(Crain's) — With online ticket sales starting Sunday, Illinois Lottery officials are watching tonight's near-record $290 million Mega Millions drawing with more than the usual degree of professional interest.
It's not that they hold tickets. Lottery employees can't play the game.
But if no one wins the pot — the eighth-largest jackpot in the multistate game's history — it will roll over to far more than $300 million, creating huge buzz for the launch of the nation's first sale of Mega Millions tickets via the Internet.
The largest Mega Millions jackpot in history was $390 million in March 2007.
The state's game plan was to start slowly with online sales opening at 7 a.m. Sunday, using no advertising except some social media.
“We wanted the size of the prize to drive interest and participation,” said Michael Jones, superintendent of the Illinois Department of the Lottery. If somebody wins tonight, the jackpot will reset to $12 million on Saturday.
“If it rolls over again — so much for a soft opening,” Mr. Jones said.
Illinois Lottery gets online clearance; web sales begin in spring
The cash-strapped state treasury has received a huge Christmas gift of sorts from federal regulators, a gift that will allow the Illinois Lottery to sell tickets online as soon as this spring.
The gift arrived Friday when, in a move that received little attention amid pre-holiday festivities, the U.S. Justice Department issued a ruling that appears to permit states to authorize Internet gambling — at least within their borders, for their own residents.
To Illinois, the ruling "potentially means hundreds of millions of dollars a year," said Michael Jones, the superintendent of the Illinois Lottery.
Mr. Jones said he intends to waste no time trying out his new gift.
After huddling with legal advisers and reviewing the ruling Tuesday morning, Mr. Jones said he expects to test selling Powerball, MegaMillion and Lotto tickets online "by the end of March or early April," with full sales targeted for the third or fourth quarter of 2012.
Mr. Jones and other state officials, such as Illinois Senate President John Cullerton, have argued for years that the state legally could sell lottery tickets online. But they were held up by prior federal rulings that U.S. law banned bets from passing through communication lines that crossed state borders.
But in the opinion released on Friday, the Justice Department said gambling within a state is exempt from the rule, unless it involves bets on sporting events. The opinion has been requested by Illinois and New York.
The ruling "allows the lottery to offer its current products on a different platform," Mr. Jones said. "Lotteries are successful when you get a lot of people to play a lot."
Lottery consultants believe that, at least on days in which a large jackpot is at stake, Internet wagering could lure an additional 200,000 to 400,000 Illinois bettors, Mr. Jones said. At an average $5 wager, "You're talking about hundreds of millions of dollars a year" — assuming the state offers the right games with the right pots.
The ruling also may clear the way for new games that attract a wider customer base, Mr. Jones said. In England, for instance, government lottery websites offer "lots and lots of different options."
Internet gambling also makes it easier for the state to screen customers who now buy tickets in stores, Mr. Jones said.
For instance, the state could require use of a state driver's license or ID number to access the lottery site, keeping minors from betting, he said. And it could impose dollar limits on betting to try to help those with gambling addictions, he said.
Either way, gambling is highly profitable for the state, with profits running 42 cents to 43 cents on every gambling dollar, Mr. Jones said.
The Illinois Lottery now is managed by a private firm, NorthStar Lottery Group LLC, under a pact that went into effect last July. But the firm's fee is tied to overall lottery profits, so any growth in revenue should flow to the state's bottom line, Mr. Jones said.
* * * 2:30 p.m. update: Mr. Cullerton is pleased. "The idea is to have the lottery function like a modern business using modern technology," he says in a statement. "In that regard, it's great to have the federal government's OK on this, and we now look forward to seeing some results."
According to Mr. Culllerton, any additional receipts from existing games are supposed to go toward capital spending. But new money from new games can be used for anything. And, more important, if it's green, it's fungible in Springfield.
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