Ohio Lottery Makes A New Bet on Mobile

The basic idea of the lottery has changed little since olden times. Ancient Romans and Chinese, medieval Europeans and others regularly bought chances at big prizes, with the money usually flowing into civic coffers for public works.

But playing and delivery methods keep changing, with Ohio of all places — no offense to the Buckeye State, home to multiple presidents and the Wright Brothers’ aerodynamic innovations — accounting for some of the latest developments.

Recent days have brought the debut of the “first mobile-enable lottery card” in the state, according to the companies behind the card, Linq3 and Blackhawk Network. The product combines the gift card with the lotto entry, and here’s how it works, according to statement announcing the launch.

Mobile Lottery Product

Consumers go Buehler’s, Giant Eagle or Kroger locations to buy the lottery card. Whenever that consumer with the lottery card desires to enter a drawing, “the player texts in the Lottery Card’s unique code to a specified number, provides their name and confirms their location to complete a one-time card enrollment,” according to the statement.

A picture message with the quick pick numbers, draw date and other info then is sent back to the cardholder. “Winners are notified via text and picture message and most winnings are paid automatically via PayPal. After enrolling, players can use their Lottery Card to play again and again by presenting it at checkout,” the statement explained.

Consumers can buy the lottery cards and give them to other people. Not only do gift cards stand as the most popular holiday present, according to the National Retail Federation and other sources, but a Blackhawk Network survey found that “44 percent of consumers surveyed are interested in receiving a gift card to play the lottery, while 43 percent would be interested in giving a lottery gift card.”

This is not the first time consumers have seen lottery gift cards, of course. A few years ago, for example, Scientific Games Corporation and InComm released North America’s first lottery retail gift cards. Pat McHugh, senior vice president of North American lottery systems at Scientific Games, said at the time that the gift cards will add a degree of flexibility to an already popular market.

Lotto and Payment Cards

Nor do these mobile-enabled lottery cards represent Ohio’s first attempt to keep its edge when it comes to state lotteries. It recently allowed lotto players to use payment cards.

In September of last year, the state began putting payment card readers in all self-service lotto machines. Those card readers now accept payments via Visa, Mastercard, Discover, Apple Pay, Android Pay and Samsung Pay. The state pays the card fees associated with those payments, not the retailers with those machines — the reader retrofit was mandatory. Lotto players can spend $10, $20, $50 or $100. A player can spend $100 per day per card. “Any money placed on the Lottery terminal using the card reader must be played,” state lottery officials said. “The only amounts that can be cashed out are winnings or cash that was inserted into the machine.”

Fear of encouraging gambling addicts is the main reason that keeps some other states (or banks) from following Ohio’s leads, according to comment from state politicians and other observers.

“Just 20 states allow lottery purchases with credit cards, and seven of those leave the decision up to retailers,” reads an analysis from earlier this year. And those rules come in different flavors. “In Connecticut, for example, you cannot buy tickets with a credit card. But you can use a gift card or debit card – unless the specific retailer prohibits using debit. In a handful of states, including Tennessee and South Carolina, lottery tickets may only be bought with cash.”

Worries about addiction also have come up with the launch of the mobile-enabled lottery cards in Ohio. “Gambling is an addiction very similar to drug addiction, so having increased availability is going to be easier to gamble and it will cause some additional challenges for the community,” Paula Cosby, external affairs director, Montgomery County Alcohol, Drug Addiction and Mental Health Services in Ohio, told a local reporter.

Younger Lotto Players

Even so, companies are trying to get younger consumers to play the lottery, and using mobile technology to make those sales. A company called AutoLotto offers a “mobile app allows users to buy tickets from their smartphone,” according to a report. “It also lets them scan a paper ticket purchased in-store to track it, and get notifications if they win.”

The company can do that because — after working with regulators before entering a specific state — it buys lotto tickets and keeps original paper tickets in a secure location, “which it also pays to insure, in case anything goes wrong at its holding facility. When it has a winning ticket, it takes it to the local lottery agency to redeem it, and pay out winners via its app.”

The target audience? Millennials, whom the company says do not provide a lot of foot traffic to retailers that sell lotto tickets. About a third of consumers between the ages of 20 and 35 buy lotto tickets.

State lotteries also run their own mobile apps — in Illinois, for instance, consumers who download the app can buy tickets, check jackpot amounts, received email notifications for winning tickets, find lotto retailers, “manage personal spending limits,” and have winnings of less than $600 deposited in online accounts.

Gambling of all types is moving further into the digital realm. That includes sports betting, thanks to a recent U.S. Supreme Court ruling that allowed all states to offer it. The Ohio launch provides an signal of where lotteries are headed, and how mobile technology will play a part in the future of betting.