Q&A: Jackpot.com CEO bemoans Texas Lottery Commission’s “knee-jerk” lottery courier ban

Lottery couriers suffered a body blow last month when the Texas Lottery Commission (TLC) deemed them no longer legal in the state, a decision that Jackpot.com CEO Akshay Khanna tells EGR was “a solution to a problem that didn’t exist”.

The pivot in policy, which came into effect immediately, as of February 25, left Jackpot.com, which is active in seven other states, with little choice but to halt operations in Texas. The withdrawal came two years after its launch in Texas, courtesy of $42m in funding from the likes of the Dallas Cowboys and the Tisch family, co-owners of the New York Giants.

Jackpot.com serves as a conduit for customers looking to buy their home state and national lottery tickets via an app, where a courier buys the physical tickets, then scans and uploads them to the player’s account. Though Jackpot.com.com doesn’t charge a fee on purchases or winnings, it has a 20% “convenience fee” on deposits. Designed to make the lottery more accessible by digitizing the user experience, it is one of the leaders in the burgeoning space, alongside Lotto.com and DraftKings-owned Jackpocket.

Yet there have been lingering concerns in some quarters over bulk buying of draw tickets, particularly in Texas. In April 2023, investment group Rook TX paid $25m for a bewildering number of combinations in pursuit of a $95m jackpot via retailer Lottery Now, as per the Houston Chronicle. The group reportedly scooped the $95m.

More recently, an Austin woman, who bought 10 tickets via Jackpocket.com, has had her $83.5m Lotto Texas jackpot withheld. The legitimacy of the win in February was called into question by Lieutenant Governor of Texas Dan Patrick, who opened an investigation into lottery couriers. Investigations by state Attorney General Ken Paxton and the Texas Rangers soon followed.

Bulk buying is a method that, according to Khanna, Jackpot.com vehemently disagrees with. The CEO’s concerns lay with the sector’s reluctance to meet the demands of the modern customer, as the lottery industry is at risk of losing “an entire generation” of players who do not want to engage with the game in its current form.

EGR: Firstly, what do you make of the Texas Lottery Commission deeming courier services illegal?    

Akshay Khanna (AK): We obviously disagree with the ruling. We believe consumers in 2025 are screaming out for the ability to transact in ways in which they want to.

It is becoming more evident that the first thing people do when they wake up is look at their phone. That could be for emails or social media. It could be because they want to transact on their favorite purchase. Removing the ability for people to do that, we feel is a net negative, especially if we are not only providing a more convenient transaction experience, but a safer, more responsible experience.

The work we do to make sure that people are who they say they are, are of legal age, physically located in a state we service, and with the number of responsible gaming policies we have on our site, far exceed your standard convenience store. So, the experience is safer than the status quo.

To remove that experience from consumers who have made very clear that that is how they want to shop feels like a knee-jerk reaction, like a solution to a problem that didn’t exist.

EGR: You suspended new orders, effective immediately, but how impactful is this to your future projections? 

AK: It’s very significant. Texas was a major state for us. It was the first state that we entered, with the implicit blessing of the TLC.

We’ve had thousands of consumers reach out to the governor’s office and various helplines to complain about the fact that they can no longer purchase lottery tickets in a secure and responsible way on their phones.

It’s one thing for me to sit here and talk about the impact, but it’s far more powerful and impactful to hear that from the everyday consumers, who feel they’ve been robbed of something that they really enjoy doing.

EGR: You expressed confidence that there is a “very clear path to allow online lottery couriers” in Texas, so what gives you that confidence given general anti-gambling sentiment in the state?

AK: We fundamentally want the same things as the people who have reacted so strongly to this point. The reaction was to a bulk-buying process that happened in 2023.

We’ve come out in support of an anti-bulk-buying bill that is weaving its way through the Texas legislature now, and we’ve made our position clear from the start. We have also made it crystal clear that we crave regulation, because regulation keeps out the bad actors. We adhere to the highest required standards in every state in which we operate. That’s not true of everyone.

We want to make sure the playing field is level, so we are entirely supportive of the bill that would create a very clear, obvious set of rules and framework that would regulate couriers in Texas. We believe that’s the commonsensical approach, given that what we are providing is nothing new.

People buy the exact same lottery tickets that they can buy in person anywhere, the only thing we are doing is allowing them to do it in a way in which people want to transact today. This is not a new form of gambling. This is the same exact lottery with the same exact lottery tickets that have been available for decades, just that people can now buy them on their phones.

We feel very strongly that there will be a commonsensical solution to this, and we hope that’s via a regulatory bill that happens in this legislative session.

EGR: We’ve seen a trade body form within the sweepstakes sector. Do you think it’s likely we’ll see something similar within the lottery courier space given the growing pressure, and would you support such a development?

AK: I have spoken previously about the creation of a Coalition of Texas Lottery Couriers. It’s us, Jackpocket and Lotto.com. We stand for the same things.

We want the same regulatory frameworks in place. We speak with a unified voice when we disavow things like bulk buying and when we encourage state legislatures to adopt sensible frameworks that would regulate a business model like ours.

