1. Contributing Member States:
Summer Meeting 2017
Westin Downtown
Denver, CO
Contributing Member States:
Connecticut, Delaware, Florida, Kansas, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania & Texas
Save the Date: NCLGS Winter Meeting 2018 January 5-7, Hyatt Regency, Miami, FL

3. Lotteries vs. Casinos Can they both go online in the same states?
National Council of Legislators from Gaming States
Summer Meeting
Denver, June , 2017
Mark Hichar
Partner and Chair of the Gaming Law Practice Group
Hinckley Allen

5. 2017 iLottery and Commercial Gaming States
2017 iLottery Status NE NM OK AR SC TN WA MT SD MN PA FL OR ID CA AZ CO KS TX LA MO IA WI IN OH WV ME WY
Internet Lottery Wagering as well as Traditional Lottery Product
Internet Lottery Subscriptions only as well as Traditional Lottery Product
Commercial iGaming
Non-lottery States

6. Differences among the State iLottery Offerings
Georgia Lottery – PC and mobile app
Offer online physical draw games; bespoke instant games
Must use iHope/Discover debit card to fund eWallet
Prize payout percent (PP%) comparable to tangible games
Illinois Lottery – PC and mobile app
Offer online physical draw games (no daily draws); No instant games
Credit cards may be used to fund eWallet
Kentucky Lottery – PC and mobile app
Online products: Physical draw games; Bespoke instant games
Credit cards may be used to fund iWallet
Michigan Lottery – PC and mobile app
2016 online games PP% was 87.5%! (Daily games
designed for 50% PP%; Instant games had 71.9% PP%)

7. Pending iLottery BillsNE NM OK AR SC TN WA MT SD MN FL OR ID AZ CO KS TX LA MO IA WI IN WV ME Y
Massachusetts (H 135) (S 182) (S 134) – Would authorize online lottery.
Ohio– Legislation to be filed that would authorize the lottery to sell games online.
Pennsylvania– (HB 271) Would authorize fantasy contests, commercial iGaming and online lottery sales (excluding internet-based or monitor-based interactive games simulating casino games).
Virginia (HB2010) –Would have authorized iLottery, but appears dead.
California (SB619) –Would allow internet concierge services.
Connecticut (GA 967) – Would allow internet sales of multi-state games.
Maryland (SB 438) – Would prohibit internet lottery sales.

8. Casino Locations by Category (from AGA 2016 Survey – State of the States)
The only states without any of these forms of gaming are:
Arkansas (2 tracks have elec. games of skill)
Georgia
Hawaii
Kentucky (3 tracks have inst. racing)
New Hampshire
South Carolina
Tennessee
Utah
Virginia
Vermont
Source: American Gaming Association
2016 State of the States
AGA Survey of the Casino Industry
18 states states states states states

9. Casino Locations by State (from AGA 2016 Survey – State of the States)
* Class II games only
^ Video lottery terminals
± Limited-stakes gaming
1The states with racetrack casinos operate Class III gaming machines.
2Native American casinos noted here include both Class II and Class III facilities. States with Class II gaming are Alabama, Alaska, Nebraska and Texas.
3The states with card rooms indicated here do not include states that have commercial casinos with poker facilities.
4The card rooms in Washington operate blackjack and other house- or player-banked games in addition to poker.
5Refers to number of non-casino locations in states where electronic gaming devices are present. The electronic gaming devices operating in the states indicated on this map are recognized as legal operations. There are some states with similar facilities, but the machines may not be authorized.
6Locations have 15 or fewer machines.
Sources: American Gaming Association, National Indian Gaming Commission, State Gaming Regulatory Agencies

