State officials brace for online gambling controversy

Tim Poulin hands over an after-tax check for $14,700 to a winner at the Maine Bureau of Alcoholic Beverages and Lottery in Hallowell recently.
Daryn Slover | Sun Journal
Tim Poulin hands over an after-tax check for $14,700 to a winner at the Maine Bureau of Alcoholic Beverages and Lottery in Hallowell recently.
By Mal Leary, Capitol News Service
Posted Jan. 01, 2012, at 2:08 p.m.

AUGUSTA, Maine — Late last month the U.S. Justice Department reversed its interpretation of the 1961 Wire Act that banned online gambling and said state lotteries are not prohibited from offering online wagering, adding another gambling issue for the second session of the Maine Legislature.

“We are reviewing that opinion and its impact on Internet lottery here in Maine,” said Tim Poulin, acting Director of the Maine State Lottery. “I think it’s fair to say that we have no immediate plans here at the Lottery to offer any Internet-based lottery sales.”

He said there are broad implications to the ruling and the basic way the state lottery operates could change. Maine now sells both instant lottery tickets and online games through retailers at 1,300 locations across the state, and the ruling would allow sales directly through a website.

“Moving to Internet-based sales would have a major impact on these retail partners of the Lottery,” he said.

Pat Fleming, Executive Director of the Gambling Control Board was on vacation last week but wrote in an email that he will be reviewing the decision and its implications for casino gambling that the board oversees.

The Justice Department response was the result of questions posed by New York and Illinois lotteries questioning the broad interpretation of the law. The Justice Department concluded past interpretations were in error and that the federal statute specifically outlaws wagering on sports over the Internet, not other forms of gambling.

Worldwide online gambling is estimated at $30 billion with estimates that online poker games could generate $6 billion a year in the United States.
Both New York and Illinois are considering adding online gambling to current state lottery offerings as a way to boost state revenues.

Other states are likely to follow. What is not clear is whether the Justice Department decision limits the online gambling to in state.

“That is one of many questions we need to look into,” Poulin said.

Online gambling is already widespread, but not for cash winnings. The Annenberg Public Policy Center has been studying online gambling by college students for nearly a decade and reports that about 20 percent play online poker at least once a month.

Sen. Nichi Farnham, R-Bangor, is the co-chair of the Veterans and Legal Affairs Committee which has jurisdiction over gambling issues. She said the panel already has several gambling issues before them and that Internet gambling will certainly be added to the list.

“We are always playing catch-up on these issues,” she said. “I would like to get ahead of this one, to get out in front.”

Farnham said Nevada regulators have already moved to get ready for online gambling by adopting rules to regulate in-state online gambling. She said with other states also looking at the issue, it’s important that Maine consider how it wants to react to the new opportunity.

“We have had to react to citizen initiated gaming laws in the past,” Farnham said. “This is giving us the motivation now to get something in place so that when, or if, this comes to Maine we have regulations in front of us.”

She said there is no doubt the committee will add the issue to one of its meetings early in the session so all members can find out about the implications of the decision and what policies Maine should consider.

Rep. Mike Carey, D-Lewiston, is the leader for his party on the panel and is pleased Farnham wants the committee to quickly address the issue. He said online gambling has huge implications for the state.

“It has implications potentially for state revenues, but also for existing Lottery revenues and revenues that nonprofits across the state count on from poker and other games of chance,” he said. “We are going to have to jump on this and try to find out as much as we can in a short time.”

Carey said the state will need to consider what other states do in setting Maine’s policy or the state could face loss of state revenues at a time when every dollar is needed.

Farnham said she will be discussing with committee members when to schedule a meeting to address the online gambling issue when the Legislature reconvenes later this week. She expects both Poulin and Fleming will be asked to attend.

http://bangordailynews.com/2012/01/01/politics/state-officials-brace-for-online-gambling-controversy/ printed on July 23, 2014