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Among the largest instant prizes claimed in America this year, the Massachusetts and Florida Lotteries had $25 million winners. Texas had a $20 million winner.
Then there was Pikachu.
In February, Logan Paul sold his PSA 10, a perfect score, Pikachu Illustrator card through Goldin Auctions for $16.5 million, including the buyer’s premium. Yes, the yellow electric mouse from Pokémon set the record as the most expensive trading card ever sold at auction.
The most sought-after trading cards, from sports icons to Pokémon, have become valuable. That demand is pushing customers to spend more on randomized packs. Most of the cards inside are worth only a few cents. A few are worth millions. For lottery marketers, the pattern should look concerningly familiar.
One Pack to Bring Them All
According to Card Ladder data reported by The Wall Street Journal, the company’s proprietary Pokémon index rose 3,821% from 2004 through August 2025. Over the same reported period, the S&P 500 price index rose 483%. (These figures measure price appreciation.)
Some PSA 10 first-edition Base Set cards posted more-than-tenfold completed-auction comparisons: Charizard sold for $8,800 in September 2016 and $270,100 in August 2025, while Blastoise sold for $2,550 in September 2016 and $40,250 in May 2025.
This is not a niche market for the rich and geeky. Walmart said trading-card sales on its online marketplace rose 200% between February 2024 and June 2025. Target said its trading-card sales increased nearly 70% during the first part of 2025, putting the category on track to exceed $1 billion in annual sales.
Circana’s March 2025 U.S. survey found that 19% of adults had bought Pokémon cards for themselves in the prior six months. Many stores sell out as soon as they get a new shipment of cards in. In May, the Pokémon Company acknowledged that very high demand is limiting availability and said it is printing additional cards at maximum capacity.
Even new trading cards can sell for hundreds on the open market. A “Mega Gengar ex, 284/217” is selling for approximately $1,250. Instead of buying it on the open market for an eye-watering sum, players have the option to pull one from a booster pack.
A booster pack is a small, sealed foil package containing a randomized selection of trading cards. Most cards are worth very little. The combined value of most cards in a pack is less than the pack itself. It takes a lot of luck to generate a significant return. For instance, TCGplayer, a trading card reseller, estimated the odds of opening a Mega Gengar at roughly 0.07%, or 1 in 1,500 packs.
This is where a game begins to resemble a lottery. Scarcity is part of the design. A manufacturer can decide that one version will be common, another will appear once in several boxes, and a third will exist only once. Few examples demonstrate this better than Magic: The Gathering’s “The One Ring.”
In 2023, Wizards of the Coast released a card set based on The Lord of the Rings. (As someone who used to play Magic, that sentence felt very odd to write.) They announced there would be a special, one-of-one version of the card “The One Ring,” printed in the fictional Black Speech of Sauron using Tolkien’s Tengwar letterforms.
Collectors began buying and opening packs in search of it. Bounties worth seven figures appeared before the card had been found. When it was found, the musician Post Malone purchased it for $2 million.
It’s Super Effective Entertainment
Traditionally, collectors buy a single pack, several packs, or an entire box of boosters and open them themselves. The suspense is a large part of the appeal. Influencers have turned that experience into a lucrative form of entertainment by opening packs on their streams. To generate more money, some will sell spots in a “box break” or make their own “packs” to sell.
Box breaks are group purchases in which a seller divides the contents of a sealed box of trading cards. Suppose someone purchases a box of baseball packs for $1,000 and wants to resell them. Rather than selling all the packs off to one customer, the “breaker” sells 30 “spots,” one for each Major League Baseball team in front of a live online audience. A buyer purchases the Dodgers spot and receives all of the Dodgers cards opened from the box. The “breaker” then opens the packs on camera and distributes the cards after the stream.
Some breakers randomly assign spots after all have been sold. Others divide the box by player, card number, or some other category. Random assignments add a second layer of uncertainty. Some spots, like a specific team or player, may have a significantly lower average return than others.
Whatnot, a livestream-shopping marketplace that resembles an eBay and Twitch hybrid, allows sellers to conduct these breaks before online audiences. Its current rules contain one important requirement: Every buyer must receive at least one card. If the buyer’s assigned team does not appear in the opened product, the seller must still ship that buyer a card, a potentially important legal distinction.
Then there are repacks. A repacker acquires cards that have already been opened and places them into packaging, then sells those packs. They design the pool, determine its contents, and control how the valuable cards are distributed. Imagine that a repacker assembles 100 envelopes. One contains a card worth $5,000. Four contain cards worth $500. The remaining 95 contain cards worth between $10 and $75. Each envelope sells for $100. The $5,000 card supplies the reason to keep buying.
Platform rules vary considerably. Whatnot permits only repacks from manufacturers on its Identified Product List and says the contents of an individual package must be unknown to both buyer and seller. Other platforms emphasize different safeguards, but not all require an independent party to randomize and pack the cards.
Still other platforms eliminate the need to assemble physical packs altogether. On Boxed, creators use the “Forge” portal to select the possible prizes and assign each one odds. The result is a creator-generated digital repack, although Boxed calls it a mystery box. The platform calculates the price of opening the box, and the creator earns a commission each time someone buys one.
Boxed has gone one step further after the reveal. Players who pull a valuable card are given a few options. They can have it shipped or exchange it instantly for store credit that then can be used to open another box. The system makes it easy to try again. And again. And again. Perhaps they get the card they want. They also can keep wagering their store credit until little or nothing remains.
