Texas Lottery Commission

See online finding aid for agency history.

The Texas Lottery Commission was created in 1993 (House Bill 1587, 73rd Texas Legislature, Regular Session). Its primary purpose is to administer the Texas Lottery, which had been authorized by a constitutional amendment approved by the voters in November 1991 (to generate revenue for the State of Texas), and which had been administered by the Office of the Comptroller of Public Accounts, 1991-1993 (House Joint Resolution 8, 72nd Texas Legislature, 1st Called Session). The new commission also received responsibility for administering the Texas Bingo Enabling Act, transferred from the Texas Alcoholic Beverage Commission effective April 1994. The commission's executive director is required to exercise strict control over all lottery games conducted in Texas, to ensure integrity, security, honesty, and fairness. The commission licenses lottery ticket sales agents, and in so doing conducts investigations into the criminal history of potential licensees (using records from the Texas Department of Public Safety, the Federal Bureau of Investigation, the Internal Revenue Service, and other law enforcement agencies). Any funds collected above the lottery's operating expenses (i.e., less 10% used for lottery administration, plus at least 5% as commissions to ticket retailers, plus payment of prizes) are considered revenue and are transferred to the unobligated portion of the state's General Revenue Fund. No political subdivision of the state may impose sales taxes or ad valorem taxes on lottery tickets or on prize payments; however, the following may be deducted from the prize: money owed in delinquent taxes, other money owed to the comptroller or the Alcoholic Beverage Commission, money owed in delinquent child support payments, or money owed in default on a guaranteed student loan.

The Lottery Commission has six major administrative areas: Charitable Bingo Operations, Financial Administration, Information Systems, Lottery Operations, Marketing, and Security. The Charitable Bingo and Security offices are headquartered in Austin and have regional offices in Dallas, El Paso, Houston, Odessa, and San Antonio. The Charitable Bingo Operations division licenses and regulates charities authorized to conduct charitable bingo games, those who manufacture or sell bingo equipment, and those who lease facilities where charitable bingo is played. The commission collects a 3% bingo rental tax and a 5% fee on bingo prizes, credited to the General Revenue Fund.

The Texas Lottery Commission consists of three members, appointed by the governor with the advice and consent of the senate for overlapping six-year terms. One member must have experience in the bingo industry. The governor names the chair. The laws governing lottery and bingo activities contain extensive conflict-of-interest provisions that apply to commission members and employees as well as to game operators and sales agents.

(Sources include: Guide to Texas State Agencies, 11th edition (2001); the agency web site ( http://www.txlottery.org/export/sites/default/About_Us/ ), accessed April 2009; and the enabling legislation, 1993.)