Are lottery ticket delivery (courier) services legal in South Carolina?

Official title

Opinion on whether a lottery ticket delivery service may operate legally in South Carolina.

Requester

Requested by The Honorable Christopher J. Murphy, Member, South Carolina House of Representatives.

Plain-English summary

A state representative asked whether a lottery ticket delivery (courier) service can legally operate in South Carolina. These services, already running in sixteen states plus D.C. and Puerto Rico, let customers order official state lottery tickets through an app or website; the courier then buys the tickets from a licensed retailer and delivers them, charging the customer a convenience fee. The representative's analogy was UberEats: the courier is not a retailer, it just connects willing adult customers with licensed retailers, much as a food-delivery app connects diners with restaurants.

The office's bottom line is that the Education Lottery Act does not answer the question, and the answer belongs to the Lottery Commission, not the Attorney General. The Act neither expressly prohibits nor expressly authorizes lottery courier services; it does not mention "couriers" at all. What it does say is that lottery tickets must be sold only by the named licensed retailer (§ 59-150-160(B)), in person, for cash (§ 59-150-70(D)(2)). Whether a courier model fits within or around those requirements, that is, whether a courier is a "retailer" under the Act or something more like a delivery service, is a factual and regulatory determination.

The office spent considerable effort clearing away two of its own older opinions that had been read as barriers. The 1989 "Gossett" opinion predated the South Carolina lottery entirely and dealt with buying lottery tickets in another state and reselling or delivering them in South Carolina, which violated the law because there was no legal state lottery then. The 2019 "Smith" opinion concerned "10 percenter" schemes where third parties claim prizes for a fee to dodge offsets like unpaid child support. Neither addresses a modern courier service where the ordering customer owns the ticket and their name is printed on it. The office agreed with the representative that neither opinion resolves the courier question, and pointedly asked that the Gossett opinion not be used as part of any Lottery Commission decision on couriers.

Because the South Carolina Constitution says only the State may conduct lotteries "in the manner that the General Assembly provides by law" (art. XVII, § 7), and the Legislature delegated broad regulatory authority to the Lottery Commission, the office concluded that whether to permit, regulate, or prohibit courier services is for the Commission (or the General Assembly), with courts deferring to the Commission's reading of the Act. It pointed to other states as examples: New Jersey expressly authorized couriers by statute, and Colorado's Lottery Commission approved a courier service after a 2019 presentation.

What this means for you

Companies wanting to run a lottery courier service in South Carolina: The opinion does not green-light or ban your model. It says the Act is silent, so the decision rests with the South Carolina Lottery Commission. The practical path is to seek a determination from the Commission rather than to rely on the absence of a prohibition.

The South Carolina Lottery Commission: The opinion places the question squarely in your lap. It is for you, as the agency enforcing the Act, to decide whether a courier is a "retailer," whether the model is consistent with the Act's purpose, and whether to permit or regulate it. The office asked that its 1989 Gossett opinion not factor into that decision.

Legislators: The opinion notes that, absent an express prohibition, this is a matter for the General Assembly or the Commission, and cites New Jersey's statute expressly authorizing couriers as one model if the Legislature wants to address it directly.

Lottery players and retailers: The opinion confirms that, as the law currently reads, lottery tickets must be bought in person for cash from a licensed retailer, and that the legality of using a courier to do that on your behalf is unsettled and depends on what the Commission decides.

Common questions

Can I legally use a lottery courier app in South Carolina right now?
The opinion does not say yes or no. It concludes the Education Lottery Act neither authorizes nor prohibits courier services, and that whether they are allowed is for the Lottery Commission to decide.

Does an old Attorney General opinion ban lottery couriers?
No. The office concluded the 1989 Gossett and 2019 Smith opinions do not address modern courier services and should not be cited as prohibiting them. It even asked that Gossett not be used in any Commission decision on the issue.

Why can't the Attorney General just decide this?
Because it turns on facts and on the Lottery Commission's regulatory authority. The office said issuing a definitive answer would, in effect, override the Commission's authority to interpret and enforce the Act, and courts defer to the Commission on that.

