The Texas Lottery Commission (TLC) has unanimously voted to ban the operation of lottery courier services in the wake of fraud allegations related to ticket sales.
The commission voted to allow the immediate revocation of a lottery license by any retailer that knowingly works with or operates a courier service. The TLC implemented the new rule following a lottery courier ticket controversy that led to the resignation of Executive Director Ryan Mindell. The former director resigned on April 21 after one year in the role.
Mindell, who assumed the role of executive director after Gary Grief retired from the commission last year, was replaced by acting deputy executive director Sergio Rey.
The Coalition of Texas Lottery Couriers, an advocacy group comprised of Jackpocket, Jackpot.com and Lotto.com, has responded to the TLC’s ban on couriers in the state.
“Lottery couriers legally operated for years with the cooperation and assistance of the TLC,” said the coalition in a statement to SBC Americas. “Although the agency repeatedly testified that it had no regulatory authority over couriers, in response to political pressure, the TLC chose to abruptly change course and eliminate businesses, jobs, state revenue and a service millions of Texans use to order lottery tickets.”
Before the TLC’s ban, couriers had accepted customers in Texas since 2019. Lottery couriers have been banned in the state after a probe by the Houston Chronicle found a group of investors, Rook TX, spent millions to purchase a winning $95 million ticket.
The probe sparked a class action lawsuit filed in a Texas court. The suit accuses Rook TX of collusion while claiming the TLC ignored money laundering in the process.
Grief is connected to the alleged fraud scheme and is named as a defendant in the class action over claims of facilitating a “long-running fraud scheme” by manipulating the Texas Lottery and allowing lottery ticket sales across state lines and international borders.
The former TLC director denies any wrongdoing amid the accusations.
The investigation and suit led the TLC to putforth regulations declaring lottery ticket couriers in Texas no longer in compliance with lottery regulatiosn, which the commission adopted today.
The declaration led Lotto.com to file a suit against the TLC asking the Travis County court to prevent the TLC banning lottery couriers in the state. Lotto.com claims lottery couriers operate within the scope of the law and that the ban is unenforceable. In the suit, Lotto.com provides a letter sent by Mindell to the company that confirms the TLC’s willingness to allow Lotto.com to accept Texas customers without violating state law. The note is similar to another letter in the suit that was sent to Jackpot.com.
Lottery-related measures in Texas
Senate and House members in Texas are taking legislative action amid the courier issues.
Sens. Bryan Hughes and Paul Bettencourt introduced Senate Bill 1346 in March as a piece of legislation that prohibits lottery ticket sales to “persons attempting to purchase all possible winning tickets in a lottery drawing.” The bill, referred to the Committee on Licensing & Administrative Procedures, mandates a hearing for improper sales.
Rep. John Bucy III proposed creating a regulatory framework for lottery courier sales before the TLC decided to ban their operation. The bill, House Bill 3201, was filed in February and also referred to the Committee on Licensing & Administrative Procedures.
