UNREGULATED? UNRELIABLE

By Gambling Insider
California State Lottery’s Deputy Director of Public Affairs & Communications, Carolyn Becker, speaks to the GI Huddle about the dangers of buying lottery products from unregulated sources

Can you talk us through the historyof the California State Lottery?

Well, we’re approaching 40 years of being in operation. We started out back in the 1980s, when California voters passed Proposition 37 (Prop. 37) in 1984. The passing of Prop. 37 legalised the lottery, allowing us to begin creating and responsibly selling lottery games. The sole mission of the California State Lottery is to raise additional money for California’s public schools, so that’s what we’ve been doing for the better part of 35+ years.

I mentioned that the passing of Prop. 37 allowed us to sell tickets responsibly and responsible gaming is something that we take a lot of pride in. We were actually the first lottery in the US to receive the highest level of certification for responsible gaming back in 2015. That means we help educate our players, we address issues like problem gambling and we’ve been recertified by the World Lottery Association (WLA) twice since our first certification, most recently just last year.

How is the lottery performing now? What products do you have on offer and how did the Covid-19 pandemic affect operations at the California State Lottery?

We’re performing quite well, let me just start with that. Even though we all faced difficulties during the pandemic and had to go over some hurdles with stay at home etc., we did see lottery sales ultimately go up. We think that mostly, particularly last year, these higher numbers were due to people having fewer options to have a little fun; things were still closed and risk was at the forefront of people’s minds. We sell most of our tickets in convenience and grocery stores, which were able to remain open during the pandemic as they were essential businesses. We expect a record year of more than $8.4bn in sales, so that means $1.8bn will go to public schools.

What’s the regulatory situation in California at the moment? You’ve previously sent out warnings regarding third-party sales; can you expand on this?  

We are actively warning, and have been for some time, both our players and retail partners about the status of third-party private companies that are selling our tickets either online or through an app. The reality is these third-party companies are not authorised in California; they’re not regulated. So, our message to players is that if you’re going to engage with these third parties, do so at your own risk. The California State Lottery is not affiliated in any way with those unregulated platforms. 

Is this a grey area? I.e. third-party sales not being illegal while concurrently being unregulated?

That’s a good way of describing it. As far as we’re concerned, the tickets somebody buys from somewhere other than our retailers are not from our retail partners. If you buy from third parties they’re not vetted, they’re not approved or regulated.

We have no oversight, authority or contractual relationships with these companies, which means we can’t ensure the safety, securing or integrity of these platforms or tickets. 

What’s the biggest risk for players;is it that tickets may be forged? 

I don’t even want to speculate on what could happen. The bottom line is that nobody is overlooking the safety and security of the process at third-party retailers. If someone buys a ticket at a lottery retailer, we have complete control over what happens when you scratch and win – if winning tickets are scratched through third parties that would’ve created a whole new layer of challenges. This is why we ask players to buy tickets at our retailers, so we can ensure the ticket is safe and the company selling the ticket is compliant.

What is the ongoing conversation with retailers about this? Is there much dialogue or does this need improving upon?

I would say both of these points apply. There are 23,000+ retailers and I believe we sent a written letter to all of our authorised bodies. We also have a dedicated sales team which is constantly in the field speaking to our retailers and having those conversations. We post messages on our social media platforms, conduct interviews, so retail is very much a part of the audience that we’re trying to educate. In some cases, retailers have been really thankful as they didn’t know about this being an unregulated offering in California, and so they’ve been very cooperative and expressed gratitude for the dialogue that’s been had.  We’ll continue to engage in that conversation both with our retail partners and our players. 

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