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Lottery ticket courier Lotto.com is looking to expand fast. Company CEO Tom Metzger told Online Poker Report that the web-based service, registered with the New Jersey Lottery, is pleased with its early performance in the Garden State.
On June 3, Lotto.com became the second registered lottery courier in the state. Jackpocket was the first, having registered in 2019. Metzger told OPR:
“We’re unable to share metrics at this time, but we’ve had a wonderful response thus far–both from consumers and media–and we’re looking forward to expanding to more states across the US.”
He didn’t mention which states were candidates, but Lotto.com’s launch announcement said the company planned to “expand nationally.”
Online lottery services go by many names and functions, but all are trying to fill a simple market need. Consumers want to buy state lottery tickets online. So whether couriers want to be known as tech companies or dot-com partners of retail stores, they’re all vying for the interest of the same consumer base.
Metzger, for instance, spoke to OPR about how “Lotto.com is a licensed lottery courier and the first digital platform for buying lottery tickets on any device, with no app download or deposit required.”
Other than the extreme clarifications of lottery middleman niches, the main brand differentiation between the various lottery ticket couriers appear to be being registered with and welcomed by state lotteries.
Other companies in the space also say they comply with the law.
The names of the online lottery ticket services can also get confusing.
In response to an OPR question, Metzger said:
“Regarding Lottery.com, although our names are similar, we offer a very different service.”
Lottery.com bills itself as “a leading platform that delivers users a safe and secure way to play official lottery games directly from their mobile devices.” In a separate statement, Lottery.com says it also works on the Web.
That sounds awfully similar, but Lottery.com is about to go public in a reverse merger. The company was founded in 2015 and has some prominent advisory board members:
The gist of the difference is that Lottery.com is bigger and isn’t registered with the New Jersey Lottery.
A few US jurisdictions offer iLotteries. It would seem that these would be competitors to lottery ticket couriers, but Metzger sees the reverse.
For one thing, he contends that consumers mainly purchase “electronic instant games” from iLotteries. This is true in Michigan, for example.
Additionally, those instant games “have 90+% payout ratios. Conversely, lottery couriers only sell draw-based lottery games which have a 50% payout and are, therefore, much more profitable,” he told OPR.
Metzger continued, telling OPR it makes sense that iLotteries aren’t more common:
“For starters, most states would require significant legislative or regulatory changes in order to sell lottery tickets online themselves. In contrast, the lottery courier model is already legal in almost every state. In addition, most state lotteries have restrictions on their marketing spend. Acquiring customers online is a complicated and risky marketing investment which state governments have difficulty navigating. Private companies like lotto.com are much more comfortable making a marketing investment that might take six or even 12 months to produce a positive return. In addition, courier services put the onus of age verification and geolocation onto private operators sheltering state lotteries from those liabilities.”
If that reasoning holds true, that might explain why so many lottery ticket couriers are popping up.