Texas is proving to be somewhat of a battleground when it comes to the lottery sector, with a plethora of legal, regulatory and political debates underway.
In the latest in a series of developments, not all related, the Texas Lottery Commission (TLC) has issued a $180,000 fine against International Game Technology (IGT).
The TLC alleges contributions IGT made to several Texas political causes violate contract terms around political donations. IGT however argues that the donations fell within the terms of the contract.
“IGT and the Texas Lottery Commission (TLC) have a long history of successful partnership, and we are committed to compliance with our contractual obligations to the TLC,” an IGT statement read.
“We respectfully disagree with TLC’s interpretation of this isolated contract provision and, through a request for declaratory relief, have asked the court, as a neutral third party, to provide clarity on the contractual language in question. There is no available alternative avenue for obtaining this clarity.”
A long term partnership in jeopardy?
IGT has been a technology and hardware partner of the Texas Lottery for over a decade, providing the TLC with services like central systems, data centre operations, field sales organisation, retail equipment and support, and marketing, among others.
The firm extended its contract with the Lottery under a six year deal in 2016, and in 2022 secured yet another renewal with the company, this time under the terms of a 10-year partnership covering scratch ticket printing and supporting services.
This partnership may now hang in the balance as the duo enter a legal exchange. The main crux of the argument is to what extent the TLC believes that IGT’s caucus donations – which the firm acknowledged it has done – violate contract agreements.
In IGT’s case, the company asserts that its political donations were to caucuses – for non-American readers this is a group of political supporters who organise campaigning and fundraising for certain candidates and/or parties – and not to individual politicians.
The firm believes that this falls within the remit of its contract, and has petitioned a Texas court against the TLC’s $180,000 fine.
“The contributions at issue were made by IGT to legislative caucuses, not to any individual Texas State Officer or a member of the Legislature,” IGT’s statement concluded.
“Further, IGT specifically directed that its contributions be used for specific purposes that did not financially benefit any officer or legislator of the state. We look forward to the court’s decision in this matter and continuing to work productively with the Texas Lottery.”
Another chapter in Texas lotto drama
The lottery sector in Texas has become the focal point for a lot of regulatory, legal and political discussions – and to an extent controversies – in recent months.
Much of this has centred around lottery couriers. In a debate completely unrelated to the TLC’s legal dispute with IGT, the TLC announced in February that it would move to ban lottery couriers.
This followed a widely publicised incident earlier that month in which an individual purchased a $83.5m winning lottery ticket via the Jackpocket lottery courier app. The ticket was purchased by a Jackpocket courier from a retailer owned by the company, raising questions about the integrity of the lottery courier system.
Lottery couriers have been fighting back against this potential ban under a new organisation, the Coalition of Texas Lottery Couriers (CTLC). In the most recent development, courier app and CTLC member Lotto.com filed a petition against the TLC’s ban, arguing that the Commission has even acknowledged in the past that it has no regulatory remit over couriers.
In other developments, Texas legislators are also looking to move forward legislation that would impose serious penalties on retailers which are found to breach lottery integrity by allowing bulk purchases of tickets.
This stems from an incident back in 2023 in which $25m worth of tickets were purchased in a bulk order in order to win a $95m jackpot. This has led to Texas legislators to question the integrity of the wider Texas lottery system, and amid all the scrutiny the Executive Director of the TLC stepped down last week.
Though the IGT dispute is unrelated to all the above events, it adds another chapter and dimension to the unfolding drama around the Texas lottery, and the systems which support it – drama that is showing no sign of ending any time soon.