Fund Vital Services for Older Pennsylvanians

MIDDLETOWN, Pa., Dec. 15, 2010 /PRNewswire-USNewswire/ -- Federal legislation to legalize Internet poker could decimate Pennsylvania Lottery sales, cut net profits that fund vital services for older adults and harm Lottery's 8,700 business partners, Lottery Executive Director Ed Trees said today as he urged lawmakers to oppose the effort.

"The draft legislation – introduced by U.S. Senate Majority Leader Harry Reid and rumored to become attached to the bill extending federal tax cuts and unemployment benefits – would legalize Internet poker and create a new gaming industry, overturning a 2006 federal law that effectively prohibits online gambling," Trees said in a letter distributed to lawmakers today.

"Online poker would negatively impact the local economies our retail partners support and directly threaten funding for programs that protect older Pennsylvanians' independence, preserve their health and improve the quality of their lives," Trees wrote.

Trees issued statements today to all Pennsylvania Congressional delegates, all members of the General Assembly and each of the commonwealth's 52 Area Agencies on Aging. Additionally, as president of the North American Association of State and Provincial Lotteries (NASPL), Trees released a statement opposing the Reid bill nationally, on behalf of all U.S. Lotteries.

About the Pennsylvania Lottery: The Pennsylvania Lottery remains the only state lottery that designates all its proceeds to programs that benefit older residents. Since its inception 38 years ago, the Pennsylvania Lottery has contributed more than $20.1 billion to programs that include property tax and rent rebates; free transit and reduced-fare shared rides; the low-cost prescription drug programs PACE and PACENET; long-term living services; and the 52 Area Agencies on Aging, including more than 600 full- and part-time senior centers throughout the state. The Pennsylvania Lottery reminds its players to play responsibly. Players must be 18 or older.

For more information on the Pennsylvania Lottery, visit www.palottery.com.

Media contact: Elizabeth Brassell, 717-787-6960

PA Lottery Letter to Pennsylvania Congressional Delegation

Dec. 15, 2010

Dear Member of the Pennsylvania Congressional Delegation:

I write today to draw your attention to troubling draft legislation – which I understand is moving behind the scenes, quietly and quickly, through the U.S. Senate – that intends to legalize Internet poker for a certain number of selected privately owned gaming operators. The Pennsylvania Lottery vehemently opposes this legislation, as it has the potential to decimate Lottery sales, diminish net profits that fund vital services for older Pennsylvanians and detrimentally impact the Pennsylvania Lottery's 8,700 business partners.

The draft legislation – introduced by U.S. Senate Majority Leader Harry Reid and rumored to become attached to the bill extending federal tax cuts and unemployment benefits – would legalize Internet poker and create a new gaming industry, overturning 2006 federal law that effectively prohibits online gambling.  

Last year, the Pennsylvania Lottery provided nearly $916 million to programs benefiting hundreds of thousands of older residents through property tax and rent relief; free reduced-fare transit; low-cost prescription drugs; long-term living services; and social, educational and recreational activities offered by Pennsylvania's 52 Area Agencies on Aging and more than 600 senior centers.  

Additionally, the Lottery provided more than $160 million to retailers across the state, many of which are small businesses that rely on the Pennsylvania Lottery for commissions and increased store traffic.  For nearly 40 years, this mutually beneficial business relationship has helped Lottery retailers create jobs, inject money into local economies and create taxable revenue for the commonwealth.

The new gaming industry that would be created by Senator Reid's bill would put points of purchase in every Pennsylvanian's home, directly vying for the discretionary entertainment dollars Lottery games attract exclusively through a network of 8,700 retail partners, thereby leaving the Pennsylvania Lottery at a competitive disadvantage. Online poker would negatively impact the local economies our retail partners support and directly threaten funding for programs that protect older Pennsylvanians' independence, preserve their health and improve the quality of their lives.

For these reasons, I strongly encourage you to oppose this legislation to legalize Internet poker.  I am available to discuss the Lottery's opposition at your convenience.

Thank you for your attention to this very important matter.

Sincerely,

Ed Trees, Pennsylvania Lottery Executive Director

NASPL Letter Issued on Behalf of All State Lotteries

Dec. 15, 2010

As President of the North American Association of State and Provincial Lotteries (NASPL), I am writing this letter on its behalf.  Founded in 1971, NASPL includes among its membership all of the 44 state lotteries in the United States. Being the most regulated form of wagering, our industry generates more than $56 billion in gross annual sales and contributes more than $17 billion in net revenues each year, which are used to support much needed programs and/or services within each state.

I am writing you today regarding the bill that Senator Harry Reid introduced that attempts to legalize Internet poker for a limited number of selected privately owned gaming operators. This initiative threatens the future success of state lotteries and directly violates the intent of two existing federal laws – the Unlawful Internet Gambling Enforcement Act of 2006, which prohibits online gambling, and the Wire Act of 1961, which is intended to assist states with enforcement of their own gambling laws.

The stated purpose of the new bill is to "strengthen the prohibition of unlawful Internet gaming, to provide for licensing of Internet poker with consumer protections and strong regulatory oversight, to enforce the tax code, and for other purposes."

However, the bill is unnecessary and harmful to states because it would interfere with a state's right to conduct and regulate gaming.  Therefore, it is important to protect the games now being offered by individual states.  The Reid bill will exempt from the scope of the Wire Act of 1961 only those lottery games in which the outcome is determined daily or less frequently.  It would not include in the safe harbor, for example, existing games such as video lottery, five-minute keno or "instant win" games such as virtual instant ticket games. The Reid bill suggests that all such games would be prohibited under the Wire Act if bets on such games (or information assisting in the placing of such bets) were transmitted via a wire communication facility and the routing of the bets (or information assisting such bets) crossed state lines – even if it crossed state lines only to return to the same state.  Existing lottery games – even if played from a licensed lottery retailer location – could thus be prohibited depending on the routing of the wagering transactions.

In short, the proposed legislation would dictate to the Lottery industry what games it could and could not offer, thereby squelching certain opportunities for future growth and much-needed revenue for states.

It has been stated by numerous courts and commentators that the purpose of the Wire Act is:

to assist the various States ... in the enforcement of their laws pertaining to gambling, bookmaking, and like offenses and to aid in the oppression of organized gambling activities by prohibiting the use of ... wire communication facilities which are or will be used for the transmission of certain gambling information in interstate ...commerce...

Instead of assisting the states in the enforcement of their gambling laws, the Reid bill's amendment to the Wire Act would thwart states in their efforts to regulate gambling.  Specifically, it would purport to limit the types of games state lotteries could offer for sale.

I ask that you protect the rights of your state and the ability of each state to manage its games as seen fit.  If the Reid bill is passed, it will greatly hamper future lottery sales that support the much needed programs and/or services earmarked for lottery revenues.

Sincerely,

Ed Trees

President, NASPL

SOURCE Pennsylvania Lottery