Just a day after we announced that Lt. Governor Dan Patrick is seeking to investigate lottery fraud allegations, a statement released today by the Texas Lottery has officially banned lottery courier services from operating in the state. The rules will be formally set forth to the Commission Board on the 4th of March.

The Texas Lottery Commission has taken decisive action against lottery ticket courier services, issuing a policy statement that prohibits their operation within the state. Ryan Mindell, Texas Lottery Commission Executive Director, announced the move on Monday, February 24, citing concerns over security, integrity, and legal compliance. The policy, effective immediately, aligns with state legislative efforts to address growing concerns regarding unregulated third-party lottery couriers.

Under the proposed amendments, any licensed retailer found collaborating with a lottery courier service will face revocation of their lottery ticket sales agent license. The Texas Lottery Commission plans to formally propose these rule changes at an open meeting set for Tuesday, the 4th of March, with the goal of adoption in April following a public comment period of 30 days.

Concerns over unregulated lottery couriers

Lottery courier services operate as independent, unregulated entities that purchase lottery tickets on behalf of customers. Customers place orders and submit payments through the courier, which then buys the tickets from a licensed retailer with whom they have a private arrangement. Couriers typically retain the physical ticket while sending customers a scanned image, charging fees for their services.

The absence of regulatory oversight has raised concerns about consumer protection, compliance with state law, and potential criminal activity. Mindell emphasized that the Texas Lottery was designed to provide a secure and transparent system where players purchase tickets directly from licensed brick-and-mortar retailers.

"Lottery courier services operating in Texas have been a significant concern for many of our stakeholders," stated Mindell. "Previously, the agency interpreted its authority as not extending to the regulation or prohibition of these services." He continued that after conducting a thorough review of their authority under the State Lottery Act and investigating recent retailer activities, they are moving forward with a formal prohibition.

Maintaining public trust and regulatory compliance

The move to ban lottery courier services reflects growing concerns from both the public and state officials about the integrity of Texas Lottery operations. Chairman of the Texas Lottery Commission, Robert G. Rivera, reinforced the agency's commitment to maintaining a well-regulated lottery system.

"Our priority is to protect the security and integrity of the Texas Lottery and the public's confidence in our games," said Rivera. "By this rule proposal, the agency will take decisive action to ensure that ticket sales remain in full compliance with state law. Maintaining a well-regulated lottery system... is essential to fulfilling our mission of responsibly generating important revenue for public education and veterans' services in our state."

Legislative scrutiny and recent investigations

Concerns about the legality of lottery couriers have been mounting among policymakers and state leadership. Several legislative proposals, such as SB79, HB389, and SB28, filed during the 89th Texas Legislature, aim to prohibit the operation of these services.

The Texas Lottery Commission's decision follows an intensified focus on courier services after a high-profile Lotto Texas jackpot win involving a ticket purchased by a courier service. The jackpot win, which occurred on February 17, prompted further scrutiny and an investigation by the agency. Just days before this event, the Texas Lottery Commission had submitted a request for an opinion from the Attorney General's Office regarding its authority over couriers.

Following these developments and recent investigations, the agency has decided to take direct action to prohibit the operation of lottery couriers and to ensure that all ticket sales comply with state law.

The role of the Texas Lottery in state revenue

Since its inception in 1992, the Texas Lottery has produced over $40 billion in state revenue, awarding over $90 billion to players in prize money. The proceeds contribute significantly to the Foundation School Fund, a fund aimed at supporting public education in Texas, and the Fund for Veterans' Assistance. Since the launch of veterans-themed scratch tickets in 2009, the Texas Lottery has provided more than $262 million in funding for programs that assist veterans in Texas.

The agency continues to emphasize responsible play and strict regulatory compliance to uphold public trust and ensure that lottery operations remain a secure and reliable source of state funding. The proposed rule amendments will be presented at the March 4 open meeting, allowing the public to provide input during a 30-day comment period before the final adoption in April. In the meantime, the policy statement prohibiting lottery courier services remains in effect, signaling a firm stand by the Texas Lottery Commission against unregulated third-party ticket sales.