Investigations into the Texas Lottery grow after courier controversy

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In the wake of hours-long hearings and a deluge of new information from the Texas Lottery Commission, state officials are doubling down on their investigations and scrutiny of the commission and its connection with couriers.

Attorney General Ken Paxton announced Wednesday that his office would be conducting its own investigation into the Texas Lottery, the third from major state officials in recent weeks.

“I’m deeply concerned about the integrity of our state’s lottery system, especially when it appears that non-citizens have shown that they are attempting to rig the system to win on demand,” Paxton said in a statement.

The attorney general’s office will be investigating the lottery’s process, the statement said, and whether any state or federal laws were broken during each of two recent major lottery wins facing public scrutiny. The first occurred in 2023 when several groups united to buy over 25 million tickets to win a $94 million jackpot, and the second was won in February for $83.5 million through a third-party courier service.

The investigation is Paxton’s first sign of involvement, but not the first time in recent weeks couriers have been flagged to his office. After backlash from lawmakers in a Feb. 12 Senate Finance Committee hearing, Lottery Commission Executive Director Ryan Mindell filed a request for opinion on whether it had the authority to regulate couriers.

Mindell announced Monday the commission would revoke the lottery license of any retailer dealing with a courier, taking action he had asked Paxton a little over a week prior whether he had the legal standing to do so. The commission is set to formally propose rules on the ban at an emergency meeting on March 4. Mindell declined a request for comment from the Tribune.

On Monday, Gov. Greg Abbott directed the Texas Rangers, a division of the state’s Department of Public Safety, to investigate the two wins. But on Tuesday, Lt. Gov. Dan Patrick said in a post on X he sent an update to DPS asking the Texas Rangers to greatly expand the scope of their investigation to include all of the lottery commission’s dealings with courier services since 2016.

Courier services allow Texas Lottery players to buy tickets remotely through websites or apps by having a third party physically purchase the ticket for them before sending photos of the ticket to the buyer.

Patrick attributed the new scope of the investigation to a Senate State Affairs committee hearing Monday on Senate Bill 28, which seeks to ban courier services entirely from the state. Lottery officials, courier company executives and others revealed several major new pieces of information during the hearing on how couriers have operated in Texas, prompting more backlash from lawmakers.

“Texans who play the lottery must be confident it is an honest and fair game they can trust,” Patrick said in the letter to DPS.

Patrick’s office investigated the storefront that sold the second controversial winning ticket, and Patrick posted a video on X on Feb. 18 in which he is seen inside the store and questioning an employee about the business.

The State Affairs Committee passed SB 28 with no amendments, and it is set to be voted on by the Senate. Nine additional senators signed on to the bill as co-authors Wednesday, making 28 of the 31 total senators in the chamber co-authors of the bill. Along with implementing a ban on couriers, SB 28 would criminalize online ticket sales, making it a misdemeanor.

Detractors and supporters of couriers voiced their frustrations to the commission over its sudden policy switch to prohibit the businesses, with Patrick calling the update “garbage,” in a social media post. Rep. John Bucy III, D-Austin, sent a letter to the commission chastising the agency for “abruptly” changing its policies on couriers. Bucy also asked that the March 4 meeting proposing the official ban be canceled and for the commission to respond by end of day Friday.

A spokesperson with Bucy’s office confirmed the commission acknowledged receipt of the letter but has not “responded substantively.”

“The Texas Lottery Commission’s overnight decision that it has the authority to circumvent the Legislature and make this decision on its own is unacceptable,” Bucy said in the letter. “That is not how our system of government works. The Legislature makes the laws, and the agencies, including the Texas Lottery Commission are supposed to follow them.”

Bucy filed House Bill 3201 on Friday, which would allow couriers to be licensed by the state after applicants undergo background checks and subject the businesses to annual sales audits. In a statement sent to the Tribune, Bucy said it was legislators that should decide couriers’ fate, and that an outright ban could jeopardize funding the lottery provides to schools. In 2024, the Texas Lottery provided almost $2 billion to the Foundation School Fund.

“Decisions that impact education funding and consumer choice should be made by the Legislature, not unelected regulators,” Bucy said in the statement.

Meanwhile, Jackpocket, the largest courier in the state and the one that sold the winning $83.5 million ticket that’s under investigation, froze its operations in the state Monday after the policy update was made public, and a notice appears in its app explaining the suspension. Registered users in the state also received an email Monday night lamenting the new restrictions.

“For years we’ve operated in compliance with the guidance of the Texas Lottery Commission, and we are disappointed this policy change is now impacting our ability to serve you and other Texans who want a reliable and more accessible way to participate in the lottery,” the email sent to users read.

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