Texas Lottery Regulations to Change after $95M Consortium Win

The Texas Lottery Commission said this week it has already implemented changes following the controversial $95 million Texas Lottery win by consortium RookTX.

The unknown company used a lottery courier app loophole to buy 26 million tickets, covering every number combination for the April 2023 draw. That mathematically guaranteed the jackpot win for the company, which duly won the $95 million rollover jackpot. It took away $57 million in a lump sum, after taxes. 

Although the operation was entirely within the bounds of the law, it sparked an official review of the Texas Lottery Commission’s services from the Texas Sunset Commission. That is a regulatory body that specializes in looking at failing state agencies. 

Texas Lottery Commissioners said this week that the regulator will be implementing several procedures to stop such a rigged win happening again. That includes a stricter review process on retailers looking to install lottery ticket printing terminals. 

An investigation by the Houston Chronicle revealed that RookTX employed several retailers who had little or no past in selling lottery tickets to order dozens of print machines from the Texas Lottery, which they used to print the 26 million tickets.

“You collaborated with a group of sophisticated players,” said Rep. Matt Shaheen (R-66) in a hearing earlier in August. 

 “A significant percentage of lottery sales in Texas is to lower-income individuals, and I think they were taken advantage of.”

The Win 

When the Texas Lottery jackpot approached $95 million in April 2023, someone realized it was the perfect opportunity for an almost-guaranteed investment. 

Under the history of U.S. lotteries up to now, it would have been infeasible for any one player (or syndicate) to purchase and process enough tickets to guarantee the jackpot.

However, with the expansion of lottery courier services across the U.S., this situation has changed. Couriers allow players to order as many tickets as they want online, and then a courier will collect them from a physical location.

Using the (now defunct) Lottery.com courier service, RookTX automated the input for an order of 26 million tickets, covering every possible combination of numbers. 

In some states, this would have ended the potential scheme, as no lottery retailer would have the free time or printers to fulfill an order that large. 

But this is where the Texas Lottery Commission’s laissez faire approach came in. It allowed several stores in the Dallas-Fort Worth area to purchase dozens of lottery ticket printing machines, despite not having a track record in the lottery retail business. 

In fact, an investigation from the Houston Chronicle alleged that Texas Lottery officials actually fast-tracked an order for a dozen printing machines from a business that had previously never sold lottery tickets – a business that ended up printing several million tickets (via a courier app) for RookTX. 

The Changes 

Texas Lottery officials say they have now taken steps to fix the problem. They plan to forward any substantial requests for new lottery printing terminals directly to senior leadership for consideration, and that it would reject applications similar to those used by businesses connected to RookTX.

“This will prevent rapid deployment of terminals to retailers who do not have a record of sustained sales, who may be acting in response to temporary demand,” said Texas Lottery executive director Ryan Mindell. 

However, he also told lawmakers that other states would probably see such attempts in the future if they don’t take steps to act. 

“With modern analytical tools and large amounts of funds at their disposal, every lottery game in the country, and likely the world, will be analyzed in one form or another by these types of groups,” he said.