Advisory Committee Says Texas Lottery Needs Better Oversight Of Couriers

Image showing lottery gaming with lotto balls along with the Texas state outline featuring the Texas Lottery logo for a story about the Sunset Advisory Committee telling the Texas Lottery it needs to tighten up its oversight of courier providers.

The Texas Lottery Commission is receiving criticism over how it handled a questionable Lotto Texas jackpot from April 2023.

The Sunset Advisory Committee, which reviews government agencies and programs in Texas, released a report saying the lottery commission is turning a blind eye to couriers.

Texas is the only state in the US where all five lottery couriers operate, allowing for online purchases of lottery draw games and scratch tickets within its boundaries.

Just over a year ago, a partnership stationed out of New Jersey named Rook Texas LLP used couriers to purchase every possible outcome of a Lotto Texas drawing with a $95 million jackpot.

Couriers responsible for nearly 10% of Texas Lottery draw sales

Texas law prohibits online lottery ticket sales, but does allow couriers to operate within state borders.

The Sunset Advisory Committee report indicated that couriers accounted for 9% of draw ticket sales in Texas for fiscal year 2023. That equated to $173 million.

That’s a stark contrast from the rest of the country. According to Eilers & Krejcik Gaming, couriers accounted for just 0.83% of the entire lottery sales in the US for 2023.

In total, EKG had couriers amassing $905 million in sales for the year. Based on the Texas courier production, that would account for nearly 20% of overall US purchases.

Winners Corner TX LLC, a retailer in Austin, received $89.2 million in FY22 sales through its partnership with Jackpocket alone.

In March 2023, Senate Bill 1820 was filed to prohibit couriers from operating in Texas. Though the Senate approved the bill, the House did not.

NJ group uses couriers to purchase all outcomes of drawing in Texas

The magnifying glass on the Texas Lottery Commission comes from an incident that occurred over a year ago.

On April 22, 2023, Rook Texas LLP purchased over 25.8 million tickets at $1 each to assure it would win the $95 million Lotto Texas jackpot.

The jackpot of Lotto Texas, a six-number draw game, had not been hit for seven months to push the jackpot to $95 million.

Rook Texas LLP was a group of players out of New Jersey who pooled funds together to purchase every possible outcome. In order to achieve this, the group had to use couriers to actually buy the tickets within the state of Texas.

One retailer named Hooked on Montana, operating in Colleyville, sold $11 million of the Lotto Texas tickets to the group. The winning ticket came through that particular purchase.

The retailer added over a dozen ticket printers ahead of the drawing to complete the large sale.

Altogether, four outlets were responsible for the vast majority of the Lotto Texas tickets for that drawing. All four were connected to courier services.

Ultimately, the winners took a lump sum payment of $57.8 million. That was a little over double their investment. However, the action wasn’t without risk. Had another player also secured the winning ticket, the jackpot share would have likely led to a loss after taxes were factored in.

Committee seeks more accountability from TLC

In response to the Rook Texas LLP actions, the Texas Lottery didn’t raise any concerns.

Instead, it touted the increased sales for the drawing as, “generating much-needed revenue for Texas schools.”

In total, 23.8% of those ticket purchases went to Texas education.

The Colleyville retailer was simply used as a printing house for tickets. It received a 5.3% commission on ticket sales, which was over $1.3 million.

While the Sunset Committee said in its report that the Texas Lottery Commission should remain in operation, it did state that it has become “stagnant.”

It believes that the Texas Lottery needs to do a better job in regulating the courier loophole.

The committee recommended establishing a Lottery Advisory Committee to provide external expertise on the state lottery. It would guide the commission on any needs or problems within the industry in the state.

This may help prevent another situation, like what happened in April 2023, from occurring again.

 

Photo by vectorfusionart via Shutterstock
Graphic from the Texas Lottery

About the Author

Drew Ellis

Drew Ellis

Lead Writer
A member of Catena Media since 2020, Drew Ellis is the Lead Writer at PlayiLottery, where he handles coverage of the online lottery industry in the US. He previously spearheaded news content at PlayMichigan, where he covered one of the most prominent online lottery industries in the US — among the many other aspects of Michigan's sprawling iGaming market. You can email him at [email protected].
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