Texas Lottery Commission to be disbanded as state game gets new restrictions

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On Sunday night, Gov. Greg Abbott ensured the Texas Lottery will continue for another four years, signing into law new provisions to clamp down on the state’s games after lawmakers weighed abolishing the lottery entirely.

As lawmakers sparred over high-profile issues like public school funding, property tax cuts and THC regulation, the Texas Lottery emerged as a smaller, unexpected flashpoint during the recently-completed regular session.

Criticism of the lottery and the Texas Lottery Commission largely stemmed from two controversies: a $95 million Lotto Texas win claimed by a single group that purchased 99% of the 25.8 million possible ticket combinations and the proliferation of online ticket sales through apps known as lottery couriers.

Couriers act as ticket resellers, printing physical tickets for customers across the state in small stores they own before sending digital scans of the tickets for customers to view through apps. Some lawmakers said the services violated state law, which banned sales “by telephone,” while providers said they acted legally and with the approval of the lottery commission.

The couriers’ unclear legal standing was further exacerbated by the commission, which allowed the services for years before suddenly moving to ban them mid-session.

Lt. Gov. Dan Patrick and Sen. Bob Hall, R-Edgewood, made banning couriers one of their top priorities. The result was Senate Bill 3070, introduced almost two months after the filing deadline but granted an exception by the Senate so it could move forward.

The bill, which took effect immediately, allows the lottery to continue until 2029, but with greater restrictions and without the Texas Lottery Commission, the agency that has run the game for three decades. The bill prohibits online ticket sales and abolishes the commission; starting Sept. 1 the lottery will be run by the Texas Department of Licensing and Regulation.

A TDLR spokesperson said it was “premature” to discuss the specific structure of their lottery oversight, but that they have organized a three-person transition team and are assembling working groups with both TDLR and lottery commission staff.

For a moment, the controversy that rocked the state’s 33-year-old lottery through the session seemed to provide a window for long-time detractors an opportunity to abolish the games completely. But concerns over how the state would replace the $2 billion that the lottery provides yearly to the public education fund ultimately halted those efforts.

“It didn't take a lot of in depth discussion, It was really around, ‘We're so far into the budget for this next session, we're not going to be able to end [the lottery],’” Hall said. “We need the income to balance the budget for this next [biennium,] and so let's work out how we make that happen.”

Hall, SB 3070’s author, had been at the forefront of the lottery’s opposition, but called his bill “the next best thing” to abolition. The new law allows players to purchase up to 100 tickets in person at lottery retailers during store hours. Selling tickets online or through apps or websites will be a class A misdemeanor punishable by up to a year in jail.

Lawmakers say that will prevent a replay of the $95 million win secured by the purchase of 99% of the possible ticket combinations.

Legislators will have another opportunity to decide the lottery’s fate in 2029, as SB 3070 requires lawmakers to extend the game after a review by the Sunset Advisory Commission. Even with all the new guardrails in place, lottery critics like Hall say it may not be enough to satisfy his and others’ long term concerns.

“I would much rather have seen an end to the lottery for a number of reasons,” Hall said. “I do not feel that there's anything in any book on good government that has the state being involved in the gambling business.”

While questions still remain about how TDLR will continue the lottery — and who will help them — much of the lottery commission’s top administration has already stepped out of the picture. The agency’s executive director, Ryan Mindell, resigned in mid-April, a departure that was bookended by resignations from two of the five commissioners in February and May.

The end of the lottery commission does not mark the ends of its controversies, however. The Texas Rangers, a division of the Department of Public Safety, are currently investigating two jackpot wins — including the $95 million win — as well as courier operations in Texas.

The commission is being sued by the winner of an $83.5 million jackpot who has not been paid yet. Kristen Moriarty, the Houston-area woman who won the jackpot in February, bought the ticket through Jackpocket, the country’s largest lottery courier.

Her win is also part of the Rangers’ investigation, and the Lottery Commission has cited the investigation as the reason she hasn’t been paid — but Moriarty said she has yet to be contacted by anyone with DPS.

“It was excitement and happiness at first, and then it just has progressed to stress and anger,” Moriarty said.

DPS did not respond to questions on Moriarty’s case, stating they cannot comment about ongoing investigations.

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