The fallout is deepening over 2023’s controversial $95 million Texas Lottery jackpot that was won by a non-U.S. consortium that bought millions of tickets to cover all the numbers.
This week, Lone Star State lawmakers at the state Capitol in Austin (pictured) grilled Lottery Commission staff over the incident. Senators speculated the win could have amounted to money laundering or fraud.
The Lottery Commission is currently under review by the Sunset Commission – a state agency that looks to close or consolidate state agencies that it says aren’t fit for purpose.
Texas Governor Dan Patrick told local media this week that the commission could recommend shutting the lottery down if it doesn’t make changes to ensure a similar incident can’t happen again.
Separately, a class action lawsuit was filed this week against those involved in the win. That includes former Lottery Commission head Gary Grief, the winning consortium Rook TX, lottery courier service Lottery.com, and Texas Lottery service provider International Game Technology.
Lawmakers and the class-action lawsuit both alleged similar collusion between the state Lottery and the winning consortium, amounting to fraud and potentially money laundering.
Texas Lottery representatives and the now-retired Grief both publicly denied the claims and maintained innocence.
The Win
The April 22, 2023, Texas Lottery jackpot was $95 million, having built up over 93 weeks before that.
Millions of legitimate ticket purchases were made across the state by customers excited they might potentially be the big winner. But little did they know, they were basically buying dud tickets.
That’s because one consortium, legally based in New Jersey but later discovered to be owned by international gambling business figures, bought $27 million worth of tickets to cover all the numbers and ensure the jackpot win.
Which is exactly what happened. At the time the Texas Lottery denied anything illegal had taken place, and things seemed to settle down. But after journalists at The Houston Chronicle exposed the details behind the win, lawmakers and private citizens began to take notes for their own investigations.
The Fraud Allegations
The main problem behind the big win was that RookTX used a lottery courier service to buy its 26 million tickets.
In prior times, no retailer in Texas would have had the capacity to print 26 million tickets. The cost of the dozen Lottery ticket printing machines compared to demand would not make business sense for almost any retailer.
Which is why RookTX used the (now closed) lottery courier service Lottery.com to order the tickets.
But Lottery.com needed somewhere to print and collect the tickets. Enter several Dallas Fort-Worth area businesses that ordered dozens of printing machines weeks before the draw – despite not historically being associated with lottery machines.
The new lawsuit and lawmakers both allege that the state Lottery may have colluded with either Lottery.com or potentially RookTX to fast-track delivery of the machines to the businesses in time for the draw.
Lawmakers also added that the foreign-owned offshore nature of RookTX meant suspicions of money laundering were also high.
The lawsuit went so far as to claim that Grief and Lottery.com collaborated from 2017, when Grief and the Texas Lottery were pushing for expansion of lottery courier services in the state.
“My client believes that this criminal conspiracy started in 2017, when Gary Grief traveled to California to lobby the founders of Lottery.com to relocate their business to Austin,” attorney Manfred Sternberg wrote in the class action suit.
“From that moment on until Mr. Grief’s sudden retirement in early 2024, the Lottery Commission and Lottery.com became a combined single criminal entity.”
Possible Outcomes
This week, Texas Lt. Governor Patrick did not hold back when discussing the situation with local media.
He says he wants the Senate to try and ban lottery couriers once again. They were legalized in the state in 2019, but lawmakers have been discussing trying to ban them again ever since. If it doesn’t work this time, the Governor might recommend the Sunset Commission close the state Lottery down.
“We banned courier services last year. The bill passed 29-to-2. That’s bipartisan, and it died in the House. We’re going to pass that same bill again,” Patrick said.
“Every 12 years, agencies are up for sunset, in various forms, so this time, the lottery happens to be up for sunset. If we don’t pass the sunset bill before we leave session, the lottery is out of business.”
The increased scrutiny on Texas gambling will no doubt be aggravating for Las Vegas Sands. The Nevada-based global casino operator is pushing to build the first legal Texas casino resort. The company and its owner, Miriam Adelson, have donated millions to politicians and financed pro-gambling ad campaigns in the state ahead of the ongoing legislative session.
Sands has even been accused of a conspiracy to potentially sabotage the Dallas Mavericks NBA team (recently bought by Adelson) in pursuit of their goal, although it has denied this.
If the lottery is banned in the Lone Star State, the optics are not good for legalizing other forms of gambling this year or anytime soon.
David is an online casino expert who specializes in online slots and boasts over 10 years experience writing about iGaming. He has written for a wide range of notable publications, including eSports Insider and WordPlay Magazine.
David graduated Derby University with a BA Degree in English Literature and Creative Writing.
