Loophole in New Jersey’s Lottery Ticket by Courier Law Allows for Online Lotto Sales

When lawmakers in New Jersey passed Assembly Bill 3904 last December, the proposal to “authorize operation of lottery courier services” didn’t garner much attention.

And even as Governor Chris Christie signed AB-3904 into law in mid-February, local media and legislative watchdogs barely took notice.

But thanks to an op-ed published by the Press of Atlantic City on February 26, the full extent of the new law’s scope on New Jersey’s lotto landscape has been revealed.

As the op-ed asserts, the loosely worded legislative language contained in AB-3904 – which was co-sponsored by state senator Jim Whelan and Assemblyman John Burzichelli – actually creates the legal framework for lottery ticket distribution over the internet.

Despite the word “courier” occurring 41 times in the brief bill, the Press of Atlantic City interprets AB-3904 as allowing lottery tickets to be sold through online clearinghouses:

“The law will grant a chosen company is the legal right to sell N.J. Lottery tickets to people online, to take their credit card payments, buy and hold the tickets for them, and redeem and pay them their winnings, if any.

All the transactions can take place online. No courier is needed. No one is going to take the ticket to the player, or hand deliver winnings.”

Indeed, as written, AB-3904 authorizes the State Lottery Commission to license third-party companies as suppliers of New Jersey’s various state-ran lotteries. And while those companies are ostensibly supposed to be using physical courier services to collect payments, distribute tickets, and dispense winnings, a closer look at the law shows that the internet can easily be used to consolidate those aspects of the business.

Section 3 of AB-3904 states unequivocally that courier services must operate a website, while outlining various consumer protection measures typically associated with e-commerce:

“In accordance with the rules and regulation promulgated by the commission, a registered courier service shall maintain an Internet site … shall safeguard the personal information, including credit card numbers, and properly verify the age and physical location of customers utilizing the service.”

Furthermore, as pointed out by Steve Ruddock of Online Poker Report, the following language found in Subsection C of Section 5 creates the conditions for an exclusively online experience:

“In lieu of delivery of a purchased lottery ticket to a customer utilizing the courier service, a courier service may store such ticket on behalf of that customer, with the customer’s consent, if the courier service provides an electronic receipt of the ticket purchased with the numbers of the ticket shown on the receipt.”

Per the Press of Atlantic City report, a Malta-based company called Lotter Enterprises provided the lobbying muscle needed to push AB-3904 through the legislative chamber and to Christie’s desk. Lotter Enterprises specializes in selling American lottery tickets internationally, and garnered mainstream coverage in 2015 when a man traveled from Baghdad, Iraq to Oregon to claim his $6.4 million jackpot win.

The company plans to apply for licensure by New Jersey’s State Lottery Commission when the courier law goes into effect on November 1.

Under the law, only players physically located in New Jersey will be able to legally purchase the state’s lottery tickets online. Unlike the state’s online casino and poker legalization, however, the online lotto bill fails to specify any methods of geolocation, or similar practices, used to verify a transaction’s point of origin.