During a firework-filled Senate Finance Committee hearing, Ryan Mindell, the current executive director of the Texas Lottery, was sharply criticized by lawmakers for not answering questions, having a flippant attitude toward correcting issues within his rogue agency, and ignoring allegations that the lottery was used to launder $25 million in 2023.
The Lottery Commission has been embroiled in scandal for the past three years after a $95 million jackpot was rigged with their help. Since then, it has done nothing to alter the perception that it is acting in bad faith, outside the law, while ignoring legislative intent.
Mindell did not help his or the Texas Lottery’s cause. In fact, on multiple occasions, senators not so subtly suggested that the commissioners who oversee the agency should find better help or, at the very least, ignore the agency’s executive director.
State Sen. Paul Bettencourt (R-Houston) pursued a particularly alarming line of questioning, first with Mindell and then, when he refused to answer a direct question, his bosses, about the potential use of the Texas Lottery to launder money during a 2023 drawing.
Bettencourt, who said he “hadn’t been mad all session but was about ready to,” called the three commissioners in attendance up to ask them one by one if the 2023 drawing appeared to be money laundering. All three agreed.
After receiving straightforward answers to his questions, Bettencourt stated he did not ever want to have an agency head come to the Capitol again, only for lawmakers to have to use neutron weapons by bringing his oversight board up to get an obvious question answered.
It should be noted that Mindell inaccurately told Bettencourt that the $25 million spent on the April 2023 lottery was merely bulk purchasing activity, “not courier activity.” In truth, it was bulk purchasing carried out by so-called couriers, using technology that was not approved by the Texas Lottery.
Mindell has played coy for the past year when asked about illicit lottery ticket resellers (who have branded themselves as couriers) operating in the state. In this approach, he is continuing the legacy of his predecessor at the Lottery Commission, a point noted by State Sen. Charles Perry (R-Lubbock).
During his time at the lottery, former Executive Director Gary Grief lied to lawmakers while testifying about illicit ticket resellers moving into the state. When asked about app companies selling tickets online before the House Licensing Committee in 2022, Grief said that TLC had “no business or licensing relationship with these entities.”
According to letters signed by Grief, pre-dating the hearing, that was false testimony.
In 2020, Grief issued letters to Lottery.com and at least two other companies, saying they could conduct credit or debit card transactions “on behalf of the Texas Lottery in Texas.” This came after he was told by legal counsel as early as 2016 that the apps were problematic.
Manfred Sternberg, an attorney testifying for a group of individuals who have been trying to get the legislature to investigate the Texas Lottery, stated that Grief traveled to San Francisco in 2016 to lobby Lottery.com to relocate its operations to Texas.
Then, in 2019, Grief issued a letter to Lottery.com, permitting the company to sell Texas Lottery tickets to foreign markets. Without that letter from Grief, the company would likely not have secured banking relationships to launch its illicit reselling of Texas tickets.
Democrat State Sen. Carol Alvarado (D-Houston) said she was surprised that Grief was not in handcuffs and still collecting a state pension. She questioned why the mounting case against him hadn’t been referred to the Texas Rangers or the attorney general.
State Sen. Lois Kolkhorst (R-Brenham) echoed Alvarado, “We need to call in the Texas Rangers immediately.”
Testifying for the Christian Life Coalition, Rob Kohler said he knew what was happening at the lottery would not be happening if the governor’s office stepped in and gave them a little direction. “Tell them to knock it off.”
A recent Sunset Commission report noted that Grief and the former chair of the Texas Lottery Commission refused to be interviewed about their actions at the lottery.
State Sen. Royce West (D-Dallas), deploying a tactic used earlier in the hearing by Bettencourt, called both Mindell and Commissioner Robert Rivera back to the witness table to ask them if a damning letter the Lottery Commission had received outlining questionable activity had been addressed.
Mindell confirmed he hadn’t even bothered to respond to the sender.
The same letter sent to the Lottery Commission in early January was delivered to a bevy of lawmakers and statewide elected officials.
For their part, most of the state senators who took part in the hearing appeared tired of the games the Texas Lottery has been playing with lawmakers.
State Sen. Bob Hall (R-Edgewood) asked the three commissioners who attended the hearing if they had instructed Mindell to implement changes or ignore legislative intent on the issue of online ticket sales. The three responded that they had been taking their cues from the executive director.
State Sen. Pete Flores (R-Pleasanton) encouraged the commissioners to apply the practices they use to govern their own businesses to drive policy, not allow Mindell to drive policy at the agency.
Flores added an old proverb to his remarks: “Don’t put the people who caused the problem in charge of solving the problem.”
Perry was more blunt, adding that what Mindell was saying to the committee about being unable to reign in illicit lottery reselling was “BS” and that he wasn’t buying what Mindell was selling. To Perry’s point, the lottery commission changed the rule that opened the door for these illicit ticket sales, and they’ve made no move to close it.
He also clarified how the lottery has run afoul of the law, as in Texas, the lottery is meant to be played “in person, with cash at a brick and mortar.” Anything that takes the lottery beyond those parameters is a change that the lottery commission can and should remedy, especially since they were the ones who created the problem.
Perry added, “You can fix the courier decision today without an AG opinion.”
Dawn Nettles, a tenacious lottery watchdog, called for an end to anonymous ticket collection, among other reforms needed to return trust to the lottery. The money launderers probably hated listening to that testimony.
