A Look At Five States That Could Add A Lottery In The Future

Written By Katarina Vojvodic on May 26, 2023

US gambling laws can vary from state to state and are subject to change.

Most US states have a state-run lottery. Most but not all. Five states ban lotteries, and these are:

  1. Alabama
  2. Alaska
  3. Hawaii
  4. Nevada
  5. Utah

A variety of reasons have paused these states from legalizing their lottery markets. Some reasons include objections from conservatives and concerns about the influence on low-income households. Some, like Nevada, even wish to refrain from competing with existing land-based gaming operations.

Hawaii and Utah are the only US states with no forms of legalized gambling. In other words, these two states do not have:

  • Casinos
  • Sports betting
  • Bingo operations
  • Lotteries

Let us take a closer look at each state and the possibilities of adding the state lottery.

Hawaii bill introduced in January would establish a state regulator

Hawaiian Democrats introduced a bill in January that would establish a state body responsible for regulating and offering gambling activities.

Hawaii Senate Bill 1107 would establish the Hawaiian Lottery and Gaming Corporation to conduct and regulate gaming operations. The only forms of gambling mentioned are poker and casino games. The law states explicitly that this move would not extend or include sports bet

If the bill passes, the governor will pick a seven-member board of directors, the Senate president, and the state House speaker. These directors will then choose a CEO responsible for the daily operations and management of the corporation. Additionally, the board will have 180 days to adopt the rules of policies governing the body’s gaming activities.

There have been no changes as of January this year. All of the five bills that were proposed during the 2022 legislative session proved unsuccessful. In the meantime, Hawaii residents cannot buy tickets for out-of-state lotteries.

Utah will remain without a lottery

Utah probably has the slightest chance of legalizing the lottery in the state. Those in Utah who wish to purchase a lottery ticket must drive to Idaho or Wyoming. The two states are the closest to the Salt Lake City metro area, where most population lives.

Lotteries have been banned for a long time in Utah. Gambling in the state faces stiff opposition led by The Church of Jesus Christ of Latter-day Saints, known as the Mormon church.

Since the Professional and Amateur Sports Protection Act (PASPA) was annulled in 2018, there have been no attempts to legalize online casinos or sportsbooks in the state. A Utah lottery is not in the cards any time soon either.

There was only one attempt to legalize betting on horse races. Sen. David Haskins believed betting on horse races could help those involved in horse racing in the state make money. But the bill died in the Senate Committee.

Even if legalized at the federal level, online gambling in Utah will stay illegal. The state’s criminal code, “Offenses Against Public Health, Safety, Welfare, and Morals,” concerning gambling, says:

“If any federal law authorizes Internet gambling in the states and that federal law provides that individual states may opt out of Internet gambling, this state shall opt out of Internet gambling in the manner provided by federal law and within the time frame provided by that law.”

Alabama has potential but needs to wait for better days

Many Alabamans drive to neighboring Georgia or Florida now and then to buy a lottery ticket. They do it for a chance to win the Powerball jackpot. Some lottery enthusiasts even send money to friends and family residing in legal gambling states for a chance to win life-changing prizes.

While serving as a Governor of Alabama (from 1999-2004), Donald Siegelman predicted a lottery would generate at least $150 million a year. He said the money could go toward college scholarships, prekindergarten programs or fund school computers. Siegelman used the lottery plan in 1998 to defeat Gov. Fob James, the Republican incumbent. His plan moved through the legislature with little opposition.

The following year, Alabama voted down a lottery referendum under opposition from churches and gambling interests from out-of-state. Almost 1.2 million votes were cast in that referendum, and it was almost certain that the lottery would be approved. But only 46% of voters supported it, while 54% were against it.

According to the NYTimes article, a poll in August 1999 showed that 61% of people surveyed in Alabama were in favor of the lottery. Less than a week before the 1999 vote, the pro-lottery Alabama Education Associated poll indicated the lottery would pass with 54% of the vote with a 4% margin for error. Later, the surveys even showed the number dropped after ministers began manipulating it.

The lottery issue divided the state. Years later, when asked many times, Gov. Robert Bentley said that the lottery might not be the best way to fund state government. But, if given the opportunity, he admitted he would not stand in the way of letting the people vote for it.

