The Texas Lottery is facing a lot of questions when it comes to couriers.
Online lottery sales are not legal in the state. However, lottery courier services provide third-party transactions of retail games through online means.
This is a hot-button issue for state lawmakers.
The Texas Senate Committee on State Affairs met Tuesday to discuss couriers and their status in the state.
Ryan Mindell, Executive Director of the Texas Lottery, spoke during the committee meeting. He handled questions from members and stressed the continued need for legislative guidance on the issue:
“The lottery is not authorizing the sale of these tickets online, and we don’t have any regulatory jurisdiction over what happens after this ticket is sold at the brick-and-mortar location.
“We’re very mindful and respectful that the legislature is the source of authority. If there is a gray area, then we do not want to go into that gray area without clear direction from this body that it’s okay to do that.”
Texas Lottery says tickets are purchased legally
The debate on couriers in Texas comes down to details.
Texas doesn’t allow for online lottery sales, but couriers don’t sell lottery tickets online. They are more of a “Door Dash” type service, taking orders then fulfilling them based on the current laws in Texas.
One concern from lawmakers is that some couriers also set up licensed retail locations where they perform most of their transactions.
While the Texas Lottery can’t take action against a courier based on the laws, some members of the committee believe it could do so against the retail location.
Mindell stated Tuesday that as long as the tickets are purchased legally at a licensed retailer, their hands are tied as to what happens with the ticket:
“We have the authority over the licensed lottery retailer, and we don’t believe we have the ability to take action against the licensed lottery retailer after a bearer instrument (a ticket) is printed at the licensed lottery retailer, is sold at the licensed lottery retailer in person, and then ultimately another entity downstream takes action with that bearer instrument.”
Mindell proposes 2 options for lawmakers
During Tuesday’s meeting, Mindell presented the committee with two options that he believes will solve the issue.
Ban couriers, or allow the Texas Lottery to regulate couriers.
Until either happens, Mindell says the state lottery is acting appropriately:
“I’m not saying that we have the bias towards this should be happening in the state or it should not. That’s why we’ve developed a proposal for your consideration, to either ban or regulate. Because, I’m not saying that this is an activity that should be happening in Texas. I’m not here to defend the courier companies. What I’m here to say is that I don’t believe I have the tools to hold the courier companies accountable for when the ticket is being sold at the licensed lottery in brick-and-mortar locations.”
A bill to ban couriers was introduced in the 2023 legislative session for Texas. However, the bill did not advance.
Now, it is expected that some form of legislation will be brought forward when the 2025 legislative sessions begin in January.
Former NASPL President supports lottery couriers
Along with Mindell’s testimony, the committee also heard from Bishop Woosley, an advocate for the couriers.
Woosley is a former Director of the Arkansas Lottery and NASPL President.
Tuesday, he spoke on behalf of the Coalition of Lottery Courier Services, which represents Jackpocket, Jackpot.com, and Lotto.com.
He dispelled concerns to the board about the operations of these third-party companies. Woosley even noted they would welcome state regulation:
“The key points I want to make are that lottery courier services do not sell tickets online. They’re service providers that accept orders for lottery tickets and then fulfill that order in person at a licensed Lottery retailer. The courier industry itself, welcomes regulation.”
Woosley also stated that the three couriers he represents do not accept group-buying purchases. This was mentioned due to an issue in 2023 where a small group purchased nearly every outcome of a $95 million Lotto Texas drawing. The partnership, “Rook TX,” used multiple couriers to achieve this purchase.
While the committee stressed concerns about the integrity of its games, Sen. Jose Mendez noted, that the actions led to an increase in funds for Texas schools:
“The upside is, how much more money did we make for the school fund based on the additional sales?”
Woosley added that the couriers he represented have age verification tools to keep anyone under 18 from using their services.
Committee members addressed that concern with Mindell. The director pointed out that the state lottery could take action if it is knowingly aware of underage gambling with its products:
“I do not want anyone under 18 in Texas involved with lottery tickets, period. I believe the proposed frameworks on courier services we developed would give us the tools to directly hold violators accountable.
“When the agency becomes aware of minors purchasing lottery tickets, we take appropriate regulatory action on licensed lottery retailers, and we can and do refer those actions to relevant law enforcement authorities for prosecution under the current statute.”
Photo by Rawpixel.com via Shutterstock
Graphic from the Texas Lottery