10. Do Land-based Casinos Affect Lottery Sales? Three Studies
Pennsylvania (2012)
Andrew J. Economopoulos and William Stolle, Ursinus College
Maryland (2014)
Douglas M. Walker (Casinonomics Consulting) Will E. Cummings (Cummings Associates)
Massachusetts (2017)
Rachel Volberg, University of Massachusetts Amherst and the UMass Amherst School of Public Health and Health Sciences, the UMass Donahue Institute and Mark W. Nichols, Ph.D., University of Reno

11. Pennsylvania – 2012 Study
1stPA casino (Mohegan Sun at Pocono Downs) opened in By 2008 a casino or racino was in every region of the state.
Analyzed data over January, 2004 – June 2010
Conclusion: 1% ↑ in casino wagering leads to % ↓ in lottery sales
Approx. 50% of cannibalization was in counties with casinos
Two other variables were statistically significant:
1% ↑ in the Powerball Jackpot results in a .2% ↑ in lottery revenues
1% ↑ in sales tax revenues associated with a 1% ↓ in lottery revenue. (Economic activity seems to have a greater impact on lottery revenues than casino activity.)

12. Maryland – 2014 Study
1stMD casino (Hollywood) opened in Maryland Live! Opened in 2012
4 casinos at the time of the study. (MD now has 6 casinos.)
Analyzed data over July 2009 (before 1st casino) – February 2014
Overall estimated annual impact of MD casinos on lottery sales:
2.53% ↓ in lottery sales (over all lottery products)
Lottery sales declined the closer a casino was to the applicable sales region

13. Massachusetts – 2017 Study
Plainridge Park Casino opened in June, 2015 (harness horse-racing track and slot parlor in Plainville, MA – between Boston and the RI border).
MGM expected to open its Springfield casino in the Summer or Fall of The Wynn casino in Everett (neighboring Boston), expected to open in June, Possible 3rd casino in Taunton (near the Rhode Island border) is in legal limbo.
Study analyzed data over June, 2014 – October, 2016.
Statewide lottery sales ↑ 4.37% in fiscal year 2016 (highest since 2012). Lottery sales in Plainville ↑ 23% in fiscal year 2016.
Sales in the year after the casino opened compared to the year before ↑ 25.78% in Plainville versus ↑ 5.19% statewide. (Sales at the casino ↑ approx. 4x after the casino opened and account for most of the sales increase in Plainville.)
On average, sales for other agents in Plainville and surroundings did not decease, but increased less than the rest of the state.
Note: The Massachusetts 2012 Expanded Gaming Act requires casinos to sell Lottery products and prohibits the sale of games “that are similar to or in direct competition” with Lottery products, as determined by the Mass. Gaming Commission.)

14. Mark Hichar
Partner and Chair of the Gaming Law Practice Group
Hinckley Allen
28 State Street
Boston, MA
= = = = =
100 Westminster Street
Providence, RI
(401)

