Pressure coming from all sides leads to immediate policy change
By Kate Northrop
The Texas Lottery announced Monday that, effective immediately, lottery courier services are no longer allowed to operate in the state of Texas.
After facing immense pressure from state legislation to rethink its relationship with courier services, the Texas Lottery has enacted new policies that effectively ban lottery courier services in the state.
"...in order to more fully promote and ensure integrity, security, honesty, and fairness in the operation and administration of the lottery, the TLC [Texas Lottery Commission] believes couriers are not legal under Texas law and the TLC will exercise its discretion under the SLA [State Lottery Act] to take all appropriate action to stop this activity from occurring, including identifying and investigating any licensed lottery retailer suspected of working in concert with a courier and initiating an enforcement action to revoke the retailer's sales agent license," the Lottery's press release says.
Since direct online lottery sales, in which the Texas Lottery would hypothetically sell tickets directly to players through its own online platform, are illegal, the ban is a step backward for many Texas residents who physically cannot travel to a lottery retailer.
Lotto Texas is a Texas-only draw game that is famous for producing some of the largest in-state jackpots in the United States (and even the world). The ban likely stems from backlash from two recent Lotto Texas drawings, in which winning tickets for both drawings were sold at retailers affiliated with a lottery courier.
The first drawing was for a $95 million Lotto Texas jackpot in April 2023. It was won by a New Jersey-based purchasing group called Rook TX, after they spent almost $26 million to purchase nearly every possible number combination. Coverage for the April 22, 2023 drawing was "greater than 99%," then-Texas Lottery Executive Director Gary Grief said at the time.
The retailer that sold the winning ticket was Hooked on MT in Colleyville. It's a storefront owned by Lottery Now, a lottery courier and the top selling retailer for the drawing which catalogued just under 11 million tickets sold out of 28 million total across the state.
Contrary to what people seem to believe, the out-of-state purchasing group did not buy their tickets online through the courier's services, which was confirmed by the Texas Lottery. The logical conclusion is that the courier service helped the purchasing group buy tickets on the side, separately from the online service they already offer.
This fact was largely ignored by local and national media and state legislators, but the association of the jackpot buyout with a lottery courier had left its lasting impression nonetheless.
Then at the beginning of 2025, the Lotto Texas jackpot once again climbed to soaring heights, breaking into the game's top five biggest jackpots ever. Last week, a lottery courier service sold a winning ticket for an $83.5 million Lotto Texas jackpot.
What made this win different from the $95 million win in April 2023 was that the winning ticket was actually purchased through the lottery courier's online services.
While the Texas Lottery will normally issue a press release about the sale of a jackpot winning ticket the very next day, there was uncharacteristic silence from the agency after the $83.5 million jackpot was won on Feb. 17, 2025. Amid swirling criticism among lawmakers and reporters for its handling of the $95 million jackpot, this more recent win added fuel to the fire.
"Last week, a high profile Lotto Texas jackpot win involving a courier service that purchased the winning ticket for a customer intensified discussion about whether these businesses should be permitted to operate in Texas," Monday's statement from the Lottery reads. "This jackpot win led to investigations by the agency amid continued focus by the public and our stakeholders."
State legislators were already hammering Texas Lottery leadership over the handling of the $95 million jackpot buyout. Then, another massive Lotto Texas jackpot is won by one ticket sold by a lottery courier.
Following the $95 million jackpot win, the Lottery added guardrails to its processes that would theoretically help deter organized jackpot buyout attempts in the future. This was not enough for legislators, who followed up on the issue in Senate Committee on Finance hearing this month to grill Lottery Executive Director Ryan Mindell.
It is not against the law to buy every single number combination to win a lottery jackpot. What lawmakers are taking issue with is the fact that an online third-party service could potentially open the door to illegal activities, such as underage gambling and money laundering.
Senator Bob Hall, who had sponsored a bill to ban lottery couriers in the past, was one of the more prominent voices of criticism during the hearing.
"Don't you think that's serious enough to give you a reason to not use the couriers?" Hall addressed the Lottery. "By using them, you are facilitating minor gambling, and that's one of the top things that you agreed that you're supposed to be protecting."
During the meeting, a delegate from the Coalition of Texas Lottery Couriers later responded to Hall's condemnation by explaining that there are indeed checks to prevent underage individuals from purchasing lottery tickets through a courier service.
