While other states ban, New Jersey aims to better incorporate couriers into the state lottery economy
By Kate Northrop
Last week, the New Jersey Lottery announced proposed rule changes that would regulate courier services and allow them to continue operating in the state.
While other states ban or consider pushing out lottery courier services, New Jersey is looking for ways to adjust its rules that would effectively "streamline" courier operations and allow them to "operate more efficiently."
The proposal was released to the public in order to "modernize operational requirements while maintaining the integrity and reputation of the Lottery," the New Jersey Lottery stated in a press release on June 4.
Many of the rule changes clarify the administrative and compliance requirements for courier services to align with current industry standards and operate in the state. Proposed revisions consist of changes to licensing, insurance, financial reporting, and the purchase and delivery of lottery tickets by couriers.
"The proposed rules are expected to streamline processes for couriers and enhance the Lottery's oversight functions," the New Jersey Lottery said.
As it stands today, the New Jersey Lottery distributes "dedicated terminals... solely for the purchase of tickets on behalf of courier service customers" to courier services. Couriers are currently provided with their own terminals programmed to exclusively allow ticket purchases from players using their platform. These terminals are designed to produce tickets for only authorized games and are not be eligible for any Lottery-approved promotions, unless the Lottery Director authorizes it. Courier services are not permitted to use any other terminals to facilitate purchases on behalf of their customers.
Providing couriers with their own devoted terminals separate from the machines regularly located at the checkout counter in convenience stores is a way for the Lottery to maintain financial control, regulatory enforcement, and consumer protection.
The main takeaway from the New Jersey Lottery's proposal only has to do with a new separation of funds between a courier service and their affiliate retailer. The rules in New Jersey stipulate that a lottery courier must have their own courier license, and they must partner with an affiliate retailer, such as a convenience store, to house their operations.
Lottery Post spoke to New Jersey Lottery Chief Communications Officer Missy Gillespie for more clarification on what the proposed rule change means. The change, Gillespie explained, further reinforces the Lottery's oversight and better allows auditors to trace discrepancies back to their source.
Under the current rules, courier services maintain their own financial accounts with the Lottery that facilitate money transfers, often called "sweeps." The brick-and-mortar retailer affiliates have their own accounts set up with the Lottery as well, but sales receipts for both the couriers and their affiliates are submitted to the Lottery as one blended set of funds, which can make reconciling data complicated.
Affiliates are "required to collect the net lottery receipts from their associated courier service in sufficient time to deposit the funds in said bank by the dates specified by the lottery," the proposal reads. The Lottery's proposed changes would create a degree of separation that would remove the burden on the brick-and-mortar retailer to collect those necessary funds from their courier partner.
When money flows separately, it provides a clearer audit trail and makes tracking sales and shortfalls occurring at the same physical location much easier. Lottery officials will be able to quickly tell whether discrepancies originate from the affiliate agent's regular sales or the courier service's online sales.
If a regulatory issue ever emerges, it additionally means that the Lottery can manage the courier's or affiliate retailer's dedicated terminals without shutting down the other party's regular business. Each business can focus on their core operations without being held responsible for their partner's financial compliance.
This change also simplifies the Lottery's process for paying bonuses and commissions for ticket sales. Currently, the Lottery distributes these commissions to the affiliate, which would then be responsible for passing the appropriate amount along to the courier. The rule changes would allow the Lottery to pay commissions "separately to the affiliate agent and courier service based on individual lottery terminal sales from the agent's terminal(s) and from the courier's dedicated terminals."
Lastly, the Lottery included language in their proposal that protects the state and Lottery Commission in the event an error occurs while a player uses a courier service. Players cannot hold the New Jersey Lottery and state government responsible for any technical errors or payout issues.
For example, should a courier company hypothetically fail to purchase a ticket on a player's behalf, a prize payout doesn't occur, or a glitch impacts a player's experience, only the courier company can be held liable. It essentially means that the New Jersey Lottery is fine with allowing these private third-party services to operate, but they are simultaneously not responsible for their mistakes.
Courier services would also be required to document errors, such as tickets printed by mistake, and submit daily reports for erroneously printed tickets to the Lottery.
The 60-day public comment period is live. Members of the public can view the full text of the proposal and have until Aug. 1, 2025 to comment on the proposed rules, with instructions on how to do so available on the Lottery's official website.
Don't use couriers look what happened to the winner in Texas. Buy your own tickets, check your own results, keep your mouth shut!
