The Texas Lottery Commission (TLC) has decided to pursue banning courier services in the state. This decision comes days after Commissioner Clark Smith stepped down from his post. Smith’s resignation, in turn, came on the heels of another large Texas Lottery jackpot going to a player who’d bought tickets through a courier.
Smith resigned on Friday. He had otherwise been set to hold the position until 2029, having been appointed to the role in November 2023 by Gov. Greg Abbott.
His decision came on the eve of a Texas Lotto drawing that was won by a Jackpocket customer last week. That further provoked the ire of multiple state lawmakers, who had already been pushing for the TLC to take action against the courier industry in light of previous controversies.
Courier customer wins $83.5 million jackpot
That win last week may have been the last straw for Texas critics of the courier industry. An $83.5 million Lotto Texas jackpot was won by a Jackpocket customer, which is the second time in the span of a few years that a courier has been responsible for a prize that size.
According to Jackpocket, the winner purchased 10 tickets for the drawing. The winning ticket was sold by retail location Winner’s Circle, which was confirmed to be owned by the Jackpocket/DraftKings partnership. DraftKings completed its purchase of Jackpocket for $750 million last year.
Lt. Gov. Dan Patrick visited Winner’s Circle following the win and documented his visit on his X account. Patrick was critical of the store’s business model, the number of lottery terminals, and its close relationship with the courier. He called for further legislative action against couriers while continuing to criticize the TLC in subsequent social media posts.
Smith would resign days later.
Lottery Commission says it is pursuing courier ban
The TLC responded quickly to Patrick’s pressure, issuing a press release on Monday stating that it is moving to ban couriers in Texas.
The introduction read:
“Lottery ticket courier services are not allowed under Texas law and that the agency will move forward with proposed rule amendments prohibiting lottery courier services within the state. The Policy is effective immediately and aligns with legislative efforts to address serious concerns raised by players and state leadership regarding the integrity, security, honesty and fairness of lottery operations.”
Also included in the report was a policy stating that any retailer working with a courier would have its sales license revoked.
These new rules will be proposed during a Commission board meeting on Tuesday, March 4 with the intent for them to be adopted at an April meeting following a 30-day public comment period.
TLC taking action after years of being passive
Previously, the TLC has stated that it didn’t have the authority to take action against couriers and sought legislative direction on the matter.
That came in the form of a pair of Sunset Advisory Commission (SCA) reports, the most recent of which came out in January.
Pressure has come from the SCA and Texas lawmakers for the TLC to act, and do so decisively. Adding to the pressure on the TLC was a recent lawsuit filed that accused the TLC and its former executive director of fraud in cooperation with a courier, Lottery.com.
That lawsuit highlights a Lotto Texas jackpot in April 2023 that was worth $95 million and won by a group called “Rook TX.” There, the group purchased nearly every outcome of the drawing through the aid of couriers, a purchase of nearly $26 million.
Now, with last week’s jackpot win through a courier, the TLC feels it has to make a chance to ensure integrity in its product.
Current executive director Ryan Mindell made a statement in the commission’s announcement on the courier ban.
“Lottery courier services operating in Texas have been a significant concern for many of our stakeholders. Previously, the agency interpreted its authority as not extending to the regulation or prohibition of these services. Since I became executive director less than a year ago, I have been keenly focused on making changes to improve the public’s perception of Texas Lottery games and how they are played and operated.
“In recent days, our agency conducted a review of our authority under the State Lottery Act. As a result of this review and information from recent retailer investigations, the Commission will revoke the license of a retailer that works with or assists a courier service and we are moving to prohibit courier services in Texas to ensure all ticket sales comply with state law and agency regulation as well as to maintain public trust.”
Couriers respond to TLC’s decision
According to WFAA ABC 8, The Coalition of Texas Lottery Couriers in a statement called the lottery commission’s announcement “abrupt, disappointing and unnecessary.”
“Lottery couriers have been legally and responsibly operating in Texas since 2019, while always maintaining a transparent and professional relationship with the Texas Lottery Commission. Throughout this process, the TLC has claimed to have no regulatory authority over courier activities, despite couriers’ persistent requests to be regulated, just as we are in other states.”
Multiple couriers have been operating in the state of Texas. They include:
- Jackpocket
- Jackpot.com
- Lotto.com
- theLotter
- Mido Lotto
In the case of select couriers, they have been using their interpretation of Texas’ laws to sell the state’s lottery tickets overseas.
Couriers have also recently been facing regulatory challenges in Connecticut, where the legislature has proposed banning couriers along with sweepstakes casinos.
Most courier companies believe they are acting within the law and with the approval of the lottery commissions for the nearly-twenty states they serve. They argue that their presence is beneficial in that they create sales of lottery tickets to non-traditional customers, which helps states add to fund education and other programs that their lotteries support.
