In June 2024, Greg Potts, the COO of Lottery.com, emailed the Texas Lottery and asked if there was a way to directly procure soon-to-expire games directly from IGT, the state’s lottery vendor.
The Texas Lottery, with a 30-year history pockmarked with controversy, instructed Potts to contact IGT.
This response, included in a batch of communications released by the Texas Lottery between Potts and other Lottery.com representatives, is indicative of the disinterest in safeguarding the lottery that has defined the agency under both of its now former executive directors, Gary Grief and Ryan Mindell.
For instance, as previously covered by Texas Scorecard, the lottery had no interest in investigating back-to-back $50,000 winners cashed by the same individual on the same day—a man who was terminated from Lottery.com for cause, according to SEC filings, after it was discovered that Texas tickets were being sold in other states.
It also couldn’t be bothered by a $1M lottery ticket sold at the exact location as the back-to-back $50,000 winners, one week later. That ticket was reportedly stashed in the desk drawer of a Lottery.com founder for months, only to be paid out weeks after the deadline for claiming the ticket by an alleged buyer from China.
The commission is currently attempting to withhold information about this ticket in response to a public information request.
But what could be the rationale behind buying up the remnant of a scratch ticket game? There are a few possibilities.
One is a straightforward statistical play that Texans have seen before.
With a game winding down, it’s possible to determine whether the largest prizes from a game have been claimed. With that information, a formula can be justified to guarantee a win or at least minimize losses by purchasing remaining tickets.
The Texas Lottery displays top prizes claimed for scratch-off games, so assuming a winning ticket hasn’t been sold and subsequently lost or destroyed, purchasing the remainder of a game could be a surefire way to win.
Famously, Joan Ginther, a Stanford-trained statistician, won multiple million-dollar scratch-off ticket prizes between 1993 and 2010. According to reporting from Harper’s Magazine, Ginther would analyze gameplay and, with the aid of a retailer, hoard batches of tickets that she’d scratched, locate winners, and then return unplayed tickets.
Potts’ email to the Texas Lottery, inquiring after unplayed aging scratch tickets, was sent one month after Ginther’s death.
If, as suggested by multiple lawmakers, including State Sen. Paul Bettencourt (R-Houston), the lottery is being used to launder money, this would also be a good approach. The remainder of scratch-off tickets in a given game would need to yield more than 70 cents on the dollar, according to the IMF, for the scheme to work.
Such a money laundering effort would be even more lucrative if the tickets were being purchased in Texas and then exported and sold abroad at a premium.
There was one other element to Potts’ communication with the Texas Lottery: online ticket claims. By June 2024, the Texas Lottery Commission had introduced an online option for players to cash in their winning tickets.
It’s important to note that Lottery.com, the company that Potts represents, was one of the lottery ticket resellers involved in the rigging of the April 2023 $95 million jackpot. The company was also selling Texas tickets into the Dominican Republic, according to internal communications and 2023 reporting.
A response to Potts’ inquiry suggests that the Lottery Commission was well aware of Lottery.com’s operations. Specifically, Potts was asked to, “Please let me know if Lottery.com plans to continue working with the retailer ALTX Management or if the company plans to work with a different retailer or retailers.”
In an email to Matt McGahan, Lottery.com’s CEO, following the 2023 lottery event, Potts discussed offloading ticket printing for the Dominican Republic to ALTX Management, a retail partner, since Lottery.com was locked out of its office due to nonpayment of rent and therefore unable to access its retail machines.
When asked if he’d contacted IGT about buying up soon-to-expire scratch ticket games, Greg Potts did not answer.
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