A Democrat judge in Texas has temporarily limited the scope of a Texas Lottery Commission rule banning ticket reseller services.
In a two-page filing dated May 2, Travis County District Court Judge Sherine Thomas granted plaintiff LTC Texas LLC’s request for a temporary restraining order on the new rule.
LTC Texas LLC is the operator of Lotto.com, a ticket reseller service. Resellers, also known as couriers, allow customers to play the lottery online through an intermediary who buys the ticket at a brick-and-mortar store on their behalf.
The group sued the Texas Lottery Commission on April 24, one month after commissioners voted to advance a rule to revoke the licenses of retailers that work with or assist ticket reseller services.
Later on April 29, commissioners finalized the rule. It was set to go into full effect on May 19.
Commissioner Mark A. Franz, who initially voted against moving forward with the ban in March, said at the meeting that he changed his mind during the interim.
“I have, during this 30-day period, and weighing the evidence of it all, I’ve been persuaded that this is the right move to go forward, and that we should do the maximum amount allowable under our current statute,” said Franz.
LTC Texas LLC argued in its petition for a TRO that commissioners changed their minds on lottery ticket resellers “on the fly”—without proper due process—and were unfairly targeting Lotto.com despite its cooperation.
Notably, before a Senate State Affairs Committee hearing in late February, commissioners held that they had no authority to ban lottery ticket resellers on their own.
Internal communications also showed that former Texas Lottery Commission Executive Director Gary Grief had secretly gone even further by recruiting ticket resellers to operate in the state in spite of concerns over legality.
Thomas’ order found that LTC Texas LLC demonstrated it was likely to win the case and was currently suffering financially over anticipation of the rule taking effect.
Now, the Texas Lottery Commission will be barred from enforcing the rule on LTC Texas LLC and Lotto.com as litigation continues. A temporary injunction hearing will occur on May 27.
The ruling does not apply to other lottery ticket resellers operating in Texas.
Reseller services have only been around for a little over a decade and have been scrutinized by lawmakers for being in clear violation of statutes governing the Texas Lottery.
The companies are also connected to other shady activities.
Texas Scorecard previously reported that Lotto.com, for example, has offered illicit scratch-off tickets on its website and engaged in questionable marketing strategies with AMC Theaters and Uber Technologies.
Some resellers left Texas before the commissioners issued their ruling in April.
DraftKings’ subsidiary, Jackpocket, left in February after Gov. Greg Abbott announced that the Texas Rangers would investigate a suspicious $83 million jackpot win it is connected to.
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