The Texas Lottery Commission (TLC) was subject to criticism from a legislative commission with a dozen members in the state that seeks to improve the work and efficiency of different agencies across the state.
The recent announcement follows a case that saw a New Jersey company called Rook TX, claim a massive jackpot from the TLC. Although the company won the $95 million jackpot, it decided to take a lump cash sum which was nearly $58 million, before taxes
In this case, the win for Rook TX was almost guaranteed, as local media outlets reported that it purchased nearly 26 million tickets. This was a rare occurrence that enabled the lottery to be mathematically exploitable and Rook TX didn’t wait for another chance but went for it.
With the cost per ticket at $1, the company had to purchase 25.8 million tickets. This translated to $25.8 million but the risk was worth it, considering that Rook TX’s chances of winning were nearly guaranteed. And this didn’t include only the jackpot prize but many lower-tier prizes as well.
The risk in the case that undoubtedly raised eyebrows was that another lottery player could have won the grand prize, which was estimated at $95 million. The company was aware of that, but disregarded the risk, considering that usually the TLC sold between one and two million tickets per draw. Compared to the nearly 26 tickets purchased by Rook TX, the risk was marginal.
The gamble paid off and the company won the jackpot last July. In addition to the grand prize, Rook TX collected an extra $2.5 million in lower-tier prizes.
A Commission Criticizes the Lottery for Its Passiveness
One might wonder how the company was able to purchase nearly 26 million tickets for a single lottery draw. The answer is lottery courier providers.
Lottery courier companies are expanding their footprint across the country even though they are formally legalized only in a handful of states. Despite their status, such applications and providers offer their services across the states, and this is precisely how Rook TX was able to purchase millions of tickets.
In a recent Executive Summary Report released by the Sunset Advisory Commission, the TLC’s passiveness was recognized. The report pointed to the strict regulatory requirements for the Lottery which demanded supervision and generating revenue responsibly.
At the same time, the Sunset Advisory Commission acknowledged the challenges the TLC is facing, which include “outdated statute” as well as opposition to “gaming altogether.” The agency added that those circumstances push the TLC into “becoming stagnant.”
Despite the challenges, the agency pointed to the criticism the lottery drew amid the expansion of lottery courier companies. It said that such companies use an “unregulated and controversial business model” that takes approximately 9% of the share of the Lottery’s ticket sales.
