Q&A for  Online Lottery Subscription Services

On-line Lottery subscription services could add literally millions of dollars in revenue to the State budget, before the end of this next fiscal year, with NO tax increases or expenditure on your part.

This can be accomplished within the current structure of the lottery through current existing licensing procedures and additional guidelines that could be approved with administrative decisions.

There is an untapped market of potentially tens of thousands of players who could subscribe to the lottery who do not have the time or the desire to purchase from current venues. These people are over the legal age, have played the lottery and have purchased products over the internet in the past year.


Q. What are subscription services?

A. Services which people will sign up to receive Lotto subscriptions physically and/or electronically promoting the already existing advance play feature for consumers who wish to purchase through other means beside retail.


Q. Who else does subscription services? Are they successful?

A. Eight states currently have subscription services, which include downloading forms from the internet, paying by check or credit card and than being notified when they are a winner.  The states include, Illinois, Maine, Maryland, Massachusetts, New Hampshire New York, (the largest with 90,000 subscribers) Vermont, and Virginia. All have responded with favorable results. However, by far the most successful, is the Israeli Lottery. Below is a quote taken directly from their web site:

 “Initiated in 1982, the Subscribers Program is unique in Israel. It addresses the problem of attracting, on a weekly basis, sectors of the population that were not traditional participants in the National Lottery. The objective was to incorporate into the Lottery a target group characterized by a relatively high income. Results indicate that this has been achieved, above and beyond expectations.

The numbers speak for themselves. In the second year of operation, the program had already registered more than 142,000 subscribers. In 1985, 1986 and 1987 there were 185,000, 250,000 and 300,000 subscribers respectively, and in 1993 the half-million mark was crossed.

In 2001, the program comprises almost 600,000 subscribers, representing hundreds of thousands of Israeli households. This has been the largest, most comprehensive marketing program in Israel to date.”


Q. Will this take business away from retail stores?

A. Experts we spoke to in the lottery industry said that there is a strong likelihood that on-line subscription sales would come from a new group of prospective players, not now playing the lottery on a regular basis. This new group of players is experienced and familiar with on-line purchases, is more educated, and has higher incomes.  Players that have an established routine of purchasing tickets at retail locations are less prone to use the Internet, and would most likely not change their game or their behavior, for example changing from purchasing “Instant Scratchers” to a long-term Lotto subscription.


Q. Is on-line subscription services Legal?

A. In most states, there are no specific laws against it. A few states do have statutes, which prohibit any sales of tickets that are not sold through a retail outlet. Many states are not sure of the legality of it, and would need to check with counsel. We have an extensive legal brief which we did for California, which addresses many of the legal issues that have been brought up by other states (This brief is available upon request).


Q. How did you come up with the data of tens of thousands of possible users?

A. Using one state as an example: According to the 2000 U.S. Census (www.uscensus.gov ) 951,127 households in this state, had incomes of $50,000 or greater. Based on a survey done in 2004 by the Pew Institute (www.pewinternet.org ) 80% of households with incomes of $50,000 go online, and 67% have gone on line and purchased.

·         760,901or 80% of this population goes on line (Pew Research 2004).

·         433,713 or 57%* play the lottery once or more in the previous year.

·         290,588 or 67% have purchased online minimum potential.

Based on the above data there is a minimum potential of 290,000 or 29.5% of the adults, who have played the lottery, gone online, and purchased products or services.

      *57% is the national average of adults playing the lottery in the past 12 months. Other benchmarks are 32% in California to 67% in Virginia.


Q. How would a consumer purchase subscription services?

A. The consumer would access an authorized web site and use existing home banking systems or pay by check. (Credit cards may or may not be approved by your state).


Q. How can our state be assured that only residents of required age?

A. Under terms and conditions when purchasing the consumer would agree to the following:

  • They are a resident of your state.

  • They are over required age (for them to collect they must prove that they are over the required age).

  • Subscriptions could only be sent to an address in your state.

  • The consumer would use existing home banking or pay by check drawn on an account in your state.


Q. How much will it cost the state?       

A. The cost would all be the responsibility of LoyalCommerce Systems. There may be some lottery staff time allocated to set up initial system requirements:

  • Setting up guidelines for subscription services. 

  • Monitoring compliance with the guidelines.