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Your Prizes, Your Way

A few lotteries now offer the convenience of mobile cashing, and players have responded enthusiastically.


By Patricia McQueen

June 25, 2024

NASPL Insights Online

Lotteries have always relied on their retail partners for both sales and prize payments, as the majority of prizes fall in the traditional range payable at retail. For most lotteries, that retail pay limit is roughly $600, although sometimes there are higher limits, either for all retailers or a select subset. Some, but not all, lotteries offer retail cashing bonuses for every ticket cashed.


Yet consumers continue to expect more in this day and age, wanting options for any transactions they conduct for goods and services – lottery or otherwise. Lottery tickets are sold online in a few American jurisdictions, and now mobile cashing has become an attractive alternative for players claiming lottery prizes from retail-purchased tickets.


It’s essentially a modernization of the claim-by-mail options offered by virtually every lottery. There’s no doubt that the pandemic fueled new strategies for paying prize claims, with a boost in claim-by-mail across the board and the introduction of drive-thru claims or drop boxes in some cases.


There is considerable variation in eligible prize levels for mail-in claims. Among North American lotteries, about half allow such claims for any prize level, although there may be individual exceptions related to jackpot wins or multi-jurisdiction games. The rest of the lotteries offer mail-in claims up to certain dollar amounts; the upper threshold might be as low as $599 or as much as $5 million, depending on the lottery.


Taking prize claims to further levels of convenience, a number of lotteries have an online claims process. Most Canadian lotteries allow online claims, with individual variations on eligible prize amounts. Four American lotteries currently offer mobile cashing in some form; in order of implementation, they are Ohio, Massachusetts, Virginia and Texas. Three more allow players to initiate a claim through standard digital means – Colorado and Illinois each have an online claims process, while players can use email in Oklahoma.


This article focuses on the four existing mobile cashing programs. It should be noted that each lottery has its own rules for exceptions that are not cashable through mobile claims. Those might be tickets that contain multiple small wins that individually don’t meet any mobile cashing minimum, games with annuity prizes, or certain prize wins in multi-state games.



Ohio Lottery

The Ohio Lottery mobile cashing program began on April 20, 2020, allowing customers to cash winning tickets between $50 and $5,000 and have their winnings directly deposited to a bank account. The upper limit was later increased to $25,000. Draw game tickets with multiple small single wins, which exceed $50 only when combined, are not eligible, nor are winning tickets that include a Lotto + Kicker combination.


Mobile cashing is built into the Lottery’s app, and players using the feature must have an account through the loyalty program, MyLotto Rewards. By using the loyalty program, players have a single sign on and seamless experience, with convenience being one major key to success. As of early June, there were more than 106,000 mobile cashing users, roughly 7% of the Lottery’s MyLotto Rewards members. 

Ohio introduced the program with a wide-ranging campaign including a press release at launch, notices on the Lottery’s website and through MyLotto Rewards, social media, email marketing and messaging at retail. Currently, mobile cashing is included in much of the Lottery’s marketing materials. Retailers have embraced the program, and they also provide mobile cashing information to customers as an option to cash their winning tickets.


Because Ohio’s mobile cashing was launched during the pandemic, the adoption rate was significant. Approximately 200 tickets were cashed the first day, and more than 3,500 in the first week. The number steadily increased to an average of 650 to 700 tickets cashed per day. At launch, 37% of mobile cashing customers were from Generation X, followed by 30% millennials and 27% baby boomers, with 5% being from Gen Z. However, the number of millennials and Gen Z users is increasing slowly.


The first to introduce mobile cashing, the Ohio Lottery has learned a great deal since 2020. It became quite clear that multiple cashing options are essential for the optimal player experience, meeting the ever-changing needs and expectations of players. So, in addition to increasing the upper claim limit for mobile cashing, there have been other new initiatives. These include a Super Retailer program, with select retailers able to cash prizes between $599 and $5,000, and a digital claim form, which allows players to submit a claim online for any prize level.


The Ohio Lottery’s mobile cashing range overlaps prizes that can be paid at retail, and it is estimated that roughly 85% of all winning tickets under $599 are paid at retail. Of all winning tickets cashed outside of retail, those cashed via mobile increased from $46.5 million in 2022 (62%) to more than $80 million in 2023 (74%). For 2024, it is expected that almost 80% of tickets cashed outside of retail will be via mobile.



Massachusetts Lottery

About a year after Ohio’s launch, the Massachusetts Lottery debuted its own mobile cashing option in May 2021. Players must have a Mass Lottery Player Account in order to access the ticket scanner and mobile claim features in the Lottery’s app. Winning tickets between $601 and $5,000 are eligible, as long as they don’t have recurring prizes (like a win-for-life prize). Similarly to the Ohio program, prizes are transferred directly to the player’s linked bank account.

To publicize the launch, the Lottery ran a paid social media campaign. Since then, awareness has come through a heavy reliance on Lottery-owned assets, including customer-facing displays at retail agents, Keno monitors, the website and app, signage at regional offices, and emails to newsletter subscribers and second-chance drawing participants. A six-month promotion wrapping up in late June incentivizes players to register for mobile cashing and other features by offering new player account registrants a chance to win a $500 prize. The app’s ticket scanner provides a seamless experience, so when players are scanning tickets to check for a winner, they will be prompted with a response that details what they won and gives them the option to start a mobile claim. Ticket scanning also allows the automatic entry of eligible tickets into the Lottery’s second-chance drawings.


