Illinois Online Lottery Could Cost Jobs

Chicagoland c-store operators are warning that 7,000 jobs could be lost if an online lottery moves forward as planned without retailer protections.

February 20, 2012

WASHINGTON - About a half-dozen states are placing bets that they can adopt an online lottery following a late-December ruling by the U.S. Department of Justice that removes previous obstacles.

Last week Illinois 7-Eleven owners stepped up to urge the state lottery commission to delay its March 25 launch of online ticket sales, warning of massive layoffs unless the Illinois Lottery protects them from competition from the availability of online sales.

"[You] know at the end of the day we could possibly see this being a 7,000 job decrease in the state of Illinois," Joe Rossi, president of the 7-Eleven Franchise Owners Association?of Chicagoland, told the radio station WLS, adding, "And we hope it isn't, but if it is it's hard to look that employee in the eye and tell them they no longer have a job anymore."

CBS Chicago reports that Rossi estimates that lottery sales bring in 30% of the business at 7-Elevens in the state, because lottery buyers buy an average of $5 in goods on top of their tickets. Rossi says he is not trying to block online lottery sales, but would like for the Illinois Lottery to find a way to protect state€™s convenience store lottery business.

According to the Peoria Journal, the Illinois Petroleum Marketers Association & Illinois Association of Convenience Stores added its support to a bill being offered by state Rep. Jim Watson, which would require Illinois residents who play the lottery online to first purchase a "stored-value card" from a retail location. The retailer would maintain a 5% commission from the sale of the card; retailers currently receive a 5% commission on lottery sales.

"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," Bill Fleischli, executive vice president of IPMA & IACS, told the newspaper, adding, "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 sell lottery tickets.

The March issue of NACS Magazine will feature in-depth coverage of the online lottery issue and the impact on convenience stores.

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