The short answer is yes, it makes sense for the three of us that represent pretty much the entirety of the courier market to work as a unified voice because, fundamentally, we do believe the same sets of approaches will be successful, not just in Texas, but in every state that has a lottery.

EGR: Given New Mexico and New York have both raised concerns (New York’s gaming regulator has said it plans to conduct its own review), is there a worry others could follow Texas’ lead and shut down lottery courier services?

AK: I believe the New York comment was in relation to bulk buying. I would categorically state that we’ve never been involved in bulk buying. We disagree and disavow it entirely. We think it should be prevented.

New York has put in place one of the best sets of frameworks and rules for couriers. They’ve done it in a very thoughtful, very thematic, very strategic way. That is what we want in every state so there isn’t confusion about what can and can’t be allowed, as well as what couriers should and should not be doing.

EGR: Do you think the lawmakers looking to ban lottery couriers are overlooking the opportunity that further digitizing and modernising the lottery industry could present?

AK: I believe so. The lottery is intended to be this fun, relatively low-price point way of conducting a transaction, and then dreaming – that’s what it’s about.

The problem lotteries will face in the coming years is that today’s 30-year-olds are tomorrow’s 50-year-olds. If our demographic is squarely in the 45- to 65-year-old range, you’re not very far away from today’s digital natives entering that age range and saying, ‘This is crazy, I refuse to engage in something that doesn’t allow me to conduct a transaction the way that I know how’.

I have friends who will conduct every transaction possible online and do not play the lottery because they don’t want to have to find wads of cash or have to physically go somewhere. They don’t want to receive pieces of paper that they may then put into pockets, that then get thrown in the laundry and poof – that’s it. Your entire proof of having purchased a ticket is gone.

There is an entire generation of people who just do not want to engage in that manner. If the lotteries are saying, ‘We do not want to engage with those people; we’re not giving them an opportunity to transact in the way that they want,’ then 100% it is a missed opportunity. Consumers are yearning for the ability to buy lottery tickets the way they buy everything else.

EGR: What do you think it will take for lawmakers to change their view on this topic? How do you go about educating them of the benefits of lottery couriers?

AK: The good news is there are several states we’re engaged in conversations with where, whether it’s the lottery commissioner, the governor’s office or the gaming commissioner, they understand.

These are people who are seeing an ageing demographic not being replaced by a younger one. That is a problem no matter what type of business you run, but it is particularly a problem when you run an enterprise where most of the revenue you garner goes towards great causes. When those wells start to run dry because you are not providing consumers the experience they want, it becomes a big problem.

We think more regulators than not are seeing that, more are appreciating that, and we generally believe the tide is going to turn in that favor because, ultimately, everyone involved in the lottery understands it is critical to appeal to the next generation of individuals.

EGR: Do you think there is a misconception around what Jackpot.com and the sector offers in general?

AK: Absolutely, and shame on us for not being vocal enough about expressing exactly what we do, how we do it, how seriously we take our responsible gaming responsibilities, how seriously we enforce our verification features, and how opposed we are to the concept of bulk buying.

We believe that as more and more awareness is raised about how lottery couriers operate, more regulators will come to realise, ‘wow, what these guys are doing is just bringing tomorrow’s customers to today in a safe, secure, responsible manner that outdoes what today’s status quo is.’

EGR: You recently likened lottery courier services to companies like Uber. What are the obvious comparisons to make between Jackpot.com and other firms that have disrupted previously analogue industries?

AK: When people understand that as a lottery courier service, all we do is simply market the state lottery’s product, we don’t sell a single thing on our platform that isn’t a state lottery product, the next question becomes, ‘what’s the opposition?’ Oftentimes the opposition is, ‘well, it wasn’t intended to be this way’.

The intent was for people to purchase lottery tickets in person, and that’s where I think the comparisons with Uber and Airbnb are really apt because those are the exact same arguments people use to oppose Uber and Airbnb – that people’s cars weren’t intended to serve as taxis, that people’s homes weren’t intended to serve as rental properties. When these rules were written or, in some cases, not written at all, no one had accommodated for the concept of the internet. As an industry, we must adapt or risk losing generations of consumers.

EGR: Just over a year ago, DraftKings acquired Jackpocket for $750m and there may have been other companies mulling over the prospect of acquiring a lottery courier service. Could the decision in Texas impact the appetite for such deals?

AK: I believe someone from DraftKings said that anyone who’s familiar with a regulated industry knows that sometimes states will put in place certain rules that prohibit a business for a certain period. But people who are looking at this from the long-term perspective will be focused on what the long-term consumer trends look like.

Whether it’s the DraftKings and the FanDuels of the world that have battled through this during the early day of daily fantasy , whether it’s the next generation of DFS+ companies that battled through this recently, I think the people who are in this for the long haul will tell you that you can’t hang your hat on every single decision.

You have to look at the long-term trend. As long as you believe the long-term trend is in favor of legalisation and regulation, then I don’t think one state’s decision is going to be the difference maker.

EGR: Has the recent spotlight on the sector impacted Jackpot.com’s plans to launch in more states?

AK: Honestly, no. Our plans remain the same. We have the same belief that we are expanding in a sustainable and sensible way. All I will tell you in terms of 2025 is, there is more to come.