Glad to see that NJ is playing it smart{ not stumbling and bumbling like TX has been doing lately}. Regulate them and make sure they stick to the rules. If NJ gets it right, they stand to reap the rewards because these couriers do a tremendous amount of business. Win, win for everybody. More revenue into NJ's coffers and more convenience for the players.
Jackpocket was easy to use in NJ then they got bought by DraftKings and now their fee structure is more expensive. Better to go to a local store and allow the local owners to make small profit at least.
When will customers be able to buy on line or with their phones?? Must a stranglehold against that in New Jersey!
I think this is New Jersey's way of allowing online sales without weakening the retailer model. You can see in the story that they are even forcing couriers to maintain their designated lottery terminal within a traditional retailer's premises.
For states that have too powerful of a retailer lobby, this is a good way to go. Banning is bad and unnecessary.
"One mans meat is another mans poison"
So goes the saying.
What exactly is this service designed to do? Do they deliver lottery tickets or something? I'm kinda confused by this......
A lottery courier allows someone to play their state's lottery games over the Internet. What you are doing is paying a company a small extra fee to go to a store for you, buy the lottery tickets you request, and hold them on your behalf. If your ticket wins, they will redeem it for you and give you the money. But if you were to win a prize big enough to claim at lottery headquarters, they would arrange to hand you to the winning ticket, and you would take it yourself to lottery headquarters to claim the prize.
Some people might think it makes more sense to skip the service fee and just buy the tickets themselves. But there are others for whom this courier service is incredible value. Think about people who are homebound with no access to a store. The elderly, the disabled, rural folks far from a lottery retailer — or maybe just someone burnt out after working a couple of shifts. A courier service provides a way to play the lottery, where before they would simply be denied due to their circumstances.
The New Jersey Lottery is doing a great service to the public, by properly regulating courier services, rather than banning them.
Makes sence. Thanks for the info!
that might work for you,but I am in New Zealand (That is a country at the bottom left of the Pacific ocean.. (That body of water off the west coast of USA)
My experience as a foreigner living outside USA..
My courier service allows me to buy tickets in overseas lotteries. I play worldwide over the Internet
Some services buy your "ticket" (your order) and scan it (to "prove that they bought it" :)). Some (My service) just seem to add the lines I buy to their total order.
If your ticket wins anything, they claim the prize (but your account is credited immediately.. It may take time to actually get the cash for larger wins).
The courier pays any withholding tax (or it is taken out before they get it) and they deposit that money into your online account, and funds can be transfered to the bank of your choice..
My service claims that all wins are anonymous.. I assume that means that they would use the company to claim major prizes (Unlike the case of one company that had to go to court to keep an Iraqi winner of several million dollars anonymous.).. Not sure how that would work in USA where the company tax rate is 21% and the Federal withholding tax I would be liable for is 30% (as a nonresident alien, I am taxed at 30% on any taxable winnings... Sucks a bit at the lower levels, but a massive jackpot.. the 7% difference between US residents and me, that adds up. )
* That's right. This " kill the patient to cure the disease " mentality by other State lotteries isn't helpful in any way to it's players.
* Just an opinion, but having LP based in the State & being the 400 lb Gorilla in the game, officials made a smart decision.
Seems fishy. If an outside entity can buy tickets. So if I don't wanna pay taxes in my state on a win. I can purchase a ticket in a different state as long as they have a currier service. " example california because there's no state tax on lottery winnings" Then it makes me wonder if said service would stiff you if you won? This is just my opinion... But it seems this could turn into tons of problems that can arise from this. I was thinking it was geared toward people who could not get to the stores in the state's they claim residence in. Handicapped. Being in a different state on work vacation ect ect ect.🤷♂️ And thanks for the info!
Something you have to remember: Courier services charge for their service. That increases the price of a ticket. e.g. A US Powerball line costs me US$4 and a MM line costs $8.45. Are you willing to pay "double" every time you buy tickets just in case you win "big"? I pay because that is my only option.. but I do limit buys to higher jackpots :)
Your bank might have reporting responsibility locally. (Person X received Y dollars from lottery provider Z.)
And.. avoiding paying state tax on a win will come back to bite you.
As for the service stiffing you..
A fly-by-night "cowboy outfit" (Non-US meaning of "cowboy outfit" :)) might not care about their reputation, but a real business? They need to be seen as reliable. word would quickly get around. The company that went to bat for their Iraqi client to protect his identity only did their reputation good.