16. Casinos & lotteries: Market Trends Demonstrating the Commercial Need for Evolutionary Offerings

17. Tim Lowry, Partner – DLA Piper LLP (US)
Summary Profile
Corporate and Finance Group/Global Sports, Media, Gaming, and Entertainment Sector Team; represents government units, private equity, private and public companies, VCs and investors (e.g., Illinois & Pennsylvania; Apple; Disney/ESPN; Gamesys, Playboy, Tropicana Entertainment, etc.)
Regularly advises on acquisitions/dispositions, outsourcing, privatization, advertising and global promotions, gambling and related white collar compliance, general litigation, and strategic direction.
Worked on several cross-border transactions including projects in Canada, the Bahamas, Mexico, the Philippines, and United Kingdom.
Before the Firm, corporate counsel to a multi-national casino operator, having maintained casino key licenses and managed legal, regulatory, and compliance matters across such jurisdictions as the Eastern Band of the Cherokee Nation, Iowa, Missouri, New Jersey, New York, and Pennsylvania.
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18. Lotteries & Gambling Products Have Been Around For a Long, Long, Long Time …
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19. Legalized Gambling: National Profile
24 States, “Commercial” Casinos
28 States, Tribal Casinos
5 States, Card Rooms
7 States, Electronic Gaming Devices
3 States, Permit iGaming (+ for Online Lottery)
Source: American Gaming Association, By The Book Database, March 18, 2017; UNLV Center for Gaming Research, February 2017
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20. Economic Impacts of Commercial Casinos
$40.5 Billion = 2016 National Gross Gaming Revenue (+1.11% YoY)
$240 Billion = Estimated National Impact
Jobs Supported: 1.7 Million
Wages: $73.5 Billion
$38 Billion: Taxable Revenue
Consumer Spending Reached $38.54 Billion
Nevada Alone, $11.2B FY’16 GGR (+1.28% YoY); Impact of $52.9 Billion, w/ $7.8 Billion in Tax Rev
$29.9 Billion in Tribal Casino Gross Gaming Revenues
Source: American Gaming Association, By The Book Database, March 18, 2017; UNLV Center for Gaming Research, February 2017
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21. State Lotteries: National Profile
No National Lottery
States W/ Lotteries:
44 States + District of Columbia, Puerto Rico, and Virgin Islands
States W/O Lotteries:
Alabama, Alaska, Hawaii, Mississippi, Nevada & Utah
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22. State Lotteries: A Giving Tree?
US alone, Over 207,053 Authorized Retailers
Over $80.5 Billion in Top-Line Sale Volume
$46.2 Billion Paid Out In Prizes to Players
And Over $22.5 Billion in Bottom Line Transfers to Beneficiary Groups and Programs.
Source: NASPL, About Our Members, March 19, 2017
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23. UNLAWFUL GAMBLING: Key Stats
Estimated Over $1 Trillion in Unlawful Gambling
$150 to $500 Billion in Estimated Black Market Sports Betting
97% of Sports Bets = Unlawful
AGA Estimates that $4.2B on Super Bowl 50 and $9.2B on March Madness Alone
Late 1990s, illegal sportsbook in New Jersey had annual volume of $200M – greater than the largest legal bookmaker in Las Vegas
April 15, 2011 (“Black Friday”): U.S. v. Scheinberg et al. 10 Cr. 336 (2011); U.S. v. PokerStars, et. al. 11 Civ (2011), eleven individuals and three online poker companies indicted for money laundering, bank fraud, UIGEA, and forfeiture. Prison Sentences, Domains Seized, Millions Forfeited, Hundreds of Millions in Fines (Civil Action Sought $3B)
Source: American Gaming Association, Law Enforcement Summit on Illegal Sports Betting, April 2015; Dr. David Forrest and Rick Parry, The Keys to Sports Integrity in the United States: Legalized, Regulated Sports Betting, September 27, 2016
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24. Offerings Must Evolve
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25. Global Interactive Is Exploding
In 1995, global population was estimated to be Billion, and it is estimated there was 100 Million “Gamers” worldwide.
Roughly 4% of population
In 2017, global population is estimated to be 7.4, and there is estimated to be 2.6 Billion Gamers worldwide.
Roughly 35% of population
References: United States Census Bureau, 2017; Kleiner Perkins (kpcb.com/InternetTrends)
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26. Internet & MOBILE Usage/Engagement = Solid Growth
Reference: Kleiner Perkins (kpcb.com/InternetTrends)
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27. Younger Generations Prefer eSports To Traditional Sporting Events
Reference: Kleiner Perkins (kpcb.com/InternetTrends)
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28. The Popularity of Daily Fantasy Sports
Demand for DFS is growing and, arguably, the bridge towards legalized sports betting. 36% +/- fantasy sports players play DFS
Volume of DFS play has grown over 140% to 11M people of 2016
Volume of season-long only has grown 52% to 37 million   
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29. We Have Come A Long Way In A Short Amount of Time …
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30. State Laws: Lotteries Appear Best Poised to Capture New Opportunities
Lottery Laws:
Typically, open-ended and generally permissive legislation. State government operates and conducts.
Example: New Jersey. “It shall be lawful for the Legislature to authorize the conduct of State lotteries restricted to the selling of rights to participate therein and the awarding of prizes by drawings when the entire net proceeds of any such lottery shall be for State institutions and State aid for education … .” N.J. Const., Art. IV, Sec. 7, Par. 2., Subpar. C. Legislature enacted various statutes to enable NJ Lottery. First, the Legislature creating a Division of Lottery within the Department of Treasury as well as a State Lottery Commission. N.J.S.A. 5:9-1 to -7. The Legislature adopted statutes setting forth the Division’s and the Commission’s authorities and administrative and regulatory duties, as well as other aspects of operating the state- run lottery. N.J.S.A. 5:9-7.1 to -25.
Gambling Laws:
Narrowly tailored, a blanket prohibition and following with specific exceptions
Private enterprise operates and conducts subject to strict oversight and regulation by state government
Example: New Jersey. “No gambling of any kind shall be authorized by the Legislature unless the specific kind, restrictions and control thereof have been heretofore submitted to, and authorized by a majority of the votes cast by, the people at a special election or shall hereafter be submitted to, and authorized by a majority of the votes cast thereon by, the legally qualified voters of the State voting at a general election, except that, without any such submission or authorization: … casino gambling.”
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31. DOJ Interpretations: Bradbury & Seitz
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Wolters Kluwer Law & Business | March 24, 2017

