Online Lottery Sales

Professionals

A New Cloud Over Internet Gaming

The Department of Justice’s (“DOJ”) Office of Legal Counsel issued an opinion on January 14, 2019 (“Opinion”) stating that the Federal Wire Act applies to all forms of internet gaming. By maintaining that the Wire Act prohibits all interstate wagering activity, the Opinion contradicts DOJ’s previously stated 2011 position. While the 2011 DOJ opinion let sunlight shine on internet gaming, including lotteries, fantasy sports, and online casinos and poker, the Opinion reinstates a “cloud” on internet gaming and its future in the US.

The Lotter is one of the oldest online lottery sites, established all the way back in 2002. OnlineLotteryService.com is an online Florida lottery service website affiliated with lottohitter.com. The purposes of the site are to let conveniently check Florida lotto tickets online, to analyze previous winning numbers, to predict coming numbers, to join Powerball, Mega Millions, and Florida Lotto pool service; and best of all, players can purchase multi-state Powerball tickets, Mega.

Background

In 2011, DOJ was asked by the Illinois and New York state lotteries whether selling lottery tickets online could trigger federal prosecutions under “The Wire Act” (18 USC §1084). DOJ obtained an opinion from the Office of Legal Counsel (“OLC”) which stated that the Wire Act’s prohibitions were limited to sports betting. (“. . . the Wire Act does not reach interstate transmission of wire communications that do not relate to a “sporting event or contest,” . . .”) Many state lotteries began operating online lottery ticket sales in reliance on the 2011 opinion and states licensed fantasy sports within their jurisdictions between 2013 and 2015. In addition, several states began operating internet gaming sites, including online poker, with at least three states creating a “compact” to create a larger pool of players. Although these initiatives have had varying degrees of success, states have spent millions in setting up these new programs and have relied on the revenue – and revenue projections into the future – in their budget plans.

The 2019 Opinion

On January 14, 2019, DOJ posted a new OLC Opinion declaring that the Wire Act extends beyond a “sporting event or contest” and includes all online casino games and poker. In its analysis, the OLC identified four prohibitions of the Wire Act: knowingly using a wire communication facility to transmit bets or wagers; knowingly using a wire communication facility to transmit information assisting in the placing of bets or wagers on any sporting event or contest; knowingly using a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers; and knowingly using a wire communication for information assisting in the placing of bets or wagers. Only one of these prohibitions is limited to sporting events. The Opinion spends more than 10 pages justifying its changed position and discusses, in somewhat tortured logic, the modifying terms of the statute and why the interpretation under the Obama Administration was simply wrong. (“[T]he linguistic maneuvers that are necessary to conclude that the sports-gambling modifier sweeps both backwards and forwards to reach all four of [the Wire Act’s] prohibitions are too much for the statutory text to bear.”) While acknowledging that the legislative history of the Wire Act leads to the conclusion that Congress’s overriding goal was to stop sports gambling through the use of a wire transmission, the OLC noted Encino Motorcars, LLC v. Navarro, 138 S.Ct. 1134 (2018) for the proposition that statutes often go beyond the initial “evil” identified and it is “ultimately the provisions of our laws rather than the principal concerns of our legislators by which we are governed.” Id. at 1142, 1143.

Finally, the Opinion discusses the impact the 2006 Unlawful Internet Gambling Enforcement Act (“UIGEA”) had on the Wire Act. (UIGEA, among other things, seemed to legalize fantasy sports while limiting the use of payment processors for all forms of gambling.) The 2011 opinion specifically did not address this question. UIGEA (31 USC §5361, et. seq.) prohibits anyone involved in the business of bets or wagers from knowingly accepting various kinds of payments from another person who is engaged in “unlawful internet gaming.” See, 31 USC §5363. Unlawful internet gaming means “to place, receive, or otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the Internet where such bet or wager is unlawful under any applicable Federal or State law . . .” Id. §5362(10)(A). The Opinion notes the exceptions to this definition included in UIGEA, including that it does not include a bet or wager where the bet or wager is initiated and received or otherwise made exclusively within a single State. Id. §5362(10)(B)(i). The OLC concludes the Opinion discussion with the statement that UIGEA “in no way” alters or limits existing prohibitions of the Wire Act.

Incredibly, the Opinion concludes that one reason DOJ needed to change its position was a need for “clarification” through litigation. In other words, the new Opinion invites appellate or Supreme Court review of their view of the Wire Act’s application and while the judicial review cannot be a substitute for the DOJ’s obligation to interpret and execute the laws of the US, DOJ notes that litigation provides a “one-way check of the correctness of today’s opinion, which weighs in favor of our change in position.”

What Does This Mean For You?

