Texas judge temporarily halts enforcement of lottery rule targeting courier services

A Texas judge has granted a temporary restraining order in favor of LTC Texas, a lottery courier company affiliated with Lotto.com, in its lawsuit against the Texas Lottery Commission. The decision blocks the commission from enforcing a new rule that would revoke the license of any lottery retailer doing business with courier services, a move that could have shut LTC down.

Travis County District Judge Sherine Thomas ruled on Friday that LTC had shown a strong likelihood of success in its case, although her decision is not a final judgment. The order prohibits the commission from taking any enforcement action against LTC or seizing its terminals. A full hearing is scheduled for May 27.

The dispute stems from a policy reversal by the Texas Lottery Commission, which had previously tolerated courier companies that facilitate ticket purchases for players through third-party services. The commission recently adopted a stricter stance, targeting retailers associated with such firms.

The regulatory shift follows mounting political pressure, particularly from Lt. Gov. Dan Patrick and other lawmakers who argue that courier services violate the 1991 lottery law prohibiting ticket purchases via telephone. Critics allege that couriers exploit a legal gray area to offer online access to lottery products.

Senator Bob Hall, a vocal opponent of the industry, told a Senate committee this week that the commission’s years-long tolerance of courier services reflected a broader failure of oversight. 

“It will be crystal clear to everyone listening that the Lottery Commission has failed to uphold any of the principles of honesty and integrity,” Hall said during a hearing on Senate Bill 1988, which proposes abolishing the lottery altogether.

Concerns about courier services intensified after a 2023 Lotto Texas jackpot of $95 million was won by a player reportedly backed by a syndicate that had used couriers to purchase nearly every possible number combination. Although the winning ticket was not bought via phone, the event sparked alarm among lawmakers.

The commission’s sudden reversal was spearheaded by then-executive director Ryan Mindell, who recommended the crackdown following tough legislative questioning. Mindell resigned last month without public explanation.

Meanwhile, a Senate bill that would formally outlaw courier operations has already cleared the upper chamber and awaits a vote in the House. Despite the controversy, the Texas Lottery remains a major revenue generator, with annual sales of around $8 billion and $2 billion returned to the state budget.