The contentious discussion of lottery ticket couriers in Texas is poised to continue with the introduction of a measure that creates a regulatory framework for the industry.
Rep. John Bucy III has introduced a measure, House Bill 3201, that aims to establish the regulatory framework for lottery couriers in Texas. The bill, which has support from state couriers, has been introduced amid recent scrutiny over its legality and regulation.
“A lot has changed since voters approved the Texas Lottery in 1991. Today, millions of Texans use digital apps to order Texas Lottery tickets, a technological convenience that has far outpaced the original legislation. It’s time we implement enforceable standards and safeguards to protect Texas consumers and the integrity of the Texas Lottery,” said Bucy.
Potential lottery courier framework
HB 3201 proposes that the Texas Lottery Commission (TLC) regulate lottery couriers while providing oversight for the state’s registration and approval process.
Under the measure, lottery couriers are only allowed to accept services from patrons over 18 years of age with geolocation requirements to ensure sales are made within the state.
Ticket sales on credit are barred by couriers, which are also required to complete an annual compliance audit at the sole expense of the courier. Auditors have the responsibility to determine if a courier is in compliance with state standards and will issue a certification of compliance to couriers that adhere to HB 3201 and state regulations.
The bill requires potential lottery courier licensees to undergo independent testing with application fees determined by the TLC’s director based on costs incurred to process the application. Under HB 3201, the TLC has the ability to suspend or revoke a lottery courier license if the holder has been convicted of a felony, fraud or gambling-related offense, if they have been a professional gambler or an employee of the commission. A spouse, child, brother, sister, or parent of an employee is also subject to the same standard.
The rule also applies to patrons who hold more than a 10% stake in an applicant courier.
HB 3201 also considers responsible gaming with prominent displays of problem gambling assistance messaging required by courier websites and apps.
Lottery couriers support Bucy’s measure
The Coalition of Texas Lottery Couriers has voiced its support of HB 3201.
“While our companies have and will continue to abide by the standards proposed by HB 3201, we firmly believe that any courier that violates these requirements should be held to account,” said the coalition. “The public’s trust and confidence in courier operations and the Texas Lottery must be honored, and we look forward to working with Rep. Bucy to advance this bill.”
The coalition is comprised of Jackpocket, Jackpot.com and Lotto.com, which are under legal scrutiny by the TLC despite Bucy’s effort to regulate lottery couriers.
Texas regulator considers couriers unlawful
On Monday, the TLC declared lottery couriers unlawful following scrutiny from Texas lawmakers and the filing of a class action lawsuit involving couriers in the state.
Last week, the state’s Senate Finance Committee proposed a ban on lottery courier services following allegations of fraud pertaining to a $95 million jackpot in 2023.
That year, a group of investors spent nearly $26 million purchasing a large number of ticket combinations for the jackpot, according to an investigation by the Houston Chronicle.
The alleged misconduct by the group of investors drew the attention of lawmakers resulting in the Finance Committee accusing the TLC of ignoring money laundering. The alleged money laundering also caught the attention of a lottery expert taking legal action.
Jackpocket reacts to recent changes
As a result of the TLC’s changed stance, Jackpocket has suspended operations in the state.
“Jackpocket has operated in Texas since 2019 with full transparency and in compliance with guidance from the Texas Lottery Commission. Despite our proven track record of compliance and commitment to responsible gaming, the Texas Lottery Commission has issued a new policy prohibiting our services,” said DraftKings SVP of Lottery Pete Sullivan. “This decision not only limits Texans’ access to the lottery but also directly impacts public education funding.”
According to data provided by the Legislative Budget Board, couriers in Texas generated $173 million in draw game sales in FY2023, roughly 9% of total state draw game sales.
Since 1991, the Texas Lottery has allocated roughly $34 billion toward the Texas Foundation School Fund while the Texas Veterans Commission has received $253 million.
Jackpocket vows to work with the TLC to craft regulations to allow couriers to operate.
