Settlement Reached In $83.5 Million Texas Lottery Lawsuit, Disputed Winner Will Claim Full Prize

It appears Kristen Moriarty is a Texas Lottery winner after all.

There looks to be a settlement in the lawsuit filed by Moriarty against Texas Lottery Commission Deputy Executive Director Sergio Rey that has resulted in her being able to collect the winnings of an $83.5 million jackpot she claimed to have won in February.

A Rule 11 Agreement Letter from Moriarty’s attorney Randy Howry to Texas Assistant Attorney General Joe Nwaokoro was submitted Thursday to Travis County District Court detailing the terms of the settlement. Moriarty brought the lawsuit in late May, three months after matching all of the numbers for the Lotto Texas drawing on Feb. 17.

Per the terms of the agreement, Moriarty was to have completed the Texas Lottery Commission’s prize claim validations Thursday morning. The state agency would then pay Moriarty $45,889,188.92, which was the “cash value Jackpot Prize” of the Feb. 17 drawing.

Seventy-six percent of that amount, $34,875,783.82, would be paid directly to Moriarty via direct deposit to a Trust Account, while the remaining 24% — $11,013,405.10 — would be remitted to the IRS for the benefit of Moriarty per the TLC’s Rules.

“With guidance from the Office of the Texas Attorney General, the Texas Lottery Commission has reached a settlement of the litigation over the prize payment with the Feb. 17, 2025, Lotto Texas jackpot claimant,” the agency confirmed in a statement published by the San Antonio News-Express. “The prize claim for the estimated annuitized $83.5 million jackpot prize has now been processed by the Texas Lottery.”

The settlement brings an end to a near six-month saga that completely upended lottery play in the Lone Star State and heavily contributed to the eventual abolishment of the Texas Lottery Commission. While there will still be a state-run lottery in Texas, it will be overseen by the Texas Department of Regulation and Licensing effective Sept. 1.

How we got here

The Texas Lottery Commission was already facing scrutiny from an unrelated April 2023 drawing regarding the circumstances of a $95 million jackpot won by a New Jersey-based group called Rook TX LP. A Houston Chronicle report indicates the group likely actually spent $25.8 million, in essence purchasing every conceivable winning combination that led to claiming the $57.8 million lump-sum payout.

Moriarty’s win, finally validated with this settlement, sparked a firestorm in February for a different reason: The lotto courier she used to purchase what would prove to be the winning ticket — Jackpocket — printed the tickets at a Winner’s Circle location in Austin that it owned.

There was nothing improper about the process. The Winner’s Circle was a licensed retail lottery location, and Jackpocket, now owned by DraftKings, is a legitimate courier service. But the optics of the transaction prompted Texas Lt. Gov. Dan Patrick — never a fan of any form of gambling — to go on a one-man crusade on social media the day following the drawing to decry what he felt was a lack of public trust in the state-run lottery.

The ensuing fallout

Once Patrick’s tweet went viral, all hell broke loose. Texas Lottery Commissioner Clark Smith resigned and bills were filed to ban lotto couriers — a direct response to Patrick’s threat to shut down the state agency entirely — in the state less than a week later.

Then Gov. Greg Abbott entered the fray, ordering the Texas Rangers to investigate both the February lottery win — Moriarty’s identity had yet to be disclosed at the time — and the April 2023 drawing.

It became known in mid-March that Howry had been retained as counsel as Moriarty looked for ways to claim the jackpot she claimed to have won. She appeared in anonymous fashion with Howry for a national interview with NBC News later that month, telling the network, “I just feel like I’ve been caught up [in] this political tornado of controversy that I don’t think I need to be involved in. It’s taking a toll for sure.”

We know who the winner might be

By April, the TLC took another hit when courier Lotto.com filed a lawsuit in U.S. District Court and won a restraining order against the agency’s ban on couriers. Lotto.com also put the TLC on blast regarding the April 2023 drawing in its filing, with CEO Thomas Metzger detailing how the agency allegedly enabled the bulk purchaser to “effectively guarantee the Texas Lotto jackpot.”

In early June, a Travis County court issued a restraining order against the TLC and its Executive Director, now Rey, forbidding the agency to spend any of the $83.5 million jackpot. Rey had taken on the role after predecessor Ryan Mindell resigned in late April.

A short time later, Moriarty self-identified herself as the lottery player who made the claim to that jackpot, describing herself as “really boring” during testimony in the now-settled lawsuit.

As the case continued, lawmakers grappled with what to do with the Texas Lottery Commission. Some wanted the TLC dismantled, and some wanted the entire lottery abolished. Eventually, there would still be a lottery in Texas, but the TLC would be no more, and couriers would be banned.

Meanwhile, couriers have made favorable rulemaking headway, based on existing legislation, in other jurisdictions such as Arizona, Colorado, and Oregon. And finally, here in Texas, Moriarty can enjoy a return to her “boring” existence with a much larger bank account and the political drama behind her.