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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 118323
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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Are there any legal issues with starting a website where I

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Are there any legal issues with starting a website where I let customers, verified to be of appropriate age of course, join "groups" to band together and increase their purchasing power for lottery tickets? Similar to office pools where a large group of people go into together, with the knowledge that if any of their tickets win, they split the proceeds according to how much they contributed?
As long as you are not providing the tickets or taking a cut of their winnings, you are not doing anything unlawful. It is not a violation of the gaming or lottery laws to merely provide a place for those interested in the lottery to connect with one another and what they do amongst themselves is between them and not your website.


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Customer: replied 7 years ago.
So it is a violation if my website were to purchase the tickets for the groups after they had formed? Would this change even if the tickets for each group were scanned and placed on a groups page on the website?

Also, I would not take a cut of the winnings, but would it be unlawful for the website to have a share in every group. Lets say the person who starts the group pays a fee up front, $1, the website then takes this $1 and enters into each group. Therefore, if any group wins, the website is entitled to whatever percentage of the profits $1 correlates, is this illegal?
Yes, since you have no way to verify whether or not they are state residents and if they give you false addresses there are laws about purchasing tickets across state lines. Also, you would likely be held to be participating in unlawful gaming because you are taking a cut of their prizes in the lottery. Your website taking a percentage as a member would be the same as you getting a cut.
Customer: replied 7 years ago.
OK, one last question then I will accept, and thank you very much for your assistance.

Same concept, but say I have a physical store, which performs the same general service, but checks ID to ensure that residents are of age, and then they would not be purchasing the tickets across state lines.

Assuming I remove the concept of taking a cut as a "member", and just simply charge a flat rate fee for the service, would this approach become legal?

You still cannot take a cut or charge a fee to buy tickets, the lottery commission would require you become an authorized seller and then you would still not be able to charge people for what you want. The states did this years ago to prevent people from cutting into their business.
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