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It's a scandal that has rocked the world of state run lotteries. A recent $83.5 million win is now under intensive scrutiny. Texas Attorney General Ken Paxton announced he is launching an investigation into the matter. And, yes, you can scratch out legalized sports betting coming to the Lone Star State any time soon Paxton was already opposed to any forms of gambling expansion coming to Texas even before this scandal broke.
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The Crux of What Transpired
Two major lottery drawings in Texas that put nearly $180 million in the pockets of winning ticket holders have set off widening state investigations over concern that ticket sellers and buyers may have exploited the rules. There are reports that millions of dollars worth of lottery tickets were purchased.
The Texas Lottery, one of the largest in the U.S., is facing mounting scrutiny from state leaders over how the winners of an $83 million jackpot this month and a $95 million prize in 2023 purchased their odds-defying tickets. Both are among the largest jackpots in the history of the Texas lottery.
At the heart of the issue, Texas officials say, is whether the games are on a level playing field. The companies that purchase lottery tickets for customers remotely, also known as couriers, are at the heart of the investigation.
The scandal stretches back to April 2023, according to The Houston Chronicle.
The Houston Chronicle report details how a parimutuel betting site from England (Colossus Bets) and a software provider from Malta (Spinola Gaming) allegedly colluded with one another to purchase 25.8 million tickets (at $1 each) for a Lotto Texas draw — resulting in the $95 million jackpot win.
From The Houston Chronicle:
An entity called Rook TX effectively purchased the jackpot, collecting a one-time payment of $57.8 million, by acquiring virtually all of the 25.8 million possible number combinations. The operation was planned in Malta and funded by a London betting company. It was carried out by four Texas retailers, all connected to online sales companies called couriers.
The Texas Lottery Commission helped in several ways behind the scenes. Prior to the draw, it filled rush orders from the retailers requesting dozens of extra terminals — even though three had sold few, if any tickets in the previous months.
The agency also did not challenge organizers’ method of rapidly entering millions of ticket orders into state terminals. Their use of personal iPads and preprogrammed QR codes appeared to skirt lottery regulations.
“Texas citizens deserve far better than bad actors getting rich off of a lottery system that is open to exploitation, and we will hold anyone who engages in illegal activity accountable,” Paxton said in a statement.
Couriers are companies that buy and send lottery tickets on behalf of customers online. The practice bypasses state law that requires tickets to be purchased in person.
Trying to Explain it All Away
The new executive director spent his time addressing the issues on Tuesday by focusing on the couriers, not the lottery.
"The $84 million recent Lotto Texas jackpot, when we believe that there was enough there to say that we need to take action with the lottery retailers over this issue," said executive director Ryan Mindell.
Mindell has held the position for 11 months after Gary Grief, the former executive director, resigned. Grief and a courier are being accused of money laundering, fraud, and manipulating the outcome of lottery games. However, they denied their involvement.
Last Thursday, the Texas Senate voted to criminalize mobile lottery applications.
If passed by the Texas House and signed by Gov. Greg Abbott, acting as a courier for pay would be a misdemeanor punishable by up to one year in jail and/or a fine of up to $4,000.
“Thank you for your dedication to this issue, so we clean up fraud in the lottery,” Lt. Gov. Dan Patrick told the bill’s author State Sen. Bob Hall, R — Rockwall.
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