Texas Lottery moves to ban courier services after controversial win

AUSTIN - The days of buying Texas Lottery tickets on a third-party app or website could be coming to an end, after a controversial win in the state drew the attention of Texas officials.

The Texas Lottery Commission has moved to ban courier services used by apps and online services.

Texas Lottery Commission Executive Director Ryan Mindell announced on Monday that lottery ticket courier services are not allowed under Texas law and that the agency will propose rule amendments to block courier services.

The crackdown is a quick reversal from Mindell's testimony earlier this month at the Senate Appropriations Committee. The director indicated the agency did not have the authority to prevent online sales or shut down couriers.

What are lottery couriers?

Dig deeper:

Lottery couriers are companies that take lottery ticket orders from customers online or on an app.

The courier then buys lottery tickets from a licensed lottery retailer.

The courier then sends a scanned image of the ticket to the customer and holds onto the ticket until it is determined to be a winner or non-winner.

The services charge a fee to customers to purchase and manage their tickets.

The couriers and retailers that sell the tickets are often in the same building or office.

Texas Lottery moves to ban courier services

Texas Lottery Commission Executive Director Ryan Mindell issued a new policy statement on Monday saying the agency is taking action to stop couriers from operating in Texas.

"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. If couriers are allowed to continue to operate, these critical safeguards will continue to be circumvented and the public will be harmed," wrote Mindell in the statement.

The Texas Lottery says it decided to end courier services comes after Lt. Gov. Dan Patrick launched an investigation into a recent $83.5 million ticket was purchased at a North Austin store via a courier service.

"This jackpot win led to investigations by the agency amid continued focus by the public and our stakeholders. And now, after information from those investigations and a review of its authority, the agency is taking direct action to stop courier activity from occurring in Texas," wrote Mindell.

What's next:

The Texas Lottery's new rules will be formally proposed to the Commission Board at an open meeting on March 4.

For the rules to be adopted, they must first go through a 30-day public comment period.

Lt. Gov. Patrick on proposed lottery rules

Texas Lt. Gov. Dan Patrick was not happy after hearing the announcement, posting two long responses on social media.

What they're saying:

"Suddenly, this morning, only 6 days after I investigated a combined retail and courier operation in person that sold an $83 million winning lottery ticket last week, the Commission quickly announced they would end all courier services. I now have even less confidence in the integrity of the Lottery Commission with this abrupt turnaround. The Senate passed a bill to end courier services in 2023 by a vote of 29-2, and someone convinced the House to kill it. If the Lottery Commission thinks this ends our investigation, they are wrong. I promise the people of Texas that we will restore the integrity of the Texas lottery so people can trust its fairness. Otherwise, the Senate will end the Lottery this session," wrote Lt. Gov. Dan Patrick on social media.

READ MORE: Texas Lottery could go away amid fraud allegations, Lt. Gov. Dan Patrick says

He continued with another post minutes later.

"I've never read so much garbage from a state agency press release in my 18 years in office. 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," wrote Patrick.

Couriers on proposed ban

What they're saying:

"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," said the Coalition of Texas Lottery Couriers in a statement.

State Hearings on Texas Lottery

What Happened:

On Monday, members of a House Appropriations subcommittee with the state Sunset Commission and a Senate State Affairs Committee both asked questions about the Texas Lottery.

Texas Lottery Commission project manager Andrew McConnell testified that the former executive director of the Texas Lottery operated in the gray areas of the law and the appointed commissioner was essentially asleep at the wheel.

"This high-risk approach likely contributed to the uncomfortable position the agency finds itself in today, not fully trusted and under scrutiny," said McConnell.

The committee also heard from Ryan Mindell, the current executive director of the Lottery Commission, who took over last year.

Mindell testified he did address the problem with bulk sales.

"As the jackpot rose in recent months, those guardrails held and stopped another purchase of the Lotto Texas game," he said.

State Rep. Nicole Collier noted the lottery has raised billions of dollars for education and voiced concern the controversy around the lottery will result in it being shut down.

