Former NJ DGE Director David Rebuck Sees iLottery As Online Casino Gambling

In the gambling world, iLottery seems to be expanding at a greater pace than online casinos.

There are more than a dozen states with online lotteries, but iGaming exists in just seven.

To former New Jersey Division of Gaming Enforcement (DGE) Director David Rebuck, the two forms of gambling are one and the same:

“With online lottery programs, they are nothing more than online casino gambling. Some states that don’t allow online gambling have online lottery sales, so it’s about states deciding what’s important to them to regulate.”

Rebuck has completed four decades of service for the state of New Jersey. He was director of the DGE in the state since 2011 when he was appointed by then-governor Chris Christie.

Lottery courier services succeeding in New Jersey

New Jersey doesn’t offer online lottery purchases through the state. However, it does have courier services available.

Currently, both Jackpocket and Lotto.com offer online purchases of NJ retail lottery tickets through a third-party service.

TheLotter.com is set to become a third option for New Jersey in the near future.

Rebuck told EGR that he was surprised by the success these courier services have had in New Jersey:

“In New Jersey, the DGE worked with the Lottery Commission to review Jackpocket, which was recently acquired by DraftKings, in obtaining a license to operate in the state. At the time, everyone at the division was like, ‘why would anybody buy an online lottery ticket?’ There are probably 3,000 retail sellers in New Jersey and you likely pass 10 on your way to work each day. We thought no one is going to do this. Why would you pay a premium for a lottery ticket when you can just go to any store.

“Then we saw the numbers. They blew us away. We could not believe it. I asked my kids, ‘why would people do this?’ It simply came down to convenience. They buy everything online. Now I get it.”

Through the help of courier services, New Jersey saw March be its seventh-highest month for lottery sales ever at $348 million.

Jackpocket also producing as online casino

Jackpocket has become a trendsetter for how a lottery operation can navigate into online casinos.

The courier opened up an iGaming application in New Jersey and is seeing rapid growth.

February’s gaming revenue was up 282% from January, climbing from $210,000 to $800,000.

The cross-promotion ability between lottery and casino has shown a better acquisition rate than sports betting to casino.

DraftKings was willing to pay $750 million to purchase Jackpocket and noted that acquisition costs for players from the lottery app are 80% lower than what it takes from its own database.

If DraftKings and Jackpocket can find a way to grow the lottery-casino partnership, it could entice other states to be more comfortable with both online options.

A holdup for states beyond just their comfort level has been tax revenue and funding. Most lotteries see their funding going toward education. Online casino revenue is more spread out to a number of needs throughout each state.

New Jersey battling with potential iLottery expansion

New Jersey has been in the works to legalize an online lottery.

In September 2022, a rule was proposed by the NJ Lottery Commission that would allow it to sell tickets to residents through the internet and mobile lottery apps.

The rule change would only apply to lottery draw games, such as Powerball, Mega Millions, and Jersey Cash 5. Residents would still only be able to purchase scratch-off games via retail vendors.

However, Bill A3759 was introduced during this year’s legislative session aiming to stop iLottery from advancing in New Jersey.

The bill reads:

“Not withstanding any other provision of law, rule, or regulation to the contrary, no lottery or type of lottery or lottery game shall be permitted to be sold via the internet by the State Lottery Commission, any entity of the State Lottery Commission, or any entity contracted by the State Lottery Commission.

“The State Lottery Commission shall not name itself, any entity of the State Lottery Commission, or any entity contracted by the State Lottery Commission as a lottery sales agent pursuant to the ‘State Lottery Law.’”

Bill A3759 was introduced in the NJ Assembly on Feb. 22 and was referred to the Assembly State and Local Government Committee. However, no hearing date has been set. Unlike other states, New Jersey holds legislative sessions open throughout the year.

Plans called for online lottery to begin in New Jersey during the fall of this year.

 

Photo by Dana.S 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].
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