"Before a player can use a lottery courier platform, they must first pass a rigorous third-party age verification process that that checks customer information against state and local records to confirm they are of legal age," the representative said.
Senator Paul Bettencourt also voiced scathing disapproval of the Lottery's relationship with couriers, which Mindell described as "neutral."
"Money laundering is the problem, okay?" Bettencourt began. "This is a huge operation of trying to wash bad money and bring it through lottery commissions so that it is cleared, effectively."
It should be noted that Bettencourt did not point to any specific proof beyond ticket sales to substantiate his suspicion of money laundering.
"If I was trying to launder money in this country, I would buy $25 million worth of lottery tickets, and, not only launder my bad money — my suspect money — I just got two to one return. I get $50 million out of it, so I don't have to win many times to make a big difference in my cash flow of laundering, true?," Bettencourt theorized.
Mindell reminded the Senator that his estimate was based on a before-tax amount. The amount a purchasing group would receive after tax would have been around $36 million, which would leave about a $10 million profit after spending almost $26 million on tickets.
"We can't gloss over this, we can't look the other way, we have to look directly at this," Bettencourt continued. "This is 99% probability money laundering, true?"
"I couldn't commit on that," Mindell replied.
Bettencourt grew more animated in his reply, pounding his fist repeatedly on his desk and raising his voice to emphasize his point.
"Well, you need to be able to commit, because you need to be able to say what are the obvious signs? Because normal consumers don't go buy $25 million of $1 tickets," he conveyed. "You know, I haven't gotten mad this whole session, yet I'm about ready to because I've got two good senators and the Chairman telling you you need to adjust your attitude, and you're not doing it. You are not recognizing the obvious. I will ask the question again ... Is buying $25 million of $1 tickets a sign of money laundering? Yes or no?"
"I can't answer that question," Mindell responded.
"Do we still have couriers, or did you take the hint that it was not in line with what the intent of the legislature was to have them and change the rules?" Hall asked.
"Couriers are still operating in Texas today," Mindell said. "They are outside the regulatory authority of the Texas Lottery. We regulate the brick-and-mortar retail location. That's who we license, and that's who we have regulatory control over. Under the statutory structure we have today, our only authority would be to revoke the license of a brick-and-mortar lottery-licensed retailer."
Mindell went on to explain that lottery couriers operate by obtaining a physical ticket from those licensed brick-and-mortar retailers with whom the courier has a private business arrangement, therefore the Lottery cannot directly revoke a licensed physical retailer for working with a lottery courier.
However, the Lottery also created a taskforce that examines how other states handle lottery couriers and use that knowledge to potentially regulate or outright ban couriers within Texas.
As Monday's ban illustrates, the Texas Lottery decided that it's not worth toiling with lottery couriers if it means facing ongoing legislative pressure, a damaging Sunset review, and public distrust.
In fact, the prohibition takes direct inspiration from the criticism put forth by multiple legislators.
"In addition, unregulated courier operations provide opportunities for other illegal and fraudulent activities to flourish, including money laundering, the sale of fictitious tickets, and false representations of a courier's association with the TLC," the Lottery's statement reads. "If couriers are allowed to continue to operate, these critical safeguards will continue to be circumvented and the public will be harmed."
Ironically, the move to ban couriers is being condemned by some as being too little too late. The same opponents of courier services are calling out the Lottery for not taking action earlier.
"I've never read so much garbage from a state agency press release in my 18 years in office," Lieutenant Governor Dan Patrick said in a social media post. "After years of claiming they had no authority to regulate lottery couriers, today the Texas Lottery Commission suddenly exercised the ultimate regulatory authority by banning all lottery couriers in Texas. It was just two weeks ago in Senate Finance that they hesitated to answer direct questions from members about their concerns about the Texas Lottery. Only when pressed did they acknowledge there may have been money laundering through the Texas Lottery. Today's action is an obvious admission that the Texas Lottery Commission had the oversight authority all along and allowed these businesses to creep into Texas and undermine the integrity of the Texas Lottery."
Mindell said during the February hearing that they would "very much appreciate the help in giving [the Lottery] the regulatory tools to take action." He submitted a letter to Attorney General Ken Paxton asking for clarification on the Texas Lottery Commission's regulatory authority over ticket courier companies on Feb. 14, 2025, two days after the Senate hearing.
