Officially Restricted to Purchases Outside the US, but Purchase Possible Through 'Proxy Buying'
Court Recognized Illegality of 'US Lottery Proxy Buying' Last April... Awaiting Supreme Court Ruling
[Asia Economy Reporter Kim Jeong-wan] Interest in U.S. lotteries such as Powerball and Mega Millions, which offer prize amounts hundreds of times larger than those in Korea, is growing.
On the 31st (local time), The New York Times (NYT) reported that the Powerball jackpot has exceeded $1 billion (approximately 1.4 trillion KRW) after 37 consecutive draws without a first-place winner. This is the second-largest jackpot amount in history.
Due to the ultra-high prize compared to domestic winnings, interest in Korea has also increased. According to the results of the 1039th Donghang Lottery drawing on October 29, there were a total of 16 first-place winners who matched all six numbers, with each receiving 1.585 billion KRW. The Powerball jackpot reported by the NYT is about 883 times the amount received by a single first-place winner in Korea.
In Korea, it is also easy to purchase U.S. lottery tickets through "purchase agency terminals." After entering a mobile phone number and verification code, payment can be made via a payment card. If the ticket number wins, the purchase agency collects the prize locally and pays the buyer. For first and second prizes, winners must collect the prize in person, while prizes below third place are delivered by the agency.
However, U.S. lottery companies such as Powerball and Mega Millions specify that foreigners can purchase U.S. lottery tickets but must do so within the United States. Powerball’s official website states, "You do not need to be a U.S. citizen or resident, but tickets must be purchased within the Powerball sales jurisdiction," and "Purchasing outside the jurisdiction via the internet or mail is restricted."
Mega Millions also explains on its website, "Visitors to the U.S. can purchase tickets, but tickets are not sold outside the U.S.," and "We have never partnered with any company claiming to sell Mega Millions tickets worldwide, including online." It also clearly states, "Mega Millions rules prohibit proxy ticket purchases."
The reason why U.S. lottery tickets can be purchased in Korea despite these regulations is that purchase agency activities remain in a regulatory blind spot domestically. Korean purchase agency companies explain that since U.S. lotteries are not issued domestically, there are no clear business standards or penalty regulations.
However, concerns have been raised about the reliability and legality of purchase agencies. In 2018, a major fraud case occurred where consumers were deceived under the pretense of overseas lottery purchase agency services. The damage amounted to 43.1 billion KRW.
However, in April, a court ruling imposing fines on purchase agency operators appears to have put a brake on U.S. lottery sales. In April, the court fined a purchase agency operator A 5 million KRW for illegal "lottery brokerage," which is prohibited by law.
The court judged that purchasing U.S. lottery tickets through kiosks via purchase agencies violated the law. To protect work ethics and public morals, the National Sports Promotion Act strictly restricts lottery issuance, and even if the lottery purchased through an agency is legally issued under U.S. law, it violates domestic law. A has appealed the first trial verdict. Depending on the Supreme Court’s ruling, the influence on purchase agency terminal companies and others is expected to be inevitable.
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