Routing Around Champion v. Ames

Today’s Miami Herald presents a fun legal puzzle for the morning in You may be able to buy Powerball tickets online: Have the purveyors of LottoGopher managed to find a loophole in Champion v. Ames (“The Lottery Case”), 188 U. S. 321 (1903)? Champion famously held that Congress had the power to ban the sale of lottery tickets across state lines under the Commerce power. And the statute is still on the books. (Plus, most states ban online sales of their lottery tickets.)

Enter the intermediary. LottoGopher‘s pitch is that although you engage them to buy a ticket for you, the tickets stay in the state of origin. They don’t issue the ticket — they send someone to buy it from a licensed issuer. Plus, they say, they only sell tickets to people resident in the ticket’s state of origin. Thus, this, from the FAQ:

Is this legal?
Yes. We abide by all lottery commission regulations in each state. We are not engaged in the business of betting or wagering, and members of LottoGopher do not participate in unlawful Internet gambling. 28 U.S.C. 301 legally prohibits LottoGopher from offering its services to individuals and entities outside of the state of origin of the lottery game. The federal statute is aimed to curb that type of interstate activity, and we abide strictly by this interpretation. LottoGopher is registered to do business in every state we operate in. We follow all city, state and federal business registration and tax requirements. LottoGopher is not directly or indirectly, affiliated with any state lottery. We do not “sell” lottery tickets or participate in the earnings of any winnings nor do we receive any commissions from a lottery organization for rendering this service. In compliance with the state lottery we do not charge the consumer more or less than the $1 cost of each lottery ticket.

Indeed, LottoGopher’s description of its services seems drafted to route around Champion v. Ames:

LottoGopher is a messenger service that provides storage and handling of lottery tickets that our subscribers legally own. We are not affiliated with any state lottery and we do not participate in, nor offer, any type of lottery or gambling.

We abide by all lottery commission regulations in each state. LottoGopher is not engaged in the business of betting or wagering, and subscribers to LottoGopher do not participate in unlawful Internet gambling. 18 USC 1301 legally prohibits LottoGopher from offering its services to individuals and entities outside of the state of origin of the lottery game. The federal statute is aimed to curb that type of interstate activity, and LottoGopher abides strictly by this interpretation.

Our policy is to offer a cancellation at any time for any unused tickets up to 4 hours prior to the drawing. (Of course, there are no refunds for tickets in drawings that have already occurred). We are available by phone or email to answer any of your questions. You always have access to all of your account information online, and we strive to provide you with the most convenient customer service experience available.

Our headquarters are in Los Angeles, CA and we have representatives located across the U.S. to fulfill orders on behalf of our users in all the states that we offer our service. LottoGopher is registered to do business in every state we operate in. We follow all city, state and federal business registration and tax requirements. All of our transactions are reviewed by a Certified Public Accountant, and our secure credit card processing is provided by a domestic bank.

The messengers who purchase lottery tickets from official state lottery resellers are selected after a rigorous interview and background check process. They are insured and bonded before given extensive training to ensure the security of your tickets.

We guarantee in our Terms & Services that you are the legal owner of any lottery tickets you have requested. We maintain a sophisticated system that tracks your orders, ticket transportation and a secure storage method. We internally audit all procedures and follow Best Practices in all of our website functions, including:

• Appropriate Safeguards to ensure age verification
• Ensure user are physically located in a jurisdiction where lottery play is legal
• Ensure all taxes due are collected
• Safeguards to combat excessive or compulsive play
• Privacy safeguards for subscribers

Our site does not provide any form of online gambling. We are a messenger and storage service for in-state residents only. LottoGopher has never broken Internet gaming laws and prohibits any version of online gambling or sports betting.

We never send unsolicited emails or advertisements targeted to minors or problem gamblers. We do not advertise in any way towards minors. LottoGopher is domestically owned, managed and registered in Los Angeles, CA, and has no affiliation with onshore or offshore sites that have illegally done business in the U.S.

All of our facilities are located in the US, and users must be at least 18 years of age (21 in certain states) as required by law. We verify the age and residence of all users of LottoGopher.com and post online the odds of winning at each lottery game as provided by the state lottery websites.

We also provide loss limits for each user who orders tickets for us to store on their behalf. We encourage our users to order services with prepaid cards and debit cards rather than credit cards, and discourage people who are delinquent on child support from using LottoGopher.com.

Looks like they may have a winning strategy — if they can police the state-by-state sales restrictions. What will happen, though, when a person falsely gives a local address? Or moves out state but doesn’t update the address? Or uses a friend as a mail drop? Or buys tickets while on vacation out of state?

Sounds like a student note topic, or at least a good Con Law I exam question.