Instead Of Facts, Lottery Retailer Rep’s Op-Ed Firmly Footed In Fantasy

May 7, 2015
Instead Of Facts, Lottery Retailer Rep’s Op-Ed Firmly Footed In Fantasy

In a recent op-ed on RollCall.com, National Association of Convenience Stores (NACS) President Lyle Beckwith called intrastate Internet gambling an “oxymoron,” and throatily backed the Restoration of America’s Wire Act.

Mr. Beckwith could have spoken to Internet technology and security experts, the regulators and lawmakers overseeing these regulated online gaming markets or a plethora of state lottery directors who all feel the current geolocation technology is sufficient to contain online gambling within a state’s borders.

He did not.

Instead, Mr. Beckwith decided to rely exclusively on casually Googling the subject.

You read that right.

Beckwith’s sole bit of evidentiary support for his controversial conclusion was some Google search results that claim to allow circumvention of geolocation technologies.

Beckwith did not:

  • Say if he or someone else was able to use these methods to successfully spoof his internet address and outwit the geolocation technology in use in states with regulated online gambling.
  • Offer a single example of said abuse happening in the status quo after several years of regulated online gambling.
  • Acknowledge that the service he describes are known (and blocked) by geolocation providers or that said services address only one layer of the multifactor process utilized by geolocation providers.

But hey, who needs to check it? When has anything written on the Internet been wrong?

Hypotheticals? We don’t need no hypotheticals

In his op-ed, Beckwith lays out what appears to be an interesting hypothetical:

” Say I’m in Hawaii, a state that does not allow any gambling. But all of a sudden, I can get online — apparently no matter how old I am — and play another state’s lottery from anywhere and everywhere with Hawaii.”

The problem is, this isn’t a hypothetical issue.

Several states offer online lottery sales, and anyone (from any state) can try to purchase tickets through these websites – keyword, TRY.

Beckwith could attempt this from Hawaii or any other state of his choosing to prove his point.

But instead of actually trying to use his newfound expertise (thanks to Google) and thwart the geolocation technology (and age verification tech) in use at regulated online gaming sites, he would rather theorize about the possibilities.

There is also the not so small problem of trying to cash in your winning ticket. A player who goes through the enormous trouble of trying to thwart the geolocation technology in place is also taking the very real risk of not receiving their winnings.

For instance, Minnesota regulations dictate all players winning prizes over $600 meet the following requirements:

“The Lottery will attempt to validate the prize at the time that the player presents the iLottery and eTicket Claim Form, the Claim Code, and proper identification to the Lottery.”

And if you’re really interested in how geolocation technology works (and why simple Google searches won’t thwart it) here is a video of GeoComply CEO Anna Sainsbury explaining the multiple layers of geolocation technology.

Kentucky Lottery President is comfortable with safeguards

In a March 2015 letter to Kentucky Senators Mitch McConnell and Rand Paul, Governor Beshear, and Kentucky’s Congressional delegation, Kentucky Lottery President and CEO Arthr Gleason Jr. stated:

“State lotteries, including the KLC, have effective technical solutions to ensure that players are of legal age to play and are located within the state’s borders…”

Illinois Lottery Director concurs

In a 2014 interview, Michael Jones, the Director of the Illinois Lottery, stated, “it is clear that the age and geography constraints that were key parts of the test are working as designed.”

Georgia Lottery Director opposes RAWA

Georgia’s lottery director, Debbie Dlugolenski Alford penned a letter to a Congressional Attorney expressing her opposition to RAWA.

Dlugolenski Alford claimed a ban of online lottery sales would cost Georgia millions of dollars per year.

Minnesota Governor calls out lottery retailers

When Minnesota’s online lottery came under fire last year, Governor Mark Dayton told the Star Tribune the opposition was coming from people, “who have a very lucrative piece of this gambling business and don’t want to give any of it up.”

Dayton’s remarks intimate that the invocation of safety by groups like the NACS is just a cover for protecting their own financial interests.

Why the NACS fears online gaming

It should be noted, Beckwith and the NACS aren’t unbiased commentators on this issue. Convenience stores have perhaps the most to lose when a state decides to take their lottery online.

In an article on their own website from June of 2014, NACS states, “One significant threat to c-store lottery sales growth is the legalization of online ticket sales.”

This was on clear display in Massachusetts in 2013. Pushback from convenience stores and other lottery retailers was a major sticking point to a potential online lottery bill, and eventually led to then-State Treasurer Steve Grossman contemplating a provision in his proposed online lottery bill that would require anyone purchasing online lottery tickets to first go to a brick & mortar lottery retailer to purchase what are essentially online “credits.”

The NACS certainly has reason to fear online lottery expansion, but Beckwith’s dismissal of proven technology is not a credible argument. At issue is whether increasing total lottery revenue is worth the potential damage done to brick & mortar lottery retailers.

Obviously, the retailers don’t think so.

On the other hand, state and lottery officials seem more than willing to make the trade-off.

Beckwith’s actual op-ed, boiled down

Beckwith and lottery retailers aren’t overly concerned about geolocation failures or underage gambling.

They want to protect their monopoly on lottery sales.

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