OK, I have figured this out.
It is caused by the fact that /dev/pts is not mounted at boot. I can mount it with the following command:
sudo mount -t devpts -o gid=5,mode=620 devpts /dev/pts
However, I will either need to do this at each boot, or add it to fstab. My laptop doesn't have an entry in fstab, which leads me to think this is not the correct solution. I am assuming that udev should be mounting /dev/pts. Can anyone direct me to the rule that is responsible for this?