Texas Lottery ticket sales to third-party services fuel controversy a…

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It took more than 100 draws of the Texas Lottery’s Lotto Texas game before one ticket matched all six numbers drawn Monday, earning a jackpot that had grown to $83.5 million, one of the largest in the game’s history.

The anonymous state resident didn’t purchase their tickets at a Texas Lottery retailer, though. Instead, Winner’s Corner, a small board game store in central Austin, provided them to the winner through a courier, a third-party service that sells lottery tickets online, according to a spokesperson representing the courier service.

With the Texas Lottery Commission under review by the state’s Sunset Advisory Commission and increased scrutiny after a separate multimillion-dollar jackpot was won under controversial circumstances, the courier’s involvement has added even more fuel to public concern about the agency. Simultaneously, lawmakers are scrambling to figure out how to mitigate the use of couriers in the state as some argue the commission should be scrapped entirely.

Winner’s Corner is listed as the most lucrative licensed retailer partnered with lottery couriers in Texas, selling over $89 million in tickets in fiscal year 2022 alone, according to the Texas Lottery Commission. The next highest retail partnership reported just over $6 million in ticket sales. The Monday win at the small store prompted a visit the next day by Lt. Gov. Dan Patrick, who posted a video on X on Wednesday that showed him inside the business interviewing employees.

Patrick said in the video there were “[lottery] terminal after terminal” in the back of the storefront that print lottery tickets. Patrick did not make clear how many terminals he saw, but said their presence was not in the spirit of Texas’ intent with the lottery.

“If people are going to have confidence in the lottery, we have to be sure that no one has an advantage,” Patrick said in the video. “We’re not suggesting anything illegal, but this is not the way the lottery was designed to operate.”

Patrick’s skepticism of the win’s legitimacy is far from the first time state officials have called into question the use of couriers in the Texas lottery — but the TLC has said it lacks the authority to regulate the practice.

What — and who — are lottery couriers?

Couriers act as a buffer between stores licensed to sell lottery tickets and online customers, providing remote access to games that traditionally have been only available in-person. A customer can purchase a ticket online at a premium, after which a courier will go to a brick-and-mortar store to physically buy the ticket before sending a picture of the purchase to the customer. If the ticket is a winner, couriers will either send the money to the winner or mail the winning ticket to the customer, depending on the prize amount.

Courier sales make up approximately 9% of the lottery’s draw game sales, according to Legislative Budget Board estimates. While a few couriers operate independently, a majority have established business relationships with the stores they purchase tickets from or are owned and operated by the same entities. Many operate their own apps or websites to easily purchase tickets, with varying levels of user verification.

The heightened presence of couriers in Texas comes amid a groundswell of concern among state officials over their ability to be used illegally. TLC officials, however, say because the transaction occurs after the ticket sale, they can’t regulate the practice.

TLC became aware of interest in Texas operations by couriers in 2015 and determined it lacked the ability to fully regulate the business practice, according to the Sunset Commission. By the start of the commission’s review in 2023, TLC identified couriers as its number one “major issue” in a self-assessment report, espousing concern the commission could not regulate couriers given its current scope. TLC officials also wrote that “no significant changes are needed to continue operating effectively.”

Despite the uncertainty, the commission did not request further guidance on what the scope of its regulatory capabilities were from Texas’ attorney general until two days after the TLC’s first Senate Finance Committee appearance of the 2025 session. Senators grilled TLC commissioners and Executive Director Ryan Mindell at the hearing over their lack of control over couriers, accusing lottery officials of enabling money-laundering and sales of tickets to underage players.

“I don’t understand how you don’t think you have an obligation to stop that behavior,” Sen. Bob Hall, R-Edgewood, said during the Feb. 12 meeting.

Hall filed a bill Thursday that would explicitly ban the use of any kind of internet service to purchase lottery tickets. Senate Bill 28 is similar to a bill Hall authored in the 2023 session that easily passed the Senate before dying in a House committee. But while Hall was the sole author of the 2023 bill, SB 28 is co-authored by a bipartisan coalition of 19 senators, a majority of the chamber. The added attention to couriers’ pervasiveness is what Hall credits for the newfound support.

