New York Authorizes Digital Sale of Lottery Tickets

New York has authorized the sale of lottery tickets online, allowing consumers to purchase scratch-off cards and withdraw rewards via their mobile devices.

Lottery Goes Digital in New York

On Tuesday, New York regulators have announced that the state lottery will begin offering mobile scratch-off tickets to consumers in a bid to bolster gambling revenue and as a precursor to a proposed plan to grant a state-controlled entity full control over a future mobile sports betting market.

While discussions continue about how many stakeholders should be allowed to take care of business in the mobile sports betting vertical, the New York Gaming Commission has pressed on with a decision that now enables consumers to buy scratch-off tickets remotely.

Moving forward, an app is accepting purchases for tickets for popular games such as Mega Millions and Lotto, and the Lottery is also exploring opportunities to start offering instant tickets in the next couple of months.

Naturally, the digitalization of ticket sales has prompted concern among retail venues that rely on ticket sales. However, the need for change is clear, argued Jackpocket CEO Pete Sullivan, who is head of the company that now operates the mobile app enabling the sale of tickets. Cited by the Associated Press, Sullivan had this to say:

“I don’t think we’re going to change the behavior of people like my father who go to the same corner store every day. But … if we can provide somebody a safe alternative and a new distribution model, I think it’s a win-win.”

-Jackpocket CEO Pete Sullivan

Payouts and Retail Businesses

Apart from looking to appeal to new demographics, the Lottery is trying to make up for recent drops in revenue. Aid to education has dropped by 9% to $2.25 billion according to preliminary estimates for the fiscal year that ends on March 31.

Jackpocket is providing the service slightly different, depending on the product a person is purchasing. Players who wish to participate in lottery drawings will get a scanned image of tickets that have been bought on their behalf whereas the scratch-off tickets ordering system is different and users can use their apps to load an original ticket in their phones.

The app charges a 9% fee on deposits, so keep this in mind. Any winning scratch-off cards must be cashed in at a retail shop if they prove winners and winning deposits under $600 can be deposited straight into the consumers’ accounts saving time.

For larger prizes, Jackpocket can arrange deliveries or consumers can go out and pick them up from designated locations. While convenient to consumers, the New York Association of Convenience Stores has raised concerns that the parties distributing winnings may need licenses to act as facilitators for payouts.

The association is also uncertain whether the digitalization of the industry would come with new challenges for the industry and specifically start depleting retail businesses from revenue. According to Jim Calvin has commented, arguing that it’s too early to tell.