How have other states handled lottery couriers?
The opinion notes New Jersey expressly authorized them by statute, Colorado's Lottery Commission approved a courier service after a presentation, and in many states couriers operate unregulated. South Carolina has not addressed them by statute or regulation.

Background and statutory framework

South Carolina voters amended the constitution in 2000 to allow a state-run lottery conducted "in the manner that the General Assembly provides by law" (art. XVII, § 7), and the Legislature enacted the South Carolina Education Lottery Act (Act No. 59 of 2001, codified at § 59-150-10 et seq.). The Act creates the Lottery Commission and gives it broad authority to regulate the conduct of lottery games and to maintain a statewide network of retailers (§ 59-150-150). It requires that tickets be sold only by the named licensed retailer (§ 59-150-160(B)), for cash only (§ 59-150-70(D)(2)), and at locations listed in the retailer's contract, with further sales rules in § 59-150-210. Federal law (18 U.S.C. § 1301) and state anti-lottery provisions (§§ 16-19-10 through 16-19-30) were relevant to the older Gossett scenario of importing out-of-state tickets.

The office relied on Logan v. Leatherman for the principle that a court gives an enforcing agency's construction of its statute respectful consideration and will not overrule it without cogent reasons, which is why it left the courier question to the Commission. It cited the New Jersey Supreme Court's description of the UberEats model in Malzberg v. Josey and New Jersey's courier-authorizing statute (N.J.S.A. 5:9-14.3) as a comparative reference, and noted Colorado's Commission approval as another example of agency-level resolution.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/opinion-on-whether-a-lottery-ticket-delivery-service-may-operate-legally-in-south-carolina/
• Original PDF: https://www.scag.gov/media/epkdu0zo/03556624.pdf

Original opinion text

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Alan Wilson
ATTORNEY GENERAL

April 17, 2024

The Honorable Christopher J. Murphy, Member
South Carolina House of Representatives
3 1 0-C Blatt Building
Columbia, SC 29201

Dear Representative Murphy:

You seek an opinion regarding whether a “lottery ticket delivery service [may] operate
legally in South Carolina.” By way of background, you provide the following:
[l]ottery ticket courier services currently offer in-state delivery solutions in sixteen
U.S. states, as well as the District of Columbia and Puerto Rico. Such platforms
allow customers the opportunity to securely reserve official state lottery tickets
through a computer, tablet, or smartphone. Serving as an extension of the existing

state lottery retailer framework, lottery couriers support the delivery of lottery
products to non-traditional players by reaching new customers where they are.

Your request letter argues that lottery courier services are not prohibited in South Carolina, just
as they have been deemed not prohibited in these other states.
You state the following as part of your argument:
[t]he South Carolina Education Lottery Act does not regulate the business model
utilized by lottery couriers. The most analogous modem parallel is the UberEats
model. UberEats is not a restaurant. It does not hold any licenses (or permits) to
prepare food. Rather, UberEats obtains food requests from willing customers through
its platform. Uber Eats then buys the food for the customers directly from the
restaurant. Finally, UberEats facilitates the delivery of the food to the customer,
charging a convenience fee to the customer for its efforts.

Similarly, lottery couriers are not licensed retailers. Rather, as recognized by one of
the few jurisdictions that regulates courier activities, couriers do not act as "retailers”
but rather as a delivery service designed to "purchase State Lottery tickets on behalf
of individuals within the State and deliver those tickets to those individuals in the
State". N.J. Rev. Stat.§ 5:9-14.3. In other words, the courier platforms simply connect

willing adult customers with the retailers who are licensed to sell the product that the
customers seek.
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The Honorable Christopher J. Murphy
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April 17, 2024

Your letter also references two opinions of the Attorney General and argues that these
opinions are not on point to the question posed. The first opinion is Op. S.C. Atf v Gen., 1989
WL 406094 (Jan. 10, 1989). This is referenced below as the “Gossett” opinion. You argue the
following:

[i]n 1989, this office was called upon to render an opinion regarding the legality of
certain types of activities relating to lottery tickets. Since that situation is clearly
distinguishable from the business model described in this opinion, the opinion in
Gossett, . . . does not provide a barrier to the activities described in this letter.

