(Texas Scorecard) – In 2014, a year before Gary Grief reportedly tried to legalize sports gambling in the state via the lottery, Jerry Jones came to Austin to hype his corporate partner.
During that visit, Jones—whose Dallas Cowboys haven’t won a Super Bowl since 1996—said he’s constantly asked to sign losing Cowboys-branded scratch lottery tickets. However, while losing is a defining characteristic of Cowboys fans and the vast majority of lottery players, the Cowboys and Jones are winning.
At a December 2014 lottery commission meeting, Grief stated that “the Cowboys organization, in general, and the Jones family, in particular, have been tremendous supporters of the Texas Lottery over time.” That stands to reason, because Grief and the lottery funneled hundreds of millions in tax dollars to the organization.
A decade after that hearing, in his final days as executive director of the Texas Lottery Commission, Grief inked one last contract with Jones’ Super Bowl-starved Cowboys. This deal doubled the scratch ticket contract value right before Grief’s planned but abrupt resignation.
Now, the commission is in duress.
The Texas Sunset Commission, a state committee that regularly reviews and decides whether or not to reform or retire state agencies, published a report in January that criticized Grief’s handling of the Texas Lottery Commission—specifically, its “ticket partnerships with recognized brands.”
Since 2009, the Texas Lottery has entered several agreements with the Cowboys franchise to sell tickets emblazoned with its iconic blue star. In addition to prize money, the lottery offers team-related winnings, like Cowboys gift cards, autographed team jerseys, and even game tickets.
While the TLC does have the authority to advertise, that power is intentionally limited. In a 2005 opinion, then-Attorney General Greg Abbott found that the TLC is not empowered to sell promotional items.
According to the contract, the Texas Lottery pays a 4 percent royalty on ticket sales (capped at $1.5 million annually) plus a $700,000 annual licensing fee.
Additionally, the lottery allocates more than $3 million for Cowboys-branded prizes and merchandise. That merchandise is purchased from the Cowboys as are Cowboys “experiences” that have been assigned values.
5 “Wild Weekend” packages valued at $50,000 each
20 “Exclusive Draft Day War Room Experience” packages valued at $50,000 each
5 “VIP Training Camp Experience” packages valued at $7,500 each
90 pairs of season tickets valued at $10,000 each
2,000 Dallas Cowboys gift cards valued at $500 each
In return, TLC receives “promotional support,” including signs in the stadium, social media promotion, television and radio advertisements, and on-site selling opportunities at Cowboys games. When asked if the ads are on platforms Jones owns, the Cowboys did not respond.
Some deals are lopsided—and in the case of advertising allocations to the Cowboys, there was no bidding process.
But, if you look at the TLC’s contract with Jones’ Cowboys, the state of Texas pre-pays for promotional items, and the Cowboys collect regardless of redemption.
According to lottery watchdogs, when a new Texas lottery scratch-off game hits the shelves, there’s a surge in purchasing that tapers off. That means that many ticket rolls—including potential winners—are spoiled.
That’s not the only way that the Cowboys collect without an outlay.
Part of the promotional packages are tickets to Cowboys games with concession allowances. The Cowboys are paid those allowances even if the allotment isn’t exhausted by winners. As previously mentioned, they are paid even if winning tickets go unclaimed because they were never purchased or played.
The Lottery is also party to a multi-year, multimillion-dollar sponsorship contract with Jerry Jones’ Star at Frisco. According to purchase orders, this agreement is between the state and Frisco Management LP, resulting in $2.6M over three years.
When Grief presented the contract to the Lottery Commission in 2014, he called it a “very important addition to our existing partnership agreement with the Dallas Cowboys organization.” Like a timeshare salesman, Grief told commissioners that the lottery was “getting in on the ground floor” by sponsoring the development of a private entity’s corporate headquarters.
This corporate handout pitch, like so many when it comes to the lottery, was made very explicitly with a “this is for the kids” cover.
Strangely, Grief and the commission have been vocal about integrating the Texas Lottery brand with high school athletics.
The onslaught of ubiquitous online sports gambling has led to an epidemic of gambling abuse among young men.
“It’s obvious that the commission and its former executive director became enamored with the Cowboys and lost their way.” That’s how Rob Kohler, a lobbyist for the Christian Life Commission, views TLC’s scratch ticket deal with the Cowboys. “That scratch ticket was just like any other scratch ticket. It didn’t perform differently from others, but they pretended it did to shell out tax dollars and enjoy access.”
If the state’s contract with the Cowboys is an example, then, like Cowboys fans, Texas has been handing over millions and potentially getting nothing of value in return for the past two decades.
While this agreement has resulted in a steady cash flow from Texas to Jones, Gary Grief and the commission attempted to further enlarge Jones’ wallet.
