Lotto.com Challenges Texas Lottery Commission’s Courier Ban in Court
A lottery courier service, Lotto.com, has taken legal action against the Texas Lottery Commission with the aim of preventing an impending ban on its operations, scheduled to take effect within a week.
The Legal Dispute
On Thursday, Lotto.com filed a lawsuit against the Texas Lottery Commission and its acting director, Sergio Rey. The lawsuit argues that the commission’s proposed ban represents a significant shift from its earlier position, which suggested that regulating courier services was beyond its capabilities.
Statements from Coalition Representatives
The Coalition of Texas Lottery Couriers, representing Lotto.com among others, emphasized the need for a collaborative relationship. “It is time to reconsider the agency’s politically motivated decisions regarding lottery couriers and restart good faith collaboration between our companies and fresh leadership at the TLC,” a coalition spokesperson stated.
What Are Lottery Couriers?
Lottery couriers are third-party entities that facilitate online ticket sales. They print lottery tickets at licensed retail locations they own and subsequently send digital copies of the purchased tickets to customers. Lotto.com is currently the second highest-selling lottery retailer in Texas, just behind Jackpocket, the largest in the nation.
Concerns Leading to the Ban
The Texas Lottery Commission’s decision to propose a ban on courier services follows a contentious Senate Finance Committee hearing held in February. During this meeting, legislators expressed concerns regarding the potential for money laundering and illegal ticket sales facilitated through couriers.
Administrative Changes at the Lottery Commission
In light of the increasing scrutiny, the commission’s executive director, Ryan Mindell, resigned shortly after the hearing. This administrative upheaval has further intensified discussions about the regulation and operation of lottery couriers in Texas.
Details of the Lawsuit
The lawsuit filed by Lotto.com asserts that the commission failed to adhere to state laws requiring a 30-day notice for proposed rule changes. The commission publicly announced its intention to ban courier services during the February hearing and simultaneously confiscated numerous lottery terminals belonging to courier companies, which the lawsuit claims was an unfair action. Additionally, Lotto.com highlights prior communications from the commission that indicated it could not regulate courier activities.
Legal Proceedings Ahead
The legal challenge comes amidst two ongoing investigations into the commission—one by the attorney general’s office and the other by the Texas Rangers, a division of the Department of Public Safety. These inquiries are prompted by repeated accusations by lawmakers regarding potential illegal activities associated with lottery couriers.
Legislative Context
Philip Patrick, the Lieutenant Governor, has made the prohibition of courier services a top priority, and a proposed bill—Senate Bill 28—introduced by Senator Bob Hall has cleared the state Senate unanimously. This bill is yet to receive deliberation in the House.
If the court does not intervene with an injunction, the Texas Lottery Commission is set to vote on the proposed ban on April 29.
For further information regarding Texas legal and political updates, stay tuned for ongoing coverage.