- Texas Sunset Commission staff blamed former Texas Lottery Commission Executive Director for the agency’s “uncomfortable position”
- New Texas Lottery Commission leadership has addressed issues such as lottery courier services and bulk purchases of lottery tickets
- The Texas Lottery generates over $1.9 billion annually for public education and provides significant funding for veterans’ services
The Texas Lottery Commission has found itself in the spotlight during the current legislative session, as the agency is under Sunset review amid high-profile controversies involving the agency. While lawmakers have raised questions about some of the Lottery Commission’s past activities, new leadership at the agency has worked to address those concerns.
Under the Sunset process, Texas state agencies are reviewed every twelve years to review the agency’s operations, effectiveness, and efficiency. State agency “sunset bills” are considered by the legislature for agencies that are up for review during that legislative session. These bills, which must be passed for an agency to continue to operate, will oftentimes incorporate changes to the agency that are recommended during the sunset process.
The Texas Lottery Commission is among the highest-profile state agencies up for sunset review this session. This sunset review comes as some lawmakers have raised concerns about the lottery, in particular the bulk purchase of lottery tickets and the emergence of courier services that allow consumers to purchase lottery tickets through online apps.
A report issued by staff at the Texas Sunset Commission in January recognized the concerns raised by lawmakers about the Texas Lottery Commission, describing “the uncomfortable position the agency finds itself in today.”
The report places much of the blame for the “uncomfortable position” of the Lottery Commission on its former Executive Director, Gary Grief. While the report described Grief, who retired in February 2024, as a respected “expert on the Texas Lottery” who helped achieve record sales under his leadership, it also found that he “seemed quite comfortable operating in the gray areas of the State Lottery Act when the agency’s authority was not crystal clear or the Legislature remained silent on emerging issues.”
The Texas Lottery Commission’s current Executive Director, Ryan Mindell, assumed that role in April 2024. The Sunset Commission’s January staff report said “Mindell has attempted to increase legislative outreach to reestablish trust, ensure the agency is acting within its mandate, and keep the Legislature informed on key issues.”
The report also described actions taken under Mindell’s leadership regarding courier services, combating underage sales, and bulk purchases. At a hearing of the Licensing and Administrative Procedures Committee in the Texas House earlier this week, Mindell testified about his and the Texas Lottery Commission’s work on these issues.
Last month, Mindell issued a policy statement that the Texas Lottery Commission “believes couriers are not legal under Texas law” and will “take all appropriate action to stop [lottery courier] activity from occurring.” At a meeting earlier this month, the Texas Lottery Commission gave initial approval to proposed rulemaking that would allow for the license of a lottery retailer to be revoked for working in concert with a lottery courier.
Bulk purchasing of lottery tickets has also drawn attention after a $95 million Lotto Texas jackpot was won by a bulk purchaser who, according to Governor Greg Abbott’s office, purchased “early every possible number combination.” Last month, Abbott called on the Texas Rangers to investigate that incident as well as the purchase of a winning lottery ticket that had been made through a courier service.
Mindell told the House Licensing and Administrative Procedures Committee last week that he had taken steps to prevent future bulk purchases of lottery tickets. These included changes to Lottery Commission procedures to prevent “large numbers of terminals” being sent to retailers and changes to software limiting the number of transactions a lottery sales terminal can process. According to Mindell, these software changes help thwart an attempted bulk purchase.
Although the Texas Lottery Commission has taken steps to prevent bulk purchases of lottery tickets to address concerns raised by lawmakers, state law does not establish a limit on purchases of lottery tickets.
While the Lottery Commission has taken steps to ban couriers, prevent bulk purchases, and ensure lottery tickets are only sold to those of legal age, some critics of the lottery are calling for it to be abolished during the sunset process. This would result in lawmakers having to replace the revenue the lottery generates for public education and services for veterans.
Under the initial state budget bills filed in the Texas House and Texas Senate, lawmakers are depending on approximately $1.9 billion per year from the lottery to help fund public schools. According to data from the Texas Lottery Commission, the lottery generated $1.98 billion for public education in Fiscal Year 2024, and more than $2.1 billion in Fiscal Year 2023.
While items such as property tax relief and teacher pay raises are priorities for leaders inside the Capitol, they could be potentially imperiled should lawmakers be forced to replace the public education funding that is generated by the lottery.
The Texas Lottery also generates the bulk of the funding for the Texas Veterans Commission’s Fund for Veterans’ Assistance, which provides grants to organizations that provide services to veterans. According to the Texas Veterans Commission, the lottery generated more than $26.7 million for the Fund for Veterans Assistance last year. This accounted for 89% of the revenue collected for the fund.
Versions of the Texas Lottery sunset bill have been filed in the House and Senate. State Senator Mayes Middleton has filed Senate Bill 2402 in the State Senate and State Representative Lacey Hull has filed House Bill 1505 in the Texas House.
