Only weeks after pulling out of Texas, online lottery courier Jackpocket, owned by sports betting operator DraftKings, shut down New Mexico operations after the state’s Department of Justice provided a legal opinion. The latest analysis by New Mexico Attorney General (AG) Raúl Torrez highlights the persistent regulatory challenge online lottery and gambling providers continue to encounter throughout the United States.
The Attorney General believes Jackpocket's business in New Mexico was unlawful under state law because it sold lottery tickets for profit without express authorization from the New Mexico Lottery Authority.
Although Jackpocket was conducting business within the state under an agreement with the Lottery Authority for electronic ticket sales, the AG feels this business model needs a formal renegotiation pursuant to Section 17 of the Indian Gaming Compact, which regulates gaming agreements between the state and Native American tribes.
After the development, Jackpocket signaled it would temporarily shut down its New Mexico operations as it pursued potential remedies. DraftKings' Senior Vice President of Lottery, Peter Sullivan, accepted the move.
Jackpocket's withdrawal from New Mexico is part of a larger trend characterized by mounting pressure on internet and mobile gaming services. State regulatory agencies are looking harder at online lottery messengers and other digital sports betting websites.
States still split on online gambling regulation
The trend of states cracking down on digital lottery couriers highlights the ongoing rift in how jurisdictions handle online gambling. While some states have embraced legalization and regulation, others still resist, either maintaining outright prohibitions or imposing tighter controls.
Texas has long had a conservative approach to gambling, limiting most legal types of betting. The state lottery commission recently proposed a complete ban on lottery couriers. Consequently, Jackpocket and other such companies were effectively locked out of the Texas market, with states that even regulate gambling, like New York, potentially changing their approach to online lotteries due to this move.
Utah is among the most anti-gambling states in the U.S., prohibiting every form of gambling, including online websites. Hawaii also forbids any legalized gambling and is among the few states without a state lottery or casinos.
Though some states have taken absolute positions against internet gambling, others fall into a regime of legal ambiguity, neither legalizing nor wholly prohibiting internet-based wagering. Idaho, for instance, has yet to pass legislation legalizing iGaming casinos or sportsbooks, precluding virtual gambling websites from being based there.
Aside from these states with express prohibitions, others function in legal gray areas where online gambling is mostly unregulated. For example, California considered numerous online gaming bills but has yet to enact laws that comprehensively legalize online casinos or sports gambling.
