Texas shuts down Lottery Commission, transferring duties to licensing department

The Texas Legislature has officially shut down the Texas Lottery Commission and handed over its responsibilities for the state lottery and charitable bingo to the Texas Department of Licensing and Regulation (TDLR). The change comes straight from recent findings by the Sunset Commission and legislation passed during the latest session.

Lawmakers made the decision after failing to pass the usual renewal bills for the commission, House Bill 1505 and Senate Bill 2402. Instead, Governor Greg Abbott and legislators moved forward with Senate Bill 3070, which does away with the commission entirely and moves all of its main duties to TDLR.

Yesterday, the Texas Senate abolished the Texas Lottery Commission, moving the state lottery to @TDLRlicense for a 2-year trial period with new strict guidelines and laws. #txlege pic.twitter.com/VA94hBI6Ui

— Office of the Lieutenant Governor Dan Patrick (@LtGovTX) May 16, 2025

Texas Lottery Commission shut down after jackpot win that broke the system

According to the official report, “The Legislature did not pass the Texas Lottery Commission’s (TLC) Sunset bill. Instead, the Legislature abolished the agency and transferred the functions of the state lottery and bingo programs to the Texas Department of Licensing and Regulation (TDLR) through SB 3070.”

Abbott signs the Texas Lottery Commission overhaul. Not a huge surpised that he signed, just that it took so long. #txlege https://t.co/DeQbJ14SCa

— John C. Moritz (@JohnnieMo) June 23, 2025

SB 3070 brings over many of the proposed reforms that were originally meant to improve TLC, but any internal management actions recommended by the Sunset Commission won’t apply anymore, since the agency no longer exists.

Some of the notable changes include new rules for how charitable bingo is overseen. The Charitable Bingo Operations Division now has to factor in an organization’s compliance history when deciding which ones to audit. They’ll also work with a newly created Bingo Advisory Committee to set clear standards for inspections.

“The agency’s governing body is not adequately engaged and lacks mechanisms to ensure the long-term success of the state lottery and charitable bingo.”

The law also makes some pretty specific changes to how lottery tickets can be sold. From now on, people can only buy up to 100 tickets in one transaction. And any kind of lottery ticket sales through phone or internet services, including apps, are completely banned. If someone violates these rules, they could face a Class A misdemeanor, which means up to a year in jail and a fine of up to $4,000.

In fact, the bill says a person can’t order a ticket online, and no one is allowed to take that order or buy a ticket on someone else’s behalf. Lottery tickets can now only be bought in person at a physical retailer, and only during that store’s regular business hours. Retailers are also required to check the buyer’s age at the time of purchase, using verification methods approved by the state.

In 2022, investigators found that the agency had sold over half a million tickets to people outside of the state, which isn’t allowed. Then in 2023, a group of international players figured out how to game the system and ended up winning a multi-million dollar jackpot. The chief subsequently resigned in April 2025.

Licensing and Regulation department to take over

To make sure everything runs properly under this new system, the law says “the State Auditor [must] conduct an annual comprehensive audit of TDLR’s lottery program.” On top of that, all contracts that the Texas Lottery Commission had in place will be reviewed by December 1, 2025, to decide whether they should “renew, amend, or terminate the contract.”

Even though the TLC is gone, lawmakers haven’t ruled out further changes down the line. The bill says there will be a “limited-scope review of the state lottery during the 2028–29 biennium,” and it sets a potential end date for the lottery program itself on September 1, 2029, unless the Legislature chooses to keep it going.

That future review will look at “whether TDLR remains the appropriate agency to administer the state lottery program” and whether it has the tools it needs to do the job right.

The Sunset Commission’s findings made it clear that change was necessary. One of their key conclusions was that the agency “is not adequately engaged and lacks mechanisms to ensure the long-term success of the state lottery and charitable bingo.” Lawmakers ultimately rejected the idea of continuing the commission for another 12 years, marking the end of its long-running role in state gaming oversight.

The full handoff of all the commission’s records, contracts, equipment, and every other part of its operations to the TDLR is set to take place on September 1, 2025. That’s when the agency will officially take the reins and begin running both the state lottery and charitable bingo programs.

Featured image: Canva

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