New York lottery players could be losing more than just the price of a ticket on their weekly purchases.
Some people who buy tickets through subscriptions are being charged a cash-advance fee on the purchases — plus interest — when they use their MasterCard Inc. cards, Jennifer Givner, a New York State Lottery spokeswoman, said Friday.
Complaints have been averaging around 10 to 15 a day, she said, since a new federal law took effect June 1 aimed at curbing illegal internet gambling. There are roughly 22,000 lotto and mega-millions subscribers that pay with credit cards, she said.
There have been issues with both JPMorgan Chase & Co. cards and Capital One Financial Corp. cards, according to a report in the New York Daily News.
Givner said the Lottery feels mistreated by both MasterCard and issuers.
"They refuse to engage us. There's an air about them that says we're better than the law," she said. "That's unacceptable. This is about our customers. They shouldn't have to pay extra."
Givner said the New York lottery is speaking to the New York Attorney General's Office as well as state politicians about resolving the fee issue.
A MasterCard spokeswoman said the payment network is not responsible for setting interest rates or fees.
However, Capital One spokeswoman Pam Girardo wrote in an e-mail that the fees stem from a policy adopted June 1 by MasterCard that "all gambling transactions (to include state lottery games) are to be classified as cash."
As a result, Capital One must "process these transactions as a cash advance (which comes with a fee). It is MasterCard's methodology of assigning the transaction as a cash advance that triggers the pricing we pass on to the customer."
JPMorgan Chase spokeswoman Gail Hurdis wrote in an e-mail that JPMorgan Chase treats "cash-like transactions" — such as lottery-tickets and casino gaming-chip purchases — as cash advances, and said that the fees imposed for these purchases are included in the terms and conditions provided to cardholders.
The issue hits only MasterCard cards. Givner said the Lottery stopped accepting Visa Inc. cards when the law took effect because payments company told the Lottery that it was preparing to change its classification for state lottery purchases, switching such purchases from a government services code to a gambling code.
"We would be put together with other purchases for illegal gambling and our players would be subjected to additional fees and interest charges," she said.
The Lottery did not drop MasterCard because it "created a code that did not lump us in with illegal gambling."
However, Givner said MasterCard "never indicated to us that they would be subjecting our customers to additional fees."
The Lottery also accepts Discover Financial Services cards for subscriptions, though Givner said there have been no complaints stemming from Discover transactions. It does not accept American Express Co. cards.