On Monday, September 14, Texans for Fiscal Responsibility testified before the Texas Senate Committee on State Affairs and told them a simple truth: reforming the Texas Lottery doesn’t address the fundamental problems it presents taxpayers and families in Texas. SB 3070 (89R)1 eliminated the Texas Lottery Commission, transferred the games to the Texas Department of Licensing and Regulation, called for an study of the program, and provided for an expedited sunset process for it in 2029. Despite all of these changes, the bill largely left the product itself in place to operate as it has for more than three decades. TFR testified that, though perhaps well intentioned, these reforms cannot fundamentally address some of the inherent problems the Lottery imposes on the relationship between Texans and state government. Changing which agency runs a state-operated predatory gambling scheme does nothing to reconcile citizens to good governance.
TFR’s message to Chairman Bryan Hughes and the members of the committee was that the Lottery is taxation by exploitation. Two hundred fifty years ago, the Founders rejected taxation without representation. Today the state authorizes an addictive product, advertises it with millions of taxpayer dollars, and keeps a share of the losses. The Texas Constitution explicitly forbids gambling of almost every variety, yet lawmakers carved out a loophole for the state to operate a monopoly for themselves three decades ago. That monopoly still stands.
In FY 2025,2 Texans spent about $7.91 billion on lottery tickets. More than $2.5 billion did not come back to the people who bought the tickets, which equate to about $4,800 leaving Texas pockets every single minute. Of those sales, about $688 million were $100 scratch tickets. A Texas worker at the minimum wage of $7.25 an hour would have to work nearly two full days to buy one ticket before their wages vanish in seconds.
Defenders still say the Lottery “funds schools.” In fact, the lottery was sold to Texans in the 1990s as a way to fundamentally transform public school funding. In FY 2025 the Lottery sent about $1.77 billion to the Foundation School Fund.3 That is a sliver of total school funding; on the order of just a few academic days, and it substitutes for general revenue rather than adding new classroom dollars. Billions leave family budgets so the state can claim a small stream for education.
The 2023 Lotto Texas drawing4 showed how far the system can stray from any public-interest claim. An international syndicate with likely criminal ties bought nearly every combination for a $95 million jackpot. More than $25 million in tickets poured through just four retailers in the days before the draw. All of this allegedly made possible by the direct and coordinated efforts of people inside the Lottery Commission. The winning ticket was paid as a $57.8 million cash prize to an entity called Rook TX, LLC. The scandal forced scrutiny of bulk buying, courier sales, and the then-commission’s oversight. SB 3070 later banned online and courier sales and capped transactions at 100 tickets. TDLR Executive Director Courtney Arbour told the committee those limits make the 2023 scheme “no longer even feasible.”5
But limits on how tickets are sold do not answer whether the state should be selling them at all.
Gambling disorder is the only behavioral addiction the American Psychiatric Association placed in the same DSM-5 chapter as alcohol and drug addiction.6 After years of research, psychiatrists concluded that compulsive gambling shares the core features of substance use disorders: craving, tolerance, failed attempts to quit, and continued use despite damage to family, work, and finances.7 The high does not come from a chemical poured into the bloodstream. It comes from uncertainty, near-misses, and the chase. Scratch-off tickets are built for that.8 Instant results and “near-wins” pull the next purchase the way a slot machine does. That is the product the State of Texas markets, advertises, and profits from. A government charged with the general welfare and the good of the people cannot also be the supplier of these destructive products.
The conflict is built in: the state profits when Texans lose.
That is why TFR launched the Texas Anti-Predatory Gambling Alliance and why the 90th Legislature should not spend another session rearranging the Lottery. It does not need another study, another sunset date, or another department. It needs to end the state’s system of predatory gambling.
People are more important than money. The Texas Lottery cannot be reformed. It should be abolished.
You can watch our testimony in committee HERE.9
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- https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=SB3070 ↩︎
- https://www.texaslottery.com/export/sites/lottery/Documents/news_releases/2025/10-27-25_FY_2025_Sales_x_Revenue_Recap_x_News_Release.pdf ↩︎
- https://www.texaslottery.com/export/sites/lottery/Documents/news_releases/2025/10-27-25_FY_2025_Sales_x_Revenue_Recap_x_News_Release.pdf ↩︎
- https://www.houstonchronicle.com/news/investigations/article/texas-lotto-executive-evidence-doubts-20191664.php ↩︎
- https://texasscorecard.com/state/senate-panel-told-lottery-reforms-working-but-accountability-concerns-remain/ ↩︎
- https://www.scientificamerican.com/article/how-the-brain-gets-addicted-to-gambling/ ↩︎
- https://www.sciencedaily.com/releases/2017/01/170103101751.htm ↩︎
- https://www.addictionhelp.com/gambling/lottery-addiction/ ↩︎
- https://www.youtube.com/watch?v=MpycN0kebGI ↩︎