In 2016, Bentley introduced a constitutional amendment that would establish an Alabama State Lottery Commission. Voting 21-12 in favor of the bill, the Alabama Senate approved Bentley’s proposal to start a state lottery. Despite the attempts, the bill did not pass the Senate.

Two years ago, the bill was seriously considered when Gov. Kay Ivey supported the legislation of the lottery and casinos. The Governor’s Study Group on Gambling Policy issued a report in 2020. The study group said that a lottery, casinos, and sportsbooks could generate up to $710 million for the state and create 19,000 jobs.

Rep. Chris Blackshear, the House sponsor of the proposition that came close to passing in 2021, said he is not working on a bill for the 2023 legislative session. As he said earlier this year, lawmakers could pass a bill next year and get it on the vote for the 2024 general election.

Last year, Sen. Greg Albritton introduced legislation to authorize:

  • A lottery
  • Sports betting
  • Eight full casinos offering slot machines and table games

While lottery and gaming bills previously received approval in the Senate, they died in the House. Albritton remains optimistic, saying he is glad to hear conversations happening in the House.

Nevada is one step closer to getting the state lottery

The US gambling capital Nevada provides various forms of gambling in multiple locations, offering:

  • Video poker
  • Keno
  • Slot machines
  • Table games

Interestingly, there are no scratch-off, Powerball, or any other lottery games. The robust land-based casino industry has blocked public lotteries.

But that may change in the future.

Nevada could see an end to its state lottery ban after Senate lawmakers took a second look at the proposed legislation in April.

The Nevada Constitution currently bans the forms of lotteries that many other states offer. But Assembly Joint Resolution 5 (AJR5), sponsored by Assemblyman Cameron C.H. Miller, could potentially change that. It would give the state legislature the power to create a lottery and allow the selling of lottery tickets.

According to the Las Vegas Review-Journal, Miller said:

“AJR5 will not create a lottery in Nevada. What it will do is give Nevadans the opportunity to vote on whether or not they want a lottery in Nevada.”

The joint resolution was introduced in March and passed on the Assembly floor on a vote of 26-15, but that’s only the beginning. The legislature would have to approve the measure this year and in 2025. AJR5 would then go to the voters in 2026. Even if voters approve the legislature, it will still have to pass more bills to create and regulate a state lottery.

Millions of dollars are leaving Nevada as lottery enthusiasts drive to Arizona and California to buy lottery tickets. While ALF-CIO and its 12,000 unions support the measure, it still faces strong opposition. Several gambling companies operating in
Nevada said they are against AJR 5
, as it represents a threat to their businesses.

Alaska had two plans debated

All legislative proposals to legalize Alaska or even Powerball lottery games have faded.

When the Alaska state government projected a $1.5 billion budget deficit, Gov. Mike Dunleavy and Steve Thompson said establishing a lottery could help. Through different approaches, they each offered plans to legalize the lottery in the state in 2020.

Thompson recommended a draw-style lottery that would raise from $8 million to $10 million yearly for the treasury.

Governor Dunleavy had a bigger vision. In the first year, he planned to establish the Alaska Lottery Corporation, overseeing a state lottery and conducting any lottery game. These would include:

  • Powerball
  • Mega Millions
  • Scratch offs
  • Sports betting
  • Games through electronic terminals

Dunleavy said the lottery could raise between $15 million and $100 million, helping education, seniors, homelessness, and women’s shelters. The 2020 pandemic disrupted the bill.

Alaska currently features a non-profit gaming industry, offering bingo and pull tabs to salmon derbies and the Nenana Ice Classic. There is no state lottery.

As Alaska’s attempts to legalize the lottery in the 1960s, 1980s, and 1990s failed, other states moved ahead with their lottery plans. The latest attempt (House Bill 385) to legalize gambling in the state has been paused since February 2022.

Photo by Playin USA
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Katarina Vojvodic

Katarina Vojvodic is a lead writer for Playin USA who lives in Toronto. Vojvodic provides coverage of the US gambling industry with a focus on US online casinos. Previously, she covered Ontario?s online gambling industry for PlayCanada.com. Vojvodic holds a master?s degree in journalism from the University of Belgrade. Outside working hours, she can be found near the water with her husband and their two kids.

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