Reality Check: Powerball and The Government Monopoly on Gambling

Everyone is so excited about that massive $1.5 Billion dollar Powerball jackpot but tonight, we are taking a look at why…

Posted by Ben Swann on Tuesday, January 12, 2016

With the Powerball jackpot now nearly $1.5 billion for Wednesday’s drawing, just about everybody is playing. Here’s a question though, how is the Powerball legal in so many states when other forms of gambling, including online gambling, are illegal? Why is the government allowed a monopoly on gambling?

This is a Reality Check you won’t see anywhere else.

It would be an understatement to use some cliché like “Powerball fever is sweeping the country.” In the 44 states, plus Washington D.C., Puerto Rico and the U.S. Virgin Islands, where Powerball is played, just about everybody is playing. Why not? You have a chance to win over a billion dollars.

Tonight, I want to look at the hypocrisy of the states that are benefiting from gambling, yet are keeping so many other forms of gambling illegal.

Take for instance the online sports betting sites, FanDuel and DraftKings. Late last year, a New York judge ordered the fantasy sports betting sites FanDuel and DraftKings to shut down and stop accepting “entry fees, wagers or bets” from New York consumers. This happened after New York’s Attorney General Eric Schneiderman sent the companies cease and desist orders. DraftKings and FanDuel say the sites provide games of skill, and not chance, and are therefore protected games under the 2006 Unlawful Internet Gambling Enforcement Act. The State of Nevada has also ordered the companies to stop. FanDuel and DraftKings are currently battling with these states in court.

The owners of those sites say their games are not gambling and are based on skill. The state’s attorney general says otherwise.

Schneiderman says no, they are games of luck and therefore, they are gambling. In New York, Powerball and other lottery games are legal and act as a monopoly of the state, where the state gets a cut of the money.

So why are betting sites considered illegal?

According to New York State law, it is considered illegal when, “A person engages in gambling when he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he will receive something of value in the event of a certain outcome.”

That is Powerball, is it not? Of course it is. Here in Georgia, we have Powerball and the lottery commission brags about how a portion of that money goes to education. In fact, the lottery is so popular here that later this year, voters may be deciding on whether six casinos will be allowed in the state. Of course, legalizing casinos isn’t legalizing ownership of casinos for everyone. They are heavily regulated by state lawmakers. So if approved, you or I couldn’t just go open our own casino. Instead, the right to operate will be granted to only those who are well connected, powerful and very wealthy already, which creates a state and private monopoly.

What you need to know is that the argument used to keep forms of gambling illegal are always made from a moral perspective. States have these laws to protect the public from its own bad behavior. In most areas of the country, private, unlicensed gambling is simply illegal and it is kept that way to protect the public.

However, here’s the real question: If gambling is dangerous and we need to be kept safe from it, shouldn’t all forms of gambling be illegal? If gambling can be fun and is a voluntary action in which adults can choose whether or not to participate, why does the government get to keep a monopoly on it?

Thats Reality Check. Let’s talk about that on Twitter @BenSwann_