The Texas Lottery Commission (TLC) confirmed its position on lottery couriers in a board meeting April 29
Although the online lottery has been illegal for years in Texas, third-party courier services were untouched and allowed gamblers to purchase tickets via the internet. As reported at PlayTexas.com, the state recently took an opposing stance to these parties after several recent massive jackpot winners were found to have used courier services.
Tuesday’s unanimous vote finalized the ban, which was first proposed Feb. 25.
Getting rid of online sellers
The easiest way to think of lottery couriers is like an online marketplace for lottery tickets. If someone is too busy to purchase a ticket at their local gas station or grocery store, they can go online and use a courier to acquire a ticket.
Controversy arose after lawsuits and investigations into the TLC alleged fraud to conspire with courier services to help individuals to win the jackpot.
The swift action to institute a ban on courier services represents a dramatic change in position for the state which, despite its staunch opposition to most forms of gambling, did not previously prohibit or regulate courier services.
Acting TLC Executive Director Sergio Rey said the ban will be enforced immediately.
“I’m sure the companies are feeling a bit of whiplash, having the Lottery Commission really have an about-face on, even their authority to regulate them and take the position for years that they had no such authority, and then immediately you make the switch and say, ‘not only do we have the authority to regulate you, it’s also illegal to operate,’” Troutman Pepper Locke Partner Stephen Piepgrass told PlayTexas.
“That puts companies that have invested a lot in creating these businesses in a really difficult position. So, I would imagine that they are experiencing significant whiplash right now.”
Legal pushback and future changes
The controversy went mainstream in April 2023, when an entity known as Rook TX used courier services to purchase 25.8 million tickets for a $95 million jackpot, which it won. That event led to a lawsuit against the TLC and former Executive Director Gary Grief, who resigned in late February.
Courier services once again came into question on Feb. 17, when a lucky winner used the Jackpocket courier service to purchase 10 Lotto Texas tickets, one of which won the $83.5 million jackpot.
That winner of the prize has not received their winnings due to investigations into the TLC and its operations.
Along with Grief, TLC Commissioner Clark Smith and Executive Director Ryan Mindell retired in the wake of the events.
“I think that those wins in which couriers were involved really did create pressure to change an interpretation, and that’s what we saw,” Piepgrass said.
One of the companies hitting back at the TLC is courier lotto.com.
In a suit filed in Texas last week, it claimed the TLC on Feb. 24 violated a 30-day rule change requirement by confiscating courier terminals the same day it announced its plans to implement a ban.
As that case continues, the TLC said it will revoke the license and fine any retail business found to work with courier services.
Several bills have also been introduced to regular couriers and the online market, with proposals suggesting a ban on online ticket sales, preventing players from buying all outcomes of a lottery drawing and licensing courier services.