Massive multi-state jackpots fuel surge in online ticket sales
By Kate Northrop
Lottery courier service theLotter is changing the way people in the state of Texas are buying lottery tickets, and two multi-state mega jackpots combined with pandemic-driven online sales are proving to be the perfect storm.
As 2021 kicks off with two multi-state lottery jackpots swelling over $1 billion combined, players are buying up their tickets in a frenzy any which way. Online ticket sales are surging now more than ever, and lottery courier service theLotter is here to ride the wave now that it has established itself in Texas under a new business model.
While theLotter has proven itself as a reputable international online ticket butler service in the past, the company has recently expanded its business model in the United States to offer its services to local residents looking to buy their state’s lottery tickets online rather than at a physical store location.
The ability for lottery players to purchase their tickets online fits right in with the numerous other businesses moving to an online sales model during the current pandemic. Add to that the current record jackpot levels for the Mega Millions and Powerball games, and theLotter’s sales model potentially makes playing the lottery more accessible for a greater number of players, while drastically increasing lottery ticket sales.
Last Thursday, theLotter reported record online sales for Texas Lottery products, the most recent addition to its online lottery ticket purchasing services. Although the company started doing business in Texas in 2019, their current online sales model went live on Jan. 6, 2021. Under this new model, only residents who live in the state of Texas are eligible to purchase Texas Lottery tickets.
“We enable Texans to play their favorite lottery games from the comfort of home,” Peggy Daniels, theLotter’s U.S. Managing Director said in a press release. “We have definitely seen an increase in the number of people searching for online alternatives to their local shops in the past year. In the past few days, we’re seeing huge numbers on our Texas website.”
In a survey of 2,268 census-balanced U.S. consumers conducted by payments and commerce platform PYMNTS, 75% of respondents who began shopping online and having their groceries delivered after March 2020 said that they would continue to do so once the threat of COVID-19 subsides. If there is one thing that has become more evident as a result of the pandemic, it’s that Americans are always looking for ways to take advantage of technology to find new ways of creating a sense of convenience and security in unfamiliar situations.
According to Daniels, theLotter essentially works as a conduit for the Lottery. For a small service fee, theLotter purchases lottery tickets from an official licensed Lottery retailer and stores them in a secure location on behalf of the customer. Players from Texas can purchase Texas Lottery products on a website dedicated only to customers who live in the state. To ensure that players purchasing Texas lottery tickets are actually located within state boundaries, the website uses geolocation checks that guarantee that the player isn’t from, let’s say, Louisiana at the time of purchase. The company also safeguards against underage gambling by performing identity checks through a back-end query after the players register with the site.
This method provides Texas players an alternative route for purchasing lottery tickets in a state where online ticket sales conducted by the Lottery are currently prohibited. Another benefit to players is the added ability to play the lottery anywhere and anytime, right from home or on the go from a smartphone.
In addition to convenience, Texas Lottery Executive Director Gary Grief noted that another advantage is the security and reassurance this model provides players when losing a physical lottery ticket is of great concern.
“The couriers eliminate that type of problem because once your ticket is purchased on your behalf, they maintain the physical security of that ticket, and you have an electronic record on your smartphone of the purchase,” Grief told Lottery Post.
In the state of Texas, the retailers at which lottery courier services (including theLotter) purchase lottery tickets rank consistently among the top three performing retailers in the entire state by exponential amounts, regardless of whether jackpots are high or at low starting levels.
“That alone gives anyone a clear picture of the potential that all state lotteries have in selling their products online,” Grief said.
Whether a state Lottery will begin to start selling tickets directly online to its players is something that is up to each individual state’s legislature. While it is probable that online sales could generate more revenue for the causes and programs a state supports, many states do not currently offer the option in order to mitigate the risk of underage gambling. Another concern that some legislatures have is potentially encouraging excessive and harmful gambling behaviors by allowing the lottery to become even more accessible to players in an unregulated way.
However, other states like New Jersey and New York have either developed or are currently developing a structured model in which lottery ticket courier services like theLotter could expand their operations in a regulated environment.
“One could argue that the overregulation of the courier model might actually end up inhibiting sales and inhibiting people’s desire to use those services,” Grief explained. On the other hand, “an unregulated environment might be more conducive to allowing players to utilize [theLotter’s] app,” especially in an age where the up-and-coming player base expects, if not demands, an availability of Lottery products at their fingertips.
Other states do not currently have a registration or application process for companies to act as a registered courier, such as Oregon. Currently, theLotter serves Oregon residents as it does Texans, where only residents located in Oregon may purchase Oregon Lottery tickets.
theLotter’s expansion into other states like Texas could be the next big move that paves the way toward a movement where online ticket sales become the norm in the lottery and gaming industry. According to Daniels, state-by-state legislation is where things get complicated. For example, in some states, seeking approval as a lottery courier has the potential to affect indigenous groups who hold tribal gambling compacts with the state.
Within the same vein, each state lottery is structured and run differently. While this makes the timeline for universal online sales fragmented and unknown, Grief suggested that lotteries should think about how to seize the attention of the next generation of lottery players.
“[State lotteries] are prone to make advancements and innovations at very different speeds depending on how much flexibility their legislature gives them,” Grief said on Wednesday. “I think it’s inevitable that Lottery products will totally be sold on the Internet at some point in the future. It’s just a matter of time.”
It is exciting to imagine how the lottery and gaming industry might change to fit the digital wants and needs of consumers, as well as how companies like theLotter are looking to transform the way people play the lottery. With two huge multi-state jackpots continuing to grow, courier services and online sales just might be the extra boost needed to energize players and bring us out of the jackpot drought of 2020.
“Players have been starved for big attractive jackpots throughout the pandemic,” Grief remarked. “Powerball and Mega Millions games have been through a period where our sales haven’t been what they’ve been in the past; our starting jackpots are slower than they’ve been. Players are excited… Please play responsibly, know that it’s just a game, and it only takes one ticket to win.”