Senator says it's good but not enough, again calls to "end" the Texas Lottery

By Kate Northrop

A Texas Senator introduced a bill that would prohibit lottery retailers from selling tickets to an individual or group that is attempting to purchase all possible number combinations in a drawing.

In another effort to deter future purchasing groups from near-guaranteeing multi-million jackpot wins, a Texas Senator presented a bill that targets retailers who sell tickets to those they know are attempting a jackpot buyout.

On Monday, lawmakers gathered at a Senate Committee on State Affairs hearing, where they discussed Senate Bill 1346. It's another proposed solution that aims to prevent someone from purchasing possible number combinations in drawing, which Senator Bryan Hughes, the sponsor of the bill, labeled as "trying to cheat."

It puts the responsibility of halting buyout attempts on the retailers, including both brick-and-mortar stores and courier services. Retailers could lose their lottery license and would be unable to reapply for a new license until a year after the revocation if they are found to be in violation.

The onus on retailers has everything to do with the $95 million Lotto Texas jackpot buyout event in April 2023, in which some courier services privately worked with an international syndicate known as Rook TX to automate the ticket buying process using QR codes and quickly print tickets for nearly every combination within 72 hours. The operation was planned in Malta and funded by a London-based betting company, Hughes said during the hearing.

"Clearly, this type of organized activity undermines the integrity and the fairness of the lottery," Hughes said. "As we heard many times, Texans buying those tickets thought they had a chance at that jackpot, but they really didn't."

The bill targets retailers who "knowingly" sell or allow the sale of lottery tickets to someone attempting a buyout, not the individual or group who purchases the tickets.

"A sales agent may not knowingly sell or allow the sale of tickets for a lottery game involving a drawing to one or more persons attempting to purchase all possible winning tickets for the drawing," the bill currently reads.

Hughes clarified that the bill's wording will change from a person or persons attempting to buy "all" possible winning tickets to "substantially all" the possible combinations.

Even so, the wording of the bill and lack of a specific ticket limit calls into question how a retailer would define "substantially all" ticket combinations. It is still possible to attempt a jackpot buyout without the aid of courier services, as described in Lottery Post's investigation, in which an organized group may coordinate a network of buyers to visit retailers throughout the state and purchase all combinations across the group. It has happened before.

If someone buys a lesser number of tickets than "substantially all," say, 1,000 tickets, is a brick-and-mortar retailer required by law to report it? What legally defines "substantially all?"

Regardless of what transpires on the retailer end, the Texas Lottery will notice when there is a jackpot buyout attempt since they have access to sales data, such as where tickets were sold, and insights on the total number of combinations sold after every drawing, also known as coverage. They can easily see, based on the coverage for a drawing, whether someone has tried to buy all or most possible combinations.

In other words, the real responsibility of this proposed bill seems misdirected. In line with the bill's logic, the responsibility should be on the Lottery to determine whether "substantially all" combinations have been sold and whether that ambiguous threshold has been crossed to nullify the "win" and warrant a jackpot rollover.

Either way, lawmakers in the Senate hearing voiced overwhelming support for the bill, with Senator Bob Hall even calling for a "lifetime" suspension of a license for violators instead of one year.

While he called it a "good bill," Hall took it a step further, arguing that Legislature should "end" the Texas Lottery since he believes the $95 million Lotto Texas jackpot buyout was orchestrated by government Lottery officials. He has been an outspoken advocate for defunding the Lottery in the past.

"This is good, but what I've learned in this is that these [purchasing groups] are very, very smart people," Hall said. "This is just one way to cheat the system. From what I've found... there are other ways the system is being cheated, and this [the bill] will take out one, but I think the only cure for the problem of the people of Texas being cheated out of money through the lottery system that we have is to end it. If we find this kind of corruption in something as benign as a lottery system, think what kind of corruption and thievery we'll have of the people if we expand gambling here in Texas."

Hall additionally accused the Lottery of "setting it up" and adjusting its own rules to specifically facilitate the buyout, which Texas Lottery Executive Director Ryan Mindell has consistently denied at previous meetings.

"The terminal deployment process is not embodied in the rules, and so that was one of the first things that I changed when I became Executive Director, saying that the way that we deployed terminals in April 2023 was not appropriate," Mindell said.

Mindell also explained that he and the Texas Lottery Commission are in the process of revoking licenses of retailers who used inappropriate QR codes or were not in involved in a business other than selling lottery tickets at the time of the buyout. They have also been working to unwind many of the rules that have made it possible for courier services to operate in Texas.

In a final question to Mindell, Hall asked why Legislature should trust that the Lottery Commission won't once again "beat the system" and "cheat the public out of money" in the future.

"Senator, I really appreciate the question," Mindell responded. "That's something that I'm very focused on, and that's why, since I've become Executive Director, we've changed the processes, we've updated the rules, we've now banned couriers and are taking action against them. As long as I am Executive Director, we are going to continue to work and be better and work on improving the trust both of the Legislature and the public."