Tyler Reporter

When the Texas legislature created a state lottery in 1991, the statute required individuals to purchase tickets from licensed, brick-and-mortar retailers using cash or debit cards. Telephone purchases were expressly prohibited to prevent gambling debts among addicts. However, the Lottery Commission has enabled independent third-party couriers to facilitate lottery ticket purchases via mobile applications and internet-connected devices.

These couriers argue that sending a person to buy a ticket in person does not constitute a telephone purchase. Nevertheless, several legislators questioned this practice during a 2023 Senate Finance Committee hearing.

During the 88th Legislature, Senate Bill 1820 was filed to prohibit digital orders, purchases, or sales of lottery games via mobile devices and third-party couriers. The bill directed the Lottery Commission to adopt rules enforcing these prohibitions but was ultimately killed by the House.

According to the Legislative Budget Board, courier services were expected to account for $173.1 million in lottery ticket sales in the twelve months leading up to September 30, 2023. Some couriers have established relationships with licensed retailers and generate significant game sales. However, current law does not account for third-party couriers despite prohibiting phone-based lottery games.

The legal ambiguity surrounding these couriers complicates efforts to track sales and ensure fair play. Incremental rule changes by the Commission have allowed independent third-party couriers into the state.

The issue gained further attention when DraftKings acquired JackPocket, a third-party courier app that operates in states where online sports betting is illegal, including Texas. DraftKings plans to expand JackPocket's reach and develop new lottery products within the app.

The Texas Lottery Commission benefits from increased sales through these services but faces pressure to uphold legislative intent amid unclear regulations. The agency’s approach has been criticized as neglectful of its duties.

The Texas legislature aims to address courier services' existence and restore traditional in-person cash-based lottery play. The Texas Lottery Commission is under review by the Texas Sunset Advisory Commission, which will include public comments and hearings on its operations.

For more information on this review process, visit https://www.sunset.texas.gov/reviews-and-reports/agencies/texas-lottery-commission.