Texas Lottery Implements Rule-Change After System Gamed for $95M Jackpot Win

Posted on: August 26, 2024, 02:10h. 

Last updated on: August 26, 2024, 02:53h.

Philip Conneller @casinoorgphilc Read More

Expertise: Gaming Business, Regulation, Tribal Gaming.

Unusual requests to the Texas Lottery from vendors who suddenly want to scale-up on ticket processing machines will be treated with a higher degree of scrutiny. That’s after a New Jersey-based syndicate walked away with a $95 million jackpot after buying up 25.8 million tickets from pop-up vendors.

From now on, requests from vendors for large quantities of processing equipment will be referred to the Texas Lottery’s executive director for closer investigation, especially when those vendors have no previous record of selling large numbers of tickets.

State Sen. Tan Parker (R-Flower Mound) said that the integrity of the lottery was “lost in the process” as a result of the jackpot win.

Jackpot Exploited

After 93 rollovers, the April 22, 2023 lottery draw was one of those rare occasions when the game becomes mathematically exploitable. The jackpot stood at $95 million, which meant that buying up every possible combination of numbers – or 25.8 million tickets at a dollar a ticket – would all but guarantee not only the jackpot but most of the other prizes as well. And that’s exactly what the mysterious syndicate did.

Because the prize was $57.8 million after taxes, the syndicate knew it was looking at a likely $22 million profit from the jackpot alone.

Even if it were unlucky enough to share the first prize with another winner, it would still make a profit of around $3 million. That’s before you consider the additional prizes, which it would be more likely to share with other winners.

A three-way split would have been a disaster, but that was an unlikely outcome and a risk worth taking for the syndicate.

The real problem was logistical. How do you go about buying 25.8 million tickets for a draw that typically only sells one to two million tickets per week? According to the state legislature, it was all way too easy.

Lottery ‘Collaborated’ in Scheme

All of the tickets bought up by the syndicate were processed at just four outlets, three of which had sold no tickets at all in the months leading up to the draw, according to an investigation by The Houston Chronicle.

That meant each outlet needed to order enough equipment from the Texas Lottery to process millions of tickets in the three days between the draws. The state agency was only too happy to oblige.

State Rep. Matt Shaheen (R-Plano) accused the agency of “collaborating” with a “group of sophisticated players.”

“A significant percentage of lottery sales in Texas is to lower-income individuals, and I think they were taken advantage of,” he said, as reported by The Chronicle.