The situation described in Gossett predated the creation of the South Carolina
Education Lottery. In Gossett, lottery tickets were bought from a lottery in another

state, then transported back across state lines into South Carolina for resale or
delivery. The business model of crossing state lines to introduce lottery tickets into a
jurisdiction where such products were not then legal would have violated both state
and federal law. See, e.g., S.C. Code Ann.§§ 1 6- 1 9- 1 0 through 16-19-30; 18 U.S.C. §
1301.

The business model set forth herein is entirely distinguishable from that in Gossett.
Importantly, lottery sales are now permitted in South Carolina. All orders are
obtained from customers geolocated to be physically present within the state. Tickets
are purchased in cash from retailers licensed by the South Carolina Education
Lottery. Further, all ticket printing, scanning and fulfillment processes occur within
the state.

For those reasons, the Gossett decision does not bar the courier model in South
Carolina.

We understand, however, that the “Gossett” opinion has been cited by the Lottery Commission
as prohibiting lottery courier services under present state law. We will address this opinion
below.

Likewise, your letter distinguishes Op. S.C. Att’y Gen., 2019 WL 4729535 (Sept. 13,
2019) with respect to the question at hand. You state:
[i]n 2019, this office rendered an opinion relating to lottery ticket transfers within the
state. As this situation is entirely different from the scenario described in that letter,
that opinion does not bar ticket delivery services in this state.

In Smith, . . . this office wrestled with the legality of ticket transfers for the purposes
of avoiding offset.

Modem lottery statutes bar underage play, and generally permit the state to offset
specified lottery prizes paid directly by the state lottery against player debts such as
unpaid child support which are contained in the state's databases. See, e.g., S.C. Code

The Honorable Christopher J. Murphy
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April 17, 2024

Ann.§§ 59-1 50-21(D) (prohibiting sales to or prizes unlawfully claimed by minors);
59-150-330 (allowing unpaid taxes, delinquent child support, and other obligations to
be offset from lottery winnings).
Such legal restrictions and adverse consequences could be too easily circumvented by

profit-seeking third parties offering to claim prizes for compensation. Some
jurisdictions have referred to these third parties as "10 percenters", referring to the
typical payment the claimant gets for helping a legitimate winner avoid prize offsets.
The legal opinion from this office in Smith sought to analyze and address ambiguities
in lottery law and rules relating to such "10 percenter" claims. But here, courier
tickets are owned by the original ordering party, and that party's name is printed on
the ticket itself.
For those reasons, the Smith decision does not bar the courier model in South
Carolina.

Your question is as follows: “. . . whether lottery ticket delivery services are legally
allowed by South Carolina law.”

As will be seen below, the Lottery Act does not expressly

speak to nor address lottery courier services. Such services are neither expressly prohibited nor
authorized by the Lottery Law.
Law/Analysis

First of all, we agree entirely with your analysis regarding the Gossett and Smith
opinions.

Neither of these opinions speak to the question at hand, i.e. whether lottery ticket

delivery services are legally allowed by South Carolina state law. The Gossett opinion predated
the creation of the South Carolina Lottery.

The opinion addressed the issue of whether it was

legal at the time to buy lottery tickets in another state and sell or deliver them in South Carolina.

There was no state lottery in South Carolina when the Gossett opinion was issued.
concluded that such a transaction violated South Carolina law.

We there

We stated: “A plain reading of

Sections 16-19-20 and 16-19-30 of the Code indicates that the scheme in Spartanburg whereby
an individual pays a courier service a fee in order for the service to buy a lottery ticket in another
state which is then delivered back to the purchaser is in violation of such provisions.” (emphasis
added). However, the question here is whether a lottery courier service is authorized by the very
same state law now making the lottery legal in South Carolina and regulating the South Carolina

Education Lottery. The two questions are entirely different and should not be conflated.
Likewise, the Smith opinion is not on point. As your letter indicates, the question at hand

does not involve “10 percenter” claims. Instead, “courier tickets are owned by the original
ordering party, and that party’s name is printed on the ticket itself.”
In short, neither of these two opinions resolves your question. These opinions should not
be cited as prohibiting the kind of lottery courier service described in your letter.

