Lottery retailers like Jackpocket and Lotto.com provide a useful service but beware of unauthorized imposters

Can Lottery Ticket Couriers Catalyze A Rise In Sales? What About iLotteries?

Lottery ticket sales fell in many states during pandemic business shutdowns and restrictions. Lottery ticket couriers hope to alleviate the problem. Plus, the services may be able to peacefully coexist with the increasing number of state iLotteries.

Using Mega Millions ticket sales as a barometer, Michigan Lottery‘s total sales of the game decreased 40% in September 2020 vs. the year before. New Jersey‘s sales for the draw game dropped 49% in June 2020, also year-over-year.

New York Lottery sales of draw games – including Lotto, Quick Draw, Take 5, Pick 10, Mega Millions, Powerball, Cash 4 Life, Numbers and Win-4 – decreased 10% in March 2020 vs. March 2019.

Since then, one state lottery ticket courier, Jackpocket, saw its new user growth in January 2021 surpass the entirety of its 2020 onboarding figures. Also, that licensed third-party app sold 7% of all Powerball tickets in the Empire State in January.

Results like Jackpocket’s may demonstrate that such lottery ticket couriers can help states gain back customers.

Jackpocket CEO and Founder Pete Sullivan told Online Poker Report last week he prefers to refer to his company as a “consumer technology” provider, rather than being lumped in with other lottery courier services. He added:

“The pandemic wasn’t the reason for our creation. But it definitely accelerated our growth, there’s no doubt about it. However, consumers have been adapting [to] digital services in nearly all industries for years now: travel, shopping, food delivery and gaming. Now that lottery players have experienced the ease and convenience of pulling out your phone and playing the lottery on the go, we don’t anticipate seeing them going back to physically finding a gas station or convenience store to buy a paper ticket.”

Lottery ticket couriers fill a hole in the market

US online gambling gained so many new customers during the pandemic, anyone unaware of the reasons behind it might just think that apps replaced in-person wagering in retail casinos. They’d be wrong.

While the pandemic is a factor, it’s mostly because more and more states are legalizing online casino, poker and sports betting. That, in turn, is because it’s what consumers want. What’s more is that the online gambling market is remaining steady as states ease or lift pandemic-related restrictions on retail casinos.

Similarly, even as consumers can once again buy lottery tickets in-person, some are opting instead to use technology to do so from their computers and phones.

Lottery players are using iLotteries in states that offer them. They’re also going online to pick their favorite numbers through lottery ticket couriers.

New Jersey Lottery spokeswoman Missy Gillespie told OPR:

“Couriers may increase lottery sales by bringing in a new demographic who are typically non- or infrequent players, but it will be some time before we have enough data to determine its impact. The state is opening up and additional options are vying for players’ discretionary dollars, such as casinos, sporting events, movies, theatre, restaurants and concerts among others. Players have many choices available to them.”

Jackpocket’s experience as a lottery ticket courier

With Jackpocket, lottery players have received “over $53 million in winnings” via the company he founded in 2013, Sullivan told OPR. The app is available in Arkansas, Colorado, Minnesota, New Hampshire, New Jersey, New York, Ohio, Oregon, Texas and Washington, DC.

In these jurisdictions alone, Jackpocket is succeeding at working alongside other Internet lottery options.

For instance, the Oregon Lottery offers “Scoreboard,” a sports betting app that generated $8.6 million in revenue between its October 2019 launch and June 2020. The DC Lottery has its own iLottery. As do New Hampshire and New York.

Sullivan told OPR:

“State lotteries have been rolling out iLottery options for the entire span of Jackpocket’s existence, and we don’t expect that trend to change any time soon. The US lottery market is over $80 billion and growing. Not only is there enough room for multiple online distribution channels, the economics will demand it. As lotteries are continually saddled with increasing obligations to deliver more revenue to their state beneficiaries, many state lotteries’ marketing budgets are being slashed.”

Couriers offer more than just convenience

In other words, Jackpocket has to market itself. In the process, it’s performing a marketing service for the lotteries with which it partners.

As for its value to consumers, Sullivan told OPR that Jackpocket is more than a convenient middleman for Americans stuck at home during the pandemic. It’s a kind of insurance plan – a way to never lose a ticket. Also, Jackpocket doesn’t forget to check on drawings – as did winners of several unclaimed multi-state lottery jackpots.

Sullivan continued:

“When you place an order, we send you an email confirmation that includes all the details of your order. Then you receive another email once we’ve secured the ticket for you, and you can even see a picture of your ticket within the app which includes the serial number. The email receipts and ticket image are proof that you are the one who ordered the ticket. If you win, Jackpocket is legally required to provide you with your winnings.”

Jackpocket is a legal lottery courier

About Sullivan’s clarification that Jackpocket has legal obligations: He’s proud of that.

He responded to OPR’s question about a gray market incident by another company in the Evergreen State by saying:

“Jackpocket is the first licensed courier service in both states where such activity is regulated (New York and New Jersey), the only courier service that is an official associate member of the state lottery trade association (North American Association of State and Provincial Lotteries), and the only courier service to receive the National Council on Problem Gambling iCAP certification.”

He emphasized that this compliance and cooperation with state regulators is his company’s competitive advantage. It also protects customers.

He noted that Jackpocket is the only gaming app licensed by a state lottery – in this case, New York – that’s present on both Google Play and the App Store. Also, he added:

It is because of our dedication to playing by the rules that we’re able to embrace digital innovation at the right time. For example, this is also why we’ve evolved to accept so many different forms of payment including PayPal, e-checks, Play+, and Apple Pay.”

