The New Jersey Lottery Commission (NJLC) has approved the sale of draw tickets online, joining a growing list of states to offer an iLottery. However, players in the state will have to wait until the fall of 2024 to play the online lottery housed by the state lottery website.
Until then, they can buy tickets online through lottery ticket courier services like Jackpocket and Lotto.com.
Meanwhile, it took almost a year for the commission to approve the online lottery, as the rule was proposed in Sept. 2022.
So it’ll be a total of two years from proposal to launch. Scheduling the iLottery debut for 2024 will give the lottery commission time to figure out details.
What’s already clear is as follows:
- Online sales will include draw-ticket games like multi-state options Powerball and Mega Millions.
- It will also include state games like Jersey Cash 5.
- The iLottery won’t include eInstants. Instant win games (scratch-offs) account for a large percentage of lottery sales in the state.
Lottery officials told NJ.com that one of the goals of launching an online lottery option is to attract younger players:
These new lottery players, primarily under the age of 40, who are more online, are essential to the long-term viability and success of the Lottery.
Facing backlash from lottery retailers, lottery officials said they believe the online lottery is in the state’s best interest. By offering online options, the New Jersey Lottery wants to ensure it stays relevant to consumers looking online for shopping, entertainment, and information.
Over a Dozen States Have Official Online Lotteries
New Jersey will become the latest state with online lottery sales. The Garden State will join seven others offering a draw-only online lottery:
- Connecticut (launching in late fall)
- Maine*
- Maryland*
- Massachusetts*
- New York*
- North Carolina
- North Dakota
*by subscription only
Recently, North Carolina announced that on Nov. 15, it will also start selling instant win tickets online. The state will join eight states and the District of Columbia that offer full-featured online lotteries with instant games. Those include:
- Georgia
- Illinois
- Kentucky
- Michigan
- New Hampshire
- Pennsylvania
- Virginia
Meanwhile, Rhode Island offers instant win games online but no draw games.
Elsewhere, a bill in Massachusetts failed this year. But with the increased popularity of online lotteries, it wouldn’t be a surprise that other states will offer online lottery options soon.
Online Lottery Sales Could Reach Over $5 Billion in 2023
The interest in the lottery is growing across most states. The recent $1.58 billion Mega Million jackpot was the fifth over $1 billion in the past year. With the increased interest, online lottery revenue is also growing.
According to statistics and consumer data provider Statista, US online lotteries will generate $5.23 billion in 2023. Statista also forecasts that the number will rise to $6.84 billion in 2027, with an expected annual growth rate of 6.94%.
The report also estimates the number of people playing online lottery in 2023 is 11.3 million. By 2027, that number is expected to grow to 13.9 million. The penetration rate (percent of the population) is 3.4% in 2023 and will rise to 4% in 2027.
Online Lottery Does Not Cannibalize Retail Sales
One of the biggest concerns for expanding online lottery sales is the impact on retail outlets, many of which are small businesses. Opponents fear that an online option would take away sales from those businesses.
In a statement, Eric Blomgren, chief administrator and director of government affairs of the New Jersey Gasoline, Convenience Store, Automotive Association, said:
I just can’t imagine that this won’t take business that would have otherwise been in neighborhood stores, whether that’s irregular players jumping in on a jackpot now doing it on their phone, or regular players making a portion of their purchases online.
Contrary to Blomgren’s beliefs, the myth of online sales cannibalizing retail sales has been debunked in other states. According to the North American Association of State and Provincial Lotteries, the online lottery has increased awareness and attracted new customers in all states where it is offered. Many of those new customers are younger. At the same time, retail sales are not impacted negatively.
A 2022 Spectrum Gaming report, commissioned by NeoPollard Interactive, further backs up the online lottery impact. The report analyzes Pennsylvania and Michigan, where retail revenue increased after the introduction of online lottery.
In Pennsylvania, retail lottery sales in 2017 (the year before online sales) were $4 billion. By 2021, retail sales grew yearly to over $4.4 billion, an increase of 10%. Meanwhile, retail lottery sales in Michigan were $2.5 billion in 2013. That number has grown yearly since; in 2021, it was over $4.6 billion, marking an 87% increase in eight years.
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