While the

The Honorable Christopher J. Murphy
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April 17, 2024

question of a present day lottery courier service is an open one, these opinions do not answer that
question.

We turn now to the present Lottery law. In 2000, voters approved a state-run lottery as
In pertinent part, such

an amendment to Art. XVII, § 7 of the South Carolina Constitution.

constitutional provision states that “[ojnly the State may conduct lotteries, and these lotteries
must be conducted in the manner that the General Assembly provides by law.” (emphasis added).
In other words, the Constitution contemplates that the Legislature must regulate operation of the
State Lottery.

Pursuant to Act No. 59 of 2001 (codified at § 59-150-10 et seq.), the General Assembly

enacted the South Carolina Education Lottery Act (“the Act”) in order to implement Art. XVII, §
7, as amended. It is the Act, as well as the regulations and policies of the Lottery Commission,
which must be consulted in an effort to address your question.
The Act provides that lottery proceeds must be used for educational purposes and
programs. Created by the Act is the South Carolina Lottery Commission to implement the State
lottery. See § 59-150-60. Pursuant to § 59-150-80, the Commission is authorized to “appoint
and provide for the compensation of an executive director. . . .” The executive director of the
commission “shall direct and supervise all administrative and technical activities as provided for
in this chapter, regulations promulgated pursuant to the Administrative Procedures Act, and

Pursuant to § 59-150-60(A)(20), the
policies and procedures adopted by the board.”
Commission is authorized to “regulate the conduct of lottery games . . . and other matters
necessary or desirable for the efficient and effective operation of the lottery for the convenience
of the public.” In short, the powers of the Lottery Commission are quire broad.
Moreover, pursuant to § 59-150-150, the Lottery Commission is required to “develop and

maintain a statewide network of lottery retailers to serve the public convenience and promote the
sale of tickets or shares and the playing of lottery games as defined in Section 59-150-20(7)
while ensuring the integrity of the lottery operations, games, and activities.” Importantly, § 59150-1 60(B) states explicitly that “[l]ottery game tickets must be sold only by the lottery retailer
named on the lottery retailer certificate.” Section 59-150-70(D)(2) makes clear that all sales for
lottery tickets must be for cash only. Payment by checks, credit cards, charge cards, or other

forms of deferred payment and payment by debit card are prohibited.”
Section 59-150-210 further regulates ticket sales. A ticket may not be sold at a price
other than that set by the Commission. However, tickets may be purchased and given as a gift.
Subsection (c) of § 59- 150-21 0(C) provides that a lottery retailer may not sell a game ticket

except from the locations listed in the retailer’s contract. Further, tickets may not be sold to
persons under eighteen but may be gifted by persons eighteen or older to persons of any age.
Cancellation, denial, revocation, or rejection of renewal of a lottery retailer contract may be done
if the executive director or his designee determines such “is in the best interest of the lottery, the
public welfare, or the State of South Carolina. . . .” Section 59- 150- 180(B).

The Honorable Christopher J. Murphy
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April 17, 2024

Pursuant to R. 44-20.10, the Lottery Commission has delegated to the Executive Director
“the authority to issue lottery retail sales licenses as provided in Section 59- 150- 150(A). the
license “is a privilege and does not create a property interest and is not a legal right.”
As your letter indicates, all lottery ticket purchases must occur “in person at the licensed

