New Jersey law 1st to legalize lottery courier services

AP News
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Posted: Feb 11, 2017 3:27 PM

TRENTON, N.J. (AP) — A company that made headlines when an Iraqi man used its services to buy an Oregon lottery ticket worth $6.4 million lobbied successfully for a first-in-the nation law that will allow the business to courier New Jersey lottery tickets bought by customers from the comfort of their own homes.

Malta-based Lotter Enterprises and its subsidiary Locallotto Inc. are making preparations to offer the service as soon as the New Jersey law takes effect Nov. 1. Founder and director Marcel Klugman told The Associated Press in a recent telephone interview he's hoping to lobby other states to pass similar laws so courier services can operate there as well.

Federal law prohibits couriers to traffic in lottery ticket sales among states, but couriers still operate in California, New York and elsewhere in the U.S., and haven't been found to be illegal.

The New Jersey law is the first to authorize and regulate lottery couriers. It requires the courier to safeguard personal information, including credit card numbers and to carry language warning that firms not registered with the state pose a fraud risk.

Companies set up a website where prospective buyers can register and purchase lottery tickets for a fee. The courier arranges for any winning ticket to be placed in a secure bank box until the rightful ticketholder picks it up, Klugman said.

In 2015, Lotter was the online agent that helped an unidentified Iraqi claim his Oregon Megabucks jackpot. Despite the federal law, officials at the time said the purchase was legal because the man lived abroad.

Klugman said he picked New Jersey to push for the legislation because online casino gambling is already authorized in the state. Republican Gov. Chris Christy signed the legislation last week.

Lottery executive director Carole Hedinger had said she had hoped the governor would veto the bill. The state's lottery revenue has fallen off, but Hedinger said a courier service would not benefit the games.

"It's a risky proposition," she said, according to Lottery Commission records from a December meeting. "The Lottery has opposed this legislation since it was introduced."

Former New York State lottery executive Robert McLaughlin said courier lottery services in the U.S. are unusual because of the potential for fraud. "It's an issue for the industry how you're involving a middle person," he said.

Klugman said he particularly wants to attract the younger generation to play the lottery.

"Very few people 18 to 35 buy lottery tickets," said Lloyd D. Levenson, a lobbyist for Locallotto. "This is a way for that whole group to buy tickets."