"Accordingly, there appears to be no existing statutory authority for the agency to regulate couriers as if they were lottery sales agents," the letter reads. "Just as the TLC cannot regulate a father buying scratch-off lottery tickets for his children's Christmas stockings or an office creating a pool to purchase tickets, the TLC has concluded it cannot regulate individuals purchasing tickets in person on behalf of another individual with effective consent."
The Texas Lottery Commission (TLC) , according to the letter, interprets its authority "narrowly," meaning it does not exercise power "beyond the plain meaning of the language" in the State Lottery Act (SLA).
Mindell said the Lottery will abide by the decisions the Legislature ultimately makes on ticket sales and defers to lawmakers to determine the state's position on offering lottery tickets to players over the Internet.
In parallel, the TLC believes that taking executive action on lottery courier companies would overstep its interpretation of the law. This is why the Lottery has not taken sweeping action on lottery couriers in past years, and why Mindell reached out to the Attorney General for clarification on the Lottery's regulatory power.
"The TLC closely follows the directives of the Texas Legislature and would promptly implement the regulation or prohibition of courier services, should it be authorized by the legislature, either explicitly or implicitly in statute," Mindell writes. "But the TLC is also mindful of the limits on its authority and does not seek to expand its powers without legislative directive. The TLC is uncertain what authority exists with respect to courier services and is hesitant to assume jurisdiction without clear direction."
Monday's ban suggests that the Lottery has been given the confirmation that it was looking for.
"The TLC has broad authority to exercise strict control and close supervision over lottery games in Texas to ensure integrity, security, honesty, and fairness in the operation of the lottery," the Lottery's press release says. "The proliferation of couriers in the state has raised serious concerns that the integrity, security, honesty, and fairness of lottery games is being undermined by the continued activity of courier services."
Since the Lottery has "no intention of pursuing Internet lottery ticket sales," getting rid of lottery couriers will effectively eliminate hundreds of millions of dollars in revenue from draw game sales alone. In 2023, Mindells' letter states, couriers accounted for about $173 million in 2023, or 9% of the Lottery's total draw game sales.
Considering Texas Legislature does not have any intention on legalizing direct online ticket sales through the Texas Lottery, the courier ban means many Texas residents who physically cannot travel to a lottery retailer, such as elderly seniors, disabled residents, and shift workers, may be unable to play the lottery.
My opinion is that this is a terrible decision and capitulation. Rather than just eliminating buying groups by imposing a limit on the number of tickets that can be purchased by a group or individual, the Texas Lottery has disenfranchised all the people who are unable to go to a store.
The right call would have been to educate the legislature and work with them to eliminate the specific problems with targeted rules.
"I will ask the question again ... Is buying $25 million of $1 tickets a sign of money laundering? Yes or no?"
Well, I don't know about that, but I travel internationally a lot, Europe, Africa and Middle East. One thing I know for certain, traveling with undeclared $10K in cash is considered money laundering. If you are a family of four and each family member has $3K, that is considered money laundering because in total you have $12K - the custom agents don't take the argument that everyone has $3K, lol.
In the state that I live.
1. There are no online lottery sales.
2. There are no scratchers.
3. Maximum tickets one can buy at once is for $125.
4. A Trust cannot claim any lottery win.
5. You have the option to claim your win anonymously. No name, no nothing.
It's therefore hard for me to be in favor or not in favor of the changes in Texas because I have not experienced what it means to play online.
I wish good outcomes for the lottery players in Texas, outcomes that make them feel that they have an equal chance at winning whether they are to spend $25 or $25M.
" Is buying $25 million of $1 tickets a sign of money laundering?"
Of course it is, you don't need to be a rocket scientist to know that.
I think 18 USC Section 1956 has the answer.
They should start an online service where tkts can only be purchased thru their website like GA and some other states
That's an interesting point I never considered.
But in the cities you have public transportation if a lottery ticket is that important to you.
Likewise there are several type service here in the sticks that provide transportation for medical appointments or shopping. They pick you up at your door and deliver you back.
The only drawback is you have to wait on others. They drop you off, drop others off wherever they are going and come back to collect you.
Of course if you're a total shut in it might not be for you. But if you're a total shut in, you're going to have problems collecting your jackpot.
I agree that what Texas did was not perfect, but they had to do something to save the lottery. They were working under the Lt Governor's statement, "either we get rid of the courier services or the lottery goes" (threat?)
