This article has been updated since publication.

In another concerning development, Lotto.com has reportedly begun offering free lottery tickets to customers of the AMC Theater chain. The revelation of this activity is similar to its promotions to Uber customers.

After Texas Scorecard reported on Lotto.com’s Uber marketing strategy, it discovered another of the outfit’s enticement partners: the AMC movie theater chain. The specific instance reported to Texas Scorecard involved purchasing tickets for the Sonic the Hedgehog 3 movie. No age verification is required to buy tickets for PG-rated movies, thus potentially exposing minors to online gambling.

This latest instance of aggressive lottery marketing comes as the former Executive Director of the Texas Lottery has been widely exposed as a rogue actor.

As noted in prior reporting, Lotto.com offers online scratch-off tickets. This practice is not legal in Texas. Here, lottery tickets are supposed to be purchased in person with cash. The state Lottery Commission systemically undermined these rules during former Executive Director Gary Grief’s tenure.

A recent report by the Texas Sunset Commission revealed how online lottery ticket sales proliferated under Grief’s watch. Grief’s decisions regarding lottery couriers had far-reaching consequences. These choices were made despite warnings from legal counsel and culminated in a rigged $95 million jackpot in 2023.

His sudden retirement after helping Lottery.com secure the record-setting jackpot—the third largest in state history—has raised eyebrows and now the same online lottery ticket company he aided is using Texas’s good name to try and attract investors.

In 2022, Lottery.com disclosed to the SEC that its leadership had engaged in illegal lottery ticket purchases. SEC records show that the company’s CFO, Ryan Dickinson, was fired due to these revelations and that they were reported to the Texas Lottery Commission.

Despite this checkered history, Grief reactivated the company’s retail license to print millions of tickets for the 2023 drawing. The commission also made extraordinary efforts to provide the enterprise with additional machines and pallets of ticket printing paper to facilitate its organized activity.

As Eric Dexheimer originally reported, the mass ticket purchase was made using iPads programmed to purchase tickets sequentially at multiple locations. According to Texas lottery observers, this scheme allowed the buyers to alter their odds of winning, which is prohibited.

The Lottery Commission has denied that the iPad technology deployed to rig the game was approved before the drawing. This admission should have voided the purchased tickets, including the ill-gotten jackpot.

While the commission has denied involvement in the proliferation of online lottery ticket sales in the state, letters referenced in the Sunset report defrocked that denial, showing Grief and his staff informed lottery couriers they had permission to peddle tickets online in the state. That approval, issued on official letterhead, could help secure banking partnerships in a highly regulated gambling industry.

Grief refused to take part in the Sunset Commission’s investigation.

Questions remain about the stability of Lottery.com, its operations, accuracy in disclosure filing, and the oversight provided by the Texas Lottery Commission.

In a recent filing with the SEC, the company stated, “We currently hold a license issued by the Texas Lottery Commission to conduct the retail sale of lottery tickets in the State of Texas.” However, when the Texas Lottery Commission was recently asked about Lottery.com’s retail license, the commission said it was inactive. This discrepancy raises serious questions about the company’s operations, its accuracy in disclosure filing, and the oversight provided by the Texas Lottery Commission. Greg Potts, the Chief Operating Officer of Lottery.com, clarified that the filing was made in error and previously amended, which he says has been disclosed to interested investors.

In the same SEC filing, the company disclosed, “Certain of our former officers are currently the subject of investigations and inquiries by the SEC and the U.S. Department of Justice.”

NASDAQ has threatened to delist the company on multiple occasions, including as recently as this year. Lottery.com is attempting to raise millions from investors while grappling with ongoing legal issues.

Circling back to Lotto.com’s advertising of free tickets, according to Rob Kohler, a lobbyist for the Christian Life Commission, since the Lottery Commission has allowed couriers to act as “merchants of record on behalf of the Texas Lottery,” the advertising violates Section 466.110 of Texas Government Code.

Specifically, the advertisements unduly influence a person to purchase a lottery ticket.

These developments highlight the urgent need for stricter regulation of the Texas Lottery, especially those that may target or inadvertently reach minors, Texans who play the lottery, and would-be investors.

Requests to Lotto.com and AMC for comment were not returned before publication. If responses to any requests for comment are returned this article will be updated.

Daniel Greer

Daniel Greer is the Director of Innovation for Texas Scorecard.

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