Lotto.com joined the fray on June 3

Lotto.com is a lottery ticket courier working with QuickChek. Unlike Jackpocket, Lotto.com is touting its non-app status.

In its announcement about debuting in New Jersey, Lotto.com describes itself as “the first digital platform for buying lottery tickets on any device, with no app download or deposit required.”

New Jersey may be its first state, but Lotto.com’s statement said it wouldn’t be its last:

“Looking ahead into the near future, Lotto.com has plans to expand nationally, and aims to bring this level of accessibility to lottery players in many other states across the US.”

A Lotto.com representative didn’t respond to OPR‘s request for more details in time for publication.

Gillespie confirmed for OPR:

“New Jersey is the first lottery to formally regulate couriers, providing a more secure and reliable experience for players in the Garden State. To date, the New Jersey Lottery has two registered couriers, Jackpocket in 2019 and Lotto.com in 2021.”

Mido Lotto is no longer operating in Washington State

Jackpocket and Lotto.com both stress their official status. However, other self-described lottery ticket couriers live in an unauthorized, gray market. They don’t always live there for long.

OPR has previously reported on the launch of one such operation – Mido Lotto – in Washington and other states. Mido Lotto describes itself as “a digital courier service” and claims that the company aims to work with authorities, like the California Lottery.

Washington Lottery spokesman Dan Miller recently forwarded OPR a communication Mido Lotto sent to its customers, which said the company was “suspending ordering in WA until the regulators agree that Mido Lotto is a valued part of the lottery landscape.”

The Washington State Gambling Commission had asked Mido Lotto to halt operations.

Brian J. Considine, the commission’s legal and legislative manager, told OPR:

“The Washington State Gambling Commission, in consultation with our Lottery Commission, has been in contact with Mido [Lotto] and asked them to cease operations in our state because they are not an authorized lottery retailer and, therefore, not allowed under the Lottery Act or the Gambling Act to facilitate any gambling activity at this time, including lottery sales. It is our understanding that Mido [Lotto} has ceased operating in Washington State at this time and it has reached out to their patrons about ceasing operations and possible options for refunds.”

Mido Lotto communication about lottery ticket courers and it suspending service is courtesy of Washington's Lottery

Mido Lotto communication about lottery ticket courers and it suspending service is courtesy of Washington’s Lottery

Why lottery ticket sales fell during the pandemic

While “the pandemic” is a true and obvious culprit for lagging draw game lottery ticket sales in many states, it’s not the only reason.

In fact for Michigan, the pandemic simply changed the game. Michigan’s lottery players shifted some of their spending from draw games to instant games – increasing buying of the latter by 23%. The Wolverine State‘s iLottery sales also rose 88% during the same year-over-year period ending in September 2020.

All of that meant the Michigan Lottery experienced an 8% bump, bringing total ticket sales to $4.2 billion. That’s a new lottery sales record.

However, New Jersey and New York didn’t see a similar pivot in purchases. In the Garden State, total ticket sales decreased nearly 8% by June 30, 2020, compared with the same date in 2019. For New York, it was a 5% drop to $9.7 billion as of March 31, 2020. That was that lottery’s most recent annual report.

Less than $100 million is less than thrilling

Ironically, the lower ticket sales for Mega Millions and Powerball drawings during 2020 originally happened because players had been excited about enormous jackpots during the previous couple of years.

During the fiscal year ending in 2019 – the way lotteries compare financial results – multi-state lottery players saw a $1.5 billion Mega Millions jackpot awarded in October 2018 and a $768 million Powerball winner in March 2019. (Another Powerball jackpot from October 2018 reached nearly $800 million, but was split between two winners.)

  • For Michigan, Mega Millions ticket sales skyrocketed 26% by September 2019 vs. the year before. Powerball’s sales rose 15%.
  • New Jersey’s draw games saw 12% more ticket sales during fiscal year 2019, “driven by the performance of Powerball and Mega Millions, which both saw several very large jackpots during the year,” according to the lottery’s annual report.
  • New Yorkers were a bit less jazzed – only upping their lottery drawing ticket spend by 2.5% by March 31, 2019.

As a result of the fiscal year 2020 jackpot malaise exacerbated by the pandemic restrictions, national lottery officials added new rules to the games in April 2020. Decreasing the minimum starting jackpot and changing the rise in jackpot increments between drawings didn’t elicit the same thrill from players. However, they did ensure jackpots were covered by ticket sales.

As Michigan’s 2020 annual report put it:

“The sales increase from September 2018 to September 2019 is primarily due to a significant number of jackpots over $100 million.”

Americans may be catching lottery fever again

It took from Adrian Tongson of Wisconsin‘s $120 million Mega Millions windfall on Sept. 15, 2020, until Jan. 22, 2021, for another large jackpot to emerge. On that date, the four-member Wolverine FLL Club of Oakland County, Mich., pocketed the $557 million cash payout on the $1 billion jackpot.

According to the Michigan Lottery’s March 2021 blog post about it, lottery players were excited again:

“From the start of the fiscal year in October through the end of the jackpot run, Mega Millions sales were up about 110% compared to the same period in 2020.”

In New Jersey, Gillespie confirmed for OPR that that was one reason sales were up:

“Sales results from July 1, 2020, through April 30, 2021, total $2.7 billion compared to $2.4 billion the prior year, which was an increase of 12%. This year has benefitted from high jackpots for the games Powerball and Mega Millions, as well as limited gambling opportunities due to public health closures.”

- Heather Fletcher is the lead writer with OnlinePokerReport. She's a career journalist, with bylines in The New York Times, Adweek and other publications. Reach her at [email protected]
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