Courier Services Account For Less Than 1% Of US Lottery Sales In 2023

Courier services have become a buzz topic in the lottery industry.

These third-party operators that offer online sales of lottery draw games are expanding to more and more states each month.

Currently, 19 states in the US have at least one lottery courier service.

Recently, Eilers & Krejcik Gaming (EKG) took a deeper dive into these couriers and what impact they are having on lottery sales.

According to EKG, $120 million in revenue was generated by these services in 2023. That was through $905 million in sales.

Though some in the industry see couriers as a threat, they accounted for less than 1% of US lottery sales in 2023.

Jackpocket responsible for 64% of US courier revenue market

The US has five different lottery couriers currently operating within states:

  • Jackpocket: 17 states, Washington D.C., and Puerto Rico
  • Lotto.com: 10 states
  • Mido Lotto: 9 states
  • Jackpot.com: 6 states
  • TheLotter.com: 4 states

These couriers are able to make revenue by charging a percentage on deposits made or ticket purchases. Each courier is different, but EKG found on average they charge 15% of deposits. On top of that, they also will receive whatever percentage commission a state gives to lottery retailers if the courier owns that retail location.

According to EKG, of the $120 million in courier revenue last year, Jackpocket accounted for 64%, or $76.8 million.

Lotto.com brought in about 30% of the revenue ($36 million). That means the top two couriers were responsible for 94% of the revenue in the US.

Of the five options, those two were the only ones also to offer the purchase of scratch-off tickets in select states.

US lottery saw over $108 billion in 2023 sales

Though couriers are having a growing influence on the lottery industry, the impact is still quite minimal for now.

Last year, the US lottery industry had a total of $108.4 billion in sales, according to EKG.

The $905 million that courier services amassed equates to just 0.83%.

By comparison, another growing aspect of the industry, iLottery, had $7.96 billion in sales, which was 7.3% of the country’s total.

Here’s how the money broke down by category in 2023:

  • Total sales: $108.4 billion
  • Retail sales: $99.5 billion, 91.8%
  • iLottery: $7.96 billion, 7.3%
  • Courier: $905 million, 0.83%

What states generate the most lottery courier business?

Of the states that are offering courier services, the top five account for 92% of the revenue.

New York is the leading state, as it had nearly one-third of the $120 million in 2023. NY features Jackpocket, Jackpot.com, and Lotto.com all available for customers to use.

Texas, the only state with all five couriers operational, produced the second-most revenue last year.

Chris Krafcik, Managing Director of EKG, discussed the concentrated courier business during an appearance on Zero Latency: An Eilers & Krejcik Gaming Podcast:

“Another thing that was interesting to me was how highly concentrated revenue is in a very small number of states.

“The interesting thing about the revenue concentration also is the couriers are operating in (19) states worth about 35% of the US population. So, while the geographic footprint of couriers is fairly widespread, revenue is not.”

Here’s a look at the top five states and their market share from last year:

  • New York: $38 million, 32%
  • Texas: $29 million, 24%
  • Ohio: $18 million, 15%
  • New Jersey: $17 million, 14%
  • Massachusetts: $8.8 million, 7%
  • Top 5 total: $111 million, 92%
  • All others: $9 million, 8%

Lottery couriers projected to more than double sales by 2028

Though couriers are making up a very small amount of lottery sales right now, EKG does see this section of the industry growing.

EKG projected what the next five years will look like for couriers and envisions steady development.

While sitting at 0.9% of lottery sales in 2023, the report believes that number will expand to 2.6% by 2028.

The compound annual growth rate (CAGR) for courier revenue is 45% over the five-year window.

That rate is projected by expected expansion into other states, but Krafcik says it’s a conservative number:

“Depending on how you calibrate our model, you can get to some fairly sizable numbers, most of which, though, depend on additional geographic expansion, and then much deeper penetration of the instant ticket product.

“But our model is calibrated pretty conservatively right now and doesn’t make any sort of aggressive assumption about instant ticket penetration or growth.”

EKG sees couriers growing the most in the instant and scratch-off business. It forecasts a 76% CAGR over the five-year period that will lead to $1.3 billion in sales by 2028.

Draw-based sales have a 22% CAGR, expected to reach $2.2 billion by 2028.

 

Photo by vectorfusionart via Shutterstock

About the Author

Drew Ellis

Drew Ellis

Lead Writer
A member of Catena Media since 2020, Drew Ellis is the Lead Writer at PlayiLottery, where he handles coverage of the online and retail lottery industry in the US. He previously spearheaded news content at PlayMichigan, where he covered one of the most prominent online lottery industries in the US — among the many other aspects of Michigan's sprawling iGaming market. You can email him at [email protected].
Back To Top