Couriers are the current “buzzword” in the lottery industry.
With a lot of big new developments for third-party lottery companies, couriers seem to be making a notable splash in the first eight months of 2024.
When it comes to the leader of couriers, Jackpocket, its success is certainly not an overnight sensation.
Now operating for 11 years after launching in 2013, Jackpocket made the biggest wave in the last year when it was purchased by DraftKings for $750 million in February.
That opened the door for lottery to join the online gambling space alongside sports betting and casino.
PlayiLottery had the chance to recently speak with Jackpocket founder Pete Sullivan, who is now SVP for Lottery at DraftKings, about what is ahead for the US courier industry and how it can earn the trust of lawmakers who could prevent its further expansion.
How Jackpocket works
Jackpocket is the most accessible courier in the United States.
Offering online sales of retail lottery tickets, customers purchase games they would like through Jackpocket via its mobile app or website.
The company then goes to a physical retail location in the state where the lottery tickets are located and makes the transaction for the customer. Jackpocket scans the purchased ticket and provides that for the customer to verify the transaction was made.
Similar to states with online lotteries, a customer receives winnings up to $600 through their account. Should someone win a prize above that total, Jackpocket arranges a way for the player to receive the actual winning ticket to take to their state lottery office.
Jackpocket earns money in this process by charging a fee of about 9% on deposits customers make.
While five different couriers operate in the US, Jackpocket is the one leading the way when it comes to accessibility.
It is available in 17 different states, along with Puerto Rico and Washington D.C. Altogether, couriers are available in 21 different US states. The states that include Jackpocket are:
- Arizona
- Arkansas
- Colorado
- Idaho
- Maine
- Massachusetts
- Minnesota
- Montana
- Nebraska
- New Hampshire
- New Jersey
- New Mexico
- New York
- Ohio
- Oregon
- Texas
- West Virginia
Why Jackpocket has been able to succeed
Jackpocket has put a lot of effort into providing a good user experience with its product.
Based on iOS download data through Sensor Tower, Jackpocket is the most downloaded lottery app in the US.
Its platform alone has a 4.8-star rating and over 180,000 user ratings available, giving potential new clients a lot of information to base their selection on.
That has led to the company reaching over $1.5 billion in sales since it began operation.
The user experience is a big reason why Sullivan believes Jackpocket is where it is now:
“We attribute our success to the exceptional user experience our app provides as well as our dedicated fan base. The reception from new and long-time lottery players has been terrific. Long-time lottery fans appreciate the convenience of ordering a ticket right from their phone, and we’ve had great success introducing the lottery to a younger, tech-savvy generation who otherwise would not be active lottery players through compelling, easy-to-use features.”
Jackpocket is tapping into a younger lottery player, as well. Sullivan says its data shows strong use by players under 40, with 67% of Jackpocket users ranging from 18-45 years old.
On top of reaching a new audience, Jackpocket has also been able to expand on its gaming options over the years.
It doesn’t just offer tickets, it now includes different options on how to play the lottery.
Most recently, the Super Pick feature has been introduced. This option allows users to play every special and standard ball option in the game with a single purchase.
With Mega Millions featuring five standard numbers, 1-70, and one gold Mega ball ranging from 1-25, this tool allows players to have 25 quick picks that will feature every possible number at least once in the 25 tickets.
Jackpocket also offers giveaways for its customers that include trips, event tickets, and lottery credits.
Jackpocket among few lottery couriers to provide scratch options
While Jackpocket has lottery draw games available in the states where it operates, it only offers scratch tickets in two of them at this time. Those are Texas and Colorado.
Scratch sales make up the majority of lottery sales in the US, so couriers developing a bigger presence with scratch games is a big key to their growth.
While draw purchases don’t have as much urgency, customers buying scratch tickets expect a little more timeliness.
According to Eilers & Krejcik Gaming, purchasing scratch tickets through a courier is about a 30–90-minute process from start to finish.
Sullivan says that Jackpocket is continuing to work on its scratch presence and should be adding new states in the near future:
“Our Scratchers feature allows users to order official state lottery scratch tickets, scratch their ticket right on their phone or computer, and receive prizes under $600 directly to their Jackpocket account. Already, Jackpocket users have won over $30 million in prizes from scratch ticket orders. Currently, Scratchers is available to users in Colorado and Texas. We plan to bring this exciting new feature to additional jurisdictions in the coming months.”
Jackpocket connects lottery to casino in NJ
Even before the deal with DraftKings, Jackpocket launched an online casino in New Jersey in January 2024.
This marked the first time an online casino had the ability to connect to an online lottery product.
That connection was the big appeal for DraftKings when it made its purchase of Jackpocket.
The new customer base and cheaper acquisition costs were a major selling point.
During DraftKings’ Q2 investor call, the company noted it had grown new customers by 80% year over year and done so with 40% less in acquisition costs.
Sullivan notes the iCasino-lottery connection allows lottery players to be introduced to a new gaming market, and vice versa:
“Jackpocket is focused on trailblazing the future of entertainment through new online, app-based products and experiences in the real-money gaming industry. As the first lottery platform in the US to enter the online casino space, we are thrilled that the launch of our online casino has been overwhelmingly positive.
