LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION May 12, 2025 TO: Honorable Bryan Hughes, Chair, Senate Committee on State Affairs FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: SB3070 by Hall (Relating to the abolishment of the Texas Lottery Commission and the transfer of the administration of the state lottery and the licensing and regulation of charitable bingo to the Texas Commission of Licensing and Regulation; creating a criminal offense.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for SB3070, As Introduced: a negative impact of ($52,460,000) through the biennium ending August 31, 2027.Additionally, the bill would have a positive, but indeterminate fiscal impact to the state due to increases in court cost revenue associated with an increase in the number of misdemeanors from new offenses created by the bill; however, the number of additional misdemeanors cannot be estimated. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill. General Revenue-Related Funds, Five- Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact toGeneral Revenue Related Funds2026($26,230,000)2027($26,230,000)2028($26,240,000)2029($26,240,000)2030($26,250,000)All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromFoundation School Fund193 Probable Revenue Gain/(Loss) fromLottery Acct50252026($26,230,000)($8,540,000)2027($26,230,000)($8,580,000)2028($26,240,000)($8,610,000)2029($26,240,000)($8,640,000)2030($26,250,000)($8,660,000) Fiscal AnalysisThis bill would abolish the Texas Lottery Commission and transfer the administration of the state lottery and licensing and regulation of charitable bingo to the Texas Department of Licensing and Regulation (TDLR). The bill would require the Sunset Advisory Commission to conduct a limited-scope review of the state lottery during the state fiscal biennium ending August 31, 2027. Unless continued, the bill would abolish the state lottery and Chapter 466 of the Government Code. The bill would prohibit a person from purchasing or ordering the purchase of a lottery ticket by telephone, Internet application, or mobile Internet application and would also prohibit a person from being compensated for 1) accepting an order for a lottery ticket from a player; 2) selling a lottery ticket to a player; or 3) arranging to purchase a ticket on behalf of a person playing a lottery game, or for another person to purchase a ticket on behalf of a person playing a lottery game.The bill would limit the number of lottery tickets one individual can purchase to no more than 100 lottery ticket per transaction.The bill would create a new offense when a person, by means of telephone, internet, or mobile internet, either purchases or orders a lottery ticket, which would be punishable as a Class C misdemeanor, or to facilitate for compensation for the order, sale, or purchase of a lottery ticket, which would be punishable as a Class A misdemeanor.This bill would require TDLR to adopt rules with respect to the enforcement of prohibitions on playing or facilitating the playing of a lottery game through an Internet application or mobile Internet application.The bill would create and establish the Lottery Advisory Committee to provide external expertise on the state lottery. TDLR shall appoint the advisory committee members who represent the following interests: 1) the public, 2) licensed sales agents, 3) interest groups with divergent viewpoints on the lottery and lottery operations, and 4) entities associated with or benefitting from the lottery's contributions to the state. The bill would require TDLR to submit an annual report to the Governor and Legislature that includes: 1) a summary of lottery revenue, prize disbursements, and other expenses for the state fiscal year preceding the report; 2) a comprehensive business plan to guide the department's major lottery initiatives; 3) address the trends and issues related to violations of state lawns under the department's lottery and bingo jurisdiction; 4) preceding calendar year charitable bingo information; and lastly, 5) provide biennial recommendation to the legislature on emerging trends, technological advancements, regulator developments, and market dynamics affecting the lottery and bingo industries. The bill would take effect September 1, 2025.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION
May 12, 2025
TO: Honorable Bryan Hughes, Chair, Senate Committee on State Affairs FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: SB3070 by Hall (Relating to the abolishment of the Texas Lottery Commission and the transfer of the administration of the state lottery and the licensing and regulation of charitable bingo to the Texas Commission of Licensing and Regulation; creating a criminal offense.), As Introduced
TO: Honorable Bryan Hughes, Chair, Senate Committee on State Affairs
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: SB3070 by Hall (Relating to the abolishment of the Texas Lottery Commission and the transfer of the administration of the state lottery and the licensing and regulation of charitable bingo to the Texas Commission of Licensing and Regulation; creating a criminal offense.), As Introduced