We note that OLC opinions are not binding precedent and have no immediate or discernible effect upon federal prosecutorial priorities. Accordingly, the change in position of the office does not mean that U.S. Attorney Offices or the DOJ Criminal Division sections will suddenly seek out federal prosecutions of on-line gaming where some aspect of the betting touches jurisdictions where gambling is illegal under state law. We believe that this Opinion is merely a change in interpretation and it remains to be seen whether this will be a new enforcement policy for the DOJ. Deputy AG Rosenstein is supposed to provide further guidance over the course of the coming days/weeks.

With respect to lotteries and fantasy sports, online sales will likely continue to be governed under the exception provisions of UIGEA which focus on where the transaction occurs – not how it occurs. However, since states are traditionally risk adverse, it is possible that some of these operations may be suspended for a period of time as states review whether their operations are fully intrastate. Similarly, as states gear up for sports betting, sports book operators have always conducted business with the knowledge that the Wire Act directly touched on their operations and have planned accordingly. This landscape should therefore remain largely unchanged.

The Opinion will have the greatest impact on the online casino and poker businesses, as the Opinion requires these businesses to revert to the pre-2011 opinion days. State lawmakers and gaming operators will need to evaluate how to structure the online gaming environment to be fully intrastate.

Should there be a panic in the streets accompanied by the “wailing and grinding of teeth”? Probably not. The Opinion is merely an opinion; it does not have the force of a law and it requires DOJ to affirmatively act to enforce this new interpretation. While courts may look to this Opinion in their analysis, it is not binding on their interpretation. Clients should be mindful in their operations and monitor the challenges that will inevitably arise. Congress may make this moot by finally acting to update the Wire Act for the 21^st Century.

We will continue to monitor developments in this.

The North Carolina Online Lottery sells tickets to Powerball, Mega Millions, Lucky for Life and Cash 5 through the NC Lottery website and via the iOS or Android mobile app. Lottery officials flirted with introducing instant win scratch-off games online as well, but those plans have been put on hold amid pushback from retailers and anti-gambling types.

That means today players can visit the North Carolina Lottery online to buy entries to draw games, but not to play instant win games. The NC Lottery mobile app also provides additional features such as the ability to check for winning tickets and to participate in second chance drawings.

NCLottery.com is the only website authorized to sell lottery tickets online in North Carolina and can be considered a safe place to play. Any prizes you win online will be treated the same as prizes earned from physical tickets.

The North Carolina Education Lottery (NCEL) was established in 2006 as a relative latecomer among state lotteries, but got off to a quick start with total sales reaching the $1 billion mark within 399 days of going live. Since then, the NC Lottery has contributed nearly $6 billion to state educational efforts.

In almost every year since its inception in 2006, the North Carolina Lottery has broken its own record for revenue raised for education. The nearly $6 billion it has raised so far has been put towards Pre-K educational programs, local school districts and college scholarships for students in need of financial assistance.

How to Play the North Carolina Lottery Online

Florida Lottery Online Sales

State residents 18 and older are welcome to buy lottery tickets online at NCLottery.com or though the mobile apps available for iOS and Android devices. From the website or through the app, you can get started by signing up for an Online Play account.

A basic Online Play account is available to anyone 18 and older in the United States, but you must be a state resident to upgrade your account for online ticket purchases. Upgrading is free and involves verifying your identity, address and the last four of your social.

The North Carolina Online Lottery will check your location using geolocation technology each time you purchase tickets to ensure you’re within state lines at the time of purchase. If you visit the website from a mobile phone, you may only purchase when connected to the internet via wi-fi connection. Alternatively, you can download the official mobile app to buy tickets when connected to your cellular data plan.

How to Buy Powerball Online in North Carolina

Powerball tickets may be purchased online in North Carolina at NCLottry.com and through the mobile app. From the main website, visit the “play now” tab and select Powerball from the list of options presented on that screen.

This will take you to your purchase screen where you can choose the number of drawings you wish to enter, the number of tickets to purchase for each drawing and to pick your numbers. The NC Lottery website also supports a quick-pick option top pick numbers at random on your behalf.

The North Carolina Online Lottery will let you enter anywhere from 1 drawing to as many as 104 straight drawings to cover an entire year’s worth of Powerball drawings. Each ticket costs $2 individually or $3 if you select the Power Play option to potentially multiply your winnings.

Players may only purchase up to 3 tickets into each drawing, which is a bit short compared to other state lotteries that will sell up to 10 tickets at a time. However, the NC Online Lottery is more flexible than other states in allowing you to enter up to 104 straight drawings all at once.

In the end, this means you can purchase a single entry for just $2 at the low end or buy 3 tickets into 104 straight drawings with the Power Play option checked for nearly $1,000. You have a lot of flexibility in how much you spend online, so be sure you only spend what you can afford to lose.

