Texas Lottery bans practice of courier services for ticket pickup

Texas Lottery Commission Executive Director Ryan Mindell issued a policy statement Monday banning lottery ticket courier services, declaring them illegal under state law.

The policy takes effect immediately. The commission also plans to propose formal rule amendments that would revoke licenses of retailers working with courier services.

The move aligns with bipartisan legislative efforts to close what lawmakers call dangerous loopholes in current regulations.

“Lottery courier services operating in Texas have been a significant concern for many of our stakeholders,” Mindell said. “Our agency conducted a review of our authority under the State Lottery Act. As a result, the Commission will revoke the license of a retailer that works with or assists a courier service.”

Courier services accept online lottery ticket orders from customers, purchase tickets from licensed retailers, and then transmit scanned images of tickets to customers while retaining the physical tickets until drawing results are known. These companies charge fees for purchasing and managing tickets.

The commission will formally propose the rule amendments at a March 4 meeting, with plans to adopt them in April following a 30-day public comment period.

The decision follows growing scrutiny over courier services, including a Feb. 17 Lotto Texas jackpot win involving a courier service called JackPocket that purchased the winning $83.5 million ticket for a customer. This incident prompted investigations amid ongoing discussions about whether these businesses should operate in Texas.

Another controversial incident occurred in 2023 when a New Jersey-based company won a $95 million jackpot after purchasing $11 million worth of tickets through a North Texas courier service.

“Our priority is to protect the security and integrity of the Texas Lottery and the public’s confidence in our games,” said Robert G. Rivera, Texas Lottery Commission chairman.

The commission cited several concerns about courier services, including consumer protection issues, compliance with state law, crime proliferation and unauthorized expansion of lottery sales. Officials emphasized these services operate without regulatory oversight to protect the public.

State lawmakers have filed several bills in the current legislative session to prohibit these services, including HB 389, SB 28 and SB 79.

Sen. Bob Hall, R-Edgewood, authored SB 28, which has gained support from 19 senators across party lines, including Sen. Pete Flores, who represents Kerr County.

“The current system allows independent companies to circumvent state laws that were intended to require in-person lottery ticket purchases,” Hall said in introducing the legislation.

The bill addresses multiple concerns, including money laundering risks and the integrity of the lottery system. Mindell has acknowledged that current laws don’t allow for regulation of courier companies.

A similar bill failed to gain traction in 2023 with Hall as its sole author. The new version’s broader support reflects growing concerns about online sales’ impact on the lottery’s integrity and public trust.

The Texas Lottery has generated more than $40 billion in revenue for the state since 1992, with $34.44 billion contributed to the Foundation School Fund supporting public education since 1997.