The $83.5 Million Legal Battle: 5 Shocking Reasons The Texas Lottery Commission Tried To Deny Kristen Moriarty's Jackpot

The dramatic legal saga of Kristen Moriarty versus the Texas Lottery Commission (TLC) has finally concluded, but the fallout from the $83.5 million Lotto Texas jackpot win continues to redefine the future of online lottery sales in the state. As of December 2025, Moriarty, a Houston-area resident, has secured her massive winnings after a high-stakes, six-month legal battle, but the controversy surrounding her use of a third-party courier app exposed a major regulatory loophole and triggered an official state ban on such services. This landmark case serves as a cautionary tale for winners and highlights the intense scrutiny now facing the Texas Lottery system. This article dives deep into the February 17, 2025, drawing controversy, the specific legal arguments used by the state to withhold the prize, and the ultimate settlement that put nearly $46 million (pre-tax) into the hands of the rightful winner, Kristen Moriarty. The entire ordeal was a perfect storm of bad timing for Moriarty, as her win was "caught in the crossfire" of an ongoing state investigation into the legality of online lottery ticket sales.

Kristen Moriarty: Biography and Jackpot Profile

While Kristen Moriarty has largely maintained her privacy as a Houston-area resident, the details of her life are now inextricably linked to one of the most significant legal disputes in Texas Lottery history.

• Name: Kristen Moriarty
• Residence: Houston-area, also cited as a Montgomery County resident.
• Prize Won: $83.5 million Lotto Texas Jackpot.
• Winning Date: February 17, 2025.
• Ticket Purchase Method: Purchased via the Jackpocket mobile application.
• Lawsuit Filed: May 2025, against the Texas Lottery Commission (TLC).
• Lawsuit Venue: Travis County District Court.
• Prize Option Chosen: Cash option.
• Final Payout: $45,889,188.92 (before taxes).
• Outcome: Won the lawsuit via a settlement with the TLC in late 2025.

Moriarty’s decision to pursue litigation against a powerful state agency like the TLC was a bold move that ultimately paid off, but the legal fight centered entirely on the method she used to obtain the winning ticket, not the validity of the ticket itself.

The Core Controversy: Jackpocket and the Third-Party Courier Service Ban

The Texas Lottery Commission’s initial refusal to pay Kristen Moriarty was not an arbitrary decision but a direct result of a growing legal conflict over the use of third-party courier services, such as the popular app Jackpocket. This single point of contention became the central legal entity in the entire lawsuit.

1. Violation of the State Lottery Act

The primary argument used by the TLC, under the guidance of Executive Director Ryan Mindell, was that third-party courier services violate specific provisions of the State Lottery Act, codified in Chapter 466 of the Texas Government Code. The TLC contended that these apps operate outside the established legal framework by acting as an intermediary between the customer and the licensed lottery retailer. The law is designed to ensure that lottery tickets are sold directly by licensed entities, and the TLC saw the courier service model as circumventing this critical rule.

2. The 'Money Received' Loophole

A critical legal detail cited by the TLC was the provision that prohibits the sale of a ticket for a price greater than the amount set by the commission. Courier services charge a small fee for their service—the act of physically purchasing and delivering the ticket. The TLC argued that this fee, however small, meant the ticket was being sold for more than its face value, a direct violation of state law. This "money received" argument was a key pillar in the commission's refusal to honor the $83.5 million prize.

3. Caught in the Crossfire of an Investigation

Moriarty’s February 2025 win came at the worst possible time. The Texas Legislature and Attorney General Ken Paxton were already scrutinizing the TLC over multiple "suspicious" jackpot wins, which had sparked a larger investigation by the Texas Rangers. Lawmakers had serious concerns that courier services could facilitate illegal gambling by allowing people outside of Texas to purchase tickets or by enabling money laundering. Moriarty's win, purchased through the controversial Jackpocket app, immediately became the high-profile test case for the state to enforce a new, stricter interpretation of the law.

The Legal Strategy and The Multi-Million Dollar Settlement

Faced with the TLC's refusal, Moriarty filed a lawsuit in May 2025 in the Travis County District Court, seeking a judicial mandate to compel the commission to pay her winnings. Her legal team argued that she was the rightful owner of the ticket and that the method of purchase was a matter between the courier service and the state, not a reason to deny a legitimate winner her prize.

The Role of Attorney General Ken Paxton

The resolution of the case was heavily influenced by the Attorney General's office. While the AG's office was simultaneously investigating the broader issue of courier services, they also played a role in guiding the TLC toward a resolution in Moriarty's specific case. The state's primary intention was to clarify the law moving forward, not necessarily to penalize an individual winner who had used a service that was operating in a legal gray area at the time of purchase.

The Settlement and The Cash Option Payout

In late 2025, the Texas Lottery Commission announced that it had reached a settlement with Kristen Moriarty, effectively ending the months-long litigation. The settlement confirmed that Moriarty would receive her prize. The original $83.5 million jackpot was the annuity option, paid out over 30 years. Moriarty chose the lump-sum cash option, which amounted to $45,889,188.92 before federal and state income taxes. The TLC's statement on the matter indicated that the decision was made to settle the specific case while moving forward with a definitive policy change. This settlement essentially ring-fenced Moriarty's win as an exception while the state cemented its opposition to courier services.

The Lasting Impact: A New Era for Texas Lottery Sales

The Kristen Moriarty lawsuit has had a profound and immediate effect on the landscape of Texas Lottery sales, establishing multiple key entities and precedents:

1. Official Ban on Courier Services

Following the intense scrutiny and the high-profile nature of the lawsuit, the Texas Lottery Commission officially voted to ban lottery courier companies from selling tickets online in the state. This definitive policy statement made it clear that third-party apps like Jackpocket are no longer permitted to operate this service in Texas, forcing companies like Lotto.com to also file lawsuits challenging the ban.

2. The Precedent of Payment

The settlement creates a legal precedent that, at the time of the February 2025 drawing, the purchase of the Lotto Texas ticket via a courier service was not sufficient grounds to deny the winner the prize. This provides a measure of legal protection for other winners who may have purchased tickets during the period of legal ambiguity.

3. Increased Regulatory Oversight

The entire controversy has led to a significant increase in regulatory oversight from the Texas State Capitol. The involvement of the Texas Attorney General's office and the Texas Rangers signals a much tougher stance on what constitutes legal lottery participation. Future winners must ensure their ticket purchases strictly adhere to the new, clarified regulations to avoid being embroiled in similar, costly legal battles. The dramatic six-month legal fight serves as a powerful reminder that even a massive lottery win can be overshadowed by complex legal and regulatory challenges.