House Approves Continuation of Lottery Commission

After a near-death experience in the House on Tuesday, the Texas Lottery Commission is still on life support.

The House voted 88-54 Wednesday to continue the agency’s operations, though the majority of House members made clear that they would like to study how to wind down the agency and replace revenue generated by the lottery for schools in future state budgets. The bill now moves to the Senate.

Wednesday's vote came a day after the House caught many lawmakers by surprise by initially rejecting House Bill 2197, which continues the operations of the Texas Lottery Commission and lays out improvements for the agency offered by the Sunset Review Commission. Hours later, the chamber reversed course and tentatively passed the measure following a meeting by the House Republican Caucus in which members discussed how dissolving the agency would lead to a $2.2 billion cut to schools.

“I came away from the experience yesterday with an appreciation for the heartfelt misgivings about the lottery in this body,” said Rep. Rafael Anchia, D-Dallas, the bill's author. Both members who voted against the renewal of the Lottery Commission and some who voted for it “share discomfort with the fact that we are raising money for public education through the lottery," he said.

On Wednesday, the House adopted an amendment by Rep. Mike Villarreal, D-San Antonio, to form a Select Joint Committee with 10 members from the House and Senate to conduct a two-year study on how to replace revenue generated by the lottery for public education. Villarreal said the study would also allow the Legislature to review other concerns brought up by House members, such as money spent on advertising the lottery.

The House was only a couple votes short of adopting an amendment by Rep. John Smithee, R-Amarillo, that would have dissolved the Lottery Commission in four years.

“The lottery is preying on those who are most vulnerable in our society,” said state Rep. Kenneth Sheets, R-Dallas. Sheets offered an amendment to prohibit the Lottery Commission from advertising on the TV, radio or internet and, in effect, only allowing print or billboard advertising. The amendment was tabled after Rep. Larry Gonzales, R-Round Rock, told the body that a study by the McCombs School of Business found that each dollar cut from advertising is accompanied by a $30 decline in sales.

The House also adopted an amendment that would require licensed charitable bingo operations to contribute at least 5 percent of gross revenue to charity.

Rep. Jim Keffer, R-Eastland, emphasized that there are problems with charitable bingo games run by the Lottery Commission. Bexar County, for example, collected $106 million in gross receipts from bingo games in 2011, but contributed only $3.5 million to charity. “That means it was 2 cents on the dollar that went to actual charities,” Keffer told members. 

Since Texas voters approved the creation of a state lottery in 1991, the Lottery Commission has generated more than $13.6 billion for the Foundation School Fund, $5.3 billion in general revenue, $160 million to support uncompensated health care for the poor and $16 million to assist veterans. The Legislature has never successfully approved a sunset review bill for the Lottery Commission but rather has sustained the agency’s operations with other safety net provisions.