Honorable Bryan Hughes, Chair, Senate Committee on State Affairs
Honorable Bryan Hughes, Chair, Senate Committee on State Affairs
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
SB3070 by Hall (Relating to the abolishment of the Texas Lottery Commission and the transfer of the administration of the state lottery and the licensing and regulation of charitable bingo to the Texas Commission of Licensing and Regulation; creating a criminal offense.), As Introduced
SB3070 by Hall (Relating to the abolishment of the Texas Lottery Commission and the transfer of the administration of the state lottery and the licensing and regulation of charitable bingo to the Texas Commission of Licensing and Regulation; creating a criminal offense.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for SB3070, As Introduced: a negative impact of ($52,460,000) through the biennium ending August 31, 2027.Additionally, the bill would have a positive, but indeterminate fiscal impact to the state due to increases in court cost revenue associated with an increase in the number of misdemeanors from new offenses created by the bill; however, the number of additional misdemeanors cannot be estimated. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Estimated Two-year Net Impact to General Revenue Related Funds for SB3070, As Introduced: a negative impact of ($52,460,000) through the biennium ending August 31, 2027.Additionally, the bill would have a positive, but indeterminate fiscal impact to the state due to increases in court cost revenue associated with an increase in the number of misdemeanors from new offenses created by the bill; however, the number of additional misdemeanors cannot be estimated. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five- Year Impact:
2026 ($26,230,000)
2027 ($26,230,000)
2028 ($26,240,000)
2029 ($26,240,000)
2030 ($26,250,000)
All Funds, Five-Year Impact:
2026 ($26,230,000) ($8,540,000)
2027 ($26,230,000) ($8,580,000)
2028 ($26,240,000) ($8,610,000)
2029 ($26,240,000) ($8,640,000)
2030 ($26,250,000) ($8,660,000)
Fiscal Analysis
This bill would abolish the Texas Lottery Commission and transfer the administration of the state lottery and licensing and regulation of charitable bingo to the Texas Department of Licensing and Regulation (TDLR). The bill would require the Sunset Advisory Commission to conduct a limited-scope review of the state lottery during the state fiscal biennium ending August 31, 2027. Unless continued, the bill would abolish the state lottery and Chapter 466 of the Government Code. The bill would prohibit a person from purchasing or ordering the purchase of a lottery ticket by telephone, Internet application, or mobile Internet application and would also prohibit a person from being compensated for 1) accepting an order for a lottery ticket from a player; 2) selling a lottery ticket to a player; or 3) arranging to purchase a ticket on behalf of a person playing a lottery game, or for another person to purchase a ticket on behalf of a person playing a lottery game.The bill would limit the number of lottery tickets one individual can purchase to no more than 100 lottery ticket per transaction.The bill would create a new offense when a person, by means of telephone, internet, or mobile internet, either purchases or orders a lottery ticket, which would be punishable as a Class C misdemeanor, or to facilitate for compensation for the order, sale, or purchase of a lottery ticket, which would be punishable as a Class A misdemeanor.This bill would require TDLR to adopt rules with respect to the enforcement of prohibitions on playing or facilitating the playing of a lottery game through an Internet application or mobile Internet application.The bill would create and establish the Lottery Advisory Committee to provide external expertise on the state lottery. TDLR shall appoint the advisory committee members who represent the following interests: 1) the public, 2) licensed sales agents, 3) interest groups with divergent viewpoints on the lottery and lottery operations, and 4) entities associated with or benefitting from the lottery's contributions to the state. The bill would require TDLR to submit an annual report to the Governor and Legislature that includes: 1) a summary of lottery revenue, prize disbursements, and other expenses for the state fiscal year preceding the report; 2) a comprehensive business plan to guide the department's major lottery initiatives; 3) address the trends and issues related to violations of state lawns under the department's lottery and bingo jurisdiction; 4) preceding calendar year charitable bingo information; and lastly, 5) provide biennial recommendation to the legislature on emerging trends, technological advancements, regulator developments, and market dynamics affecting the lottery and bingo industries. The bill would take effect September 1, 2025.
