As the legislative future of Texas sports betting remains in limbo, state regulators took action against a key database builder for a national sportsbook.
The Texas Lottery Commission announced Monday that lottery courier services are not allowed under Texas law. That came after a winning ticket was purchased on DraftKings-owned Jackpocket last week, with Lt. Gov. Dan Patrick quickly posting his “investigation” of the situation.
Patrick is a firm opponent of Texas sports betting and determines what bills are heard in the Senate. There are live bills in the legislature after a sports betting bill passed the House in 2023.
How Texas Lottery got here
A lottery ticket purchased through Jackpocket in Austin was a winner in an $83.5 million lottery drawing. In a statement announcing a Texas Rangers investigation into the situation, Gov. Greg Abbott also mentioned a 2023 $95 million jackpot win using a courier service to purchase “nearly every possible number combination.”
Courier services take lottery orders and transmit scanned images of the tickets to customers, charging a fee for the service. The Texas Lottery Commission said courier services are unregulated operators, and “in practice, the courier and retailer are often located in the same building or office.”
The concerns are over the integrity of the lottery. A bill prohibiting courier services passed the Senate in 2023 before dying in the House. The same bill was recently introduced, and Patrick has warned that the lottery might not continue without that law.
Lottery commission takes action
Then came the lottery commission’s announcement Monday from Executive Director Ryan Mindell. The commission previously believed it did not have authority over the services but now will propose a rule to prohibit courier services, with action expected at its March 4 meeting. It will also revoke licenses of retailers that work with courier services.
“The Texas Lottery was established to provide a secure and transparent system for players to purchase tickets in person from licensed brick-and-mortar retailers for the purpose of generating revenue for public education and veterans’ services in a responsible manner,” Mindell said. “Lottery courier services operating in Texas have been a significant concern for many of our stakeholders.”
Patrick posted online that he believes the agency is only acting because of his “exposing” of the practice.
DraftKings sports betting connection
DraftKings purchased Jackpocket for $750 million last year. The courier service operates in 18 states.
DraftKings told The Closing Line that it is suspending its Texas operations.
“We remain dedicated to working with policymakers to ensure access to secure lottery options and working with the Texas Lottery Commission to craft regulations that would allow lottery courier services to continue in Texas,” said DraftKings SVP of Lottery Pete Sullivan.
Texas sports betting situation
The prospects for Texas sports betting legislation are not bright with Patrick presiding over the Senate. That is despite plenty of momentum building behind the industry, including words of relative support from Abbott.
Even the House, which passed the sports betting bill in 2023, might be an uphill battle. Last week, Rep. Matt Shaheen told the Dallas Morning News, “We’re going to make sure it’s dead.”
And without a majority of Republicans in the Senate supporting the issue, Patrick is unlikely to change his longstanding tune.