In roughly three years, the Mass Lottery acquired more than 343,000 new player account registrants. Over that time period, 45,469 unique users claimed at least one prize, and the total amount of prizes claimed was over $148 million. In May, 30% of eligible claims (prizes from $601 to $5,000) were made through the app.


Lottery officials emphasize that it’s important to have a strong working relationship between the digital team and the customer service reps handling player inquiries in order to ensure the best experience for players. New scenarios continually pop up that must be handled with care and added into Mass Lottery’s day-to-day processes. Even after three years, the Lottery continues to learn and streamline its processes.



Virginia Lottery

The Virginia Lottery is the first with a full iLottery program to also add a mobile cashing option for retail purchases, doing so in March 2023. Not stopping there, also added was an option for players to withdraw funds from their wallet at retail locations. It’s all about prioritizing the continuous improvement of the player experience, because players want a variety of cash-out options for their digital wallet. Mobile cashing and the option to withdraw at retail are two features that help bridge the online and retail channels while allowing players flexibility and more ways to easily engage with the Lottery.


Using mobile cashing, players can redeem prizes up to $5,000 from tickets purchased at retail directly into their online player wallet. To participate, players must set up a Virginia Lottery account, if they don’t have one already. Funds in the wallet can be transferred at any time to approved bank accounts or other payment methods attached to the player’s account, such as debit cards and Venmo.


To publicize mobile cashing after launch, Virginia focused primarily on communication to existing players with online accounts, retail point of sale materials, and other owned media advertising. There is also an ongoing promotion offering ten free eInstant games with the first retail ticket cashed.

To date, the majority of ticket cashing has taken place at lower prize amounts, and about two-thirds of players are redeeming prizes from Scratcher tickets. So far, there have been nearly two million tickets cashed for over $33 million in prizes, supporting the Lottery’s goal of providing players with ease of interaction.


Along with the introduction of mobile cashing, Virginia also added the ability to make online wallet withdrawals at any lottery retailer. Players can create a withdrawal voucher for up to $250 (with a maximum of five vouchers per day), which they can cash at any retail location (subject to the retailer having available cash funds). More than 8,000 players have been approved to withdraw at retail since the launch of this feature.


There are additional challenges to this option that are being addressed by improving communications about the vouchers and retailer acceptance. For example, players may not expect the processing time required to create the vouchers, and retailers may not fully understand the program.



Texas Lottery

The Texas Lottery is the latest to launch mobile cashing, with a preliminary rollout that began in August 2023. The eligible prize range is $600 to $5,000, with the goal of providing an efficient and convenient claim and payment process for players while not competing with the Lottery’s licensed retailers.


Players must first register for a player account and then scan their tickets through the Lottery’s app. Unique among the lotteries offering mobile cashing to date, Texas Lottery players must be able to utilize Zelle payments to receive their funds. It’s all about getting prizes into players’ hands as quickly as possible – payments through Zelle can be processed within minutes, whereas by linking directly to a bank account, it may take two to five business days for the prize funds to be available to the player.


The Lottery has used the preliminary phase, without widespread publicity, to pinpoint adjustments required in its internal system to reduce the volume of claims placed on hold, which necessitate manual processing. For example, no payment transactions are submitted to the Lottery’s bank (Bank of America) during weekends and holidays. This practice aids in mitigating payment failures caused by BOA system maintenance. The Lottery team, including IGT, is also working on other details, such as providing the ability to resubmit transactions that may fail for any reason, rather than the fallback of paying the player via a physical check. 


Once these details are ironed out, the Texas Lottery will consider widespread promotion of mobile cashing. Until then, officials are happy with the percentage of claims being processed via mobile with no real promotional effort expended.


From August 14, 2023, through May 29, 2024, there were a total of 106,911 prize claims through all options. Of those, 92,370 claims were paid from $600 to $5,000, with 13,219 coming through the mobile claims process, or 14.3% of eligible claims. That percentage is slowly rising, again without any real promotion. Just this year, from January 1 through May 29, there were a total of 59,232 prize claims. Of those, 51,593 were paid from $600 to $5,000, with 8,859 coming through the mobile claims process, or more than 17.1% of eligible claims.

Constantly Learning

These real-world experiences by pioneering lotteries clearly indicate that players seek convenience and seamless participation in lottery from purchase to prize claims. Lotteries are eager to do what they can to improve the total player experience.


One side-effect of cashing smaller prizes through mobile apps is that it may help lotteries capture more funds that may be due to cover past due child or spousal support or state debt.


Although mobile cashing is generally a fast, secure and convenient way for players to receive their prizes, there are some challenges (as there would be for any new technology). As noted above, lotteries continue to evolve their operational policies and procedures. And with all programs and technologies, security of customer data, ease of use for a customer and fraud mitigation strategies are essential for a successful, long-term program.

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