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Sunset review, courier controversy and bingo IT top Texas Lottery Commission session testimony
Summary
Sunset staff pressed the Texas Lottery Commission over past passive oversight and a prior executive director’s handling of unregulated courier services; the Lottery responded with rule changes and a policy statement declaring unregulated couriers not legal under Texas law and said it will seek a board rule to restrict retailers’ engagement with couriers.
The House subcommittee reviewed the Legislative Budget Board’s recommendations for the Texas Lottery Commission and heard a separate presentation from the Sunset Advisory Commission summarizing a strategic fiscal review and management findings.
LBB recommended funding the Lottery Commission at $673 million for 2026–27, a modest increase in appropriations driven by baseline adjustments. The LBB memo highlighted that operator contract rates remain uncertain because the current contract expires in fiscal 2026 and recommended rider language to allow billing rate updates if contract terms are not finalized prior to biennial implementation.
Sunset Commission staff described management concerns discovered during a recent review and an unusual follow‑up probe into the prior executive director’s handling of lottery ticket couriers—mobile applications and informal middlemen that procure lottery tickets on behalf of customers. Sunset staff told the subcommittee the lottery commission had often “played a passive role” on key policy matters and that the prior executive director had been comfortable operating in gray areas, which created risk and public trust problems.
In response, Lottery Executive Director Ryan Mandel told the committee the agency has already implemented new board subcommittees, revised rules, strengthened youth purchase prevention measures, and executed a memorandum of understanding with the Texas Alcoholic Beverage Commission to share information on retailer violations. Mandel also announced a policy statement and said the agency would propose a rule to the board prohibiting lotteries retailers’ engagement with unregulated courier services; the department said couriers that operate outside the licensing system are not legal under Texas law and the commission is taking steps to stop that activity.
The hearing included extensive discussion about the charitable bingo program, which is regulated by the Lottery Commission. Bingo leaders testified in support of the Commission’s requests for IT upgrades and modest funding to retain trained staff. Charitable bingo operators and advocates told the committee a 10‑year‑old IT platform has reached end‑of‑life and increasingly hampers licensing, reporting and compliance work; the commission’s exception items seek funding for replacement systems and to address turnover in the bingo division.
The committee did not take final budget action; members asked the commission for follow‑up on courier enforcement, operator contract assumptions and the timing and scope of IT upgrades for bingo regulation.
