If you buy a ticket to the lottery or hear about those big jackpots— do you ever wonder if, secretly, the fix is in? Judging by a scandal still unfolding in Texas, you could be right to ask the question. Today, we look at how a foreign betting syndicate put a lock on a game of chance. And how it led to criminal charges, changes in law, and a heated debate over the state helping to stack the deck. Our cover story is: A Sure Bet.

The following is a transcript of a report from “Full Measure with Sharyl Attkisson.”
Watch the video by clicking the link at the end of the page.

In April 2023, after months with no winner, the Lotto Texas jackpot climbed to its third largest in history: $95 million.

Local news anchor (March 15, 2023): Happening today, the top prize for Lotto Texas is growing.

Local news anchor (March 15, 2023): That’s right it is now sitting at the biggest jackpot in more than 12 years.

Texas lottery video (April 22, 2023): Tonight’s Lotto Texas jackpot is an estimated $95 million.

When the rubber balls came up with the six winning numbers—one ticket matched.

The winner took the lump-sum-check option and collected about $57.8 million.

Sharyl: What made you first suspicious that there was some funny business?

Dawn Nettles: I knew that two days before it ever happened.

Lotto watcher Dawn Nettles publishes the online Lotto Report in Texas.

Nettles: I even posted on my website that the jackpot would be won Saturday night. Or I felt like it most likely would be one on Saturday night. And that was because Texans weren’t spending—I think total sales for that particular draw was 28 million. No, that’s out of the ordinary.

Her suspicions grew when the state lottery commission announced where the winning ticket was sold.

Nettles: In this case, it was the TLC— the Texas Lottery— reported that that ticket was purchased at a store called “Lottery Now” in Colleyville, Texas. There’s no store called Lottery Now in Colleyville, Texas, because I was there the next morning. It was a strip, business center, so to speak, with just a little bit— It’s a little bitty strip. And it was called Hooked on Montana, or Hooked on MT, is what it was called.

As the mystery unraveled, it exposed a hidden system of loopholes and backroom dealings. And it’s fueled broader questions about fairness when players can turn a game of chance into a sure bet with help from the house. But to fully understand what happened, let’s back up.

Lotto Texas is a simple six-number game. There are about 25.8 million possible combinations. With the jackpot at $95 million, someone with enough money could buy every combination— and still walk away tens of millions of dollars.

Buying up all the combinations wasn’t technically against Texas law. But former Texas Lottery official Rob Kohler says the system was designed to prevent it.

Rob Kohler: So we always knew, even from the beginning, if it got to a certain point, on paper or in theory, somebody could go get all combinations. What always prevented that was that logistically it was impossible.

Sharyl: Tell us about the logistics that should have prevented it.

Kohler: Because it used to be you had a piece of paper and a pencil. That’s how you fill out a play slip. It was impossible, logistically impossible to fill out, 28 million play slips.

Sharyl: Between two drawings.

Kohler: Uh-huh.

Sharyl: Between a Wednesday and Sunday

Kohler: In 72 hours.

Not only that: Texas law still said you had to buy a ticket in person at a licensed shop—not by phone or mail. But then, a new kind of middleman appeared.

One of them is “Lottery Now,” which owns and operates the Mido Lotto app and website. It meant distant customers could order tickets on the web or phone app. The middlemen would get the paper tickets printed.

Kohler: And in our state, you know, we don’t have sports betting. We don’t have casinos. The lottery was always a face-to-face transaction. You walk in a convenience store, you know, the clerk’s looking at you. And the Texas Lottery changed rules that enabled these companies to operate in our state selling tickets over mobile phones without being in violation of the rules.

Sharyl: Under whose authority were the rules changed?

Kohler: Under the Texas Lottery. And, and it was done in a way that it was done very quiet.

Those changes helped open the door for the winners of the April 2023 jackpot:

A foreign syndicate, including a professional gambler from Australia known as “The Joker.”

