AUSTIN (KXAN) — “It is a hard line, couriers have to go,” Texas Lt. Gov. Dan Patrick said on Wednesday. The statement comes on the heels of an $83.5 million Lotto Texas jackpot, the fifth-highest in the game’s history, which was won through the app Jackpocket — a DraftKings subsidiary.
“(Courier services) violate the spirit of the law,” Patrick said. “I don’t care what kind of changes they want to make, it does not solve the issue. The lottery was established was to have cash tickets so we don’t have kids buying tickets… not for an app to be a digital courier, buying thousands and thousands or millions of tickets.”
Patrick’s trip to Winners Corner
Jackpocket owns and operates an Austin-based retail store Winners Corner, a storefront primarily consisting of board games. Despite being located in an area with little foot traffic, they generated the most lottery ticket sales in 2023 by a longshot, with the next closest store selling less than a quarter of what Winners Corner sold.
According to instructions from the Texas Lottery Commission, to be a licensed lottery retailer in Texas, “you cannot be in the sole business of selling Texas Lottery tickets.” But to process all those app orders for tickets, Jackpocket needs a physical space to buy tickets as ordering lottery tickets over the phone is illegal in Texas. Winners Corner solves this problem, at least in the eyes of the Texas Lottery Commission.
“Winners Corner is a licensed lottery retailer,” Jackpocket CEO Peter Sullivan said. “We are not in the sole business of selling lottery tickets… we are open to the public, so someone can go in and order an official lottery ticket directly in the store. And then we work with Jackpocket, so Jackpocket receives the order from the customer and then that Jackpocket employee goes into the retailer and purchases the ticket — a physical ticket — from that retailer.”
Upon hearing the news of the $83.5 million win, Patrick decided he needed to check out the retailer for himself, posting his visit on X.
Patrick questioned the cashier at the front of the store, then called Winners Corner’s legal team. Afterward, Patrick said he went into the backroom but wasn’t allowed to film, saying he was disturbed by the operation he saw.
“Our count was somewhere around 30 terminals just run, run, running, running — sp itting out tickets,” Patrick said. “You have a little retail shop that’s violating the spirit of the law or maybe the law totally, about how they’re selling other items, and they won’t let me go behind the wall and take a photograph of what they’re doing. If it’s all on the up and up, what are they afraid of showing the public?”
What is a courier?
“When you think of a courier, what do you think of? You think of GrubHub or something, I don’t know. You order food and they bring it to you,” Patrick said. “Most people think courier service(s) bring them tickets — no, it’s an app.”
Unlike Patrick, Sullivan argues that their process is more along the lines of a public service.
“Individual customers that are both age-verified and located inside the state of Texas can place an order for a lottery game, one of the many Texas Lottery games they already know and love. Jackpocket receives that request and then we go to a licensed lottery retailer and buy the physical ticket on their behalf. We then scan the front and back of that ticket, and then provide the image back to the customer and link it to their identity. We will either credit their account if it falls under $600 of winnings, if it’s over $600 we’ll get in touch with that customer, give them the physical ticket, which they then go and redeem through the lottery,” Sullivan said. “Through this we’ve been able to create millions and millions of additional dollars towards the great beneficiary that the lottery provides for.”
Either the couriers go, or everything goes
According to state law, “The [Texas Lottery] commission is subject to review under Chapter 325 [Texas Sunset Act]. Unless continued in existence as provided by that chapter, the commission is abolished and this chapter, Chapter 466 of this code, and Chapter 2001, Occupations Code, expire September 1, 2025.” This means unless the legislature takes action this session to extend the Texas Lottery Commission, called a Sunset bill, the Lottery Commission will cease to exist as of Sept. 1.
Typically, this is a formality. But in this case, Patrick seems intent on using this power to make sure couriers are officially banned by the legislature.
“We will pass [legislation this session] to ban couriers. Number two, if they don’t make changes and they don’t instill confidence for the legislature and the people of Texas in the lottery, we will not pass the Sunset bill in the Senate, and the lottery will be out of existence,” Patrick said. “[Couriers being banned] is a hard line for me, and I think the Senate… I haven’t talked to all the Senators but the bill [last session to ban couriers] passed 29-2.”
Current legislation on the table
Bills and a joint resolution filed on Wednesday propose banning mobile lottery games and eliminating the Texas Lottery entirely.
Rep. Matt Shaheen, R-Plano, authored the bill on making mobile lottery games a criminal offense, which would eliminate courier services. These services allow players to place orders for lottery tickets online to then be fulfilled by a licensed lottery retailer in Texas. At a hearing earlier this month, senators questioned the director of the Texas Lottery Commission about potential money laundering within the agency. The couriers were criticized for allegedly facilitating underage and out-of-state play in the Texas Lottery through insecure verification measures.
Additionally, they were accused of buying out an abnormal amount of six-digit lottery number combinations that would increase the likelihood for those vendors to hold the winning set. At the hearing, senators expressed concerns about how a courier service helped a buying group purchase over 99% of available combinations. However, the Coalition of Texas Lottery Couriers, consisting of Lotto.com, Jackpocket and Jackpot.com doesn’t want to be affiliated with that scandal, saying they want to work with the legislature to make sure it can never happen again.
“It’s been extremely frustrating because I think there’s been a lot of confusion,” Sullivan said. “Lottery courier services like ourselves that are regulated in other states do not allow for bulk purchasing. It’s just not possible on our app.”
They say they support legislation to ban bulk purchases, similar to a bill filed by Sen. Brian Hughes, R-Mineola, to prohibit a person from purchasing all possible winning tickets in a lottery drawing.
Shaheen also authored the joint resolution that would abolish the Texas Lottery. A joint resolution is an amendment to the Texas constitution. It requires the approval of both legislative chambers and then is offered up to Texans for a majority vote. The Texas Lottery primarily benefits public schools and Texas veterans through the Foundation School Fund and the Texas Veterans Commission Fund. The Texas Lottery Commission reported that around $1.9 billion was allocated to the Foundation School Fund in 2024. According to Sen. Bob Hall, R-Rockwall, this amount doesn’t contribute to much in the grand scheme of things.
“I asked in the committee hearing yesterday ‘how much money is the lottery bringing in?’ and what he said amounts to about what we spend in three days,” said Hall. “Three calendar days. Three out of 365. So I don’t think in the Texas budget it’s a monumental problem to replace that funding.”
Hall and his co-authors Sen. Mayes Middleton, R-Galveston, and Sen. Charles Perry, R-Lubbock, introduced a Senate bill mirroring Shaheen’s proposal to criminalize mobile lottery games.
“The bottom line is, if people are gonna have confidence in the lottery, we have to be sure that no one has an advantage,” Patrick said. “And again, we’re not suggesting anything illegal, but this is not the way the lottery was designed to operate.”
The Texas Lottery Commission is conducting internal investigations to assess the scope of lawmaker’s concerns.
