Ruling Allows Second-Chance Online Lottery to Continue

Those who bought losing scratch-off tickets for the Texas lottery should still be able to enter online for a follow-up contest, according to an opinion issued by the Attorney General’s office this week.

The Texas Lottery Commission offers the second-chance "promotional" drawing, nicknamed the “Luck Zone,” which allows players who to enter their scratch-off ticket numbers online for another chance at a prize. But in January, state Sen. Jane Nelson, R-Flower Mound, asked Attorney General Greg Abbott to determine whether these online submissions were legal, as well as whether the commission could conduct “any game of chance via the internet” at all.

In the opinion, which was written on Wednesday and distributed on Thursday, the attorney general wrote that “it is likely" that the Lottery Commission has the authority to use the internet to receive entries for its second-chance drawings. The issue has only recently surfaced because prior to last fall, the second-chance entries arrived by mail; the commission decided to make it possible for ticket-holders to enter via the internet. Thirty-four other states receive entries for promotional drawings via the internet, according to Kelly Cripe, a spokeswoman for the Texas Lottery Commission. (The drawings themselves still are not conducted online; rather the entries are transferred to a separate computer that is not connected to the internet, where the second-chance drawing is conducted, according to Cripe.)

Because powers granted to the commission are “sufficiently broad,” the opinion explains that a court could decide that the commission has the authority to administer the second-chance prizes. As for using the internet to collect the Luck Zone entries, the opinion concluded that federal statutes currently in place — namely, the Unlawful Internet Gambling Enforcement Act and the Interstate Wire Act — do not contradict the practice. On the state level, the Legislature has not banned such online contests, though it “could enact such a statutory prohibition,” Abbott wrote.

In light of the ruling, Nelson said that the Legislature should study the use of the internet by the Texas Lottery Commission.

"With internet gaming becoming more prevalent across the country, we needed legal guidance on what type of lottery games are currently allowable in Texas over the Internet,” Nelson wrote Thursday in an email. “This ruling indicates that the Lottery Commission’s authority to conduct games over the internet is fairly broad, so the Legislature will need to consider whether that is appropriate moving forward.”

Cripe said the Luck Zone drawings, with online entries, will continue, but that other lottery functions will remain offline.

"We believe that the sale of Texas Lottery tickets over the internet and conducting drawings via the internet are policy decisions best determined by the Legislature and in the absence of express authority, the Texas Lottery Commission has no intention of pursuing internet lottery sales or conducting drawings via the internet," she wrote in an email.