But first, the syndicate had to find a way to get tens of millions of tickets printed in three days. That’s when the Texas Lottery Commission sprung into action. It approved and delivered dozens of extra terminals and paper to multiple sites to print the syndicate’s tickets.

Nettles: From a Wednesday to a Saturday draw, there’s only 72 hours between the draws. And so they had to make sure that they could print 24, 25 million combinations in that 72-hour period.

Sharyl: It would not have been possible to buy all the tickets unless they had set up special machines?

Nettles: They used iPads and telephones too, and QR codes.

The gambling syndicate generated and loaded millions of combinations on private phones and tablets as QR codes. Workers fed the codes into the official terminals at high speed. The terminals spit out tickets around the clock.

Kohler: The administration of the Texas Lottery knew that they were working with people that were gonna buy every combination, they were still telling the people of the state, “Come spend your money. You know, come win this 95 million dollar jackpot” when they knew it was impossible for a Texan. And, you know, Eden, Texas where I’m from, you know, that’s gonna go spend a dollar and see if they can win. It was impossible for them to win the full amount, advertised amount, because on the side, they were letting these characters buy every combination.

It wasn’t only The Joker and his partners who hit the jackpot. The middlemen also cashed in.

Lottery Now, which printed and sold about 11 million of the tickets at its Hooked on Montana storefront earned about $600,000 in commission. Three other stores responsible for printing millions more of the syndicate’s tickets got more than $700,000.

Lotteries and promotional games have a long history of scandal.

In 1980, TV announcer Nick Perry weighted numbered balls in Pennsylvania’s Daily Number drawings to fix the win.

In the 90s, the man trusted with guarding the winning McDonald’s Monopoly stickers before they were distributed stole most of them and passed them to a ring that collected $24 million in prizes.

More recently, the man hired to secure multi-state lottery computers rigged the machines to steer $20 million in prizes.

As Nettles and the local media began unraveling the Texas scandal, one thing became clear: its murky nature. Some facets of the operation were clever but, arguably, not illegal.

Sharyl: The syndicate of people that won this, the winning combination, are they in trouble? Did they break the law?

Kohler: Right now, they’re not criminally charged. Their response when that kind of, they got that same question, was it’d be kind of hard for them to think that they were breaking the law when the people responsible for running the lottery was there with them, they maintain. So ya gotta, that carries some weight. At the end of the day, though, when you look at who possibly broke laws, our former executive director has been indicted by a grand jury.

The former executive director of the Texas Lottery, Gary Grief, is charged with abuse of official capacity. He declined our interview request. His attorney told us, “There is no allegation that Gary Grief obtained personal benefit or payments in any form from the lottery ticket purchases. The case will be challenged legally and factually in the coming months.”

Meantime, lawmakers in Austin decided to shut down the Texas Lottery Commission.

Texas Representative Matt Shaheen says they put the lottery under another agency. They also banned courier, app, and phone orders and bulk buys.

Matt Shaheen: We’ve done some work, but we haven’t gone far enough.

Shaheen, a Republican, is now pushing to get rid of the Texas lottery altogether.

Shaheen: Any form of gaming is highly susceptible to fraud. Even something that supposedly is harmless like a lottery ticket. And quite frankly, Texans should be spending their money on more important things than lottery.

Nettles: I would advise players to try to take an interest in the rules. The rules of the game that they’re playing.

The Joker’s win may be the biggest Texas lottery scandal Nettles has chased. But it’s not the only one. She says the real sure thing is how hard the house works to look clean.

Sharyl: Sounds like it can be a dirty business.

Nettles: It is a dirty business. Money is evil. Remember that. Money can make good people do things bad or turn bad.

Sharyl (on-camera): The winner of the jackpot after the contested one is suing. He argues he got cheated out of $100 million because the prior drawing was rigged. Meantime, the former lottery director posted a $10,000 bond and returns to court next month. The SEC is also investigating.

Watch the video here.

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IPAK-EDU is grateful to Sharyl Attkisson as this piece was originally published there and is included in this news feed with mutual agreement. Read More