New York regulators are talking about a closer look at their lottery practices after some Texas-sized trouble kicked up in the Lone Star State involving a subsidiary of one prominent online sportsbook. The New York State Gaming Commission met Monday and one of the topics of discussion was the Texas lottery controversy that recently arose following a jackpot that was won using DraftKings-owned Jackpocket.
Texas Gov. Greg Abbott announced on Monday he directed the Texas Rangers to investigate two incidents involving the state lottery: “a bulk purchase of lottery tickets in April 2023 and the recent $83.5 million win through a courier service.”
I've never read so much garbage from a state agency press release in my 18 years in office. After years of claiming they had no authority to regulate lottery couriers, today the Texas Lottery Commission suddenly exercised the ultimate regulatory authority by banning all lottery… https://t.co/ljn456sMBR
— Office of the Lieutenant Governor Dan Patrick (@LtGovTX) February 24, 2025
The bulk purchase in April 2023 resulted in a $95-million jackpot win for an entity that purchased tickets using almost every possible number combination, Abbott said. The $83.5-million win this February through a “courier service” was reportedly done using Jackpocket, which DraftKings acquired in 2024 in an approximately $750-million deal.
“Texans must be able to trust in our state's lottery system and know that the lottery is conducted with integrity and lawfully,” Abbott said in a press release.
The Texas Lottery is now moving to ban lottery courier apps like Jackpocket, and DraftKings, despite saying it doesn't allow for bulk purchases, has also said it was suspending operations in the state.
Yet Jackpocket is available in more than a dozen other states, including New York. And gaming regulators there are well aware of the blowup that's happened in Texas.
“The commission has noted in their discussions that there has been a real problem that has come up and subject of an awful lot of publicity on the Texas Lottery and all the problems that are inherent in the cornering of that market,” New York State Gaming Commission Chair Brian O’Dwyer said during Monday's meeting. “We've had discussions with our staff and we look forward to a real review of that and … we want to make sure that that never happens in New York.”
The "that" O’Dwyer referred sounded like it was directed more at bulk purchases than courier services in general. Even so, he added later he scheduled additional time at the commission’s next meeting to discuss the topic.
Everybody's talkin' at me
Where New York will go next remains to be seen. However, the fact the Texas lottery controversy is being considered at all in New York suggests there could be consequences beyond the Lone Star State.
That might mean headaches for DraftKings and Jackpocket, depending on how regulators see the status quo. DraftKings CEO Jason Robins said in a letter to shareholders this month the digital lottery courier app “has proven to be an efficient acquisition channel for the DraftKings ecosystem.”
“In 2025, we believe Jackpocket is positioned to benefit from larger prizes, more states, and an expanded product offering that includes scratcher games,” Robins wrote.
Jefferies analyst David Katz wrote in a note to clients Wednesday that, despite the recent uproar in Texas, Jackpocket appears to be doing better than expected for DraftKings, especially when it comes to cross-selling users in online sports betting (OSB) and iGaming.
“Jackpocket has several advantages in that it is legal in some states where OSB is not (i.e., [DraftKings] is able to build a player base prior to OSB legalization), it is a good counter-seasonal asset in that players continue to play even in the sports-offseason, and it should also benefit from the recent change to Mega Millions (tickets will be $5 each instead of $2 starting in April),” Katz wrote. “Finally, DKNG could fully integrate Jackpocket to its DraftKings app, allowing for easier cross-sell and up-sell opportunities with players. Ultimately, we come away expecting at least solid returns on the acquisition.”
New York already requires lottery courier services to get a license and come under local rules, such as preventing people under the age of 18 from buying tickets.
Keeping things fair
Gaming Commissioner John Crotty said during Monday’s meeting New York regulators asked their staff to think through various issues relating to who has access to lottery terminals, noting he “expressed reservations in the past” about courier services.
Access has been a concern in Texas as well, with the state lottery recently claiming couriers and retailers are often located in the same building or office. In addition to the move by the Texas Lottery to ban courier services, there is legislation percolating in the state targeted at the apps.
Crotty also said he had questions about fairness following what happened in Texas. He (and likely other New York gaming commissioners) are hoping for answers from staff at future meetings.
“It's unclear on a number of factors, not the least of which is they haven't been here already and operated the same type of plan that they did in Texas,” Crotty said, without clarifying who “they” were. “I’ve been assured that that's not possible but we've asked staff to take a look at that and make sure that's the case. And there's a broader question of couriers generally, their access to the system and the implication and fairness to our existing vendor network and the players themselves.”
