The Texas Lottery Outrage And Scandal Is Neither An Outrage Nor A Scandal … Discuss
Authorities in Texas are falling all over themselves to figure out what’s going on but it all seems much ado about nothing
3 min
GAMBLING CZAR: Let’s call this meeting to order, and first item for business is the stripping of “Texas” from “Texas hold‘em,” with the reason being politicians and authorities in Texas treat gambling like it’s a biblical plague and thus it should lose the naming rights to the game. Do we have a second? Good. New ideas? The representative from New Jersey, yes?
NJ REP: Let’s change the whole name. How about Turnpike Tussle?
GAMBLING CZAR: Not bad, not bad. Anyone else? Nevada?
NEVADA REP: Silver State Showdown!
GAMBLING CZAR: I see Minnesota has entered the chat. Yes?
MINNESOTA REP: You Betcha Poker, Eh?
GAMBLING CZAR: Well, I mean, maybe, but before we go on, let’s discuss exactly why we called this meeting … this whole Texas Lottery thing.
Outrage, scandal
Let’s turn it back over to reality …
As I said on the latest episode of the Low Rollers podcast, the Texas Lottery situation is an outrage in search of a scandal.
Outrage No. 1: In 2023, a consortium smart enough to realize the 25-odd-million combinations in the Texas Lotto was a significantly lower number than the $95 million jackpot bought up nearly every combination — cost ‘em $25.8 million — and booked themselves a nice profit of $32 million after taxes. The Texas Lottery may have helped them, by getting more lottery terminals placed at a particular location so they could print more tickets.
This consortium wasn’t the first to do this: There was also a Romanian economist who pulled off a similar scheme no fewer than 14(!) times in the ’80s and ’90s. Good for him, I say. Pull those levers, make it rain.
And according to our Low Rollers guest, Eric Dexheimer of the Houston Chronicle, people in Virginia and Massachusetts have also been able to work the system in a similar manner.
Outrage No. 2: Someone won last week’s $83.5 million jackpot by buying 10 tickets through Jackpocket, the lottery courier.
That’s pretty much the outrage there.
As a result of these outrages, scandal is at the door, peering in, trying to gain a foothold.
How we got here
Texas Lt. Gov. Dan Patrick kicked it off last week with a one-man, camera-phone-recorded investigation into lottery courier services after the $83.5 million winning ticket was sold at Winner’s Corner in Austin. Patrick confirmed the store was owned by Jackpocket, a lottery courier service owned by DraftKings.
The lieutenant governor threatened to shut down the Texas Lottery if courier services weren’t banned, noting the lottery is up for “sunset” review this legislative session.
The fallout was swift. Texas Lottery Commissioner Clark Smith resigned Friday. By Monday, the Texas Lottery Commission announced lottery courier services “are not allowed under Texas law” and would be banned, with Executive Director Ryan Mindell implementing the policy immediately.
On Tuesday, the TLC expanded its actions, announcing all courier services in Texas would be investigated and limiting lottery terminals to five per retail location.
Gov. Greg Abbott then ordered the Texas Rangers to investigate both the recent $83.5 million jackpot and the previous $95 million jackpot.
“Texans must be able to trust in our state’s lottery system and know that the lottery is conducted with integrity and lawfully,” Abbott said.
Then on Wednesday, Texas Attorney General Ken Paxton launched his own investigation, saying the winnings in these cases are potentially “unlawful.”
Outrage!
But is the outrage legit?
If we’re being honest, the “buy all the tickets with the help of the lottery” isn’t a great look. I mean, if someone wants to buy all the combinations, great. But enlisting the aid of the lottery to get more terminals up and running — as Dexheimer reported happened in the 2023 case — is, at best, not that cool, and at worst, kind of dumb.
But it certainly wasn’t illegal.
As for the second one? I mean, courier services were legal in Texas, someone bought 10 tickets through Jackpocket, and then they won a big jackpot last week. “Congratulations” seems like a better response than, “Outrage! Scandal!” (And yes, I recognize Winner’s Corner had all those lottery machines in the back, which — again — not a great look, but also not anywhere near illegal, outrageous, or scandalous. I mean, it just makes sense for Jackpocket to own the store where it is going to print the tickets. Anyway … )
Make no mistake, Texas politicians smell blood in the water. Remember: They don’t love gambling as a rule. (“Turnpike Tussle” is really growing on me, BTW.)
“At best, the lottery commissioners were deliberately indifferent,” Sen. Bob Hall, R-Rockwall, said Monday, according to WFAA. “At worst, they’re co-conspirators in the vastest financial crime since Enron.”
Settle yourself, Bob.
Even before Patrick filmed his own Dateline feature, politicians were on the attack.
“We can’t gloss over this,” Sen. Paul Bettencourt, R-Houston, said during a finance committee hearing on Feb. 12, concerning the first outrage. “We can’t look the other way. We have to look directly at this. This is, 99 percent probability, money laundering.”
Enron? Money laundering? Sheesh. We’re days away from a politician claiming Jackpocket was on the grassy knoll.
From where I’m sitting, the 2023 “scandal” was just some good ol’ fashioned arbitrage, and last week’s “scandal” was some good ol’ boy who used the internet to buy a lottery ticket.
I do fear, however, that the facts here won’t really matter, and courier services are dead in Texas, and — as Dexheimer noted on the pod — this isn’t going to help any other gambling legalization efforts in the Lone Star State.
Texas hold‘em? More like Texas fold’em, amirite?
