Online gaming is a booming industry. In fiscal year 2022–23, the Pennsylvania Lottery’s iLottery program generated $872.5 million in eInstant sales, while online gambling revenues topped $2 billion in Pennsylvania last year according to published reports. But behind the scenes, a dispute has arisen that pits the Pennsylvania Lottery against privately owned casinos. The fight is over legislation that prohibits the Pennsylvania Department of Revenue, the administrator of the lottery, from offering products that “simulate casino-style lottery games” as part of the iLottery program. The Pennsylvania Supreme Court recently construed the meaning of that phrase in Greenwood Gaming & Entertainment v. Department of Revenue, 306 A.3d 319 (Pa. 2023), and remanded the case to the Pennsylvania Commonwealth Court with instructions to apply a corresponding standard. The question now is whether, and to what extent, the Commonwealth Court will be able to establish a boundary between iLottery games and the online products offered by casinos.

Act 42

On March 15, 1972, the Pennsylvania Lottery sold its first ticket for a weekly drawing. The lottery, then only a year into its existence, operated without competition and continued to do so for decades. Over the years, with the rising popularity of lottery games, including now-ubiquitous “scratch-offs,” came a tide of competition and technology that shepherded in a new legislative era for Pennsylvania gambling rules. First came the Race Horse Development and Gaming Act (the Gaming Act), which authorized slot machines. Six years later, the Legislature expanded the Gaming Act to include table games. Then, in 2014, the General Assembly amended the State Lottery Law (the Lottery Law) to prohibit the department from offering “internet instant games” and “simulated casino-style lottery games” through the lottery, absent further legislative authorization.