I don't know if there is a perfect solution.
The answer was a resounding YES 🤣🤣🤣🤣
The courier services appears to be defeating the equality guarantees of the lottery to the players at-large and the need to preempt and defeat it by the lottery, is at this time, higher than the benefits of on-line services to the players.
Some people can't get out of the house. Also, Texas is a huge state with very large rural areas. I imagine many people live far away from town and don't have easy access to the lottery.
The Lt. Governor's statement was ill-informed and illustrates that he does not have a grasp on the situation. The Lottery should have educated the government officials privately about the issue — not in a hearing where the participants are trying to score political points.
As I mentioned, there is a really good solution on the table that could have easily solved the problem with no impact on anyone (other than buying groups). Too bad it wasn't even brought up.
You mentioned a "perfect solution". I think I gave them one. Taking a hatchet to an innovative courier model was not the right move.
I admit you raised a good, interesting thought.
Yes, Texas is hugely rural. I moved from Dallas in 2009 and where I live now would be three Dallas city blocks population wise.
State medicaide provides transportation for medical appointments. They will pick you up and deliver you to your door. And they have been known to stop for prescriptions, or other necessaries as well. Had a neighbor who used them for years.
There is also the rural transit system which I've used to see a specialist an hour away. Costs like $5 for senior citizens.
Too, I see people at the clinic missing a leg, a hand, both legs, on oxygen; we had one man who drove his motorized wheel chair across a major highway and the loop to make his appointment.
Sadly, it's foreign to me to hear people can't leave home. Maybe it's the area I live in. Now, I don't doubt what you say, but forgive me, I haven't seen it.
If it were my decision, it would be simple; no online mess, no apps, and no courier services. Kids today are not as stupid as we like to think. When they talk verification these kids know if they just use mom or dad's name on their account they'll get in.
This stuff is too easy to scam, manipulate, and misuse. And those who could have regulated it failed.
It's a republican state and they are following the lead of Elon and dt. They want complete control over everything . Whether it's right or wrong they have control. I lived there in the 90's and it wasn't as bad.
Has nothing to do with politics.
What started the uproar is an investment firm made a deal/contracted/whatever you want call it to use it equipment provided to a lottery site that was wooed by then director Gary Grief to print and purchase 25 million tickets and win one of the largest jackpots in state history.
And nobody can get answers to why this site has at least 30 machines with pallets of ticket and printer paper. And a second location operating in Waco.
And kids involved in the operation.
And why would an investment firm, Rook TK, be playing the lottery? It's not an investment. You play, has lottery been a moneymaking investment for you?
Then another large jackpot was won by a ticket purchased on jackpocket.
As crazy as it sounds if they want to be transparent they should post the top purchasers and the number of tickets bought. and that's a crazy idea but it would prevent people from purchasing tickets once they knew someone had bought all the combinations.
When that happens it's a waste of time and money to even hold a drawing. Just announce we have a winner after the last ticket is printed and save everyone the trouble.
I agree. Just the facts. TDS.
The Spicewood facility has been known for years to anyone who looked at sales sheets and Google Street view. Seems odds that nobody thought having that many terminals was suspicious until now.
I don't watch sales sheets or use Google view. I suspect a majority of players across the state are in that group. Probably not many players across the state that are familiar with Spicewood facility.
It follows if the majority didn't know about the facility they wouldn't have reason to be suspicious of the number of terminals.
It's common knowledge that people living in one city are not in the know of thing taken for granted in other cities or areas of the state.
It wasn't until the Lt. Governor Dan Patrick toured/visited the facility the specifics became public knowledge. He uses the terms, "at least 30," and goes on to say they were not allowed to photograph the back room where the materials were found. Why? If you're operating legally, you have no reason to hide your operation.
The Texas Rangers have been tasked with the investigation so we know 1) it ain't going away until there are answers, 2) and we're looking at possible charges of criminal activity.
And we know criminals don't usually get caught until they get caught.
Naturally with two historically large prizes won by tickets provided/purchased by third party couriers there are questions.
Is there a group/party/conglomerate using these sites/apps to target large jackpots?
Can it happen now or in the future?
Wouldn't you like to get a straight answer to that question? Before you buy a other lottery ticket wouldn't you like some assurance the lottery is being run according with the policies, regulations and laws written to protect the public from scams, money laundering, and greed.