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The World Lottery Association (WLA), the largest lottery organization globally with over 80 members spanning five continents, has released a policy paper calling for stricter regulations on lottery couriers and a ban on bulk ticket purchases.
These digital couriers have become increasingly popular in the US and the world, facilitating ticket purchases for players and charging commission fees on both the ticket and any winnings.
The WLA highlighted that while these couriers, including well-known services like Jackpocket, Lotto.com, and Jackpot.com, are regulated in some areas, many operate without oversight. They identified four common models used by couriers:
- Partnerships with licensed lottery retailers
- Shared ownership with such retailers
- Direct purchases from lotteries
- In-person ticket buying
Clarifying its position, the WLA emphasized that if regulatory authorities choose to permit lottery couriers, they should adhere to established best practices to ensure consumer protection and integrity within the lottery system.
WLA Recommendations
The WLA has proposed a comprehensive three-phase strategy to ensure safety and integrity for regions that choose to permit these courier services.
First, at the courier level, the WLA suggests implementing regulations through legislative measures or lottery rules. These should include clear guidelines for ticket ordering, digital delivery, retention, and redemption processes.
Additionally, couriers must identify their retail partners and undergo the same background checks required for retailers. Geolocation technology should verify that purchasers are within the appropriate jurisdiction. Age verification and adherence to responsible gaming practices are also critical, alongside respecting trademarks and advertising rules. Importantly, bulk ticket sales should be prohibited.
Second, regarding retailers, the WLA recommends that they maintain a viable level of non-lottery sales to qualify for terminal access. Furthermore, the number of terminals per retailer should be limited to meet walk-in customer needs, with an additional dedicated terminal for those partnered with couriers.
Finally, at the lottery level, the WLA emphasizes the need to assess potential vulnerabilities when designing products. Monitoring sales patterns for at-risk products during significant jackpot increases is crucial for timely intervention.
Lotteries should avoid direct partnerships with syndicates for bulk ticket purchases and utilize encrypted barcodes to prevent couriers from generating unauthorized QR codes.
WLA Highlights Negative Effects of Bulk Sales
In its statement, the WLA emphasized that the downsides of bulk ticket sales are far from hypothetical. Such practices can significantly harm a lottery’s credibility and undermine the integrity of its operations.
They warn that bulk sales can lead to misleading or fraudulent jackpot advertisements. When one entity purchases all possible combinations, it diminishes the chances for others, effectively reducing their potential winnings and sparking accusations of theft or fraud among legislators.
Additionally, bulk sales can create opportunities for money laundering, as it becomes unclear where the funds for purchases originate. There are also concerns about the enforcement of age restrictions, with reports indicating that underage players may still be able to buy tickets.
WLA also argues that these bulk sales can lead to violations of gambling laws in jurisdictions outside the one where the lottery operates, and ticket prices can soar for consumers compared to the official retail prices set by the lottery, making it harder for average players to participate. That’s why it’s calling for a total ban on such sales.
Couriers Continue to Face Scrutiny in the US
The spotlight on lottery couriers intensified following a notable incident in Texas in 2023. A syndicate made headlines by spending tens of millions to purchase 99.3% of the possible combinations for a Lotto Texas game, which culminated in a staggering $95 million jackpot.
This situation raised significant concerns, especially when the jackpot amount surpassed the cost of buying all those combinations. The fallout from this event led to critical discussions during the state’s legislative session, resulting in the dissolution of the Texas Lottery Commission.
Lottery responsibilities were then shifted to the Texas Department of Licensing and Regulation, which enacted bans on couriers, online ticket sales, and the purchase of more than 100 tickets at a time.
Other states have taken similar actions in response to the growing scrutiny. In California, the Attorney General issued an opinion in 2022 recommending a legal prohibition on couriers. Meanwhile, Indiana moved forward by implementing a ban on these services this spring.
Meanwhile, Arizona has taken a different approach, opting to regulate couriers rather than ban them outright, while the Oregon Lottery is preparing to discuss a similar regulatory framework in an upcoming hearing.
Source: SBCAmerica
