Sorry New Hampshire, UIGEA Blocks Online Lottery Sales

Written by Kaus | Thursday, January 22nd, 2009

Well if you were one of the many regular customers of the New Hampshire Lottery who purchase your weekly Powerball tickets online you would have experienced a technical difficulty this week when your US credit card was rejected.

While puzzling as it sounds the government has blocked banks from processing gambling transactions made through a Visa, MasterCard or any other major credit card issued by a US bank. This law which went into effect only a few days ago is meant to enforce the UIGEA and restrict players from making payments to online casinos and poker sites.

What does online gambling have to do with your Powerball ticket?

Nothing really, except that the government neglected to think about how this law would affect their own state lottery sales. This is somewhat humorous really. Not for the players who are forced to purchase tickets at a lottery retailer, but more so that the UIGEA and all the super-imposed regulations the government has pushed onto their citizens is finally starting to kick them in the ass.

As for the lottery itself, the Executive Director Rick Wisler said in an interview “We could end up losing some significant revenue from this. It can amount to a million dollars a year or more to the Lottery if credit cards are not allowed.”

According to Wisler many of the players who purchase tickets online do so through subscriptions and didn’t find out that their credit card was denied till after the fact. During his interview he said the New Hampshire state lottery is “caught in the cross-hairs of over-regulation”.

Why the sudden change? Earlier this year the UIGEA came into effect forcing banks and financial institutions to block US gambling transactions to online companies. The state lottery was supposed to have some kind of immunity from this law, but as we can see this was somehow overlooked. Last year companies were to verify what kind of transactions they process and if they were gambling or not. The credit card company would than code them accordingly and those who offered gambling services online would be blocked from US credit cards.

To add frustration on top of confusion, players who were able to get their cards processed for lottery tickets have made complaints that their banks charged them a service fee for the gambling transaction.

The New Hampshire Lottery’s Executive Director said he plans on taking all necessary actions to mediate these problems including seeking legal advice. Apparently the NH lottery is seeing a definite decline in revenue, nearing the $12 million mark in the last six months. Obviously this could be one of many things including the US recession, however Tier feels that the course of action the government has taken to prevent US citizens from playing online has defiantly affected their overall revenue.

The New Hampshire Lottery was one of the first states to legally offer a state-wide lottery program and sold their first ticket in 1964. During the first year of opening their doors the NHLottery sold over $5.8 million worth of tickets, which is impressive considering the value of money back then. Over the last 40 years they have continued to be the leader in operating one of the most successful lotteries, with 2008 generating more than $280 million in revenue. Where do the proceeds go? The New Hampshire Lottery helps fund public education and has provided over $1.2 billion since their opening in 1964.

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