Georgia Lottery fights federal proposal to outlaw online gaming

Even as Gov. Nathan Deal was courting casino mogul Sheldon Adelson's support, his administration has been engaged in a quiet lobbying campaign against federal legislation supported by the billionaire that would restrict online gambling.

Adelson is behind a nationwide campaign against Internet gaming, and he's a supporter of legislation introduced by Republican Sen. Lindsey Graham of South Carolina that would do just that. Three states - Delaware, New Jersey and Nevada - have allowed some forms of online gaming. But it riled up Georgia officials for a different reason.

The Georgia Lottery Corporation began to sell tickets online in November 2012, making it one of the nation's first lotteries to expand sales to the Internet.  The lottery put together a fact sheet it sent to supporters warning that the lottery would be required to shut down its online sales channel and cancel current lottery options should the legislation succeed.

So far, the online ticket sales have generated more than $6.6 million, sending nearly $2 million to the HOPE scholarship and pre-kindergarten programs. But lottery officials say the legislation would have an even broader impact, also banning the organization from paying prizes electronically or conducting second chance drawings through the Internet.

Debbie Dlugolenski Alford, the lottery's head, said in an April letter to a top U.S. House attorney that the proposal would effectively end an online distribution channel that "continues to be critical to our success and our ability to grow revenues for education."

"Innovative and effective methods of increasing revenues are central to keep up with rising costs of providing education, and the incremental sales growth provided by this channel plays a vital role in that effort," she wrote.

In all, lottery officials, the legislation would amount to a loss of $39 million in funds for the lottery-funded programs - which the lottery translated into a loss of nearly 7,000 HOPE scholarships or 11,000 pre-K participants.

The governor, we should note, has been tightlipped about whether he met with Adelson, a major GOP benefactor. But when Politico caught up with him in Vegas during his recent visit, this is what Deal had to say:

“Politics requires a large sum of money nowadays to be successful, and it’s nice to have people like Sheldon who are willing to support causes they believe in."