The mystery is solved.
Who won last year’s enormous $95 million Lotto Texas jackpot?
The official announcement placed the winner in Colleyville. But when I went to the storefront where the winning ticket was sold, it was the strangest lottery store I ever saw.
There were no signs indicating that lottery tickets were sold there. The place was billed as “Hooked on MT,” which promotes Montana fishing.
It didn’t take long for The Watchdog to figure out that a syndicate had pooled its money together and spent almost $26 million to buy every possible numeric combination.
What a gamble! Spend $26 million to maybe win the $95 million (payout $57.8 million after taxes).
It worked. There was one jackpot winner, but as permitted under Texas lottery rules, the identity of winners of high-dollar prizes can remain undisclosed. That happened here.
Since then, fallout has been immense. Some think the integrity of the lottery has been compromised. How could regular players buying $1 tickets stand a chance competing against someone who bought $26 million worth of tickets for the Lotto Texas draw?
State lawmakers are studying lottery rules to determine how and if players can legally compete using phone apps and computer software.
And how does someone buy $26 million in entries over a 3-day period? In Texas, the rule is you must be physically present to buy a ticket over the counter of a retail store. The lottery changed that during the pandemic to allow e-purchases. Critics say that violates the intent of the law which was to keep sales sold the old-fashioned way.
All of the above I first reported last year. But I didn’t know who bought the winning tickets and how they did it. Now thanks to Houston Chronicle reporter Eric Dexheimer, who spent weeks on the story, a vivid picture of how this went down emerges.
It’s not a pretty picture.
Winner in Maltese?
According to the Chronicle, the winner was a company called Rook TX. But don’t be fooled by TX. It’s a Delaware-based company with a registered agent in New Jersey.
The scheme was organized by a Maltese businessman, the Chronicle learned. The massive purchase was apparently funded by a London betting company called Colossus Bets which puts together betting syndicates like this one.
In Texas, only four lottery outlets sold nearly 26 million tickets in three days.
The Colleyville store, for instance, sold 11 million tickets in the 72-hour sales period. How is that physically possible?
Four lottery stores like the one in Colleyville asked the lottery commission for an extra dozen computer terminals to handle the massive sales. The lottery complied. More terminals meant more sales – but not necessarily to Texans.
What seems to have happened is these terminals in four lottery sales companies in Texas used special software to run 24/7 to sell that many tickets.
The lottery commission did not respond to The Watchdog’s written questions for this story. But a spokesperson told the Chronicle no laws or rules were broken.
State Sen. Bob Hall, R-Canton, challenged the lottery to adhere to its roots and not modernize sales through phones, computers and the Internet – unless it gets legislative approval.
He wants the games “to be played in person and with cash.”
Lottery couriers
For this huge purchase, one method used was iPads with QR codes containing number combinations that could be used by state-approved terminals and printed out, the Chronicle reported.
Lottery rules ban high-tech, third-party devices that were used to speed up purchases. The commission must approve the setup.
If phone apps and computer purchases are not allowed under lottery law how could the lottery sell almost $26 million in tickets in only three days before the April 2023 drawing.
The answer is couriers. Defenders of high-tech sales say the couriers are like DoorDash delivering tickets rather than food. They take the order, buy the product and deliver it.
Couriers take ticket orders from customers using an app on their phones or computers. Couriers claim they send a staffer to purchase tickets from licensed brick and mortar lottery retailers. A scanned image of the ticket is sent to the player.
They can move massive numbers of tickets electronically to licensed lottery stores.
Strangely, lottery officials say they can’t regulate couriers because theirs is a private business arrangement outside of the lottery’s jurisdiction.
Dawn Nettles of Garland, who runs the Texas Lotto Report gadfly website, asked in a letter to state lawmakers, “Why is the Texas Lottery defending the apps so fiercely? Answer: Sales were declining, and egos were hurting.”
This story matters to Texans because regular lotto players who hope to hit the big one are essentially snuffed out. The odds against regular players, who bought about $1.5 million for the drawing, were mathematically thwarted by international buyers from winning.
“Their chances drop considerably when wealthy, international players use modern tech to buy up almost all of the tickets, as what happened here,” Nettles wrote.
Sure, everyone has the same chance of winning the jackpot. But what happened here, Nettles told me, is that Texas players built the jackpot, and then outsiders came in and won the money by buying almost all combinations to almost guarantee a win.
This is more than about the questionable use of high-tech tools to buy tens of millions of dollars of game tickets at warp speed.
This seems like the definition of state-authorized greed.
