The Texas Department of Licensing and Regulation is preparing to absorb the state’s lottery and charitable-bingo programs and will expand sharply in staff and budget, agency leaders told the commission.

Transition scale and timeline: Transition director Glenn Neil told commissioners that absorbing the Texas Lottery Commission (TLC) will increase TDLR from roughly a $140 million agency with about 615 FTEs to an approximately $800 million agency with about 1, 148 FTEs (a roughly 50% increase in FTE and a multiple increase in budget). Staff said the September 1 cutover is the operational milestone for payroll and personnel transfers; systems and full IT integration will extend beyond that date.

Work groups and priorities: Neil described four working groups focusing on human resources, information technology, finance and procurements/contracts. HR priorities include configuring the state payroll and HR system (CAPS) and onboarding staff so payroll runs on Sept. 1. IT priorities include establishing secure network connections and interim Microsoft solutions for staff access before full integration. Finance priorities include ensuring payroll and budget coding elements are in place; full accounting-system migration from TLC’s proprietary MIPS is unlikely by Sept. 1 and staff will use interim visibility workarounds.

Contracts and procurement: The transition team is reviewing existing TLC contracts to decide which to extend, renew or reprocure. Neil said TDLR plans a one-time extension of the lottery operations contract (held by IGT) through the 2026 fiscal year to provide runway to reprocure a multi-year contract for the 2029 fiscal start.

Budget outcome: Deputy executive director Myers presented the agency’s proposed biennial operating budget for fiscal 2026–27. The proposed baseline with legislative actions produced a starting biennial budget of about $809,560,228 and 938.2 FTEs in the materials presented to commissioners. Myers said about 80% of TDLR’s exceptional-item requests were funded during the legislative session, including funds for workforce recruitment and retention, cybersecurity, the Financial Crimes Intelligence Center, emergency stop-order authority and other items; the lottery transfer contributed substantially to budget growth.

Why it matters: The transfer will significantly enlarge TDLR’s mission and require coordination on payroll, IT, contracts and procurement to avoid service interruption for lottery and charitable-bingo operations.

Process and oversight: TDLR said it has included Legislative Budget Board and governor’s office staff in transition work-group meetings, and the agency will provide regular status briefings. Commissioners were told that staff will present more detailed deliverable tracking after a project manager is hired.

Ending: Commissioners asked for regular updates; staff said more quantitative deliverables and status reporting will be provided at future meetings.