The World Lottery Association (WLA) has published a policy paper recommending the stringent regulation of lottery couriers and a ban on bulk buying tickets.
Digital couriers typically purchase lottery tickets on behalf of consumers and take commission fees from purchases or winnings. They have become a popular way of playing in the U.S. and beyond. Including the likes of DraftKings-owned Jackpocket, Lotto.com, Jackpot.com and others, they are regulated in some geographical areas but not others.
The WLA noted that the four most common models used by unregulated couriers are affiliated partnerships with licensed lottery retailers, shared company ownership with such retailers, direct purchases from lotteries or in-person purchases at retailers.
In its full position statement, the WLA said that, while it recognizes that the use of couriers is a policy decision to be made by regulatory authorities, if a state or other jurisdiction decides to allow lottery couriers, they should follow several best practices.
What does the WLA recommend?
Firstly, the WLA advocated for couriers’ activity to be regulated either through legislative or lottery rules. It said that a particular focus should be on ticket ordering and delivery, including banning bulk sales.
The WLA opined that bulk sales of tickets “threaten the credibility and integrity” of the global lottery industry and its products and operations. The WLA also stated bulk buying can lead to accusations of money laundering, false or fraudulent advertising, lack of enforcement, price-gouging and circumvention of gambling laws.
The association also advocated for ID and background checks for retailers that have relationships with couriers, as well as recommending geolocation and verifications of players. Lotteries should not collaborate with syndicates for bulk sales purchase of tickets, it said.
SBC Americas reached out to several lottery courier services for comment on the WLA’s recommendations.
What brought this on?
The WLA has declared its position amid recent controversies surrounding the use of lottery couriers, nowhere more so than in Texas.
In its paper, the lottery association directly referenced the 2023 bulk purchase scheme on a Lotto Texas game that netted a total jackpot of $95 million after a syndicate spent tens of millions of dollars buying 99.3% of possible combinations. The WLA said the case highlighted many concerns, particularly when the game’s jackpot exceeds the cost of buying the number of possible combinations.
The Lotto Texas $1 game has 25.8 million number combinations. When the jackpot was at $74 million, the WLA asserted, bulk purchasing through unregulated couriers began and raised the jackpot to $95 million in a few days. The Texas Lottery Commission (TLC) provided four courier-related storefronts with 40 additional terminals to handle the increased demand. The couriers converted each number combination into a QR code and scanned them into terminals, according to the WLA.
As a result, the WLA recommended that retailers should have to meet several requirements, such as limiting the number of terminals installed to respond to walk-in needs and adding a dedicated terminal for retailers who have a relationship with a courier. A “normal” sales level should be established to enable easier reporting of suspicious levels. The WLA also urged lotteries to consider potential vulnerabilities when designing products and to monitor sales patterns of vulnerable products when jackpots reach a “critical” level.
More states take action on couriers
That 2023 Texas case was a key discussion during the state’s legislative session this year. That ended with the abolishment of the TLC, lottery gaming responsibility being migrated to the Texas Department of Licensing and Regulation, and bans on lottery couriers, online ticket sales and buying more than 100 tickets at once.
Other states have made their moves.
California’s Attorney General issued an opinion in 2022 that couriers should be prohibited under law, and Indiana banned them this spring. On the other hand, Arizona’s lottery passed a motion in April to regulate couriers, and the Oregon Lottery has proposed a similar approach which it will discuss at a hearing in August.
Lotto.com CEO Thomas Metzger and Jackpot.com Chief of Staff Mike Silveira both told SBC Americas in interviews recently that their companies do not operate in any state without receiving the go-ahead in advance.
