St. Paul, Minnesota resident, Brandon Stevenson won $1 million in the Powerball on July 11. Stevenson didn’t buy his ticket at the corner gas station, though. Instead, he purchased the ticket through the mobile lottery app, Jackpocket.
Stevenson is the first big winner for the company that counts two states in its portfolio: New Hampshire and Minnesota.
Jackpocket launched in Minnesota last month and has been a topic of discussion ever since.
The controversy comes from the fact that online lottery gambling is illegal in Minnesota. It seems there is a disagreement about whether Jackpocket is considered online gaming.
Basically, the app allows the player to buy a lottery ticket virtually, skipping the visit to the local convenience store.
What exactly is Jackpocket?
The five-year-old Brooklyn, New York mobile app company allows anyone in New Hampshire or Minnesota to purchase a ticket through the app. A lottery player doesn’t need to be a resident of those states; they just need to be within the borders of either state.
Jackpocket has a team that physically walks into a store and purchases lottery tickets on its customer’s behalf. After purchasing the ticket, it is scanned and sent to the customer via the app.
Winnings under $600 are automatically deposited back into the customer’s Jackpocket account. Big winners, like Stevenson, must take their ticket to the lottery office to claim the winnings. Jackpocket makes arrangements to transfer the physical ticket to the customer.
The company makes its money from a seven-percent service charge on each customer deposit. Jackpocket is also forming relationships with retailers for a portion of the commission the retailer makes when it sells a winning ticket.
Think of Jackpocket as the Uber, GrubHub, or InstaCart of lottery tickets.
Questions surround Jackpocket’s legality
There are questions around whether Jackpocket is legal in a state where online gambling is illegal.
It is legal for someone to buy a lottery ticket for someone else. It is also legal for someone to gift a lottery ticket to another person.
A person is still physically purchasing the ticket at a retailer. Does it matter whether it is the winner purchasing the ticket or not?
The Minnesota Lottery thinks the company is operating U.S. online gaming legally and signed a Memo of Understanding to that effect.
“They operate under Minnesota statutes to make these purchases for their customers,” said Adam Prock, the director of communications for the Minnesota Lottery to the Star Tribune.
As far as we’re concerned [Stevenson] is just like any other winner, and this is like any other brick-and-mortar purchase. We’re excited we have a new millionaire in Minnesota.
Jake Grassel, the executive director for Citizens Against Expanded Gambling, disagrees. Grassel says an app that allows someone to sit on their couch and gamble by purchasing a lottery ticket is online gambling.
“What’s next — can you pay someone to sit on the slot machine while you push the button on your phone from the couch?” Grassel said.
There is certainly a case for both sides. Stevenson bought his lottery ticket virtually. He also could have emailed a friend and asked him to buy a ticket for him. Is there a difference?
Sullivan says no. “It’s not online gambling. What Jackpocket does as a service is we buy that ticket on the user’s behalf,” he said.
Will the Minnesota legislature take up the issue?
Grassel contends the legislature did not intend to create this kind of loophole in outlawing online gambling. He asserts that Citizens Against Expanded Gambling will lobby state legislators to address this issue specifically.
State Representative Greg Davids (R-Preston) agrees with Grassel. Davids sent a letter to Robert Doty, the director of the Minnesota Lottery, expressing his concern.
The Minnesota Lottery’s continued refusal to work within the confines of state law is a source of ongoing frustration for state lawmakers.
Given the legal uncertainty and risk posed to our state, I urge the Minnesota Lottery to immediately rescind the MoUs and work with the Alcohol Gambling and Enforcement Division to suspend operation of reseller services until these issues can be resolved.
The Minnesota legislature convenes next in January 2019. Only time will tell whether the legality of mobile lottery apps will be on the calendar.
For now, Stevenson, a Concordia University student was able to take the ticket purchased by Jackpocket on his behalf and claim the $1 million prize. He used the credits Jackpocket awarded for referring a friend to buy the ticket.
Stevenson might want to keep his referral link handy. Chances are he is likely to get asked a lot about Jackpocket in the coming days.