New York regulators adopted new rules this week that may hamper lottery couriers in allowing players to automatically make deposits.
The Empire State is one of two states, along with neighboring New Jersey, that licenses lottery couriers such as Jackpocket, which allow players to purchase lottery tickets online provided they are in the state.
However, the New York State Gaming Commission passed new rules on Monday (December 4) that are intended to prevent players from coming into the state, placing a recurring order, and then returning to their home state to fund the account, citing concerns that failing to do so may violate federal laws on interstate wagering activity.
The revised rules require the player to be in the state not only to purchase a lottery ticket but also while funding the account through an online payment.
“The regulation would require a customer’s presence in New York both at the time the customer requests the delivery of a New York lottery ticket through the courier service network and at the time the customer directs the courier to apply existing customer funds to such New York ticket-delivery order,” the commission said in a response to public comments on the issue earlier this year.
Licensed lottery couriers such as Jackpocket and Lotto.com were critical of the proposed rule, with both companies saying that the rule would have “unintended consequences” that would limit offerings beyond what the commission intended.
Jackpocket argued that funding a digital wallet is not the same as buying a lottery ticket.
“It is a completely separate transaction, akin to taking out cash from an ATM machine to purchase a ticket,” the company said in comments on the rule.
The company specifically expressed concern about the rule’s impact on its auto-fund feature, which allows customers to automatically refill their account with a set payment method whenever their balance drops below a certain amount.
“It is the interplay of such functionality that raises the federal-law concerns that give rise to this proposed rulemaking,” the commission said in response to concerns about auto-funding features.
“The commission, through the adoption of this proposed rulemaking, will prevent Jackpocket from allowing the funding of lottery-purchase-related services while the lottery courier customer is outside of New York.
“Allowing such automatic replenishment of funds to purchase lottery tickets when requesting delivery, staff believes, unduly risks violating the federal prohibitions on interstate lottery activity,” the lottery commission said.
The commission adopted the rule unanimously, with one member abstaining from the vote for unspecified reasons.