The new rules, which haven’t received final approval, target international sales, bulk purchases and protect winner privacy.
The Oregon Lottery will soon impose new rules intended to cut down on fraud, raise revenue and ensure player privacy.
The Oregon Lottery Commission last week considered approval of a series of rule changes, which will join legislation passed this year and set to go into effect in September.
The new rules are intended to cut down on out-of-state sales and regulate the practice of lottery discounting, which allows winners to avoid paying taxes and other obligations like child support on their winnings. And discounters can often avoid taxes by deducting the purchase price of a winning ticket on their personal taxes.
The state is soliciting public feedback through the end of the month. A final vote will be held in the fall.
Last year, The Oregonian published an investigation into international companies that profit off the Oregon Lottery. One murky practice, called lottery discounting, involves purchasing a winning video lottery or keno ticket, redeeming the ticket at full value and pocketing the difference as profit. So-called lottery couriers are another problem. The newspaper identified one Australian company that purchases tickets on behalf of customers in Australia and New Zealand on an “industrial” scale from a Beaverton bar — worth more than $6.2 million since 2018.
The problems are deeply entrenched and politically thorny. The Oregon Lottery has been subject to complaints by other state and international lotteries for violating laws banning cross-border sales. A threatened penalty is losing the ability to offer the multi-state Powerball and Mega Millions, which combined brought in more than $150 million last year.
One new rule prohibits international sales of lottery tickets by online courier services working with lottery retailers in Oregon. A potential downside is the ban on international sales could result in a loss in gross revenue of between $33 million and $55 million per year. That drop would result in a contribution to the state economic development fund of $11 million to $19 million.
The new rules limit bulk purchases of draw games and Scratch-It tickets by individuals or groups potentially looking to rig a jackpot. The changes also implement a privacy provision allowing lottery winners to remain anonymous. Under a proposed rule, no individual or group of individuals would be allowed to purchase more than 50,000 tickets in a Scratch-It game or 50,000 combinations of numbers in a draw game.
The proposed rules also go after courier services, which take orders online and arrange sales with local retailers. Couriers are currently unregulated and according to agency officials, present legal and game-integrity risks. Oregon retailers would be banned from working with couriers who sell tickets out of state. And they’d be subject to new customer data protections and requirements to verify age and geographic locations.
The new privacy provision is intended to reduce harassment of winners. According to The Oregonian, it would also prevent the kind of reporting done by the newspaper in 2024, when it identified the parties redeeming millions from the Oregon Lottery including two Australian companies.
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