Since an international syndicate cornered the Texas Lottery to win a $95 million jackpot in 2023, the Lottery Commission has been on defense, and employees have misled lawmakers in the process.
The Lottery Commission has insisted that a 2020 rule change opening the door to online sales for all Texas lotto games was non-substantive and they could not have predicted that the change would enable online sales by vendors, including sales to out-of-state players and international syndicates.
The narrative was upended last week during the Lottery Commission’s most recent hearing. It was revealed that the commission had already dealt with out-of-state buyers purchasing tickets through vendors in the past, and rules were written to stop such play.
Rob Kohler, representing the Christian Life Commission, put the Texas Lottery Commission on notice by testifying about a 1995 case in which Scott Wenner, a New Jersey police officer, used the vendor Pick-a-State to win a $10.4 million Texas Lottery jackpot.
At the time, the Texas Lottery Commission rejected Wenner’s claim on the jackpot.
The commission argued that the ticket was sold over the phone across state lines for more than face value, violating regulations requiring in-person sales at face value. It even threatened to revoke the license of the liquor store that sold the ticket for not complying with state laws.
Back then, the Lottery Commission adhered to the legislative intent that the lottery be played in person and with cash by refusing to pay the purse. Ultimately, the officer sued the TLC and settled the claim, but that episode influenced the rules later adopted by the commission.
Fast forward to today, and the TLC has brazenly taken the opposite approach.
In 2023, an international syndicate reportedly purchased $25 million of lottery tickets, covering 99.6 percent of all possible number combinations to secure a $95 million jackpot. To facilitate this massive purchase, the commission provided extra machines to four lottery locations, enabling the rapid printing of tickets to secure the rigged win.
Notably, these tickets were sold at more than face value and through an app, not in person—starkly contrasting the policies enforced in 1995. Despite these similarities to the previous case, the commission did not deny the jackpot win or take action against the sellers.
Instead, the TLC has gone out of its way to defend the rigged win and claims it has no control over ticket sales despite having the power to pull licenses, as threatened in 1995.
Compounding the TLC’s plain abuse of its position, the commission has testified to lawmakers that the 2020 rule change was not substantive; it could not have anticipated the change would lead to the online sale of lottery tickets through courier services.
The TLC is currently undergoing a process conducted every 12 years designed to evaluate state agencies’ performance known as a sunset review. This process can result in a call for reforms or even agency abolishment.
As part of this process, agencies must provide information about their inner workings, budgets, historical timelines, and state or federal litigation affecting agency operations.
The TLC risks being accused of lying to lawmakers by omitting its history regarding out-of-state purchases by third parties, the rules it created to stop such sales, and the litigation that led to that rule-making.
At the time of the 1995 winning ticket dispute, an attorney for Pick-a-State was quoted in the New York Times saying “The state doesn’t object to us bringing in all this money for them, or to international syndicates that buy millions of tickets through agents to improve their odds.”
The commission’s rule rewrites and current stance on sales facilitated by third parties contradicts its past actions, raising questions about transparency and the commission’s integrity, especially since the risk of an international syndicate manipulating the odds was known and accounted for in TLC rules nearly 30 years ago.
The Texas Lottery Commission has courted controversy multiple times, including numerous attempts to expand gambling against the electorate’s wishes and lawmakers’ legislative intent.
Members of the Lottery Commission are appointed by Gov. Greg Abbott and confirmed by the Texas Senate.
