Lawmakers weigh moving bingo operations out of Texas Lottery’s purview amid agency’s uncertain future

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With bills moving in both Texas legislative chambers seeking to regulate the state lottery’s jurisdiction, the potential consequences of altering or outright abolishing the game are beginning to be weighed by lawmakers and advocates alike.

The Texas Lottery Commission has received increased scrutiny in recent weeks over a potentially illegal 2023 bulk purchase and the use of couriers involving two major Lotto wins, including several state investigations and calls to abolish the game altogether.

On Monday at a Senate State Affairs committee hearing, the focus shifted to the lottery commission’s lesser-scrutinized branch: charitable bingo, which the agency also oversees. The committee brought the games that benefit charities into conversation as the panel discussed Senate Bill 1721, which would move bingo operations to the Texas Department of Licensing and Regulation. Filed by Sen. Mayes Middleton, the Galveston Republican said the proposed move is a direct result of the controversy the lottery commission is mired in.

“Members of the lottery commission and their many documented failures have put us in this position, unfortunately,” Middleton said during the hearing Monday.

The bill is one of 15 that aim to alter the structure of the lottery and its commission, as the agency is currently under sunset review and needs legislative approval to continue. Half of those 15 bills, including SB 1721, were filed after lawmakers’ criticisms over the lottery reached a peak as the upper chamber unanimously passed Senate Bill 28, which would ban couriers in the state. Couriers are third-party services that facilitate online lottery ticket sales, a practice lawmakers have worried is at best unregulated or at worst already illegal under state law.

Some of those who gave public testimony Monday on SB 1721 spoke positively of the lottery and worried the bingo’s removal from the lottery commission would push the agency closer to dissolution.

“Our concern is real, that this is the first chess piece on the board to ultimately get rid of the lottery — the VFW would oppose that,” said Mitch Fuller, legislative director for the Texas Veterans of Foreign Wars.

The Texas VFW is the largest holder of bingo licenses in Texas, and contributed over $2 million in charity through bingo to communities they are active in, Fuller said. For him, bingo’s move away from the lottery commission felt “inevitable,” but Fuller said he worried that shutting the department would be detrimental to veterans in the state. Since 2009, the Texas Lottery has contributed over $262 million to veterans’ programs, according to the agency’s website.

Sen. Bob Hall, R-Edgewood, the author of SB 28 and one of the most vocal opponents of the state lottery, said there was no indication state bingo employees were involved in the “shenanigans” of the lottery commission. Despite absolving bingo officials of other decisions made by the commission, Hall said any losses to veteran support because of the lottery’s dissolution was a needed sacrifice to protect Texans, and that the bingo operation needed to move agencies “no matter what happens.”

“Almost all crimes that are committed have collateral damage,” Hall said.

The outcry in Texas over couriers’ legality has become infectious, igniting national concerns: New Mexico’s Attorney General issued an official opinion after SB 28’s passing in the Senate that stated the nation’s largest courier, Jackpocket, likely violates several state laws through its businesses, and New York Lottery officials recently said in a public meeting they would review couriers’ practices to ensure “everyone is on the same playing field.”

The Texas Lottery Commission itself moved to limit couriers after yearslong claims they had no jurisdiction over the businesses. The commission announced in late February they would move to create official rules that would revoke the license of any lottery retailer working with the services. The rules were officially suggested in early March, and a public hearing on the rules is set for April 3.

Bingo advocates at the hearing were explicit in their confidence in most of the lottery commission, going out of their way to compliment the commissioners and charitable bingo director LaDonna Castenuela because of their support for charitable bingo.

“We will not turn our backs on Chairman [Robert] Rivera, Commissioner [Lyons] Fields or the other commissioners, [or] LaDonna Casteleñuela — these people have been excellent stewards of charitable bingo,” Bresnan said.

A bill filed by Hall in March that would abolish the state lottery was referred to the state affairs committee Monday, but is not currently scheduled for a hearing. The bill stands in contrast with House Bill 1505 and Senate Bill 2402, the sunset bills allowing the lottery commission to continue and overhaul its training and oversight requirements. The bill would also build out the bingo operation by creating a bingo director under the agency as per the Sunset Advisory Commission’s guidance through the commission’s review process.

HB 1505, filed by Rep. Lacey Hull, R-Houston, was referred to the chamber’s Licensing and Administrative Procedures committee. Those involved with bingo and the lottery said they’re unsure how to proceed amid uncertainty over the fate of the state lottery.

“Our neutrality on [SB 1721] is driven by the fact that we don’t know what’s going to happen with the lottery,” Bingo Interest Group advocate Steve Bresnen said during the Monday hearing. “I think some folks would be happy to see the lottery go. I don’t know what other options there might be.”

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