Illinois Retailers Favor Bill to Keep C-stores in Online Lottery Loop

SPRINGFIELD, Ill. -- Lottery sales have long been a staple of convenience stores but that could all changes as more states consider online lottery sales.

Illinois convenience stores are facing that very issue. Illinois lottery tickets are set to become available online in early March. With that day looming in the very near future, leaders from the Illinois Petroleum Marketers Association/Illinois Association of Convenience Stores said Friday that they support legislation by State Rep. Jim Watson, (R-Jacksonville), which would require individuals to purchase a kind of debit card in-store before accessing the online lottery, according to The State Journal-Register.

Bill Fleischli, executive vice president of IPMA/IACS, said their member stores are concerned that an online lottery will lead to a loss of revenue and a loss of jobs.

"They say that with the Internet lottery, you will see a reduction in foot traffic and a reduction in ancillary sales, and because of the income loss, it may mean a loss of tax revenues and there will be a significant loss of business revenue," he said. "If that happens, you would see a reduction in the workforce."

Out of the 4,500 convenience stores in the state, Fleischli estimated that 4,000 of them sell lottery tickets. Losing a job or two at each of them could result in the loss of 4,000 to 8,000 jobs across the state, he added. Fleischli said groups reached this estimate by assuming that the online lottery sales would cause lower revenue sales, forcing to stores cut one of their lottery salespersons, the news outlet reported.

However, retailer reaction is a mixed bag. According to the report, Grady Chronister of Chronister Oil, which owns Qik-n-EZ stores in Springfield, said last month that lottery sales are "a very, very small commission for us."

"It's (lottery sales) an integral part of our industry, but not necessarily the main reason we are in business," he said. "I don't necessarily agree with that whole thing that people come to our stores just to buy lottery tickets."

On the other hand, Curt Adams, president of Illinois Ayers Oil Co., said he was disappointed to hear that lottery tickets will be sold online.

"The bottom line is, the less sales inside our store, the less sales tax revenue for local and state governments, not to mention less income tax," Adams said.

Lottery ticket retailers earn a 5-percent commission on the tickets they sell, according to SJ-R. They can make additional money by cashing winning tickets up to $600 in their stores and for selling winning tickets of $1,000 or more.

As sales go online, only Lotto and Mega Millions will be available through the Internet. There is legislation to put Powerball online too; Senate Bill 3497, sponsored by Sen. Jeff Schoenberg, is sitting in committee, the newspaper added.

Fleischli said his organization does not oppose an online lottery outright, but they want the process slowed down so that a solution can be devised that would benefit retail stores.

In early January, the National Association of Convenience Stores (NACS) urged Congress to pull the plug on online lottery, as CSNews Online reported. The move came after the U.S. Department of Justice removed the obstacles to online sales.

"The ruling is not only bad for convenience stores and the communities that they serve, it is potentially bad for the states that are seeking any means necessary to fill budget gaps," said NACS Director of Government Relations Corey Fitze. "Not to mention that we have concerns that DOJ actually ignored existing law."

Specifically, the association contends that the DOJ did not take into account existing law. According to NACS, the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) blocks payment for any gambling on the Internet, including lotteries. Congress' intent in passing UIGEA was, based on the department's decades-long position, to keep any lottery games on the Internet illegal.

In addition, NACS raised concern over the potential decrease in foot traffic c-stores could see as lottery sales go virtual, as well as the possible increase in gambling addiction.