The NC Lottery website also supports group play, which allows you to buy tickets for a group. Once you have an account, you can create new groups to keep track of who all’s involved and invite your friends to create an account and join the group. Then, all group members will be notified of winning tickets. The group play option is a great idea for anyone purchasing tickets as a group to avoid disputes later.

NC Powerball Screenshots

Other NC Online Lottery Draw Games

Moving beyond Powerball, the NC Online Lottery also sells Mega Millions, Lucky For Life and Carolina Cash 5 online. These games all cost the same online as they do when purchased in-person and prizes are the same as well.

All NC online lottery games support group play, year-long subscriptions and support up to three tickets per drawing. Below is an overview of the cost of each game, the number of tickets you can buy into each drawing and the number of drawings you can enter ahead of time as a subscription.

NC Lottery Instant Win Games

The North Carolina Online Lottery does not offer instant win games at this time. In late 2017, lottery officials said they were considering adding instant win games similar to those offered by the Pennsylvania Lottery.

Kerala Lottery Online Sales

A scheduled vote to authorize online scratch cards was tabled for further study after the commission received considerable pushback from retailers and anti-gambling groups.

North Carolina Family Policy Council President John Rustin said the proposed games are “essentially video sweepstakes right there on your device – on your home computer, on your tablet. It would create, in our opinion, a very significant conflict with the policy that has existed in the state for many years”

The North Carolina Retail Merchants Association also opposed the proposal out of fear online sales would hurt business by encouraging customers to stay home rather than visiting their stores. Andy Ellen, president of the association, said this:

“If you can sit at your house and play with a debit card and a checking account, especially in rural areas, it’s actually tougher to get customers to come physically to your store.”

The concern among retailers is related to the idea of cannibalization – that players will stay home rather than buy tickets in person, which in turn hurts retailers because with decreased foot traffic, sales slump across the board. However, these concerns are likely overblown and there’s a decent chance retailers come around to the idea of online instant win games.

In Michigan, for example, retail lottery sales hit new records every single year after online lottery tickets and instant win games were introduced. Rather than decreased traffic, Michigan retailers are seeing record-breaking sales since the introduction of online lottery games.

North Carolina Mobile App

The official North Carolina mobile app is available for iOS and Android devices and offers online play, ticket purchases, the ability to scan tickets for winners and to submit tickets for second-chance drawings and rewards points.

Before you can use the mobile app, you will need to visit NCLottery.com from your desktop or smartphone to sign up for an account. Then, launch the mobile app and log in on the front page. Once you’re in, you’ll see a simple interface with self-explanatory navigation menus to buy tickets, scan tickets and so on.

Buying tickets through the mobile app is fairly simple with the interface making it a step-by-step process. Choose the game you want to play and follow the instructions on the screen to pick your numbers, choose a number of drawings and to confirm your purchase.

Mobile App Screenshots

NC Lottery Promotions and Bonuses

The NC Online Lottery does not offer a deposit bonus or any special rewards for signing up, but it does host frequent promotions for regular players and regular second-chance drawings. The mobile app is the best way to participate in these programs because it can be used to scan physical tickets rather than having you manually input ticket numbers to credit you with reward points for playing.

All draw games and most scratch cards can be submitted through your account online at NCLottery.com or by scanning tickets with your mobile app. Scanning tickets will give you Lucke-Rewards points, which can then be used to enter special drawings that give out cash bonuses on a regular basis.

Additionally, tickets can be entered into second-chance drawings for a chance at winning a consolation prize. Second chance drawings offer even bigger prizes than the Lucke-Rewards drawings, with top prizes often topping out at $1,000,000.

NC Lottery Payments

If you’re located in North Carolina and are at least 18 years old, you can fund your NC Online Lottery account via bank transfer from your checking account, debit card (Visa and Mastercard) or by redeeming an Online Play Gift sent to you by someone else. Credit card deposits are not accepted by the NC Lottery in an effort to promote responsible gambling.

If you have a friend you’d like to help, you can sign in to your NC Lottery account and use your account balance to send your friend a virtual gift voucher. Your friend will be given a unique voucher code and can redeem it online for instant credit.

Online Lottery Sales

Prizes under $600 are automatically credited to your online account and may be withdrawn via check in the mail. If you originally funded your account with a bank transfer, you may also have your funds sent back to your checking account via bank transfer.

If you win a prize of $600 or more, the NC Lottery will send you an e-mail with a link to fill out a claim form. After filling out the claim form, you can visit a regional claim center or the NC Lottery headquarters in Raleigh for prizes up to $99,999. All prizes worth $100,000 or more must be claimed in-person at the NC Lottery headquarters.