Texas Lottery Under Fire for Alleged Money Laundering and Corruption

The Texas Lottery has once again found itself at the center of controversy, as recent Senate Finance Committee hearings exposed a series of alarming allegations, including money laundering, regulatory negligence, and potential criminal activity. The agency’s Executive Director, Ryan Mindell, was put on the defensive as lawmakers expressed frustration with his dismissive attitude and failure to address systemic corruption.

A Scandal-Plagued Agency

For years, the Texas Lottery Commission has been mired in scandal. Following the revelation that a $95 million jackpot was rigged with its help, the agency has failed to regain public trust. Rather than working to clean up its reputation, it appears to have doubled down on operating outside the law and disregarding legislative oversight.

That perception was only reinforced during the recent Senate hearing when Mindell repeatedly evaded questions regarding allegations that the Texas Lottery was used to launder $25 million in 2023. His refusal to provide direct answers prompted State Sen. Paul Bettencourt (R-Houston) to take the unprecedented step of calling up the commissioners who oversee the agency. Unlike Mindell, all three commissioners conceded that the drawing in question bore the hallmarks of money laundering.

The Role of Illicit Ticket Resellers

Mindell attempted to dismiss concerns by claiming that the $25 million in questionable transactions was simply “bulk purchasing activity,” rather than unregulated courier activity. However, lawmakers pointed out that the so-called couriers involved were operating without approval from the Texas Lottery, making his statement misleading at best and outright deceptive at worst.

This isn’t the first time Texas Lottery officials have misled legislators. Former Executive Director Gary Grief was caught in a similar web of deception. In 2022, he falsely testified that the Texas Lottery had no official relationship with online ticket resellers. Yet, documents dating back to 2016 revealed that Grief had explicitly granted such companies permission to conduct financial transactions on behalf of the lottery. He even lobbied for Lottery.com, one of the implicated companies, to relocate its operations to Texas.

Despite mounting evidence of wrongdoing, Grief retired with a state pension instead of facing legal repercussions. State Sen. Carol Alvarado (D-Houston) remarked that he should be in handcuffs rather than collecting taxpayer-funded retirement benefits. State Sen. Lois Kolkhorst (R-Brenham) called for immediate intervention by the Texas Rangers.

“B.S.”

The Senate hearing made one thing clear: lawmakers are running out of patience with the Texas Lottery’s repeated failures. State Sen. Bob Hall (R-Edgewood) questioned whether the agency’s commissioners had been instructed to uphold legislative intent or merely take direction from the executive director. 

Their response—admitting they had been deferring to Mindell—did not sit well with Senators.

State Sen. Pete Flores (R-Pleasanton) urged the commissioners to apply the same ethical standards they would to their own businesses, rather than allowing Mindell to set policy. 

Meanwhile, State Sen. Charles Perry (R-Lubbock) outright dismissed Mindell’s claims that the agency lacked the authority to shut down illicit ticket reselling operations, calling his statements “BS.”

Ending the Texas Lottery?

In the wake of these damning revelations, calls to abolish the Texas Lottery have gained momentum. 

State Rep. Matt Shaheen (R-Plano) has filed HB 2918, which would phase out the program by 2026 and redirect its funds to education. Supporters argue that this move would benefit taxpayers and Texas families while eliminating a state-run gambling operation riddled with corruption.

Meanwhile, efforts to expand gambling in Texas continue in the House, with House leadership pushing bills to legalize casinos, such as State Rep. Charlie Geren’s (R-Fort Worth)  HJR 137—despite growing evidence that state-regulated gaming operations are susceptible to fraud and criminal activity.

Texans for Fiscal Responsibility is calling for the immediate abolition of the Texas lottery, demanding that state funds be returned to taxpayers. The lottery has failed to “fund public schools” like so many politicians promised it would, and has done nothing but fuel gambling addiction, hurt Texas families, provide avenues for criminal activity and cost taxpayers money. 

The Lottery should be an example to taxpayers and elected officials alike: gambling, in any form, is proving to be more trouble than it’s worth for Texas taxpayers.

Texans for Fiscal Responsibility relies on the support of private donors across the Lone Star State in order to promote fiscal responsibility and pro-taxpayer government in Texas. Please consider supporting our efforts! Thank you!

Get The Fiscal Note, our free weekly roll-up on all the current events that could impact your wallet. Subscribe today!