When New Jersey native Peter Sullivan helped his dad buy an iPhone 5 eight years ago, it seemed like almost anything would be available through that mobile device.
But Sullivan’s dad noticed something missing right away: why couldn’t he, an avid lottery player, also buy his tickets online?
And that’s how a company called Jackpocket was born, as Sullivan – who has an economics degree from Rutgers and experience in graphic design, bond sales, and tech company startups – decided to create a product to meet the needs of his father as well as others. .
This made Jackpocket the first officially licensed third-party lottery app – in New Jersey and New York – in the United States, with availability for sale in almost all states due to the lack of a ban on such. sales (except in Virginia, Wisconsin and Indiana).
“Most lottery laws are silent about how business is conducted, but in New York and New Jersey we have the specific licensing framework,” said Sullivan, who grew up in West Milford, in the. northern New Jersey. New Jersey Online Gambling Monday. “However, we have the same consumer protections and standards in every state. “
Jackpocket is also “live” in Arkansas, Colorado, Minnesota, New Hampshire, Ohio, Oregon, Texas and Washington, DC, and Sullivan said the goal was to add more. other states this year and develop further in 2022.
Riding the wave of online gaming?
The number of states legalizing mobile sports betting and online casino games continues to grow, and Sullivan said it is “starting to be more correlated” with this expansion and with consumer receptiveness to lottery games. in line.
Jackpocket just went live in New York in January, and Sullivan said that in the first month, 8% of Mega Millions and Powerball sales came from his company’s product. In New Jersey – as with many gaming options, a pioneer in this industry – Jackpocket launched with state endorsement in December 2019. For some major jackpots, Sullivan said 10% of sales were made there via jackpocket.
Minnesota, Sullivan noted, had the first million dollar lottery winner for his business in 2018 – and local media reported the story.
The second million dollar winner – who lost his job during the pandemic – won four months ago in New Jersey. This price is $ 1,000 per week for life.
Target a new clientele
The idea of having to visit a local convenience store to buy a lottery ticket – or whatever, really – is alien to the younger consumer population. Sullivan said ads on Snapchat that promise free tickets to those who refer friends to join the program have proven to be popular.
But how much does it cost?
Sullivan said Jackpocket charges a 9% fee on each deposit – but if a ticket wins, the consumer keeps any winnings (less IRS fees for winnings over $ 600).
He proudly highlights the company’s endorsement by the National Problem Gambling Council for its efforts on this front. The Jackpocket app offers daily deposit and spending limits, an option to self-exclude from play, and built-in access to NCPG’s resources and helpline. Jackpocket also promotes responsible gambling through its website, blog, social media pages, newsletters and advertisements.
“We take this issue very seriously,” said Sullivan, adding that in New York those who self-exclude from gambling at licensed casinos are also removed from the Jackpocket database so that they do not receive no incentives to play the lottery online either.
A rival emerges
Earlier this month, Lotto.com launched in New Jersey touting its partnership with convenience store company QuickChek and the fact that there is “no app needed and no need to open an account with. funds to draw on. Instead, it’s a pay-as-you-go. Of course, for a younger population, an app seems “necessary” for almost all economic and social activities.
Sullivan touted his company’s track record of responsible gaming, the ability to purchase recurring memberships, and a “pool with friends” feature as differentiators.
The subscription option is convenient for customers who might only want to bet when a multi-state jackpot hits $ 100 million, $ 200 million or whatever milestone the customer chooses, with a predefined amount coming from of the customer’s account at this point.
The “pool with friends” is a relief for anyone who has ever run an office lottery pool. Numerous lawsuits have been filed for multi-million dollar jackpots by office mates who claim to have contributed to the weekly payout or who note that they are regular players who might have missed out this week.
This feature does not yet exist in New Jersey or New York, but Sullivan said the company is working on it. A traditional website format, he added, is coming “in a few months” for those who prefer this form of commerce.
“Free money” for states
Sullivan said the lack of opposition to his business is because each state derives additional tax revenue from its operations, as most customers were not previously lottery ticket buyers.
“It doesn’t cost the state anything for us to operate,” Sullivan said.
And after? Sullivan said the current situation is simply moving sets of physical tickets to smartphones. Upcoming iterations are expected to be more social gaming based, unrelated to the 7-11 store ticket format, to appeal to a younger audience who expects a modern format.
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