Lottery betting is the activity of predicting the results of a lottery draw and placing a wager on the outcome. Lottery betting (also known as lotto betting) is a form of

online gambling Online gambling is any kind of gambling conducted on the internet. This includes virtual poker, casinos and sports betting. The first online gambling venue opened to the general public was ticketing for the Liechtenstein International Lottery i ...

, run by licensed betting firms, where players place bets on the outcome of lottery draws instead of buying physical or online tickets via official lottery operators. By betting on the outcome of a lottery draw, rather than purchasing an official ticket, players are able to take part in

international International is an adjective (also used as a noun) meaning "between nations". International may also refer to: Music Albums * ''International'' (Kevin Michael album), 2011 * ''International'' (New Order album), 2002 * ''International'' (The T ...

and

state State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Department of State * ''The State'' (newspaper), a daily newspaper in Columbia, South Carolina, United States * ''Our S ...

lottery draws that are usually out of their jurisdiction. For example, a resident of the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the European mainland, continental mainland. It comprises England, Scotlan ...

could place a bet on the outcome of an American lottery drawing, such as

Mega Millions Mega Millions (originally known as ''The Big Game'' in 1996 and renamed, temporarily, to ''The Big Game Mega Millions'' six years later) is an American multi-jurisdictional lottery game; as of January 30, 2020, it is offered in 45 states, the D ...

Powerball Powerball is an American lottery game offered by 45 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. It is coordinated by the Multi-State Lottery Association (MUSL). From its inaugural drawing on April 19, 1992, unti ...

, even though they would not be eligible to buy official tickets.

Models

Insurance-based

Most betting firms that provide lottery betting operate using an

insurance Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...

-backed model. Companies using this model are not required to purchase tickets from official lottery operators. Instead, when a player places a wager on a lottery, the company then forwards this bet to a third-party insurance company. The betting company pays a set fee for every wager placed to the insurance company in order to offset the risk of a large lottery prize being won. If a player wins a large prize (such as a jackpot), the insurance company pays the betting company, who subsequently give the money to the winning player. In the event of small prize wins, the betting firm will typically pay the prize directly to the player from their own funds. Insurance-backed lottery betting firms are required to hold betting licenses in the jurisdictions they wish to operate.

Ticket reseller

Companies operating using a ticket reseller model purchase tickets for the official lottery draw on behalf of the player. The company then charges the player the price of the ticket, as well as an extra commission. In the event of a winning ticket, the company collects the winnings from the official lottery operators and then forwards the winnings on to the player. Lottery messenger services earn income from charging a service fee for the tickets they sell. This fee goes towards paying staff and maintaining the quality of the website.

Types of bets

Draw betting

Betting on the outcome of lottery draws is the most common form of lottery betting. This follows the same format as purchasing online lottery tickets in that players follow the same ruleset as found on the official lottery draw. Typically, this means that players choose the same amount of numbers and win the same prizes if they match these numbers, as they would have if purchasing an official ticket. The cost of betting on a lottery can differ from the cost of purchasing an official lottery ticket.

Number betting

With some betting firms, players are also able to bet on certain numbers being drawn, rather than following the ruleset of official lottery operators. For example, a player could bet on just one number being drawn on a specific lottery. With number betting, the betting company can set its own prize amounts and pays out prizes directly to customers.

Legality

Lottery betting is legal in parts of the world where online gambling is permitted, including most European nations, although it is heavily regulated. Companies offering lottery betting services are required by law to hold a relevant gambling license for the jurisdiction of their customers. Following a year of consultation, the British Government banned third-party betting on the EuroMillions lottery in April 2018. This was, in part, due to its violation of the

Gambling Act 2005 The Gambling Act 2005 (2005 c 19) is an Act of the Parliament of the United Kingdom. It mainly applies to England and Wales, and to Scotland, and is designed to control all forms of gambling. It transfers authority for licensing gambling from t ...

, and "closed the loophole" used by betting companies to allow gamblers to bet on international lotteries in the UK.

References

{{Gambling Gambling games