Texas Lottery Overhaul

AUSTIN — A bill that would preserve the Texas Lottery but abolish the commission that oversees it is headed to Gov. Greg Abbott.

The Senate Friday night agreed with changes to the compromise plan, paving the way for the beleaguered state lottery to be managed by the Texas Department of Licensing and Regulation. Charitable Bingo, which is currently under the embattled Texas Lottery Commission, would also be overseen by TDLR.

Background and Expectations

Lawmakers expect Abbott to sign the bill. In February he ordered the Texas Rangers to investigate two multi-million jackpots that have stirred controversy. Attorney General Ken Paxton and Lt. Gov. Dan Patrick have also announced investigations of the lottery.

“I’m satisfied with where we are,” said state Sen. Bob Hall, R-Edgewood, a day before the Senate concurred with House amendments to the bill he authored.

Reforms and Changes

Under the bill passed Sunday, the revamped lottery would be subjected to a series of reforms, including the banning of third-party couriers to assist customers in ticket purchases, mandating retailers develop age-verification tools to prevent the sale of tickets to minors and a comprehensive review by state regulators to develop additional recommendations.

FILE – Edith Patlan grabs printed tickets from a Texas Lottery sales terminal at Fuel City in Dallas, Wednesday, Feb. 26, 2025. (AP Photo/LM Otero, File)(LM Otero / AP)

Contract Extensions and Evaluations

The House amendment, developed by state Rep. Charlie Geren, R-Fort Worth, would extend the contract of International Game Technology, the company that operates the lottery, for two years. State officials are currently in the process of procuring another lottery operations contract after the current one expires in 2026.

The potentially soon-to-be abolished Lottery Commission is under its 12-year systematic evaluation and will expire Aug. 31 without reauthorization from the Legislature. The evaluation started last year with the Sunset Advisory Commission, which made recommendations on how lottery oversight could be improved.

Revenue and Controversies

Under the terms of the bill that passed the House Sunday, the Legislature now has to review and approve the continuation of the lottery by Sept. 1, 2029. The original Senate version called for a review and extension by Sept. 1, 2027.

Some lawmakers, while disturbed by recent headlines about lottery scandals, didn’t want to look elsewhere in the budget to replace the revenue it provides.

Since 1997 the lottery has provided $34 billion to public schools, including $2 billion in 2024. It has generated $267 million for veterans since 2010. Opponents of the lottery contend lottery revenue is a small fraction of the total state budget and could easily be made up elsewhere.

Scandals and Investigations

Recently the lottery has been beset by controversies.

Lawmakers were concerned over whether lottery officials violated Texas law by allowing couriers to take online ticket orders to make the system more convenient for customers. Legislators said the system violated the prohibition against telephone and online sales of tickets and made it possible for minors to play the lottery.

In February, the Senate voted 31-0 to ban the use of couriers to facilitate the purchase of lottery tickets. The Senate vote came after former Lottery Commission executive director Ryan Mindell banned couriers, which he had consistently told lawmakers he lacked the authority to do.

The new bill would continue the prohibition against lottery couriers.

Keeping tickets from being sold online and over the telephone is just part of the frustration legislators have with the lottery.

The Lottery Commission is embroiled in an April 2023 jackpot scandal, where an overseas entity bought over 25 million $1 tickets, giving it access to almost every possible number combination, to win $95 million.

A February $83.5 million jackpot is also under scrutiny. The sole winning ticket was purchased from an Austin lottery store connected to a courier. The woman who bought the ticket is suing the Lottery Commission, which has refused to pay her as the investigations into the jackpots continue.

Investigations into both jackpots and the Lottery Commission are ongoing.

Conclusion

The Texas Lottery has been a topic of controversy and debate in recent years, with lawmakers and investigators looking into various scandals and irregularities. The new bill aims to address some of these issues by abolishing the Lottery Commission and transferring oversight to the Texas Department of Licensing and Regulation. While some lawmakers are satisfied with the bill, others are concerned about the potential impact on revenue and the effectiveness of the reforms. As the bill heads to the governor’s desk, it remains to be seen how the Texas Lottery will change and what the future holds for this beleaguered institution.

Frequently Asked Questions

What is the current status of the Texas Lottery Commission?

The Texas Lottery Commission is currently under a 12-year systematic evaluation and is set to expire on August 31 without reauthorization from the Legislature.

What are the main reforms proposed in the new bill?

The new bill proposes to ban the use of third-party couriers to assist customers in ticket purchases, mandate retailers to develop age-verification tools to prevent the sale of tickets to minors, and conduct a comprehensive review by state regulators to develop additional recommendations.

How much revenue has the Texas Lottery generated for public schools and veterans?

Since 1997, the Texas Lottery has provided $34 billion to public schools, including $2 billion in 2024, and has generated $267 million for veterans since 2010.

What are the controversies surrounding the Texas Lottery?

The Texas Lottery has been embroiled in several controversies, including the use of couriers to facilitate online ticket purchases, the sale of tickets to minors, and scandals surrounding jackpot winners.

What is the future of the Texas Lottery?

The future of the Texas Lottery is uncertain, as the new bill aims to abolish the Lottery Commission and transfer oversight to the Texas Department of Licensing and Regulation. The bill is currently awaiting the governor’s signature, and it remains to be seen how the reforms will be implemented and what impact they will have on the lottery.