The Texas Lottery Commission has been playing fast and loose with the rules since 2020, and it caught up to the agency in 2024.
This year, the lottery has been embroiled in multiple controversies and faces intense scrutiny as it enters 2025, a year it will undergo Sunset Review by the Texas Legislature. During Sunset Review, state agencies are evaluated to determine if they are meeting the expectations for the agency, and if so, improvements are recommended. If not, the agency may be abolished, and its duties transferred to another state entity if necessary.
In recent years, the Lottery Commission has been a tool for gambling expansion beyond what Texans approved in 1991.
Since a rule change in 2020, the lottery has, at best, looked the other way and, at worst, facilitated online sales, evading Texas lawmakers who have been clear that playing the lottery is meant to be limited and in person.
During the pandemic, the Lottery Commission violated legislative intent and its long-standing precedent by changing its rules, allowing third parties to sell lottery tickets online.
That rule change led to an international gambling syndicate rigging a jackpot in 2023 with the help of the Texas Lottery.
This year, senators received testimony that the Lottery Commission was allowing players to break the law by permitting online ticket sales, thus violating state regulations requiring in-person purchases. Despite having the authority to revoke licenses from retailers facilitating online sales, the commission has taken no action, raising questions about its commitment to enforcing existing laws.
Concerns have been raised about the possibility of minors purchasing lottery tickets online. The Sunset Advisory Commission highlighted the lack of proactive monitoring and enforcement by the Lottery Commission to prevent underage gambling.
It’s also now possible for players to use credit cards for online purchases, which is prohibited by state law for lottery ticket sales.
Making matters worse, the commission has misrepresented what the unintended consequences of its 2020 rule change mean, as lawmakers periodically scrutinize the commission’s operations.
During a commission hearing in October, it was revealed that the state had faced similar issues before, including a notable 1995 case involving an out-of-state jackpot win. This revelation contradicted the commission’s claims that they couldn’t have anticipated the consequences of the 2020 rule change.
In addition to increasing the likelihood that children can purchase lottery tickets over the phone, the Lottery Commission may have opened Pandora’s box by enabling Indian tribes to expand their casino footprint across the state with more aggressive forms of games.
The Kickapoo Traditional Tribe of Texas warned the Texas Senate that due to the proliferation of online lottery ticket sales, the tribe may pursue full-blown casino gambling if the issue wasn’t addressed. This ultimatum raised the potential cost to Texas for unintended consequences of the Lottery Commission’s actions.
Analysis of the Lottery’s fiscal performance revealed that despite generating $8 billion in annual revenue, only $2 billion was distributed to education and veteran services. This contribution amounts to just 3 percent of total education funding, falling far from the promises made when the lottery was established in the early 1990s that it would fund education.
The year ended with revelations that the same couriers that have set up shop peddling the Texas Lottery to international gambling syndicates and potential children have ties to China. Jackpot.com, a platform selling Texas Lottery tickets online since 2023, is the operator of Lotto China, raising concerns about foreign influence and potential security risks.
As the Texas Lottery Commission undergoes its Sunset Review, lawmakers are considering significant operational changes or complete abolishment. The controversies of 2024 have underscored the need for stricter oversight and a fundamental reevaluation of the lottery’s role in Texas.
The coming year will likely see continued debate over the future of gambling in Texas, and the Lottery Commission’s actions will serve as a focal point for discussions about regulation, revenue, and reigning in rogue agencies.
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