"This is a negative light on this process and that could be money that we could lose if this is not reigned in. I mean, we've got to get a hold of this," she said.

State Rep. Brian Harrison reminded Mindell of his previous testimony and previous reluctance to stop couriers.

"This should have been cut off a long time ago. I do think the legislature needs to act to abolish the whole commission. But, if short of that, this type of activity can never again be tolerated in the state of Texas," said Harrison.

Mindell was on the hot seat again in front of the Senate State Affairs committee.

The hearing was over SB 28, which would ban the purchase of lottery tickets online or with an app. A similar bill passed the Senate last session, but failed in the House.

Mindell said he supports the bill, but state Senator Bob Hall, who filed the bill, was not convinced.

"By the end of the day, it will be clear to any reasonable person listening that the Lottery Commission has failed to uphold any principles it has been charged with protecting," said Hall.

Lt. Gov. Dan Patrick's investigation

The backstory:

The announcement comes just days after Texas Lt. Gov. Dan Patrick opened an investigation into the Texas Lottery and a North Austin store that recently sold a winning $83.5 million ticket.

The jackpot was the fifth-largest in the history of Lotto Texas and had been growing since last June. 

The ticket was sold at the Winners Corner TX LLC store on Rockwood Lane, which has seen many lotto-winning tickets, including in December 2024 when someone bought a winning lottery ticket of $2 million and in March 2021 when a Texas Two-Step ticket sold there worth more than $2 million also won.

The business is considered a lottery courier, which allows Texans to buy tickets online, then a courier will send a representative to physically purchase the ticket in person at one of the lottery retailers.

The winning ticket was purchased through an app called JackPocket, which also owns Winners Corner.

Patrick visited the store on Feb. 18 and posted a video on social media of his visit. His video shows a couple of terminals to buy lottery tickets and merchandise tables with board games for sale. Patrick said behind the public part of the store he saw dozens more ticket terminals printing lottery tickets.

DraftKings, the parent company of JackPocket, argues they aren't breaking any laws and that this win was not as a result of a bulk ordering system, where millions of dollars are spent buying nearly all possible number combinations.

Patrick says while a courier service like JackPocket is not illegal, it is not the intent of the state lottery when it began in 1991.

"Do you not see an issue where the public might lose confidence if the courier service somehow happened at this one location in the entire state of Texas sold an $83 million winning ticket, and they also own the location that printed the ticket?" Patrick asked a store employee at Winners Corner.

Other legal disputes over lottery couriers

What we know:

Lottery couriers have been legal in the state since 2019.

On Feb. 14, the Texas Lottery Commission asked the Attorney General's Office if it has the authority to regulate transactions between couriers and customers.

There is also an active lawsuit involving the Texas Lottery Commission.

Former executive director of the Lottery Commission Gary Grief and a courier are being accused of money laundering, fraud, and manipulating the outcome of lottery games. However, they denied their involvement.

Grief's attorney sent a statement:

"Gary Grief served the Texas Lottery Commission as Executive Director for approximately 15 years. He is proud of what he and his dedicated staff accomplished during those years. 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."

The current lawsuit has sparked skepticism among people who are following the number of lucky tickets that are bought at these courier lotto stores.

However, the Texas Lottery claims it has "cleaned house."

Texas Rangers to investigate Texas Lottery incidents

Texas Governor Greg Abbott announced on Monday that he has directed the Texas Rangers to investigate the $83.5 million win at Winners corner and a 2023 bulk purchase of lottery tickets that led to a win in April 2023. In that incident, a group won a $95 million Lotto Texas jackpot by purchasing nearly every possible number combination/

What they're saying:

"Texans must be able to trust in our state's lottery system and know that the lottery is conducted with integrity and lawfully," said Governor Abbott. "Today, I directed the Texas Rangers to fully investigate these incidents and identify any potential wrongdoing. Texans deserve a lottery that is fair and transparent for everyone."

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