NYS moves to ban 'bulk buying' of lottery tickets after Texas scandal

ALBANY — The New York Gaming Commission on Monday moved to ban "bulk buying" of lottery tickets, hoping to avoid the type of scandal that engulfed the Texas lottery when a gambling syndicate bought 99% of the numerical combinations to win a $95 million jackpot.

New York regulators proposed banning attempts to buy up every mathematical combination of a lottery ticket, prohibiting ticket-sales collaboration, mandating lottery sales agents to report bulk buying attempts and suspending an agent’s license if their store or outlet allows a bulk purchase, among other measures.

The commission unanimously approved the measures as proposed new state regulations, which means allowing for a public comment period before the rules take effect, likely in October.

Commissioners and agency staff said bulk purchases can damage the integrity of the lottery and they didn’t want a Texas repeat.

"Bulk purchases, particularly by large investment groups and syndicates aiming to buy nearly all possible combinations, can undermine the public’s perception of fairness and randomness in the lottery," said Robert Williams, the agency’s executive director, at the commission meeting Monday.

The new measures, Williams said, will "mitigate the risk of such an attempt and protect fairness."

"It will help the integrity of the game itself, which was not upheld in Texas," Commissioner John A. Crotty added.

What happened in Texas sounds right out of a techno-crime caper. What makes it even more intriguing is it was apparently legal at the time, that it took nearly two years to become viral and that Texas regulators are only now trying to pass measures to stop future scandals.

According to numerous media reports, a London-based syndicate moved to buy up nearly every number possible in the spring of 2023 — 25.8 million tickets, at $1 apiece.

They obtained official ticket printing terminals, which they set up to print nearly 100 tickets per second, according to the Wall Street Journal. In just three days, the syndicate had tickets with nearly every possible number combination. The lottery in question required picking six numbers, between 1 and 54.

In the end, the group won $95 million, which minus the ticket costs of $25.8 million and other expenses netted a payout of $58 million.

The scheme didn't break into a scandal until a longtime lottery watchdog and player won a jackpot earlier this year but was disqualified because she had used an online app to buy tickets. That apparently is illegal, but she not only sued, but also raised the question of how could Texas have allowed what happened in 2023.

Part of the answer was staff at the Texas lottery helped facilitate the huge purchase of lottery ticket printing machines.

Texas Lt. Gov. Dan Patrick called it the "biggest theft from the people of Texas in the history of Texas," though no criminal charges have been filed. Several agency officials have either retired or resigned. A new investigation is underway.

New York officials said they aren’t aware of any similar attempts to lock up a lottery draw here. But they read the stories and want to prevent it.

"This is really aimed at what happened in Texas," said Brian O’Dwyer, commission chairman.

Some of the proposals also include prohibiting sales terminals from being sold on a temporary basis, banning accepting wire or electronic money transfers and requiring a purchaser to be a "natural person."

But there’s a related issue, too, O’Dwyer noted: Courier companies, or online services that allow players to buy tickets through a phone or other device, can move a high volume of tickets. Texas has moved to ban them since the scandal, as have other states.

Couriers are legal in New York. O’Dwyer signaled the commission might consider taking up that subject in the future.

"Members of this commission have raised significant issues in regard to the courier issue in the lottery," O’Dwyer said. "And I don’t want anyone to think what we do here [today] is the end result of all of those things. We still have substantial issues to work through in terms of and I want everybody to be aware we’ll take those up at a future time if necessary."

By Yancey Roy

yancey.roy@newsday.com@yanceyroy