ttFresh off Texas taking steps to ban lottery couriers, Jackpocket has suspended its business in New Mexico in the wake of a negative legal opinion from the state’s Department of Justice.
New Mexico Attorney General Raul Torrez’s take on couriers wasn’t a positive one. He sees Jackpocket as selling lottery tickets for profit without the authorization to do so from the state lottery.
The lone lottery courier in New Mexico had been operating through an agreement with the New Mexico Lottery Authority. According to Torrez, this is a form of online gambling and its existence would require the state to renegotiate the Indian Gaming Compact with the state’s tribes.
This move is the latest from a state seeking to crack down on businesses that conflict with regulated gambling in the state. Whether it be couriers, sweepstakes casinos, or offshore betting sites, more states are looking to keep gambling under a regulated umbrella within its borders.
New Mexico latest to usher out couriers
Following Torrez’s opinion on their business, the DraftKings-owned courier, Jackpocket, elected to cease business in New Mexico.
Peter Sullivan, SVP of Lottery at DraftKings provided a comment to The Closing Line’s Dustin Gouker.
After receiving a copy of an opinion from New Mexico Attorney General Raúl Torrez, which was requested by tribes in New Mexico, Jackpocket has temporarily suspended lottery courier operations in the state. We are exploring options and avenues to find a resolution to this matter.
This is the second state that JackPocket has had to stop business in recently. Two weeks ago, Texas issued a ban on all couriers. Unlike New Mexico, Texas was open business for all couriers, not just Jackpocket, which led to issues with state lottery tickets being sold outside of its borders.
Connecticut is also in the midst of pursuing a legal courier ban, as a Senate Bill has been filed on the matter.
iGaming states targeting unregulated casinos
The focus on couriers is coming mostly from states that don’t have any type of legalized online casino gambling, Connecticut being the lone exception. Lawmakers and regulators are often quicker to act on unregulated gaming when it conflicts with regulated or state-operated gaming. For states like New Mexico and Texas, that means the lottery.
By contrast, in states that do offer iGaming, most of the focus has been on unregulated casino sites, rather than lottery couriers.
Bovada, a well-established offshore sportsbook and casino, was first served a cease-and-desist letter from Michigan this past summer. Following Michigan’s lead, other states began to do the same. That included all states with legalized online casinos, outside of Rhode Island. Now, 18 states and Washington D.C. have all managed to block Bovada from operating in their state.
Now, some attention has been turned to sweepstakes casinos. These online games are typically played with two forms of virtual currency, Gold Coins and Sweepstakes Coins. Gold Coins are available for purchase but can’t be resold for real currency. Sweepstakes Coins can be won through play or promotion and redeemed for prizes.
From the point of view of federal law, these “sweeps” sites are very different from offshore real-money casinos. Sites like Bovada are explicitly illegal, while sweeps sites are play-money social casinos that offer cash prizes under federal sweepstakes law. However, many gaming regulators see them as similar in that they aren’t locally-licensed, but are seen as competing for the same customers as regulated real-money casinos.
Michigan was one of the first states to work on expelling sites following the sweeps model, saying it violates the Lawful Internet Gaming Act. Other states have begun following suit this year, including Maryland and West Virginia.
Are trading markets the next targets?
The next form of gambling that could be the target of state regulators looks to be trading markets.
There was some legal battle over sites like Kalshi, PredictIt, and Robinhood being able to get into the US Presidential Election this past November, but the three were able to do so successfully.
Recently, Kalshi decided to begin pursuing sports prediction markets just in time for the Super Bowl.
Similar to sports betting, Kalshi offered customers the ability to purchase a contract for what team would win the Super Bowl, and those that held a contract with the winning team would earn a payout.
Kalshi has continued to open new sports markets, which has gotten the attention of Nevada.
The Nevada Gaming Control Board issued a cease-and-desist to the operator, ordering it to stop operations in Nevada by March 14. The NGCB says their business is illegal as its not licensed by the state commission.
As we’ve seen with other niche gambling forms, this could be the first domino of many to fall on prediction markets.
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