“With the crossover between our two platforms, Jackpocket fans in New Jersey can seamlessly move between the Jackpocket Casino and Jackpocket Lottery apps helping us to amplify visibility and participation in the lottery with new winners, games, and prizes. As the iGaming space continues to grow and we venture further into the market, we’re excited to provide our users who are dedicated lottery fans with easy and fun ways to get involved in casino games through the platform they already know and trust. We will continue building on the momentum we’ve achieved thus far in bringing accessible, convenient, and safe play to lottery and casino fans alike.”
Jackpocket partnered with USA Today, pro sports franchises
Following the DraftKings deal, the courier industry has seen big partnerships develop in 2024.
Google announced it would begin permitting ads from couriers on its search engine in mid-July.
Sullivan believes this will allow couriers to reach another new audience:
“Our mission has always been to create a convenient, fun, and responsible way to play the lottery, and the recent news from Google will allow us to meet lottery fans where they are online. We’ll be even more capable of supporting lottery engagement by creating easier and more accessible ways for folks to participate.”
Media groups have gotten in on the act, as well. The Associated Press announced a deal with Jackpot.com to become the lottery provider for the AP. On top of that, the AP will be able to direct users to the courier in the states where it exists for potential lottery sales.
Back in October, Jackpocket struck a similar deal with USA TODAY and its parent company, Gannett. Sullivan believes these partnerships will help take couriers to the next level:
“Major partnerships, such as our own with Gannett/USA TODAY as the official digital lottery courier of the USA TODAY Network, illustrate that the landscape is evolving for couriers, as evidenced by our competitors following suit. We know that ordering lottery tickets with an app is a brand-new concept to many. These relationships with longstanding brands and household names not only help us meet lottery players where they are but also build trust and legitimacy for the future of the industry.”
Jackpocket also has a big presence in the national sports world. It has struck partnerships with 10 different professional sports franchises, including teams in New York, Boston, Dallas, and more.
Sullivan believes these affiliations help establish Jackpocket as a trustworthy third-party lottery option:
“We know that playing the lottery with an app is a brand new concept to many, so we’ve worked very hard to gain the trust of lottery players through various avenues. For example, our professional sports partnerships across the NFL, MLB, NBA, and NHL and with other household names like media powerhouses Gannett/USA TODAY and Audacy have helped further demonstrate that Jackpocket is a secure, easy option for playing the lottery.”
Some states growing concerned over courier influence
There is a real line in the sand around the country when it comes to couriers.
While some states, like Texas, New York, and New Jersey, have an open and positive approach, others want them outright banned.
California has taken a firm stance against couriers and the state lottery has said it won’t acknowledge a win if it knowingly was purchased through a courier.
Though Texas has all five couriers operating inside of it, state lawmakers are beginning to call for action from the Texas Lottery on the matter. They feel the couriers are operating without any rules or regulation, while also violating specific laws when it comes to lottery within the state.
Sullivan knows the challenges couriers face in earning the trust of state lotteries and lawmakers. He thinks there are four keys that all couriers can enforce in order to calm the concerns states have toward the industry:
“Integrity is the foundation of the lottery industry. As the leading digital lottery courier in the US, Jackpocket supports a set of commonsense compliance standards to responsibly grow and sustain the industry. 1. Full transparency around ticket fulfillment. 2. Geofencing protections so states can ensure that sales occur within the correct jurisdiction. 3.Full transparency around payment providers. 4. Embedding responsible gaming into the product. Since our founding in 2013, Jackpocket has modeled integrity through our commitment to the highest standard of compliance. With new digital innovations and companies emerging onto the scene, it’s essential that compliance remains a top priority.”
Sullivan notes that the Jackpocket ticket purchases are all made legally based on each state’s requirements. Those sales also help aid the various funds that state lotteries contribute to.
When it comes to providing responsible gaming options, Sullivan also mentions that Jackpocket has been an active participant in the cause since it launched:
“We are committed to ensuring the lottery does not turn from a game of fun into a financial issue. Jackpocket is a member of the National Council on Problem Gambling and the first third-party lottery courier service to receive a responsible gambling iCAP certification for best practices in player protection, backed by the expertise of the National Council on Problem Gambling. To ensure player safety, Jackpocket offers consumer protections such as daily deposit and spend limits, self-exclusion, and in-app access to responsible gambling resources.”
Sullivan wouldn’t provide comment on the practices of other couriers that could be dirtying the impression lawmakers have toward Jackpocket.
Some are operating without the permission of the states they are in, while others offer sales of multistate draw games to players in other countries around the world. Sullivan feels Jackpocket has a simple mission and provides a needed service in the lottery industry:
“Our goal is to increase accessibility and participation in the lottery. Jackpocket works alongside traditional lottery ticket retailers as another distribution channel for games lottery players already know — it is not meant to change the behavior of players who buy lottery tickets at brick-and-mortar retailers. Instead, Jackpocket exists to serve as an additional option for current lottery players and an option for those who would not otherwise play the lottery.”
Photo by vectorfusionart via Shutterstock
Graphic from Jackpocket
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