Posted on: Tuesday, October 5, 2004

Lottery ticket sites are a gamble

By Kim Komando

The stories about lunch ladies or steelworkers winning $10 million, $50 million and even $100 million jackpots always make the headlines. But what if you live in a nonparticipating state?

Enter "online lottery" on a search site and you'll find a dozen or so Web sites. They promise fantastic sums with a few mouse clicks and a credit card or checking account number.

But the truth is, only authorized retailers in participating states are allowed to sell tickets for Powerball, Mega Millions and other multistate lotteries boasting huge jackpots.

The same rules apply for single-state lotteries with multimillion-dollar jackpots, such as those in Florida and New York.

But Web sites such as Buy Powerball Online (www.buypowerballonline.com) and PlayLot (www.playlot.com) claim that you don't need to live in or visit those states to play.

When you buy a ticket from such Web sites, they say they then buy a lottery ticket from a state-licensed retailer and charge you a service fee (usually $1 per ticket). The fee covers, among other things, the holding and monitoring of the ticket.

If you win a small sum, the site mails you a check. If you win the jackpot, arrangements are to be made for you to pick up the winning ticket and claim your prize, since lottery tickets cannot legally be sent through the mail in the United States.

Another Web site, Lottery Universe (www.lotteryuniverse.com) instead allows you to bet on the winning numbers. If you guess correctly, it will pay you dollar for dollar— but only up to $1 million, even if the jackpot is in the tens of millions.

The problem, according to Wayne Dolezal, director of business and legal affairs for the Multi-State Lottery Association, which runs Powerball, is that these sites are offshore and unregulated. There's no guarantee that online services are actually purchasing tickets for you. Resolving any disputes over the tickets or suing could be difficult.

Other Web sites offer the chance to play in foreign lotteries — in Australia, England, Japan, Spain and elsewhere. But according to the Federal Trade Commission, it's illegal to buy or sell foreign lottery tickets through the mail, telephone or Internet in the United States.

It boils down to this. The odds of your winning a lottery game through an online site and cashing in are slim.

With reporting by Ted Rybka.