"Gaming the Texas Lottery"
Investigative CATEGORY — SHOWCASE Silver winner
Houston Chronicle
Eric Dexheimer, reporter | Ken Ellis, designer/illustrator | Yaffa Fredrick, editor | Robert Eckhart, editor
01/27/2025
When an unknown entity won the $95 million Lotto Texas jackpot in April 2023, there was plenty of speculation that the buyer might have purchased all possible number combinations, based solely on the abnormally large number of tickets sold.
But the winner collected the prize anonymously, leaving no easy way to identify or contact the players to confirm how it was done.
As the one-year anniversary date of the big win approached, Houston Chronicle investigative reporter Eric Dexheimer wondered if he could prove it, as well as describe how the operation was carried out and what rules – or lack of them – enabled it.
He did just that.
Analyzing a database of every lottery prize winner with the help of gaming statisticians, Dexheimer used public records to prove conclusively that the Rook TX syndicate had essentially bought up the entire Lotto Texas draw, netting an estimated $20 million payday at the expense of everyday Texas players.
Dexheimer interviewed members of the cast of characters that planned and executed the operation, scoured court documents and requested records from the Texas Lottery Commission. He tracked the syndicate to Florida, Malta and England. He interviewed former partners and contractors who confirmed how they used devices self-programmed with millions of number combinations to process lottery sales in milliseconds in order to meet a three-day deadline.
After revealing how this group of international gamblers had gamed the state lottery, Dexheimer turned his attention to the Texas Lottery Commission, the state agency that oversees the game.
His investigative stories published in 2025 demonstrated how regulators actively assisted in the controversial operation. With no questions asked, the agency fulfilled highly unusual last-minute orders for dozens of extra sales terminals and official lottery paper from outlets that had barely conducted any lottery business the previous year, allowing organizers of the operation to print out millions of tickets in the three-day window for sales.
The lottery commission also looked the other way as the gamblers and their associates churned out the 25 million number combinations, breaking lottery sales rules requiring retailers to conduct business other than lottery sales and be open to the public, and forbidding them from connecting “any device” to state-owned lottery terminals.
After the drawing, the agency failed to conduct a meaningful review of where the jackpot ticket had been printed, which would have revealed the operation’s noncompliance with those rules. When the Chronicle published its story revealing how it was done, the lottery commission’s board of directors sent its investigators back to re-investigate. The second visit confirmed Dexheimer’s reporting.
The agency’s executive director then resigned, and state officials launched two more investigations – one by the Texas Rangers, and another by the attorney general’s office – to hunt for evidence of criminal misconduct. They remain ongoing.
The top two lawmakers in Texas were so incensed by the details revealed by the Chronicle that they began to question other Texas Lottery wins. A Houston woman’s $83 million jackpot was blocked by the Legislature.
In the wake of the Chronicle’s stories, the Texas Lottery Commission enacted major regulatory changes to prevent a similar scheme. Going forward, any requests from retailers for additional ticket processing equipment must be approved by upper-level executives. The outlets also must justify the request by demonstrating prior ticket sales warrant it.
The commission said it also adjusted the software of lottery sales terminals to limit the number of tickets processed to 5,000 per day per machine, instead of the millions processed over 72 hours by organizers of the April 2023 win.
Despite such changes, by May 2025 infuriated lawmakers had heard enough: They voted overwhelmingly to dissolve the entire agency, which had been in existence for more than three decades, moving oversight of the lottery to the Texas Department of Licensing and Regulation.
The Houston woman whose win was blocked had bought $20 worth of tickets for the February drawing. In August, her lawyers announced an agreement allowing her to collect her prize. But another lawsuit filed on behalf of lottery players has yet to be resolved.
The new rules for lottery sales enacted in response to the Chronicle’s coverage resemble those already in place in several other states, and will serve to protect the integrity of the Texas Lottery. And thanks to Dexheimer’s reporting, Texans themselves now know the signs that a big draw has been hacked.
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Submitted by Eric Dexheimer