New Senate bill offers last-minute reprieve for troubled Texas Lottery

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A bill that would keep the Texas Lottery alive and enact sweeping changes by placing it under a new agency was heard in a Senate committee on Monday, a last-minute lifeline for the increasingly scrutinized department and its games.

Senate Bill 3070, filed by Sen. Bob Hall, R-Edgewood, would abolish the Texas Lottery Commission and move supervision of the state-sponsored game under the Texas Department of Licensing and Regulation. The proposal also contains provisions from several other bills currently being considered by lawmakers in both chambers that would increase oversight of the game and create new criminal penalties for online play and mass purchases of tickets.

“If there isn't enough of an appetite to get rid of the lottery outright, then this bill represents the next best thing,” Hall said during the Senate State Affairs hearing on Monday.

All of the bills aiming to tighten the lottery come as the game and its commission have been criticized by lawmakers throughout the session after two lottery jackpots involving lottery couriers sparked concerns of illegal activity. Lottery couriers print and scan tickets for customers, usually at licensed retail stores they own, as a way of playing the lottery online.

The first jackpot was won in April 2023 when a single group with ties to a courier used four licensed retailers and dozens of ticket-printing lottery terminals to buy 99% of the 26 million ticket combinations, scoring a $95 million jackpot. The second jackpot was won in February, by a ticket purchased through a courier app called Jackpocket.

Fears about couriers enabling money laundering and sales to out-of-state and underage customers have culminated in several lawmakers suggesting the lottery be eliminated entirely.

Hall’s omnibus bill is a potential lifeline for the Texas Lottery, as deadlines are approaching that will determine whether the game and the billions in funding it provides to public schools will continue. Despite being months past the Legislature’s bill filing deadline, SB 3070 was filed by Hall on Monday at the end of the Senate’s session alongside a few other bills after senators voted to suspend the rules.

The bill includes a total ban on lottery couriers and online ticket sales with criminal penalties — identical to Hall’s Senate Bill 28, one of Lt. Gov Dan Patrick’s 40 priority bills. SB 28 was unanimously passed by the Senate in February. SB 3070 would also ban customers from buying more than 100 lottery tickets in a single purchase, establish a lottery advisory committee and limit the total number of ticket-printing lottery terminals licensed retailers can have. Those restrictions echo looser provisions suggested in Senate Bills 1346 and 2153.

The Senate already approved a bill that would move the state’s charitable bingo operations to the licensing and regulation department, which SB 3070 also proposes. The proposed move for the lottery, however, requires the state’s Sunset Advisory Commission to conduct a review of the game by Aug. 31, 2027, to determine whether it should be abolished.

SB 3070’s current proposals may not be its final form, either. During the Senate hearing, Hall listed four amendments he said would be filed once the bill reached the Senate floor that would add provisions not currently in any bill. Those amendments would amplify criminal penalties for illegal ticket sales, require that individuals, not business entities or limited liability companies, cash in winning tickets and create restrictions on where tickets can be bought.

The amendments would also deputize the governor, lieutenant governor, attorney general and speaker of the house as approved inspectors for the lottery, allowing them to enter licensed lottery retail stores and investigate where they keep equipment. That provision comes after Patrick posted videos of himself on social media visiting a lottery courier on two separate occasions, including in April when he was denied entry into the back of the store where they keep their terminals.

“Whenever you’re in business and you’re doing business with the taxpayers of Texas, transparency is the key,” Patrick said in an April 29 video from inside a courier-owned retailer after an employee denied his request to see their lottery terminals.

The lottery commission is currently under a routine review by the Sunset Commission, which state agencies undergo every 12 years, and requires legislation to continue its operations. Without SB 3070, one of two “sunset” bills in either chamber must be passed; as of Monday evening, neither have received a single hearing. SB 3070 also circumvents the lottery’s looming budget obstacles, as the House removed the lottery commission’s budget for the next two years from the state’s budget proposal.

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