The Minnesota State Lottery has entered into a “memorandum of understanding” with New York-based Jackpocket, which, after a test run, recently began selling Minnesota lottery games through its smartphone app. Lawmakers and other opponents, however, said it is an unlawful expansion of gambling.
Lottery spokesman Adam Prock said the lottery is not affiliated with Jackpocket and that the new app is legal under a statute that allows “a ‘lottery service business’ that for a fee or commission purchases lottery tickets on behalf of customers or subscribers,” Prock said. He added, the lottery has told Jackpocket, “These are the rules that we expect you will live by, including making sure people live in Minnesota and are 18 years old.”
State Rep. Greg Davids, chairman of the House Taxes Committee, said he wants more information from the lottery but believes the app violates state law. He said under current law, lottery games must be sold on the premises of the retailer under contract; sellers cannot charge a fee to buyers; and tickets must be bought with cash or the equivalents specified in statute.
This is the second time in recent years that the state lottery has drawn the ire of the legislature. In 2015, lawmakers passed a measure banning the agency from selling tickets online or at gas pumps and ATMs without legislative approval. Davids co-authored that legislation.
Minnesota is the first state to offer Jackpocket’s app, said Chief Executive Officer Peter Sullivan. “We’ve had an open and great conversation with the Minnesota Lottery,” he said, adding the test run in Minnesota helped “make sure the lottery was comfortable” with the process.
Users sign up for the app and give Jackpocket a bank account number to create an account and purchase tickets. Jackpocket employees buy the tickets at a specific retailer in the Twin Cities area, whom Sullivan would not identify. Upon ordering, players receive an e-mail that matches their identity to the ticket serial number; an image of the front and back of the ticket appears on the app.
Winners with a payout of $600 or less receive a credit on their Jackpocket account for the full amount. The funds can be transferred to a bank account or used to buy more lottery tickets. For payouts over $600, Jackpocket’s website notes, “We will arrange to have the ticket delivered to you in a secure fashion so that you may claim your prize from the State Lottery.”
Jackpocket charges a 7 percent fee for the service and limits daily purchases to $100. Players must be in the state where they want to buy tickets; GPS technology allows Jackpocket to confirm their location, Sullivan said. Scratch-off tickets are not offered.
Davids said, “What could possibly go wrong with people giving this company their bank account number? You talk about the fox guarding the hen house.”
Minnesota’s lottery took in $563 million in 2017, a decrease of more than $29 million from 2016. Of that amount, $139.2 million went to the state budget, conservation efforts and gambling addiction programs.
