Texas Regulator Cracks Down on Online Courier Ticket Sales

In a dramatic turn of events, the Texas Lottery Commission voted unanimously to prohibit the use of courier sites and apps for selling lottery tickets, a substantial escalation in the state’s ongoing efforts to clamp down on unregulated online gambling activity. This decision has caused significant controversy, with Lotto.com even resorting to legal action.

Couriers Contend with Substantial Criticism

The new rule bars licensed retailers from partnering with third-party lottery couriers or using their services to facilitate sales. It also calls for severe punishments for any retailer knowingly engaging with such platforms, including license suspensions. This development is particularly notable given the commission’s previous concerns about whether it could enforce such a ban.

This development follows growing criticism by lawmakers and regulators, who caution that the increasing expansion of lottery courier services has exposed the state to underage gaming, illegal out-of-state ticket purchases, and potential money laundering operations. Such services accept ticket orders via mobile apps or websites and then complete the purchases by printing and scanning tickets at partnering state-licensed retailers.

The commission’s decision closely follows two controversial high-profile wins that triggered alarms within the state government. The first incident happened 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 prompted calls for investigations.

The Commission Faces Its Share of Difficulties

While couriers like Jackpocket and Lotto.com account for less than 10% of Texas Lottery sales, their market presence has grown exponentially. A recent Texas Tribune report revealed that, according to commission reports, the two companies facilitated more than $226 million in ticket sales in 2024, over five times more than the top five brick-and-mortar retailers, who combined sold just $34 million.

Lotto.com preemptively responded to the looming ban by taking legal action last week, seeking an injunction against the new rule’s enforcement. The court has yet to issue an official ruling. Courier service providers argue that they self-regulate via stringent identity checks and anti-fraud measures, including geolocation restrictions and age verification. However, these platforms have very limited third-party oversight.

This development coincides with an existential threat to the Texas Lottery Commission as a recent budget proposal eliminates all funding for the agency. It is also undergoing a routine review by the Sunset Advisory Commission, which will likely decide whether to reauthorize the commission’s existence. Coupled with the rising pushback from legislators and courier service providers, the stakes for the state’s gaming regulator have never been higher.