Texas Lottery Commission Faces Legal Challenge Over Sudden Courier Ban

A legal fight is brewing between the Texas Lottery Commission and online courier service Lotto.com, as the commission gets ready to vote on a controversial rule that might ban these services across the state.

TC Texas Files Suit, Alleges State Worked With Couriers Before Proposed Ban

LTC Texas, the company behind Lotto.com, filed a lawsuit in a Travis County district court on April 24. The lawsuit claims the commission changed its stance on whether courier services are legal, reported the Austin American-Statesman. The complaint argues that the Texas Lottery Commission did not just allow these services before, but also worked with them as they set up shop.

Lotto.com says it started operating in Texas in 2022 with the commission’s full knowledge and silent approval. The company points to several talks with lottery officials, including letters from former Executive Director Ryan Mindell showing that its operations did not break existing laws. The lawsuit also claims that the commission even pushed for the use of official gear and branding and talked about ways to boost security measures.

Even with these exchanges, the commission said in February that it planned to outlaw all lottery couriers, firms that purchase tickets in-store for online customers. This choice came after rising political pressure and public attention when two big jackpot wins raised concerns about bulk ticket buying and possible weak spots in the system.

Lotto.com Lawsuit Follows Jackpot Scandals and Courier Ban Push

The first incident took place in April 2023 when someone won a $95 million jackpot by buying almost every possible number combination. The second, an $83.5 million win in February, involved a retailer linked to a courier. Both cases raised eyebrows about possible money laundering and kids’ gambling.

After these issues, Mindell, who had first said the commission could not control couriers, changed his mind and brought in a new rule. This rule threatened to take away licenses from stores that worked with couriers. He stepped down earlier this week just before the commission was set to vote on the proposed ban. Sergio Rey now leads the agency as Acting Director, and he is also named in the lawsuit.

Lotto.com claims the rule change skips legal requirements to notify and get public input. It says the move responds to pressure from lawmakers for political reasons. The Coalition of Texas Lottery Couriers, which includes Lotto.com and other services, has spoken out against the ban.

They stress they are ready to work under regulatory oversight. The lawsuit also aims to stop any further investigations or actions against courier services until the court decides. The ban could start as soon as April 29, when the commission meets next, if a court order does not stop it.