Rhode Island Online Lottery Ticket Sales Bill Introduced

Rhode Island state Representative Charlene Lima introduced a bill Friday that would allow for the sale of both number-draw lottery tickets and “scratch-off” lottery tickets online. Rep. Lima believes that this method of buying tickets would be attractive to “millennials” who are comfortable with conducting virtually every aspect of their lives online.

“It is time to explore alternate means of revenue rather than always placing the burden on the taxpayers,” Rep. Lima said in a press release. “Additionally, it is time that Rhode Island make an honest effort to reduce its unfunded pension liability and make our retirees and pensioners whole as promised.”

H7437 is short, simply authorizing internet/mobile lottery sales and laying out what the lottery division would need to do to implement such sales. There is nothing ground breaking here: age verification technology must be in place to make sure players are at least 18 years old, players must register in person at a licensed lottery retailer, online purchases can only be made within state borders, wager limits must be implemented, and players must be able to self-exclude.

The bill would send half of the proceeds from internet lottery sales to the state pension fund and the other half to the state lottery fund. According to the Rhode Island lottery website, lottery funds are mostly used to pay prizes (80.46 percent). 9.91 percent of lottery revenues goes to the state’s general fund, 9.6 percent goes to commissions, and 0.37 percent goes to pay for operations and other costs.

The Rhode Island constitution requires any expansion of gambling to go to a statewide vote, but Rep. Lima thinks her bill might not require that.

“Since we already have a lottery and scratch tickets in RI, I do not believe the question would have to be submitted to the voters. However if the constitutional lawyers determine that it would, we can place it on the ballot along with Governor Raimondo’s legalized sports betting contained in her state budget proposal if that also is considered an expansion of gambling,” she said.

In reference to the last part of the above quote, Governor Gina Raimondo wants to include a sports betting legalization measure on the state budget. With her proposal, sports betting would only be permitted in casinos and thus she also doesn’t believe that it would have to be voted on by the state’s residents because it could be considered just another game offered by casinos and not really an “expansion” of gambling.

Rep. Lima understands that there will be some pushback on her bill and that many people might not want to raise revenue through gambling.

“Regardless of your opinion,” she said, “gambling in Rhode Island and all across the world is a fact of life. It is here to stay and is an integral part of our yearly revenue stream that brings relief to the taxpayers. My legislation merely puts a modern face on gambling that has been an accepted form of adult entertainment for centuries.”

The bill has been referred to the House Finance Committee. If it does have to be put to the voters as a referendum, there is a history in Rep. Lima’s favor. In 2014, a gambling-related referendum permitting the relocation of the Newport Grand Casino passed with more than two-thirds of voters giving it the thumbs-up. In 2012, voters came out even more in the affirmative or the authorization of tables games at casinos.

The meat of the bill is reproduced below.

(a) Lottery tickets may be sold by or for the lottery division through the use of mobile applications by mobile devices or over the Internet. With respect to such sales, the lottery division shall provide:

(1) Age verification measures to be undertaken to block access to and prevent sales of lottery tickets to people under the age of eighteen (18) years. Such measures shall include requiring players to register for an account at a lottery retailer licensed pursuant to this chapter.

(2) That lottery purchases shall be limited to transactions initiated and completed within the geographic borders of the state of Rhode Island.

(3) Wager limits for daily, weekly, and monthly amounts for each player and account consistent with the best practices in addressing problem gambling.

(4) A voluntary self-exclusion program for players to self-exclude themselves from wagering for set periods of time.

(b) Owners of retail establishments who have been convicted of a felony within the previous ten (10) years which has not been annulled or expunged by a court, or a misdemeanor involving falsehood or dishonesty within the previous five (5) years which has not been annulled or expunged by a court, shall not be allowed to sell lottery tickets in their retail establishment.

(c) Fifty percent (50%) of proceeds from the Internet sale of lottery tickets shall go to the state pension fund, and fifty percent (50%) of proceeds shall go to the state lottery fund.

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