On Boxed, users purchase digital mystery boxes, or repacks, that can cost anywhere from a few cents to $10,000. When the box opens, cards spin past like a slot machine. Afterward, the platform offers the option to sell the prize for store credit and play again.
Prepare for (Legal) Trouble
The card industry has already faced one serious federal challenge, Chaset v. Fleer/SkyBox International, in the late 1990s. The defendants included major card manufacturers, distributors, sports licensors, and the companies involved with Pokémon cards. Several plaintiffs were parents acting on behalf of children.
The plaintiffs argued that card packs contained the three traditional elements of a lottery. There was consideration because the customer paid for the pack. There was chance because the contents were randomly determined. And there was a prize because a chase card could be worth hundreds or thousands of dollars on the secondary market. They alleged that at least part of the pack’s purchase price was paid for the opportunity to obtain that valuable card. They attempted to treat the alleged illegal gambling operation as racketeering activity under the federal Racketeer Influenced and Corrupt Organizations Act, better known as RICO, and sought compensatory and treble damages.
At an earlier stage of one of the cases, a federal trial judge found that the gambling theory was at least legally plausible. Applying New York and New Jersey law, the judge in one case reasoned that a product does not necessarily escape lottery laws because the purchaser receives something else of value. A theater ticket could include both admission to a movie and a chance to win cash. The litigation eventually turned on a different question. Even if the card sales violated state gambling laws, had the purchasers suffered the kind of concrete financial injury required to bring a private federal RICO claim?
The courts concluded that they had not. The buyers knew the packs contained random cards and that only some packs contained chase cards. Since the purchasers received cards, they had “received the benefit of their bargain.” The Ninth Circuit affirmed that reasoning in 2002.
The decision helped reinforce a broader industry assumption: when buyers receive the randomized merchandise they were promised, they may struggle to prove compensable financial injury. The card companies, in other words, won without obtaining a definitive answer to the industry’s most uncomfortable question. The court decided that these particular purchasers could not collect federal racketeering damages. It did not declare that the commercial practice itself was beyond the reach of gambling law.
Digital lootboxes are now bringing this question back to the forefront.
And Make It Double
In February, New York Attorney General Letitia James sued Valve, the company behind the Steam video-game platform, alleging that some randomized digital lootboxes constitute illegal gambling.
Think of lootboxes as card packs for digital games. A player pays to open a lootbox containing a randomly selected digital item, often a cosmetic character accessory or weapon skin. Some skins are very rare. As of 2025, the most valuable documented item generated by a Valve game’s randomized reward system was a StatTrak Factory New AK-47 Case Hardened skin bearing the coveted No. 661 “Blue Gem” pattern. It was sold privately in June 2024 for more than $1 million. The odds of receiving this skin are 1 in 20.8 million with each lootbox costing roughly $100. The New York attorney general has specifically cited the sale while discussing Valve’s lootbox system.
Valve invoked Chaset, the Ninth Circuit decision that rejected civil RICO claims for lack of cognizable financial injury without deciding whether physical card packs violate state gambling law.
Meanwhile, customers have filed private arbitration claims against Whatnot alleging that randomized card breaks and certain repackaged sports-card products amount to illegal lotteries or unlawful gambling. On June 20, ESPN reported that Paul Lesko of Lesko Law represented nearly 70 Whatnot customers in the private arbitration effort. Whatnot says gambling is prohibited on its platform and “absolutely reject[s]” the complaints’ characterization of its business.
The claims principally assert California-law lottery violations and are proceeding in private arbitration. Taken together, they raise three related questions.
The first is whether dividing a factory-sealed box among several buyers changes the legal character of the sale. In a break, each buyer purchases only a defined share of the contents. In randomized formats, chance determines which team, player or portion of the box the buyer receives. California law defines a lottery broadly to include schemes in which buyers pay for a chance to obtain property, or a share of it. Does splitting a sealed box among several buyers turn an ordinary product sale into a lottery?
The second concerns repacks. California law treats certain sports-card grab bags as lotteries when buyers pay for a chance to receive a designated prize placed in some, but not all, of the packages. Does giving every buyer a card make the repack ordinary merchandise, or are buyers really paying for a shot at one of the advertised high-value cards?
The third concerns Whatnot’s role. Its terms describe Whatnot as an online marketplace that facilitates transactions and is not a party to buyer-seller agreements. Sellers host the streams, offer the inventory and ordinarily fulfill purchases. But Whatnot provides almost all of the functions necessary for sellers to conduct these services. If a challenged sale is found to be a lottery, could Whatnot’s involvement amount to setting up, managing or assisting it?
Blasting Off Again
While Polymarket and Kalshi dominate gambling headlines, products adjacent to gambling and other forms of speculative entertainment are proliferating. From retail investing to Pokémon cards, consumers are increasingly drawn to products that offer a small chance of an extraordinary return.
It also isn’t just for adults. At the 2025 Fanatics Fest, Greg Marangell described 10-year-olds offering him “thousands in cash” for rare Downtown inserts. He joked that some children’s card binders rivaled the retirement accounts of recent college graduates. Children are actively participating.
True, a card is not cash. But when its value is advertised, it can be sold quickly on online marketplaces or instantly exchanged for credit, making the distinction less obvious. Whether a consolation card is enough to preserve that distinction is the question regulators and courts need to answer.
The card industry is betting that they won’t.