Investigations into two controversial lottery jackpots in Texas have highlighted the role of online lottery ticketing firms, known as lottery couriers, both within the state and across the nation.
This week, Texas Governor Greg Abbott requested the Texas Rangers to investigate two Lotto Texas jackpots involving virtual ticket sales: an $83.5 million prize this month and a $95 million jackpot in 2023 won by an investor group. State officials have expressed concerns that these cases are eroding public trust in the lottery.
Critics argue that some courier services can be used to purchase tickets in bulk. This practice faced scrutiny after Lottery Now, a company, was used by a New Jersey entity in 2023 to order millions of tickets, resulting in a $57 million win.
This incident has prompted questions about the fairness of traditional lottery models.
What is a lottery courier service?
A lottery courier service acts as a third-party vendor, purchasing lottery tickets on behalf of customers, notifying them of wins, and delivering the funds. According to Locance, a geolocation technology company, these services act as escrow, holding tickets and ensuring compliance with local laws, including age, location, and fund verification.
Courier services operate in 19 states, according to a 2024 report by the Florida Office of Program Policy Analysis and Government Accountability. These services, typically online or app-based, offer convenient lottery play, including national games like Mega Millions and Powerball.
Only New York, New Jersey, and Arkansas regulate these services, according to a 2024 Texas House report. In Texas, couriers are not required to obtain licenses or permission from the Texas Lottery.
The Texas Lottery is now moving to ban courier services to maintain public trust and ensure compliance. The Texas Lottery Commission has launched an investigation into all courier services and limited lottery terminals to five per retailer. A commission meeting is scheduled for March 4 to discuss proposed rules.
Pros and cons of lottery courier services
Users appreciate the convenience of playing from home. However, courier services have drawbacks, including fees, legality issues, and unlimited ticket purchases.
According to a Texas House report, courier services contributed $101 million in lottery ticket sales in Texas in the first seven months of the 2023 financial year.
In New York, licensed couriers are subject to financial and anti-money-laundering controls, audits, and other regulations.
What’s happening in Texas
The odds of winning Lotto Texas are 1 in 25,827,165. Bulk ticket purchases can improve these odds.
This month’s $83.5 million winning ticket was purchased through Jackpocket, a major courier service, which has a $600 daily purchase limit. Jackpocket has since suspended operations in Texas after the state moved to ban courier services.
Lotto.com also expressed disappointment at the ban and is considering its options.
Texas Lottery Commissioner Clark Smith resigned amid the controversy. A class-action lawsuit alleging fraud and manipulation has been filed against the former director of the Texas Lottery Commission and others.
Texas State Senator Bob Hall has accused lottery commissioners of either negligence or complicity in financial crimes.