Patrick, the powerful Senate leader who controls the fate of legislation in the chamber, also voiced tacit support for Hall’s bill in his video, in which he bemoaned the House’s failure to pass the 2023 bill and added, “It’s time we take a deep look at these courier services and these retail units.”

The Coalition of Texas Lottery Couriers said in a statement Wednesday that Jackpocket, the state’s largest courier service, sold the Winner’s Corner ticket to a legitimate Texas resident, who picked the winning numbers, as part of a 10-ticket sale. The coalition is made of three of the state’s largest courier services and began less than a year ago to represent responsible lottery couriers in Texas.

Rob Porter, chief legal counsel for coalition member Lotto.com, said couriers are akin to food delivery apps like Uber Eats, and help engage potential customers who otherwise wouldn’t buy lottery tickets. The added support increases the lottery fund, creating a net win.

“Couriers intentionally seek out customers that aren’t participating in the lottery today,” Porter said. “When those people participate in the lottery, everybody wins.”

Jackpocket, the courier service that sold the winning $83.5 million ticket this week and one of the coalition members, is a subsidiary of DraftKings. The sports betting and fantasy sports giant is among the companies that are part of a renewed push to legalize casinos and sports betting in Texas, which is opposed by many of the same hardline conservatives looking to crack down on the state lottery. Some proponents of gaming in the state are also worried the courier confusion may bleed over onto their own push.

“Y’all are sure muddying the waters for some of us who try to expand gaming in this state,” Sen. Carol Alvarado, D-Houston, said during the Feb. 12 meeting.

Conspiracy amid “high-risk policy decisions”

Hall said he first became aware of couriers after a $95 million jackpot was won in Colleyville in April 2023 in which over $138 million was spent by customers over the course of the prize’s buildup. An investigation by the Houston Chronicle revealed the jackpot was won by a foreign group that bought almost all of the 26 million possible combinations that could match all six numbers, spending over $25 million to win $54 million after taxes.

To make the bulk purchase, the groups partnered with stores that requested dozens of lottery terminals to be able to print the millions of tickets. The TLC did not flag the sudden request for new terminals but has since created new guidelines to prevent terminals from being requested en-masse.

The individuals who won the $95 million jackpot are still unknown to officials, and much of the finance committee hearing’s discussion centered around the possible foreign involvement and criminal intent behind the endeavor. Lottery.com, a courier TLC acknowledged was working with retailers in a 2022 report, was identified by the Chronicle as one of the groups who helped print the tickets.

Also tied to officials’ concerns was former TLC Executive Director Gary Grief, whom the Sunset panel singled out in its most recent report on the TLC for the commission’s courier troubles. Grief, one of the most decorated lottery professionals in the country, was the longest-serving executive director in TLC’s history and was inducted into the Lottery Industry Hall of Fame in 2014 before resigning in February 2024.

The Sunset report heavily criticizes Grief’s decisions as director and cites him for the commission’s current turbulence because he “made high-risk policy decisions without adequate oversight.” Grief, according to the report, worked in gray areas in the TLC’s understanding of their jurisdiction over couriers for almost a decade to assist companies in building out their presence in the state.

Hall said in an interview with the Texas Tribune that the TLC, led by Grief, had implemented rule changes as far back as 2015 that enabled couriers, rather than the companies simply working their way into gaps in the law.

“It finally dawned on me that this was not something that smart people on the outside looked at and said, ‘Oh, wow, we can beat the system by doing this.’ It was people on the inside that set the system up so that it could be manipulated,” Hall said.

Grief denied any wrongdoing in a statement provided to the Tribune on Friday by his lawyer, Sam Bassett. Grief stated he is “proud of what he and his dedicated staff accomplished” during his time as executive director.

