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Mass. to consider online lottery sales

State treasurer creates task force to research issue

Grossman characterized the federal opinion as ‘a surprise that accelerates the urgency of dealing with online lottery sales and online gambling.’ Grossman characterized the federal opinion as ‘a surprise that accelerates the urgency of dealing with online lottery sales and online gambling.’
By D.C. Denison
Globe Staff / January 14, 2012
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The Massachusetts State Lottery may be headed to the Internet.

Steve Grossman, state treasurer, is forming a task force to consider whether Massachusetts should institute online sales of lottery tickets following a recent legal opinion from the Justice Department that clears the way for states to do so.

Grossman characterized the federal opinion as “a surprise that accelerates the urgency of dealing with online lottery sales and online gambling in general.’’

The task force will consist of about 20 members, including representatives from the state treasurer’s office, the Massachusetts Lottery, private citizens, and elected officials, according to a spokesman for Grossman. The state has also begun a search for a consultant to provide expertise and research services.

Grossman said he expects to start meeting with task force members as early as “the next few weeks,’’ even before the consultant is hired.

The Department of Justice opinion arrived as the state is implementing a law that legalizes casino gambling. Signed in November, the law allows three full-scale casinos and one slot machine parlor in Massachusetts. The state is also poised to allow consumers to purchase lottery tickets using debit cards as well as cash.

The department issued the opinion in response to requests by the states of New York and Illinois to clarify whether the Wire Act of 1961, which bars wagers via telecommunications that cross state or international borders, prevents states from using the Internet to sell lottery tickets to adults within their own borders.

The new interpretation said the Wire Act applies only to bets on a “sporting event or contest.’’

One question is whether the opinion will set the stage for a boom in nonsports Internet betting. “If the Department of Justice is saying that the Wire Act only applies to sports-related wagering, then that opens it up for everyone else who is offering online poker, online table games, and so on,’’ said Kimberly Herman, a lawyer who represents lottery equipment makers for the Boston office of the law firm Sullivan & Worcester. “There’s so much money involved, they are all going to rush in.’’

For opponents of expanded gambling in Massachusetts, the opinion opens a new, unwelcome battle front, and the prospect of state-sponsored online gaming. “More Internet gambling will simply siphon more and more money out of the economy and create more individual debt, suicides, alcoholism, and mental health problems,’’ wrote Tom Larkin, president of the antigambling group United to Stop Slots in Massachusetts, in an e-mail.

Larkin said he was particularly concerned about Internet gambling’s impact on youth.

Grossman said yesterday that some gambling opponents would be appointed to the state’s investigative task force. “The social impact of online gambling will be a major concern of the task force,’’ he said.

Yesterday, four legislators were named as the committee’s first members: Representative Timothy Toomey of Cambridge, a Democrat; Representative Daniel Winslow, a Republican from Norfolk; Senator Jennifer Flanagan, Democrat of Leominster; and Senator Richard Ross of Wrentham, a Republican.

Grossman said he wants the group to consider the possible impact that online gambling might have on the 7,500 retailers who sell lottery products. An average Massachusetts lottery agent makes $37,000 a year on commissions from lottery sales.

The task force will also consider the impact of online gambling on Massachusetts’ nascent casino industry. “What happens if there is unfettered online poker and online roulette in Massachusetts?’’ Grossman asked. “Will that cause casino companies to bid less aggressively for licenses?’’

As state treasurer, Grossman said he has to take “an entrepreneurial and aggressive approach’’ to new online opportunities to ensure that Massachusetts does not lose revenue to other states that may embrace online gambling more aggressively.

“This is a fast-moving, highly competitive market,’’ Grossman said, “and this opinion only accelerates this moment of change.’’

D.C. Denison can be reached at denison@globe.com.

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