32. Other Considerations: Trending Towards Legalization and Expansion
On DFS, “[S]o many Kansans participate in this and we want to make sure they’re operating on the right side of the law.” Rep. Brett Hildabrand (R – Shawnee).
“Legalized casino gaming in New Jersey presently stands at a crossroads, facing critical challenges … , and it is in the public interest to modernize and streamline the current outdated casino regulatory structure … .” “The ability of the legalized casino gaming industry in New Jersey to compete in an ever-expanding national gaming market requires a regulatory system that is sufficiently flexible … .” N.J.S.A. 5:12-1b(18)(19).
“Mississippi Governor Phil Bryant says he wants legislators to make a late-session push to enact a lottery to possibly generate tens of millions of dollars a year to boost the state budget.” Associated Press, Clarion Ledger (Feb. 23, 2017).
In response to a question on $1B in new capital investment and 5k jobs, “We’d be rolling out the red carpet.” Sen. Brandon Beach (R – Alpharetta)
Expansion discussed or underway in Massachusetts, New Hampshire, Pennsylvania, Georgia, and California, to name a few.   
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33. From the Coliseum to the Present Day Stadium
On Sports Betting, NBA Commissioner Adam Silver writes, “Congress should adopt a federal framework that allows states to authorize betting on professional sports, subject to strict regulatory requirements and technological safeguards … sports betting should be brought out of the underground and into the sunlight … .” Op-Ed, New York Times, November 2014.
“We’ve seen the changes in the culture around the country in gambling … We’re obviously very sensitive to that … .” Michael David Smith, NBC Sports, January 26, 2017 (quoting Roger Goodell in response to question by Colin Cowherd if the NFL is softening its opposition to gambling).   
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34. Coming Soon to a Lottery, BAR, TAVERN, oR CASINO Near You!
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35. QUESTIONS? Timothy J. Lowry Partner DLA Piper LLP (US)
(609) Office
(609) Mobile
(609) Assistant
NOTE: This presentation is the intellectual property of DLA Piper LLP (US) and is intended as a general overview and discussion of the subjects stated herein. This is not intended, and should not be used, as a substitute for legal advice in any specific situation. DLA Piper LLP (US) accepts no responsibly for any actions take or not taken on the basis of this presentation. Pursuant to applicable Rules of Professional Conduct, this presentation may constitute attorney advertising. Copyright 2017 by DLA Piper LLP (US); All Rights Reserved.