AP NEWS

Mobile lottery app Jackpocket aims to begin selling Ohio Lottery tickets in 2019

October 8, 2018

Mobile lottery app Jackpocket aims to begin selling Ohio Lottery tickets in 2019

CLEVELAND, Ohio – Would you be more likely to try your luck at the lottery if you could do so from your cell phone anywhere in Ohio, skipping the line at the local gas station or convenience store?

The people behind a mobile app called Jackpocket believe so, especially for the under-35 crowd.

Their goal is to begin operating in Ohio next year, with or without a deal with state officials.

For now, it takes going to a handful of other states to play the lottery with a mobile phone.

Jackpocket in late June introduced the mobile option in Minnesota. Two weeks later, a 20-year-old Concordia University student won $1 million playing Powerball. His winning ticket was purchased not using cash, but rather promotional credits for referring a friend to the app.

Here’s how it works:

A player pays a 7 percent fee to load money to an online account, and then uses the app to buy tickets at any time while physically in the state, confirmed by GPS.

Preferences can be set for automatic purchases once a jackpot reaches a certain amount. There is a $100 per day limit. Scratch-off tickets are not sold; only other plays.

Technically, the player is placing an order; not buying a ticket. Jackpocket then buys a physical ticket at a retailer and sends a scanned image to the player as confirmation. In Minnesota, Jackpocket owns the retailer, Mike Zipper’s Fun Merchandise in St. Paul. Jackpocket went through no special licensing with the state lottery beyond what is normal for other retailers.

Winnings, unless over $600, are automatically transferred to the player’s account. The player can then transfer that money to their bank account. Because of tax laws, when prizes are larger than $600, the player is provided a ticket to personally cash out.

“The reason this is legal is that they are actually purchasing the ticket from the actual lottery retailer,” said Adam Prock, spokesman for the Minnesota State Lottery. “They are working as a courier service.”

Critics have argued that this amounts to unauthorized online gambling in Minnesota, but nothing has been done by the legislature or other authorities to stop the business. The lottery asks that Jackpocket follow all its standard regulations, the state lottery’s Prock said.

Jackpocket began operating in New Hampshire late last year, added Minnesota this year and will launch soon in New Jersey and New York, Chief Executive Officer Peter Sullivan said.

Danielle Frizzi-Babb, spokeswoman for the Ohio Lottery, said state lottery officials have not attempted to answer legal questions because they haven’t gotten to the point to consider a proposal from Jackpocket or anyone else.

“Vendors come here all the time pitching to us. They did come forward about a year ago,” Frizzi-Babb said. “We did not move forward and have not at this point.”

Sullivan said he wants to work with the administration of the next governor, who will take office in January. The Ohio Lottery director and the lottery commission members are appointed by the governor.

Without a formal arrangement, Sullivan said he believes Jackpocket could still expand into Ohio. Orders could be completed by buying tickets through a licensed Ohio Lottery retailer, as is done in Minnesota, he said.

Asked if this type of arrangement would be legal, Dan Tierney, spokesman for the Ohio Attorney General’s office, said:

“Ohio law in general does not prohibit someone getting a lottery ticket for you. People participate in lottery pools all the time. There is no statutory prohibition on that.”

Tierney, however, said he was limited in how much he could say now because the attorney general is the lottery’s legal representative.

Rich Exner, data analysis editor for cleveland.com, covers casinos and the lottery. Follow on Twitter @RichExner. See cleveland.com/casino for other Ohio gambling industry news.

AP RADIO
Update hourly