Methodology
This analysis assumes that the merger of the Texas Lottery Commission into the Texas Department of Licensing and Regulation (TDLR) would be cost neutral to the state as the funds appropriated to the Lottery Commission in the 2026-27 biennium would be transferred to TDLR for the operations of the state lottery and charitable bingo. This estimate is based on the analysis of the Comptroller of Public Accounts using data provided by the Texas Lottery Commission (TLC). In fiscal year 2024, sales from retailers that are known to sell to courier companies (as reported by the TLC) totaled $229.4 million, about 2.7 percent of lottery gross sales. The state share of the overall lottery after accounting for prizes paid and administration is approximately 24 percent of the total ticket sales. Bases on these figures, this estimate assumes that the share of the courier sales for lottery tickets in fiscal year 2024 would be approximately $55.1 million.This estimate assumes that while most lottery ticket sales would be expected to continue as players would purchase tickets through a brick-and-mortar retailer, an estimated 2.7 percent of lottery sales that are currently associated with courier activity would cease by September 1, 2025. This estimated revenue loss would reduce allocations to General Revenue-Dedicated State Lottery Account No. 5025 in amounts as shown in the tables above. Additionally, under current law, Lottery Proceeds are a method of finance for the Foundation School Program (FSP). The CPA assumes the bill would decrease future Lottery Proceeds revenues for the FSP in the 2026-27 biennium, which would increase the amount of unrestricted GR required to fund the FSP by the same amount as shown in the tables above.Additionally, the bill would have a positive, but indeterminate fiscal impact to the state due to increases in court cost revenue associated with an increase in the number of misdemeanors from new offenses created by the bill; however, the number of additional misdemeanors cannot be estimated.This estimate assumes creating a new criminal offense may result in an increase in demands upon state correctional resources due to a possible increase in the number of individuals placed under supervision in the community. The impact on state correctional populations, on the demand for state correctional resources, and on court cost revenue increases resulting from an increase in misdemeanor convictions cannot be determined due to a lack of data to estimate the prevalence of conduct outlined in the bill's provisions that would be subject to criminal penalties.
Additionally, the bill would have a positive, but indeterminate fiscal impact to the state due to increases in court cost revenue associated with an increase in the number of misdemeanors from new offenses created by the bill; however, the number of additional misdemeanors cannot be estimated.This estimate assumes creating a new criminal offense may result in an increase in demands upon state correctional resources due to a possible increase in the number of individuals placed under supervision in the community. The impact on state correctional populations, on the demand for state correctional resources, and on court cost revenue increases resulting from an increase in misdemeanor convictions cannot be determined due to a lack of data to estimate the prevalence of conduct outlined in the bill's provisions that would be subject to criminal penalties.
Local Government Impact
The fiscal implications of the bill cannot be determined because the impact on local correctional populations or on the demand for local correction resources cannot be determined.
Source Agencies: b > td > 116 Sunset Advisory Commission, 212 Office of Court Administration, Texas Judicial Council, 304 Comptroller of Public Accounts, 362 Texas Lottery Commission, 452 Department of Licensing and Regulation
116 Sunset Advisory Commission, 212 Office of Court Administration, Texas Judicial Council, 304 Comptroller of Public Accounts, 362 Texas Lottery Commission, 452 Department of Licensing and Regulation
LBB Staff: b > td > JMc, WP, GDZ, JBel, TUf, CMA
JMc, WP, GDZ, JBel, TUf, CMA