Lottery officials have said it is necessary to offer online and mobile app ticket sales to keep pace with the habits of younger consumers, who often use websites and apps in their day-to-day lives for everything from ordering food to paying bills. They’ve also said tickets for scratch-off games, which account for more than 50% of the Lottery’s overall ticket sales, would continue to be available only at brick-and-mortar retailers. Lottery sales in New Jersey generated more than $3.5 billion in revenue during the 2024 fiscal year, according to unaudited revenue figures released earlier this year, officials said.
After hearing concerns from several influential business lobbying groups, state lawmakers took a first step toward blocking the New Jersey Lottery from selling tickets directly to consumers online or via its mobile app.
A key Assembly committee last week gave its unanimous approval to legislation that preserves the status quo for a network of nearly 7,000 brick-and-mortar businesses that currently sell tickets for the state Lottery.
The in-person ticket purchases often generate foot traffic that can lead to other sales that help sustain the Lottery’s retail partners, according to several witnesses who testified during the hearing.
“Lottery sales for small businesses have been a cornerstone for the last 50 years,” said Eric Blomgren, executive director of the New Jersey Gasoline, Convenience Store, Automotive Association.
“They draw in people to purchase other, higher-margin items,” he said.
“Allowing the state to sell tickets directly (to consumers) would effectively put our physical retail stores, small businesses, in direct competition with the very same entity that is their supplier, distributor and chief advertiser,” Blomgren said.
The bill’s introduction earlier this year followed an announcement from the state Lottery last year that indicated officials were planning to begin offering consumers the option of buying tickets directly from the Lottery via its website and mobile app for draw games, such as Mega Millions, Pick-6 and Powerball.
At the time, Lottery officials said the proposed ticket-sale change would take effect in late 2024.
The state Lottery relies heavily on the thousands of brick-and-mortar retail businesses to sell its tickets to consumers. Tickets can also be purchased online, but only using state-registered third-party “courier” services.
Lottery officials have said it is necessary to offer online and mobile app ticket sales to keep pace with the habits of younger consumers, who often use websites and apps in their day-to-day lives for everything from ordering food to paying bills.
They’ve also said tickets for scratch-off games, which account for more than 50% of the Lottery’s overall ticket sales, would continue to be available only at brick-and-mortar retailers.
Lottery sales in New Jersey generated more than $3.5 billion in revenue during the 2024 fiscal year, according to unaudited revenue figures released earlier this year. But that total was down slightly from the prior fiscal year, officials said.
In addition to funding jackpots and operations, state Lottery revenue also helps support the public-worker pension system in New Jersey, easing some of the pressure on taxpayers to fund those retirement benefits.
Last year, the dedicated pension contributions from the Lottery totaled $1.1 billion, marking the seventh consecutive year the Lottery produced more than $1 billion in annual revenue for retired-worker pensions in New Jersey.
Moreover, every dollar for the pension system that is generated by the Lottery provides some relief to taxpayers who also help fund public-worker pensions in New Jersey via employer contributions allocated in the annual state budget, as well as the budgets of county and municipal governments.
In recent years, state lawmakers themselves have enacted laws to legalize online casino gambling and internet sports betting, activities that generate millions of dollars annually for the state budget.
But during last week’s hearing before members of the Assembly Regulated Professions Committee, representatives of the New Jersey Chamber of Commerce, New Jersey Business & Industry Association and the New Jersey Food Council were among those urging lawmakers to support the bill that would maintain the status quo for brick-and-mortar retailers.
The same bill would also continue to allow online sales to occur via the state-registered courier services.
Mary Ellen Peppard, vice president of the New Jersey Food Council, said allowing the Lottery to sell tickets directly to consumers would “have a significant impact on our members,” including many convenience stores.
“It’s not just the loss of the sale of the Lottery (ticket), it is all the ancillary sales for somebody that used to go to that store for that ticket,” she said.
“They’re buying their groceries, or a cup of coffee, or fuel, so that is a significant loss,” Peppard said.
Asked last week by NJ Spotlight News about the status of the plan to offer online and app ticket sales in 2024, Lottery spokesperson Missy Gillespie said only that such sales are “not currently available in New Jersey.”
Gillespie also declined comment on the pending legislation.