Two Texas Stores That Helped Print Almost Every Lotto Combination Have Surrendered Their License

Two Texas stores that helped process millions of tickets for the $95 million Lotto Texas jackpot in April 2023 have given up their licenses to sell lottery tickets, after regulators alleged they entered wagers using a method the state never approved.

Neither store contested the allegations. Between them, the four retailers involved in the drawing earned close to an estimated $1.3 million in commissions and bonuses, and there is no indication the state has tried to get any of it back.

The findings were exclusively reported by the Houston Chronicle, which has been investigating the 2023 drawing for more than a year.

What happened in April 2023

The Lotto Texas jackpot had rolled for seven months without a winner, reaching the third-largest prize in the history of the game. Then a single entity called Rook TX won the jackpot.

According to the Houston Chronicle report, Rook TX was a syndicate that bought virtually all of the 25.8 million possible number combinations, which came close to guaranteeing it the jackpot. It took the money as a one-time cash payment of $57.8 million rather than as an annuity, and by the Chronicle's calculation the investors cleared roughly $20 million after taxes.

The people behind it were later identified as Bernard Marantelli, a professional gambler from Melbourne who founded the London betting firm Colossus Bets, Zeljko Ranogajec, an Australian gambler known as "The Joker", and David Walsh, a professional gambler and museum owner.

A typical Lotto Texas drawing sells two or three million tickets. This one sold about 28 million tickets, and more than 25 million of those tickets were processed at just four stores.

The method regulators questioned

Texas rules allow two ways to buy a ticket. A player can feed a paper play slip into an approved terminal, or use the Texas Lottery Commission's own mobile app, which produces a QR code the clerk scans. Both require selections to be entered one number at a time.

The Chronicle reported that the crews working for Rook TX instead scanned pre-programmed QR codes holding sequential number combinations from personal devices. At the Colleyville store, the volume worked out to roughly 3.26 tickets processed every second across the three days between drawings.

Cleared once, cited later

Inspectors visited the Colleyville store soon after the drawing and found nothing wrong. "It's not unusual for us to send investigators to visit with a retailer after one of these large jackpots are won," then-executive director Gary Grief said at the time. A spokesman later said the unannounced investigation "identified no violations of state law or Commission rules."

After the Chronicle published its reporting, the commission sent a second inspector to the Colleyville outlet in late 2024. That inspector concluded the method used to enter the wagers "was not an approved method by the Texas Lottery Commission," and the owners agreed not to do it again.

Four months later the agency filed "show compliance" letters against two retailers, according to records at the State Office of Administrative Hearings. The letters said the stores had "intentionally or knowingly sold Texas Lottery draw game tickets that were generated using a selection method not approved by the Commission," and cited a second violation for using a license in a way that endangered the security or integrity of the games.

Both retailers were offered a hearing to challenge the allegations. Records show both instead surrendered their lottery licenses, so the claims were never tested. The Colleyville location no longer sells lottery tickets. Lottery Now chief executive Kevin Kramer declined to comment, and the owner of the Round Rock store did not respond to requests for comment.

The commissions for the stores

Texas pays retailers a 5% commission on every $1 ticket sold, plus a $25,000 bonus for selling a jackpot winner. Applied to the volumes each store handled, the four retailers earned close to $1.3 million.

Attorneys and officials familiar with the statutes told the Chronicle that state rules give Texas an opening to try to recover that money, since breaking the rules could make a retailer ineligible for the commissions. So far there is no sign anyone has tried. Lottery officials declined to comment, citing ongoing litigation over the drawing.

Texas appears to have clawed back lottery money only once before. In 2009, a Grand Prairie clerk told a customer his $1 million ticket was worth $2, then claimed a $750,000 payout himself and was suspected of fleeing to Nepal. Prosecutors froze his bank accounts and eventually recovered about half the prize for the rightful winner.

A criminal charge and a dispute over consent

The people who ran the Rook TX operation have said it was carried out with the knowledge and consent of the Texas Lottery Commission. "It would not have been possible to operate at this scale without full cooperation," Ranogajec told the Sydney Morning Herald. Lottery officials have denied that.

Travis County prosecutors have pursued Grief through two rounds of charges. A grand jury indicted him in April, an assistant district attorney dismissed that case days later, and a second grand jury re-indicted him on May 14 on a first-degree felony count of abusing his office to defraud the state.

The Texas Lottery Commission was named in a separate indictment for abuse of official capacity, accused of fraudulently misusing government property and services through actions that Grief and two other officials authorized, requested, performed or recklessly tolerated.

Grief has not been convicted of anything. His attorney has called the charges "the product of politics, not facts demonstrating a crime," and said Grief cooperated with the Texas Rangers investigation and that his leadership generated millions of dollars for Texas schools and veterans.

The commission he once ran no longer exists. Texas dissolved the agency and transferred its duties to another part of state government.

An executive at Lottery.com, which held the license for the Spicewood store, raised his own concerns shortly after the drawing. "It is considered cheating by lottery players and we do not want to raise attention to it," Greg Potts wrote in emails reviewed by the Chronicle. The company let its license for that location lapse in late 2023.

Why it matters to ordinary players

A syndicate with enough capital to buy nearly every combination is doing something a regular player never could, and it needed four licensed retailers and three days of round-the-clock printing to pull off. There was real risk in it, too. The whole plan depended on no other player matching the same six numbers, because one co-winner would have halved the prize and turned about $25.8 million of tickets into a loss. Whether the state treats the operation as a loophole or a breach is still working its way through the courts. We looked at the wider question of how lotteries keep their games straight in are scratch-offs rigged, and where the money from an ordinary ticket ends up in where every dollar of a scratch-off goes. Current Texas games are on our Texas page.

Sources

Houston Chronicle: Texas Lottery retailers cited for breaking rules, but kept $1M in commissions

Texas Tribune: Former Texas lottery director reindicted

KXAN: Texas Lottery Commission, former director indicted in Travis County over $95 million jackpot win