retailer location, utilizing cash to obtain the tickets in question.” Your argument, however, is
that a lottery courier service is not a “retailer” under the Act and that the Act “does not regulate
lottery couriers. You argue that there is no “sale” of lottery tickets by the courier service. See
Op. S.C. Att’y Gen., 1984 WL 159818 (Jan. 31, 1984) [a “sale” requires “a contract or
agreement between two parties by which a seller, in consideration of payment or a promise of
payment of a certain price in money, transfers to a buyer the possession of property.”]. Again,
rather than selling tickets, you liken a lottery courier to a food delivery service such as UberEats
or Door Dash. See Malzberg v. Josey, 282 A.3d 1109, 1111-12 (N.J. 2022) [“The UberEats app
allows food delivery service providers and restaurants to connect with each other so that they can
fulfill orders placed by consumers.”]. Your view is that “. . . the courier platforms simply
connect willing adult customers with the retailers who are licensed to sell the product that the

customers seek.” While your argument in this regard has merit, as witnessed by the number of
states where lottery courier services are operating, we are unaware that the Lottery Commission
has ever ruled on the question of whether a lottery courier service is or is not a “retailer” for
purposes of the Act. The Lottery law, as written, requires a face-to-face transaction between a
purchaser of a lottery ticket and a licensed retailer and may or may not contemplate a third party
go-between. However, that decision would be up to the Lottery Commission, based upon the
facts. As the agency responsible for enforcement of the Act, it is up to the Lottery Commission
to determine who is a “retailer” and who is not. See Logan v. Leatherman, 290 S.C. 400, 403,
351 S.E.2d 146, 148 (1986) [construction of a statute by the agency charged with executing it is

entitled to most respectful consideration and should not be overruled without cogent reasons]. §
59- 150-1 50(A) [“The Commission shall develop and maintain a statewide network of lottery
retailers to serve the public convenience and promote the sale of tickets or shares and the playing
of lottery games . . . while ensuring the integrity of the lottery operations, games, and
activities.”].

Colorado provides a good example of a state where its Lottery Commission approved a
letter courier service. A recent Report by the Colorado State Auditor stated:
[s]ince 1983, when the Colorado Lottery began selling its first games, lottery tickets
have only been available for purchase in-person at brick-and-mortar licensed lottery
retailers, such as grocery stores, convenience stores, and gas stations, as well as at
Lottery offices and lottery-owned kiosks.
However, in 2019, a new type of business began operating in Colorado that allows
customers to order lottery tickets from a business known as a “courier through the
courier’s website or app.” The courier then purchases the tickets from their licensed
lottery retailer’s brick-and-mortar store and delivers the tickets to the customer either

The Honorable Christopher J. Murphy
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electronically or through the courier’s website, electronically through the courier’s
app, or in hard copy through the mail.
According to Lottery documentation, the first company that intended to operate under
the courier sales model in Colorado approached the Lottery in 2018, made a
presentation to the Lottery Commission in June, 2019, and began operating in
November 2019.

See Colorado Office of the State Auditor, Colorado Lottery pp. 11-12 (November 2023).
In short, the South Carolina Education Lottery Act does not expressly prohibit, nor even

address lottery courier services. Nothing in the Act mentions “couriers”, but specifies that
lottery tickets must be purchased in person for cash from an authorized retailer (at a brick-andmortar store). As discussed above, neither the Gossett opinion (nor the Smith opinion) addresses
the legality of lottery courier services.

We note as a matter of historical significance that some form of a lottery courier service
sought recognition at the very outset of the operation of the South Carolina Education Lottery.
Apparently, a “shuttle and package delivery service” (G&E Limousine Shuttle) attended a forum
conducted by the South Carolina Lottery in October, 2001, shortly before the South Carolina
Lottery was to be implemented (in January, 2002). The purpose of G&E’s attendance at the
forum was to “find out G&E might be able to provide the lottery with courier service.” See 2001
WLNR 1410754 (The State, October 11, 20012) (“Companies Look To Cash In On Lottery”). It

