The Kickapoo Traditional Tribe of Texas has launched a formal complaint against online lottery couriers, stating that these services have affected their finances and livelihood. The tribe owns and operates the Lucky Eagle Casino Hotel, and they have said that online lottery couriers don't just deliver tickets - they provide comprehensive iGaming experiences that mimic unlawful gaming.

In a strongly worded letter to the Texas Senate's State Affairs Committee, the Kickapoo Traditional Tribe of Texas has expressed serious concerns over the spread of online lottery couriers, which they contend constitute an illegal expansion of gambling in the state. Jason C. Nelson, the tribe's general counsel, warned that the financial well-being of the tribe is at risk due to these services, which he argues are "directly and adversely" impacting the tribe's revenue streams.

Affecting the Kickapoo Tribe's revenues

The tribe's primary source of gaming income, the Lucky Eagle Casino Hotel located on their reservation near Eagle Pass along the Rio Grande, is a class II establishment offering bingo machines and poker. Under the Indian Gaming Regulatory Act (IGRA), the tribe is permitted to operate class II games, which are allowed if a state legalizes that type of gaming in some form. However, to operate class III games - such as Las Vegas-style slots and table games - the tribe would need a negotiated compact with the state, a process the state has historically resisted.

According to Nelson, online lottery couriers enable forms of gambling that are otherwise illegal in Texas by offering a virtual gambling experience that simulates real-time games of chance. Nelson claims that these services do more than simply buy lottery tickets for customers from brick-and-mortar lottery retailers - they provide an experience that "mimics otherwise unlawful internet gaming." In essence, each ticket purchased via courier is a virtual bet placed in anticipation of a lottery draw, which Nelson believes is in clear violation of Texas's strict ban on internet gaming.

The tribe has called on Texas lawmakers to address this issue. "This is an express attempt to work around the state's ban on internet gaming," Nelson wrote in the letter, pointing to the discrepancy between what lottery couriers advertise and the actual user experience they provide.

Recent controversies with lottery couriers

The Kickapoo's opposition to these online services arrives on the heels of a recent controversy involving lottery courier companies in Texas. Earlier this year, several courier companies, with their own state-licensed retail outlets, orchestrated a massive operation to buy every possible combination for the Texas Lottery draw on the 22nd of April, 2023. This syndicate purchased an estimated 25.8 million lottery tickets, far surpassing the usual 1 to 2 million weekly ticket sales.

The syndicate's move guaranteed it would win the jackpot, valued at $95 million before taxes, as well as all the secondary prizes. The extraordinary effort required couriers to process ticket orders around the clock in the days leading up to the draw, sparking heated discussions over whether such practices undermine the spirit of the lottery and violate Texas gambling laws.

The lottery courier loophole

Texas law explicitly prohibits the sale of lottery tickets by telephone and bans online gambling. However, lottery courier services assert that they operate within a legal gray area, claiming they merely facilitate the delivery of tickets purchased in person. The Kickapoo Tribe, however, disputes this interpretation, contending that these services amount to full-fledged online gambling.

The tribe has argued that these services operate under a "courier loophole" that Texas lawmakers need to address to prevent further financial harm to legal gaming operations in the state. "Each purchase of a lottery ticket is in essence the placement of a bet, and each lottery drawing is the 'outcome' of that bet," Nelson said. "These actions directly affect the tribe's financial health."

No push for Class III gaming - for now

A report this week by Texas Scorecard, a conservative news outlet, suggested that the Kickapoo might seek class III gaming rights as leverage to push the state into cracking down on online lottery couriers. However, Nelson's letter to the Senate State Affairs Committee makes no reference to any immediate plans to pursue class III gaming. While the tribe has previously sought class III gaming privileges, which would allow it to offer traditional casino games, these efforts have been repeatedly blocked by the state.

The issue of lottery couriers is expected to be addressed in the next Texas legislative session, slated for 2025. With the stakes high for both the Kickapoo Tribe and other vested interests in Texas's gaming and lottery sectors, the legislative response to the tribe's plea could shape the future of gambling in Texas.