Establishment of Texas Lottery

House Bill 54, created a lottery in Texas, which was signed by the Governor in a special session of the 72nd Legislature. The lottery Act required voter approval before taking effect. (2) 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, and which had been administered by the Office of the Comptroller of Public Accounts, 1991-1993. 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). (3) 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 excess 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's 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.

(1) Since 1997, proceeds from lottery sales have been dedicated to the Foundation School Fund. Unclaimed lottery prize funds revert to the state to