Days after Texas Lottery commissioners faced widespread criticism from state lawmakers, Texas senators have sent a measure banning lottery courier services to the House for approval.
Senate Bill 28, filed by State Sen. Bob Hall (R-Edgewood), passed 31-0 in quick fashion on Thursday.
The measure will prohibit online couriers from allowing customers to purchase lottery tickets at a premium from brick-and-mortar stores without being physically present. In addition, SB 28 includes criminal misdemeanor offenses for violators.
Lt. Gov. Dan Patrick, who tagged the item as a priority, thanked Hall before final passage for his investigative work on the Texas Lottery. He later issued a press release calling on the lottery to shape up or face the wrath of the state government.
“The Texas Lottery cannot continue unless the people of Texas have faith that the game is not rigged in advance or that it is not being used as a criminal enterprise to launder massive amounts of money,” stated Patrick.
“Today, the Senate made it clear that the first step in restoring public trust in the commission, if even possible, is to ban lottery couriers,” he continued. “The decision on whether the lottery will continue will be made in the coming days and weeks of the legislative session.”
The courier process was introduced to Texas over the last decade, well after the Texas Lottery was established in August 1991.
While the purchase of lottery tickets via telephone is specifically prohibited in the 1991 measure, questions of online and smartphone ticket procurement via couriers initially received little to no opposition from the Texas Lottery Commission.
Lottery commissioners previously claimed that they had no regulatory capability to clamp down on courier services, recently reiterating the same point during a Senate Finance Committee hearing earlier this month.
However, the commission reversed course only hours before a State Affairs Committee hearing on Monday.
In a policy statement issued that morning, Texas Lottery Commission Executive Director Ryan Mindell pledged that the commission would begin taking steps to ban courier services regardless of whether SB 28 or similar legislation were passed.
Hall confronted the commissioners and Mindell on the sudden change at the State Affairs hearing.
“Last Wednesday, just a little more than a week ago, you adamantly denied having the authority to do it. What happened that all of a sudden you decided that you did have the authority?”
Robert G. Rivera, chairman of the Texas Lottery Commission, said that up until Wednesday, the legal advice he received said it was outside of his authority.
“Do we have that authority? Maybe we do, maybe we don’t. But the fact, though, is that I would like to move forward and have that discussion. And so, a week from tomorrow, we will officially have that discussion,” said Rivera.
Hall and other senators on the committee also voiced other concerns regarding the Texas Lottery.
Those concerns include a recent $83.5 million winning ticket that Lt. Gov. Dan Patrick exposed as questionable and the appearance of alleged child labor in another questionable jackpot win reported by the Houston Chronicle.
The abundance of criticisms against the lottery led Hall to call for Gov. Greg Abbott to expand his investigation into the commission and issue an executive order immediately disestablishing the Texas Lottery.
“When I began looking into the lottery commission, I never expected to find what I found,” said Hall on the Senate floor. “I never expected to find an agency that had specifically written rules to bypass specifically what the Legislature had told it not to do. And I never expected to find that situation creating a criminal organization actually operating within our state government.”
“The agency created loopholes specifically to allow the use of telephone and internet group purchases, resulting in underage gambling and other changes to open the door wide for what the Legislature intended to be illegal gambling practices,” he added.
One amendment to the measure was offered by State Sen. Roland Gutierrez (D-San Antonio) to exempt online scratch-offs. It failed 20-11.
The item will now be sent to House members for consideration.
A separate House measure, HB 3201 by State Rep. John Bucy (D-Austin), seeks to regulate couriers rather than prohibit them entirely. It received the support of representatives from courier services at the State Affairs hearing earlier this week.
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