In 2025, a high-profile lawsuit emerged involving a Texas woman, Kristen Moriarty, who won an $83.5 million jackpot from the Lotto Texas drawing but was initially denied her winnings by the Texas Lottery Commission (TLC). The dispute garnered widespread media attention as it exposed complexities around lottery ticket purchases through third-party courier services and the legal challenges affecting prize payouts.
Background of the Lawsuit
On February 17, 2025, Kristen Moriarty purchased a Lotto Texas ticket through an app called Jackpocket. Jackpocket operates as a lottery courier service legally at the time of purchase, allowing users to buy tickets remotely from authorized retailers. Moriarty’s ticket matched the winning numbers in the $83.5 million drawing, making her the jackpot winner.
However, the Texas Lottery Commission withheld payment, citing ongoing investigations into the legality of lottery courier services in Texas. The TLC indicated that such services were not permitted under Texas law, and shortly after Moriarty’s win, regulatory changes were proposed to ban them moving forward.
Legal Claims and Arguments
- The lawsuit asserts that the Texas Lottery Commission acted unlawfully by refusing to pay Moriarty her prize based on a service that was legal at the time the ticket was purchased. The Commission was accused of changing the rules retroactively after the drawing.
- The suit named Sergio Rey, acting deputy executive director of the TLC, alleging that he and other Commission officials unjustly withheld the winnings “at the behest of one or more elected office holders.”
- The complaint claimed the refusal to pay violated the Commission’s own rules and Texas state law, effectively penalizing Moriarty for using a legitimate ticket purchasing method.
- Moriarty’s attorneys sought a temporary restraining order and permanent injunction to prevent the Commission from distributing or redirecting funds that belonged to her prize.
Settlement and Resolution
Following months of legal battle and public scrutiny, a settlement was reached in August 2025. The Texas Lottery Commission agreed to pay Moriarty 76% of the lump-sum cash value of the jackpot, approximately $34.9 million, with the remaining 24% forwarded to the IRS as tax withholding in accordance with lottery regulations.
The settlement was made official through a Rule 11 agreement, ensuring that the payout represented the full cash value jackpot and that the prize claim was processed. Moriarty agreed to dismiss the lawsuit with prejudice, releasing the TLC and associated officials from any future claims related to this case.
Controversies and Wider Implications
The case shed light on the emerging controversy surrounding lottery courier services and the regulatory challenges they face across multiple states. In Texas, the Commission was criticized for attempting to retroactively apply new rules that disadvantaged consumers using modern digital ticket purchasing platforms.
Public reaction emphasized fairness for lottery winners and the need for clear legislative guidance on innovative lottery service providers. Legal experts debated the implications of this case for future lotteries and digital ticket sales.
Other Related Texas Lottery Lawsuits
Another ongoing case involves a New Jersey-based group, Rook TX, accused of rigging a $95 million Texas lottery jackpot through fraudulent means. This case is under investigation in newly established Texas Business Courts and remains active with allegations of deceptive practices.
Impact on Stakeholders
For lottery players, this lawsuit highlighted the importance of understanding evolving regulations governing ticket purchases, especially through third-party apps. Regulators grappled with balancing consumer protection, technological innovation, and maintaining lottery integrity.
For lottery commissions nationwide, the case underscored the necessity to adapt to digital ticket sales while maintaining transparent and equitable rules for winners.
Conclusion
The Texas lottery winner lawsuit involving Kristen Moriarty and the $83.5 million jackpot represents a landmark case in lottery law and digital ticketing regulation. While the settlement resolved this individual dispute, the broader questions about the legality and regulation of lottery courier services remain relevant.
This case serves as a cautionary tale to lottery operators, policymakers, and players regarding the intersection of traditional gaming frameworks and technological advances redefining how lotteries are accessed and contested.
