AUSTIN (Nexstar) — The Texas Lottery Commission announced Monday morning it’s moving to ban lottery courier services in the state. The decision comes after pressure from state lawmakers to ban the services from doing business in Texas.
Lawmakers have raised concerns including the potential for enabling money laundering and allowing underage players to buy lottery tickets.
Courier services take lottery ticket orders from customers online or through an app.
Texas Lottery Commission (TLC) Executive Director Ryan Mindell issued a Policy Statement Monday morning, announcing that “lottery ticket courier services are not allowed under Texas law and that the agency will move forward with proposed rule amendments prohibiting lottery courier services within the state,” according to a press release from the Texas Lottery.
According to its news release, the commission intends to “exercise this authority through administrative enforcement proceedings to revoke the lottery ticket sales agent license of a retailer that works in concert with a courier, whether under a common ownership arrangement or otherwise.”
The policy is effective immediately, but the rule amendments will be formally proposed at an open Lottery Commission Board meeting scheduled for Tuesday, March 4, “with the intent for the amendments to be adopted at an April open meeting following a 30-day public comment period,” per the release.
What led to the proposed ban
The announcement comes just hours before members of the commission are expected to provide testimony to the House Appropriations Committee. Later Monday, the Senate State Affairs Committee is scheduled to discuss legislation from Sen. Bob Hall that would create criminal offenses for anyone facilitating or playing the lottery through the internet or on a mobile phone.
Last week, Texas Lt. Gov. Dan Patrick said the Texas Lottery would end if lottery couriers weren’t banned.
Days later, Texas Lottery Commissioner Clark E. Smith resigned from his position on Feb. 21, a spokesperson for the TLC confirmed.
The announcement from the Texas Lottery Commission noted that a $83.5 million dollar jackpot last week was won by a ticket sold by a courier service. The ticket was bought through the app Jackpocket, a DraftKings subsidiary.
The news of that jackpot led Lt. Gov. Dan Patrick to visit the Austin-based retail store that sold the winning ticket. Winners Corner, owned and operated by Jackpocket, is 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.
Patrick went inside the store, and later posted video of his conversations with the store manager and the representatives of the company. Afterwards, Patrick called on the Texas Lottery to ban couriers.
“It is a hard line, couriers have to go,” Patrick said on Wednesday. “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.
Shortly before the Texas Lottery Commission announcement Monday morning, members of the Coalition of Texas Lottery Couriers voiced support for a bill to toughen regulatory standards for lottery couriers.
“Issues such as facilitating bulk purchases, the international distribution of Texas Lottery games or underage orders cannot be tolerated. The public’s trust and confidence in courier operations and the Texas Lottery must be honored,” the statement from the coalition said, supporting HB 3201 filed by Democrat John Bucy.
Lt. Gov. Patrick emphasized that he believes lottery couriers have to be prohibited.
“(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 voiced skepticism Monday morning after the announcement that the Lottery Commission would prohibit courier services.
“I now have even less confidence in the integrity of the Lottery Commission with this abrupt turnaround,” Patrick wrote in a post on X.
“If the Lottery Commission thinks this ends our investigation, they are wrong. I promise the people of Texas lottery so people can trust its fairness, otherwise the Senate will end the Lottery this session,” Patrick added.
The Coalition of Texas Lottery Couriers issued a statement Monday following the announcement from TLC.
Lottery couriers have been legally and responsibly operating in Texas since 2019, while always maintaining a transparent and professional relationship with the Texas Lottery Commission. Throughout this process, the TLC has claimed to have no regulatory authority over courier activities, despite couriers’ persistent requests to be regulated, just as we are in other states. Today’s decision by the TLC to ban lottery courier services is abrupt, disappointing and unnecessary. We will continue to encourage a regulatory solution, such as the one proposed by HB 3201, which allows our millions of Texas customers to continue to safely and conveniently order lottery tickets using our services.
Coalition of Texas Lottery Couriers
Dylan McKim and Adam Schwager contributed to this report.
