Texas Lottery Faces an Uncertain Future Due to Ongoing Scandal

The Texas Lottery is teetering on the brink as state lawmakers face a tight deadline to decide whether to keep the program alive. A wave of investigations, internal upheaval, and legal controversies has thrown the future of the Texas Lottery Commission into deep uncertainty, just as the legislative session nears its close.

At the center of the crisis are serious allegations surrounding multimillion-dollar jackpots and third-party courier operations. The Texas Rangers and Attorney General Ken Paxton are actively investigating whether two large lottery wins—one for $95 million in 2023 and another for $83.5 million earlier this year—involved illegal bulk ticket purchases and improper involvement by couriers. In response to growing scrutiny, Governor Greg Abbott initiated the probes and has yet to make public whether he s extending the commission’s authority.

Mounting Pressure and Missing Funds

The Texas Legislature must reauthorize the Lottery Commission before August 31, or the agency will cease to operate. Unlike many state entities, the Lottery Commission is not automatically funded through the state budget, making legislative action critical to its survival.

Republican State Sen. Bob Hall has emerged as the leading voice for abolition, calling for the lottery to be dismantled through Senate Bill 1988. “Government does not need to be in the gambling business,” Hall stated, claiming the system is beyond repair. During a committee hearing, he accused commission officials of enabling what he described as “an illegal organized crime lottery operation,” suggesting internal staff either ignored or facilitated rule changes to benefit third-party digital courier platforms.

Hall’s bill, which remains under committee consideration, would shutter the lottery by January 1, 2026. Funds already allocated would be redirected exclusively to the state’s Foundation School Program, and oversight of charitable bingo would shift to the Texas Department of Licensing and Regulation.

Courier Controversy Fuels Debate

A major flashpoint in the scandal involves digital lottery couriers, companies that buy and hold tickets for customers who order them online. Although these services operate legally in some jurisdictions, Texas law prohibits selling tickets over the internet or phone.

In a unanimous February vote, the Texas Senate banned the use of couriers to buy tickets, citing concerns about potential access by minors and violations of lottery law. Former Lottery Commission executive director Ryan Mindell had previously argued the agency lacked the authority to regulate couriers. Nonetheless, he moved to prohibit their activity shortly before reg in April—a decision now being contested in court by Lotto.com.

The Coalition of Texas Lottery Couriers denounced the ban, stating: “Although the agency repeatedly testified that it had no regulatory authority over couriers, in response to political pressure, the TLC chose to abruptly change course and eliminate businesses, jobs, state revenue and a service millions of Texans use to order lottery tickets.”

Billions at Stake for Schools and Veterans

If the lottery is allowed to expire, lawmakers will be forced to identify alternative sources for vital public programs. Since 1997, the Texas Lottery has contributed $34 billion to public education, including $2 billion in 2024 alone. Additionally, scratch ticket games have generated $267 million for veterans’ services, with $27 million allocated just last year.

Rice University political scientist Mark Jones warned that while reforms are likely, a complete shutdown would leave a massive funding void. “The last thing legislators on a conference committee on the budget would want to have to deal with is how to fill a last-minute, biennial hole that’s caused by Texas Lottery revenue disappearing,” he explained.

Still, some lawmakers argue the state’s current financial position makes replacing the funds feasible. “We’re flush with cash and the Texas economy, overall, is in good shape,” said Rep. Matt Shaheen, who s abolishing the lottery. “I’d say we definitely have the capacity to replace the revenue that the lottery provides for education and veterans.”

Leadership Divided, Time Running Out

While Lt. Gov. Dan Patrick has signaled openness to eliminating the lottery, he stopped short of endorsing abolition outright. “If the lottery continues at all, we’re going to change all of it and fix it,” he said, emphasizing the need to restore public trust.

Temporary Executive Director Sergio Rey, who stepped in after Mindell’s resignation, told lawmakers the commission remains committed to lawful and transparent operations. However, Sen. Hall rejected that assurance, saying, “The agency specifically made rule changes that were 180 degrees out from what the law said.”

Two bills—SB 2402 and HB 1505—have been introduced to extend the Lottery Commission’s existence, but neither has advanced out of committee. With the legislative session ending June 2, lawmakers are under increasing pressure to act.

“The Texas Lottery is in trouble,” Jones noted. “You can expect a housecleaning, for sure.”

Source:

Texas Lottery faces an uncertain future. Could this be the end?, dallasnews.com, May 5, 2025.