The unusual circumstances surrounding two of the largest Lottery jackpots in Texas history have touched off a furious debate about the unorthodox methods used to snag the prizes and have led the governor and attorney general to announce investigations.
On April 22, 2023, someone won a $95 million Lotto Texas jackpot by spending $25 million to buy nearly every possible number combination in the draw. The winner, identified only as a business entity called Rook TX, of Scotch Plains, N.J., ended up claiming the lump-sum payment of $57,804,000 before taxes.
Then, on Feb. 17, someone won an $83.5 million Lotto Texas jackpot by ordering tickets online through Jackpocket, a third-party app owned by DraftKings. Jackpocket also owned the store in Austin that printed the winning ticket. It sold board games in front and had dozens of lottery terminals behind a wall in the back.
Can you buy millions of lottery combinations?
In early 2023, as the jackpot in Lotto Texas ballooned over months without a winner, someone figured out a way to almost guarantee a win, according to Ryan Mindell, executive director of the Texas Lottery Commission.
In the run-up to the drawing, the person or persons — it is not clear how many were involved — worked with four retailers in Texas to order a “significant” number of lottery terminals, enough to pump out roughly 25 million tickets and cover nearly every possible number combination, Mr. Mindell said.
Then, in the three days leading up to the drawing, people went to the stores and entered millions of number combinations using QR codes that had been loaded onto iPads, Mr. Mindell said. The Texas Lottery app allows customers to generate QR codes that can be scanned at participating retailers to generate tickets.
The operation caused a giant spike in sales, with about 27 million tickets sold in less than 72 hours, compared to about 2 million in a typical Lotto Texas drawing, Mr. Mindell said.
“I remember waking up that Thursday morning and seeing the sales numbers and thinking, ‘What the hell is happening?’” he said.
One of the tickets contained the winning combination — 3-5-18-29-30-52 — for the $95 million jackpot, the third-largest in Lotto Texas history. Officials have not disclosed who was behind Rook TX, the entity that claimed the prize. Texas law allows those who claim Lottery prizes of $1 million or more to remain anonymous.
The operation — which The Houston Chronicle has helped to expose through extensive investigative reporting — touched off outrage at a hearing in the State Senate last month.
“This is probably the greatest fraud ever perpetrated on the State of Texas by any group,” Senator Paul Bettencourt said at the hearing. “We gave up, probably on a fraudulent win, $57.7 million.”
Mr. Mindell said that the Lottery had taken steps to thwart similar “bulk-buying” operations by limiting the number of terminals that retailers could order in a short period and capping the number of tickets each terminal can print per drawing.
“Generally speaking, if one person had a lot of money and wanted to buy as many tickets as they wanted, that doesn’t violate the law,” he said. But he added: “The perception of the fairness of the game is significantly hurt.”
A quiet store with dozens of lottery terminals.
On Feb. 17, a buyer won an $83.5 million jackpot, also one of the largest in Lotto Texas history, by using Jackpocket. The buyer was a Texas customer who had ordered 10 entries for the draw, spending a total of $20, according to Jackpocket.
The app is one of a number of third-party companies known as courier services, which allow customers to order online without physically entering a store.
A day after the win, Lt. Gov. Dan Patrick released a video of his visit to Winners Corner in Austin, the store that had sold the winning ticket through Jackpocket.
He was not pleased with what he saw: He noted that the store, which was also owned by Jackpocket, kept a large number of lottery terminals in the back, hidden from public view. In addition to lottery tickets, the store appeared to sell mostly board games, he said.
“We’re not suggesting anything illegal, but this is not the way the Lottery was designed to operate,” Mr. Patrick said in the video. “It was designed to operate by someone coming into a store, giving someone cash and getting a ticket back — not for machines behind walls, and not from a courier service and a retailer all being connected.”
The store, a licensed lottery retailer, has for years been the top-selling lottery retailer in Texas, Mr. Mindell said.
Texas officials say both wins have shaken public confidence in the Lottery.
On Feb. 24, Gov. Greg Abbott of Texas ordered state law enforcement officials to investigate both wins. “Texans must be able to trust in our state’s lottery system and know that the lottery is conducted with integrity and lawfully,” he said.
That same day, the Texas Lottery announced that it was moving to ban courier services like Jackpocket, and that it would revoke the license of any lottery retailer that worked with one.
Two days later, Attorney General Ken Paxton announced his own investigation into what he called “suspicious and potentially illegal lottery ‘winnings.’”
“Texas citizens deserve far better than bad actors getting rich off of a lottery system that is open to exploitation, and we will hold anyone who engages in illegal activity accountable,” he said.
Peter Sullivan, senior vice president of lottery at DraftKings, said in a statement that Jackpocket would suspend operations in accordance with Texas Lottery policy. But he noted that the app had operated in Texas since 2019 with “a proven track record of compliance and commitment to responsible gaming,” and had complied with guidance from the Texas Lottery Commission.
He said that the company hoped to work with policymakers to craft rules that would allow courier services to resume operations. Jackpocket, he said, had driven over $550 million in lottery ticket sales in Texas, helping to generate vital revenue for public education.
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