State Sen. Bob Hall calls for end of Texas Lottery amid scandal

AUSTIN (Nexstar) — State Sen. Bob Hall, R-Rockwall, was one of the first lawmakers to call for an investigation into the Texas Lottery Commission over their alleged role in a controversial 2023 Lotto Texas drawing. Months later, he laid out the case for abolishing the commission altogether.

"I apologize for the length of this," Hall said to the Senate State Affairs committee as he went into detail about why the lottery should be abolished. "It's very important that you know some of the specifics of the laws where it appears they maybe continuing to be broken by a criminal organization deeply embedded within our government."

Hall filed Senate Bill 1988, which would repeal the Lottery Act, shifting the Lottery Commission's remaining funds to the Foundation School Program and leaving the state's charitable bingo operations in the hands of the Texas Department of Licensing and Regulation (TDLR).

Inaction is action

While SB 1988 was left pending in committee, the Texas Lottery isn't out of the clear. For starters, the committee could come back and send it to the Senate floor, although with just 10 days until the Texas House bill deadline, it's unlikely SB 1988 would move fast enough to get passed by the end of the legislative session.

However, the Texas Lottery Commission (TLC) is also up for a scheduled Sunset Review, meaning the legislature has to pass a bill to extend the agency. Neither State Sen. Mayes Middleton's, R-Galveston, Senate Bill 2402 or State Rep. Lacey Hull's, R-Houston, House Bill 1505 have been heard in a committee hearing. Additionally, the Texas House struck all funding for TLC in their proposed version of the Texas budget, and asked their conferees to fight for defunding the TLC as they negotiate the budget with the Texas Senate.

If there's a small sliver of hope for the Texas Lottery, it comes from Lt. Gov. Dan Patrick's comments last Monday.

"Look, folks like to play the lottery. They like their scratch-off ticket games. They know they don't have a big chance of winning, but they like to play and they like to hope," Patrick said. "If we have a lottery game, we need to close down the Lottery Commission and turn it over to [TDLR]."

There's no current proposed bill to move the Texas Lottery to another agency, however the measure could be enacted with an amendment to an existing bill.

During the hearing, Acting Deputy Executive Director of the TLC Sergio Rey advocated for his current staff.

"I can tell you that the remaining 300 employees are honoring the integrity, honesty and fairness of the agency," Rey said. Rey started with the TLC in late 2023 (after the notable Lotto Texas drawing) and took on his role when Executive Director Ryan Mindell resigned last month.

'It would actually make a Sales Tax blush'

One of the common arguments in favor of state lotteries is the money provided to the public sector. In Texas, the majority of lottery profits go to schools or veterans. However, according to an analysis presented by Rob Kohler with the Christian Life Commission of the Baptist General Convention of Texas, the money is coming from the people who can least afford to lose it.

"When [Texas] started the lottery back in [the] 90s, the discussion was around -- to fund education, whether there was going to be a sales tax or go to a lottery," Kohler said. "It was thought -- at the time --- a sales tax was going to be too regressive, and that a voluntary non-regressive tax would make more sense and fund education... the idea that it was a non-regressive enterprise -- I think when you see this data -- it would make a sales tax blush."

Kohler argued the areas in Texas with the lowest wealth spent the most on the lottery. He said House District 119 in the San Antonio area sold the most tickets ($102.9 million) while having a per capita income of $26,414. To the contrary, House District 108 in the Dallas area has the highest per capita income of $104,418. They sold less than a quarter of the lottery tickets as HD 119, only selling $24.3 million worth of tickets.

"[Ticket sales are] coming from communities and areas in our state that we pour money into trying to help folks -- and I represent folks that believe in that -- but at the same time, it makes no sense putting $70 million in a district in the name of helping them and then tricking them out of $70 million the same year."