“Gary adamantly denies being part of any dishonest, fraudulent or illegal scheme during his tenure and looks forward to cooperating in any official inquiry addressing the allegations being made,” Bassett said in the statement.

After the $95 million jackpot was inflated with the help of couriers, Grief acknowledged the groups were “adding to the buying frenzy,” in a 2023 statement.

“While there is no prohibition on these types of purchases, it certainly generated unprecedented jackpot growth over the last few days of this jackpot run,” Grief said in the statement.

A lawsuit filed on Feb. 14 after the Senate Finance Committee hearing goes further, alleging Grief, along with three businesses that were involved in the $95 million jackpot win, worked in tandem with the companies to defraud the state. Several of the lawmakers also said they wanted to see criminal charges brought against Grief for potential fraud or money laundering.

Dawn Nettles is the plaintiff listed in the lawsuit, and has been an expert on the Texas Lottery for decades, running a website dedicated to tracking winners and current jackpots. Nettles said she knew something was suspicious about the April 2023 scheme when the jackpot rapidly ballooned — a sign that millions of tickets were being bought.

Only now, after the hearing, Sunset report and her lawsuit, does she feel people are starting to see what she said has been a pattern of Grief’s manipulation.

“Texans were harmed big time, and it’s taken two years for me to get any action on this,” Nettles said.

Even with serious doubts on the lottery’s integrity, lawmakers have acknowledged the game’s benefit to Texas. Money from ticket sales goes to the Foundation School Fund and Texas Veterans Commission Fund. Since 1997, the lottery has raised over $34 billion for the school fund and $262 million for veteran programs.

“I think it’s the integrity of the commission that’s at stake, not what you’re doing, because arguably we’re kind of addicted to the dollars,” Sen. Charles Perry, R-Lubbock, said during the Feb. 12 finance committee meeting.

The future of couriers and the lottery

After Hall’s 2023 bill seeking to restrict couriers failed in the House, lawmakers attached a provision to the state budget that sought similar prohibitions. Gov. Greg Abbott axed it with a line-item veto, saying it ran afoul of the Texas Constitution by trying to enact a law through the budget.

Hall’s latest courier bill is not the only measure targeting TLC and the state lottery system this session. The agency’s future existence hangs in the balance under the state’s sunset review process, through which a group of 10 state lawmakers and two members of the public, known as the Sunset Advisory Commission, periodically reviews state agencies and recommends how they should be improved or whether they should continue to exist.

Whenever an agency is up for review, lawmakers must pass a bill extending its life until the next review — otherwise, it will cease to exist. Such must-pass bills are often used as vehicles to overhaul agencies and the laws that govern them.

Legislation allowing the TLC to continue after its sunset review has yet to be filed. But already, one of the lawmakers on the Sunset Commission, GOP Rep. Matt Shaheen of Plano, has filed his own bill — and proposed a constitutional amendment — seeking to abolish the state lottery. Such calls have gained steam among some of the House’s more conservative members, including Rep. Briscoe Cain, R-Deer Park, who has argued that the lottery does not generate enough revenue for public schools — a key function underpinning the lottery’s creation in the early 1990s — to justify its continued existence.

“It is not something that we can regulate, and has been demonstrated because they clearly broke the law, very craftily changed regulations to set up a criminal enterprise,” Hall said.

Despite finding a number of faults in the TLC’s leadership and recommending stiffer regulation of couriers, the Sunset Commission recommended that the Legislature continue the agency.

Yet Patrick’s involvement has raised the stakes for the TLC and casts more doubt than ever on its future. This week, he told the Austin American-Statesman that he had “no confidence” in the lottery, adding that the agency “better get it in gear and address these issues and start answering questions, or there won’t be a lottery after the end of May,” when the legislative session is over.

In a separate interview with KXAN-TV, Patrick added that the TLC’s continued existence depends on whether lawmakers ban online ticket sales.

“It is a hard line: couriers have to go,” Patrick said.

Disclosure: The Texas Veterans Commission has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.

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