During its investigation of the lottery, the Sunset Commission found internal communications where “Grief instructed staff to plan to launch a new fantasy sports game before the 2016 football season.”
These emails are similar to those that were the subject of investigative reporting that same year, where Grief stated that he knew the Cowboys had a relationship with fantasy sports gambling.
In 2015, while Grief was abusing his power at the Texas Lottery, Jerry Jones was publicly defending his stake in DraftKings, one of the largest daily fantasy sports companies in the U.S. Grief was trying to sync up with that same company for fantasy gambling.
Attorney General Ken Paxton ultimately shut down these efforts, determining that they exceeded the agency’s statutory authority.
Even after the Attorney General told them they were not allowed to operate in Texas, DraftKings stated, “We intend to continue to operate openly and transparently in Texas.”
This isn’t dissimilar to the posture lottery ticket resellers have taken when confronted with their circumvention of the letter and spirit of Texas law.
Reports from the time state that Grief and then-Texas Lottery Commission Chairman Winston Krause were urged to pursue fantasy sports by an unnamed lawmaker.
After Grief’s sports gambling gambit went sideways, Krause said Grief and others at the agency got mixed messages about expanding gambling with novel projects and that, in the future, to avoid a similar public scandal “the first thing that’s going to happen is going to be a call to [the] governor’s office.”
In hindsight, it’s clear that after the governor’s office publicly nixed the clandestine push to expand gambling in Texas via fantasy sports, it was quickly replaced by another end-run around the legislative process: lottery resellers.
Grief’s effort to expand sales by taking them to the internet and removing friction would put the agency in peril. It’s also another effort that could link the Cowboys, Jones, and the Lottery.
In 2023, DraftKings, the same entity Grief eyed as a partner in sports gambling, acquired a lottery ticket reseller, Jackpocket.com. But that’s not his only connection to lottery resellers.
According to a trade publication, Jones was an investor in Jackpot.com, a lottery ticket reseller that officially launched its operations in Texas on January 9, 2023, with $42 million in funding and partnerships with major sports franchises, including the Dallas Cowboys.
The same year that DraftKings acquired Jackpocket.com, the Texas House passed a measure, HB 1942, that would have 1) legalized sports gambling in the state and 2) made the Texas Lottery Commission the regulatory agency responsible for sports betting.
In other words, by 2023, in just seven years, the Texas Lottery went from being publicly chastised for trying to circumvent state law to being the preferred regulator of another multibillion-dollar gambling industry.
The author of HB 1942, Jeff Leach (R-Allen), was joined by Republican co-author Jared Patterson, the state representative for Frisco, which hosts the Dallas Cowboys headquarters and training facility.
Now that Grief and Krause are out, who’s mediating the Jones relationship with the Texas Lottery?
Robert Rivera, the current Texas Lottery Commission chair, is a former Arlington City Council member. He was on a planning commission that approved the Cowboys’ AT&T Stadium construction and co-founded a group called Touchdown Arlington. That group funded television and radio ads and spent thousands on a “Vote Yes” bond campaign so taxpayers could subsidize the Cowboys’ new stadium.
Scratch tickets aren’t the only way the Lottery has funneled cash to Jones’s connected outfits.
The Texas Lottery has a multi-year, multimillion-dollar no-bid contract for naming rights at Texas Lottery Plaza, an outdoor music venue located at Toyota Music Factory. Legends Hospitality, a Jones-owned business, owns the venture.
The contract between the state and Legends was discussed at a TLC meeting on April 6, 2017. During that meeting, Eric Sudol testified for the partnership and identified himself as Senior Vice President of Legends Global Partnerships, another branch of the business. During his testimony, Sudol served simultaneously as vice president of corporate partnership sales and marketing for the Dallas Cowboys.
Then-executive director Grief called the TLC’s partnership with the Toyota Music Factory a “very creative way to put our brand out front and center in a venue that will, unlike any traditional advertising campaign that’s based on TV and radio, what this will do is promote the Texas Lottery brand year-round in perpetuity [emphasis added].”
Creative, like illegally allowing the sale of Texas lottery tickets online to the Dominican Republic?
It is difficult to ascertain the full extent of TLC’s contracting with Jones, the Cowboys, or other Jones-linked entities. For instance, a TLC interoffice memo from August 2023 proposed executing a contract with the National Medal of Honor Museum Foundation. Charlotte Jones, Jerry Jones’ daughter, chairs the board of that foundation.
The Cowboys’ contract with the TLC runs through March 2026, with potential extensions for up to ten additional years.
“All of the activity around this relationship, the scratch ticket, the fantasy sports push in 2015, and the real estate development should be the focus of an investigation,” Kohler stated.