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ALEXANDRIA, Va. -- States may be applauding the recent U.S. Department of Justice (DOJ) ruling that removes obstacles to online lottery tickets, but the move is receiving jeers from the convenience store industry.
NACS, the Association for Convenience and Fuel Retailing, is pushing for the ruling to be overturned, citing several problems with the decision.
"The ruling is not only bad for convenience stores and the communities that they serve, it is potentially bad for the states that are seeking any means necessary to fill budget gaps," said NACS Director of Government Relations Corey Fitze. "Not to mention that we have concerns that DOJ actually ignored existing law."
Specifically, the association contends that the DOJ did not take into account existing law. According to NACS, the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) blocks payment for any gambling on the Internet, including lotteries. Congress' intent in passing UIGEA was, based on the department's decades-long position, to keep any lottery games on the Internet illegal.
The DOJ also failed to analyze the provisions of the law separate from the Wire Act (such as 18 U.S.C. 1301), specifically making the interstate communication of lottery chances illegal, according to NACS.
In addition, NACS said the move to an online lottery will hurt convenience stores, which depend on the foot traffic generated from lottery sales. The association is also raising concerns about a possible increase in gambling addiction. According to NACS, customers are currently prohibited from buying lottery tickets with debit or credit cards inside a store; however, online lotteries will rely upon those transactions. Online lottery sales also open the door to underage sales, the association noted.
As for state income, NACS said customers may be able shop around for the best lottery deals, pushing them to buy online tickets in other state lotteries. Also, the association added, as states compete for the best deal on lotteries, they will be forced to sweeten deals that could result in reduced funds heading toward scholarship programs.
Furthermore, credit and debit card transaction fees could add to states' operating costs, NACS said.
NACS is now urging Congress to step in and keep online lotteries illegal under federal law. The association wants Congress to enact new legislation specifically stating that Internet gaming is illegal, as well.