MJP –
An investigation by the Houston Chronicle last month exposed a scheme wherein rich investors were buying millions of tickets to guarantee a winning number in the Texas Lottery.
Lawmakers in Texas have been looking into the Texas Lottery Commission’s decision to authorize the practice since that story went viral. Subsequently, the commission announced that it would be making adjustments to future policies to curb the purchase of tickets in bulk.
The most recent revelations arising from the reporting of Eric Dexheimer, an investigative journalist for the Houston Chronicle, were shared with Laura Rice of the Texas Standard by the Texas Standard.
For the sake of clarity, this transcript has been minimally edited:
The Texas State Law: All right. Please review your earlier reports for our reference. Provide more details regarding the massive acquisitions that you discovered involving the Texas Lottery.
So, this specific draw took place in April of last year, according to Eric Dexheimer. Players in this Lotto Texas draw had to choose six numbers at random. Additionally, the jackpot is awarded to those who correctly guess all six numbers. By April of last year, the jackpot had climbed to $93 million, meaning there had been 93 draws without a winner.
And there is a specific mathematical set of conditions that makes it profitable for institutional, wholesale, or syndicate buyers—to name a few—to essentially purchase up every possible combination. Plus, if there are six numbers, you have to buy 25.8 million combinations. One bidder in this draw accomplished just that. They were the lucky winners of the $57.8 million prize, which was paid out in one lump sum.
Holy cow. Consequently, what was the lottery commission’s stance on this matter at that period? Did they know about it?
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They claimed that no laws had been violated. It was legal for sellers to sell these tickets and for one person to purchase all of them. After the fact, they did admit that it impacted how people felt about the lottery’s fairness.
Furthermore, if the prize is $95 million and one person has already won it, then the remaining players are only competing for half of that amount.
After seeing your stories, lawmakers blasted the lottery commission for letting this happen. What exactly did they say?
One of the major obstacles to this operation is the logistics, namely the question of how to collect 25 million tickets. As a result, all four of those establishments carried them. Because they were involved in the operation, they had to acquire more gear. Only lottery-issued machines can process and sell lottery tickets. Stores like them made extremely strange, last-minute demands for a plethora of devices.
Before that point, these shops hadn’t done very well. Similar to pop-up shops, they would come and go. To handle these tickets in the 72 hours between draws, they sought a couple dozen extra equipment from the lottery.
And instead of looking into it, the lottery essentially gave their stamp of approval. Governor [Greg] Abbott created a lottery commission, and after that, the commission requested that the lottery’s employees investigate the incident.
One of the adjustments they made was to require the executive director to assess any future unusual requests like this from outlets that have not sold a lot of tickets before, meaning they have not earned the right to have these extra machines. Were it to have been done in April, this draw likely would not have taken place.
For the time being, I suppose it won’t stop it from happening again. More preparation would be necessary, I suppose. Now that these stores have the machines, they may be involved in it again, aren’t they?
As I mentioned before, these were pop-up operations, and they have subsequently returned them. I see your point, though; the law does not prohibit it. I guess that they’re attempting to, you know, add a few extra hurdles.
Legislation is the responsibility of the Legislature. This year, the Lottery Commission is also participating in the Sunset review, an annual process when the commission assesses the effectiveness of an agency’s activities.
As the Legislature convenes in the new year, I do not doubt that this will continue to be a hot subject of discussion for them.