is unclear what G&E proposed specifically, or what the business was told at the forum, or
whether or not there was any indication from Lottery officials that such activity was permitted or
not. We are unaware of whether the Gossett opinion was cited as prohibiting a lottery courier
service under the South Carolina Lottery Law. If it was, that would have been incorrect.
Needless to say, the Act regulating the Lottery was not changed or modified as a result of the
request concerning lottery courier services. Thus, the issue posed by you has been around since
the South Carolina Education Lottery was created.
A general on-line publication discusses the status of lottery courier services in the United
States today. See Joyce, “Regulatory Review: Lottery Courier Services in the U.S.” (February
16, 2024). There, it was stated as follows:
[IJottery courier services are third party companies that enable consumers to purchase
digital lottery tickets through mobile accounts or applications. Couriers fulfil lottery
ticket orders on behalf of their patrons from licensed state lottery retailers, the latter
of which is typically unaffiliated with and independent from couriers. In this blog,
we take a look at lottery courier services in the United States and give you a glimpse
of some of the applicable regulatory framework in states where lottery courier
services are explicitly regulated and subject to licensing conditions.

The Honorable Christopher J. Murphy
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What’s the State of Regulatory Activity for Lottery Courier Services Across the US?

Much like other forms of gaming, state regulators have the authority to either

explicitly regulate or prohibit such lottery courier services.

However, such services

are unregulated in most states - that is, not addressed by state law or regulations.

As your letter indicates, lottery courier services are currently operating in a number of states.

It is apparent there is presently no express prohibition in the South Carolina Lottery Act
or in Lottery Regulations, concerning lottery courier services.

Such regulation would thus be

within the jurisdiction of the South Carolina Lottery Commission or its Executive Director and a
court would afford deference to the Lottery Commission’s analysis.
Conclusion

As discussed above, neither the Gossett opinion, nor the Smith opinion, in any way

resolves the question of whether lottery courier services are legal or should be authorized in
South Carolina.

That is a matter for the Lottery Commission to determine, unrelated to our

previous opinions.

In order for the Lottery Commission to assess whether lottery courier

services are warranted, the South Carolina Education Lottery Act must be examined. That Act
did not even exist at the time the Gossett opinion was issued.

Thus, these opinions have no

bearing on the question you present.

Our examination of the South Carolina Education Lottery Act reveals that the Act does
not expressly address lottery courier services.
lottery courier services in the Act.

There is, in

short, no express prohibition of

Absent any express prohibition, it would be a matter for

either the General Assembly or the Lottery Commission, pursuant to authority delegated to it, to
address.

For example, the New Jersey Legislature, by statute, has expressly authorized lottery

courier services to operate in that state.

See N.J.S.A. 5:9-14.3.

In a number of other states,

lottery courier services are operating, but are unregulated, apparently with the approval of state

regulators or lottery commissions.
As discussed above - at the time the South Carolina Education Lottery was to go into
effect - a business inquired of the Commission regarding the possibility of a lottery courier

service.

There is no indication as to the guidance this business was given.

However, if the

Gossett opinion was, in that circumstance, cited as precluding a lottery courier service, that
conclusion was incorrect.
In other words, it is up to the Lottery Commission - the agency to whom the Lottery’s
regulatory authority has been delegated by the General Assembly - rather than this Office, as to
whether lottery courier services will be permitted, based upon the Commission’s examination of

the South Carolina Education Lottery Act, as well as the policies and procedures of the
Commission.

As noted, such a determination has been made by the Lottery Commissions in

other states.

As we document above, a presentation was made by a lottery courier service to

Colorado officials before that service began operating in Colorado.

The Honorable Christopher J. Murphy
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April 17, 2024

In summary, the South Carolina Lottery Commission would need to resolve the factual

issue of whether a lottery courier is more akin to a “retailer” under the Act or an “UberEats”
delivery service.

This Office cannot make such a factual determination in an opinion.

The

Commission would also adjudge whether a lottery courier service is consistent with the Act’s
purpose.

In other words, any opinion by this Office as to whether a lottery courier service may

operate in South Carolina would, in effect, supersede the Lottery Commission’s regulatory
authority under the Act.

A court will give deference to the Commission as the agency which

enforces the Act. Logan, supra. However, we respectfully request that our 1989 Gossett opinion

not be used as part of any decision by the Lottery Commission.
Sincerely,

Robert DrCook
Solicitor General