Texas has embraced lottery couriers as an alternative to an online lottery, but the Kickapoo Traditional Tribe of Texas sees them as a threat to its gaming business and wants them gone. It says their business model constitutes illegal online gambling and infringes on its tribal gaming rights. If the state and the tribe can’t see eye to eye, there’s a chance the Kickapoo could take gaming expansion into their own hands.
This past month, Texas Scorecard posted a letter the Kickapoo Tribe sent to the Texas Senate State Affairs Committee asking for regulators to bring an end to lottery couriers. While there were no explicit statements about what the Kickapoo would do if lottery couriers are allowed to continue, some sneaky language may hint at future plans to expand gaming.
At present, there are five major lottery couriers operating in the state:
- Jackpocket
- Jackpot.com
- theLotter
- Mido Lotto
- Lotto.com
Kickapoo believe couriers acting outside of Texas law
In the tribe’s letter, the Kickapoo assert that lottery couriers aren’t allowed under Texas law. The reason? They allow online sales of lottery tickets. In the tribe’s opinion, that makes them unregulated online gaming.
Texas law allows lottery retailers that deliver physical lottery tickets to their customers and prohibits lottery sales by telephone. The Kickapoo argue that since lottery couriers don’t deliver physical tickets and that mobile devices are a natural extension of telephones, couriers are operating outside of the law.
Additionally, the tribe noted that Texas Lottery Commission rules prohibit the sale of lottery tickets “by mail, phone, fax, or other similar method of communications.”
The tribe wrote that allowing lottery couriers sends policy “down a slippery slope for the State’s restrictions and prohibitions on internet gaming.” Also, it said that lottery couriers are eating into the tribe’s “ability to generate essential governmental revenue to provide for its members.”
What it would mean if lottery couriers count as “internet gaming”
The tribe made a point of saying that lottery couriers provide “unlawful internet gaming.” So, inaction by Texas regulators would open the door for courier services to offer “random number generator” games or “real-time online games of chance.”
Those two types of gaming are, by the tribe’s estimation, forms of online gambling. So, it stands to reason that the tribe’s letter has dual motives. First, it serves as a plea to regulators to end online lottery sales. That, in theory, would increase the tribe’s gaming revenue.
Second, it could serve as the starting point for tribal gaming expansion to online websites. Under the Indian Gaming Regulatory Act, states must allow tribes to offer any form of gambling available elsewhere in the state. If the state fails to negotiate in good faith, the tribes can opt out of state regulation and get permission directly from the federal government. Several tribes in California have already gone down that path.
Claiming that online lottery couriers are online gaming could be a roundabout way of the tribe saying, “if couriers are allowed to offer online gaming, so are we.”
The main drawback to the tribe’s argument is that online lottery couriers don’t typically expand their offerings from lottery tickets to lottery tickets and casino-style games of chance. Additionally, other states likely won’t join the “lottery couriers are just online gaming operators in disguise” movement.
