Firm seeks to be Netflix for lottery playersLottoGopher manages the tickets and even retrieves the winnings, depositing them onto a credit card on file. It also gives users the ability to enter pools with other users to increase the odds of winning.
Michael Hanken of Fresno calls himself "an online person."
He's also been a lifelong lottery player. But he's not a fan of driving to the store to buy tickets. In search of a secure solution, he found LottoGopher.com about two months ago.
"There are a lot of scams," Hanken, 53, said. "I tried to find something legal."
LottoGopher is one of a handful of businesses that sells big-jackpot games online to California residents. The legal issues involved in establishing such a business can be tricky, but the market is lucrative â€" in fiscal 2012, Californians spent more than $1.1 billion on Lotto games, according to the California Lottery.
And with a number of high-profile jackpots recently from multi-state games including MEGA Million and POWERBALL, it's likely that number will only rise.
The allure of hundreds of millions of dollars in winnings is what motivates Hanken, who moved to Fresno from Germany about 15 years ago. An information technology professional, Hanken is vice president of IT at Multiquip, based in Southern California.
Hanken pays a subscription fee of $12 per month. Another option of $99 per year brings the monthly cost down. That allows users to pay the face cost of tickets for three games â€" MEGA Million, POWERBALL and SuperLotto Plus. LottoGopher manages the tickets and even retrieves the winnings, depositing them onto a credit card on file. It also gives users the ability to enter pools with other users to increase the odds of winning.
LottoGopher doesn't take any part of the winnings. Its revenue is from subscription fees. In beta testing mode for the last year and half, it officially launched to the public in late December.
James Morel, founder of LottoGopher.com, declined to reveal detailed statistics on his users, but he said the website has thousands of them with winners in every single drawing.
"We are growing fairly quickly," he said.
LottoGopher also has a free option for users. They can buy a ticket to only one game per week without use of the pooling options.
Morel said the site's bread-and-butter are the subscription options, and while the free subscription isn't profitable, it can serve to draw subscribers in.
"We lose a little money," he said. "We offer it as a courtesy."
Morel said LottoGopher.com uses an automated system to purchase the tickets from an authorized California Lotto retailer. Most of those purchases are made with retailers near LottoGopher's Southern California headquarters, but Morel said they are looking into ways to spread those purchases around â€" especially to retailers considered "lucky" for past jackpots.
While LottoGopher is only operating in California, it is looking to expand. Morel said there are up to 22 states where it could work. Individual states often have differing lottery rules that automatically preclude services like LottoGopher from operating. Florida, where there is a rule that nobody can redeem a winning ticket on the behalf of someone else, is an example.
Seniors are the most obvious demographic targeted by the site, but there are also younger users who have grown accustomed to subscription services online. The average user of the site is 48 years old, Morel said.
Morel said that while LottoGopher.com is being optimized for viewing on mobile devices, creating actual mobile applications would create another complicated layer of legal compliance. LottoGopher is focusing on making its existing website more user-friendly.
Hanken of Fresno said he hasn't won big money yet from his weekly MEGA Million play, but who knows?
"I know the odds are against me, but I'm not too disappointed," he said.