New York gaming regulators are continuing to tighten rules governing lottery couriers, approving a rule change that would limit players' ability to fund accounts from outside the state.
New York is one of only two states in the U.S. to officially license lottery couriers, with three licensed courier businesses in operation in Jackpocket, Lotto.com and Jackpot.com.
However, the New York State Gaming Commission (NYSGC) has recently begun to tighten the reins on lottery couriers, with the latest move being a provision that would restrict customers from placing an order for multiple lottery tickets for future drawings while in the state, and then leave the state and fund the purchase remotely.
Under the new rule approved on August 3, players must cover the full cost of such an order while in the state, or the courier must set aside funds in the player’s wallet to cover the order through either account balance or a credit or debit card.
A previous version of the regulation would have limited players from funding their accounts from outside the state entirely, which couriers argued could have unintended consequences.
“Funding the Jackpocket wallet is not an act of purchasing a lottery ticket,” Jackpocket said in public comments filed with the commission. “It is a completely separate transaction, akin to taking out cash from an ATM machine to purchase a ticket.”
In its comments, Jackpocket pointed out the example of a player who deposits funds into their wallet in New Jersey and then uses those funds to buy a New York lottery ticket while they are in the state.
“Such a transaction would satisfy our concerns,” said Robert Williams, director of the NYSGC.
“However, to ensure compliance with the federal interstate lottery activity prohibitions, the proposed regulation would prevent a lottery courier service from allowing the customer to order the lottery ticket in New York without having funded it, leave the state and then while elsewhere fund the New York lottery ticket purchase.”
Williams said that in further conversations with Jackpocket, the company expressed concerns about the rule’s effect on its autoplay features, which allows players to subscribe to a lottery with Jackpocket automatically ordering tickets for each drawing, and auto funding, which allows players to set an automatic reload and a payment method for doing so when their account drops below a certain balance.
Those features, Williams said, would not be permitted under the new rule, as players would be required to fund the entire order at the time of the purchase, while in the state.
“Staff believes allowing such automatic replenishment funds to purchase lottery tickets when requesting delivery, unduly risks violating federal prohibitions on interstate lottery activity,” he said. “In this matter, the commission can be assured that the entire lottery-related transaction occurs only within New York, as federal law requires.
“In the commission's lottery subscription program, by contrast, a player must fully fund the series of future ticket purchases at the time of the purchase request and be in New York State at the time of such funding.”
The rule approved will sit for another 45-day public comment period before it can be adopted and published.
Earlier this year, the commission also passed new rules that prohibited lottery couriers from indicating that customers can “play the lottery” or “buy lottery tickets” when marketing their service in New York.
Regulators argued that the reputation of the lottery could be hurt if a courier failed to follow through with the customer’s order and actually purchase the ticket on their behalf.
Jackpocket recently released a series of proposed best practices for lottery courier services, including a recommendation for couriers to coordinate their marketing activities with those of state lotteries.