A proposed Connecticut bill would see the state officially ban lottery courier services if passed. The same bill would also outlaw the sweepstakes social gaming business model in the state.
Senate Bill 1235, introduced by the General Law Committee, addresses a number of consumer protection recommendations regarding gaming regulation and the lottery. Included is the option to ban couriers.
One of the major concerns by the lawmakers is a lack of transparency from the couriers when it comes to state tax enforcement, and also if courier operation violates gaming compacts the state has already established.
Currently, Connecticut features a state-run online lottery that features only draw games. The Connecticut Lottery Corporation oversees operations for both retail and online lotteries.
Couriers offer online purchases of retail lottery games through third-party means. Some lawmakers see that as a resale of lottery tickets, which Connecticut seeks to make illegal in SB 1235.
No couriers operating in Connecticut
Five different couriers currently operate within multiple states in the US. They are:
- Jackpocket
- Jackpot.com
- Lotto.com
- theLotter.com
- Mido Lotto
While most couriers work with state lotteries to ensure they’re welcome in the state and compliant with relevant laws, others do not. That has not only drawn the ire of some of the states, but also of other courier companies. Those who are more scrupulous about compliance feel the operations of less diligent operators taint the overall perception of the industry.
Only one of the national courier companies had, until recently, advertised its services in Connecticut. That was Mido Lotto. They were able to do so as couriers are not currently included in the legal framework of the Connecticut Lottery. However, Mido Lotto has recently removed Connecticut as an available location on its website.
That courier is operating in other states where it isn’t welcome, such as California. The California Lottery has issued multiple statements that it won’t honor any wins that it can prove came from a courier purchase, and will revoke the license of any retailer known to be working with a courier.
Other couriers seeking a regulated market in CT
During a public hearing of the General Law Committee on Friday, representatives from DraftKings and Lotto.com spoke to the lawmakers hoping to encourage them to do away with the bill and seek a regulated relationship with couriers.
SVP of Lottery for DraftKings, Peter Sullivan, was the first to speak. Sullivan was a founder of Jackpocket and moved into this new role following DraftKings’ $750 million purchase of the courier, which was concluded in May.
Sullivan urged the lawmakers to leave the door open for a regulated partnership with couriers as opposed to an all-out ban, citing other states that have done just that.
Instead of a rush to prohibit these courier services, the focus should be on setting clear requirements that ensure only responsible, complaint operators participate in the market. New York and New Jersey have done exactly that and today the licensed courier services in those states account for approximately 15% of all draw-based ticket sales on a given day.
Robert Porter, Chief Legal Officer for Lotto.com, also spoke to the Committee. Porter also previously worked with the Iowa Lottery and stated that couriers open lottery sales to new customers for each state. Thus, it generates more sales for state lotteries and more funding for the respective states.
Couriers are able to reach non-traditional lottery customers. The folks that we reach get their prescriptions delivers online, they get their groceries delivers, they order things off Amazon.
Other states providing a blueprint for regulation possibility
Sullivan and Porter both noted other states that have worked with couriers to set up a regulated market.
In both New York and New Jersey, Sullivan noted Jackpocket has to meet regulation requirements with age verification, identity verification, geolocation and responsible gaming tools. It also has operational oversight that requires daily reports to the state regulators.
Sullivan also noted that Jackpocket is a courier that seeks approval from a state lottery before entering into the market. The courier is currently available in 17 states, as well as Washington D.C. and Puerto Rico.
There’s an important distinction between responsible, ethical, lottery couriers and rogue operators who do not follow strict consumer standards. Companies like Jackpocket operate transparently, working closely with state lotteries to provide players with a secure, compliant way to participate in state lotteries.
Porter agreed with Sullivan on working with Connecticut lawmakers to establish regulation in the state. He pointed the Committee in the direction of Colorado for a blueprint to consider. Colorado currently has Jackpocket, Lotto.com and Jackpot.com available in its state.
Members of the Committee assured both Sullivan and Porter that discussion on SB 1235 would continue and the lawmakers would be open to other resolutions to the courier issue.
For the bill to become law, it must pass through the Committee on General Law before being moved to the Connecticut House of Representatives. From there, if passed, it would head to the state Senate for approval before being sent to Gov. Ned Lamont to sign it or veto it.
Bill also seeks to ban sweepstakes casinos
SB 1235 also would ban sweepstakes gaming in Connecticut.
The text of the bill notes the ban would include, “real or simulated online casino gaming or sports wagering.”
This is just another step that state has taken toward sweeps. Last fall, the Connecticut Department of Consumer Protection one of the largest sweepstakes casino operators in the country with a cease-and-desist, leading it to bar customers from the state.
Sweepstakes casinos are legal in in the majority of the US, as they are accepted in over 40 states.
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