(Texas Scorecard) – Although Texas lawmakers sent a measure abolishing the Texas Lottery Commission to Gov. Greg Abbott, they stopped short of ending the gambling enterprise entirely.
A potential reason? The Texas Lottery is a very lucrative business for its vendors.
In fiscal year 2024, the lottery generated roughly $8.39 billion in total sales.
As of March 31 of this year, the state has received $949 million from the lottery. Roughly $887.5 million of the $949 million was dedicated to the Foundation School Fund, which supports the state’s school system.
While it initially appears substantial, the amount going to the FSF is actually 13.8 percent lower compared to the same period in the previous fiscal year.
So, where are all those sales coming from? And where is the money going?
Rob Kohler, a consultant with the Texas Baptists’ Christian Life Commission, provided answers to those questions when testifying before the Senate Committee on State Affairs last month.
“When you look at where the sales are coming from, [they’re in] areas where per capita income is low, compared to … wealthy districts,” explained Kohler. “It’s coming from the folks who can least afford it.”
Kohler also pointed out during the hearing that only about 24.5 cents of every dollar have gone to education, with around 60 cents going towards paying prizes, and the rest going to administrative costs and the state.
The lottery’s operator, International Game Technology PLC, better known as IGT, has benefited significantly from the revenue generated.
Texas was IGT’s third-largest market in 2024. Only the entire countries of Canada and Italy had larger market shares for IGT, and the next closest U.S. state was New Jersey, which has had expansive casino gambling since 1976.
IGT’s contract to continue running the Texas Lottery was last renewed in 2010, with commissioners agreeing to one of the largest contracts ever awarded in the state up to that point, worth $1 billion.
Later, in 2016, IGT signed a six-year contract extension with the Texas Lottery Commission to continue providing lottery operations and services through August 31, 2026.
However, IGT’s connection to the lottery appears to extend beyond being its vendor.
State Rep. Charlie Geren (R–Fort Worth) admitted while laying out his transformative amendment to Senate Bill 3070—the measure abolishing the Texas Lottery Commission—that it was crafted alongside the lottery’s “stakeholders.”
Geren’s amendment, which was eventually approved, protects IGT’s contract with the state and strips a provision giving the lieutenant governor, speaker of the House, attorney general, and governor the ability to act as inspectors of lottery operations.
SB 3070 also bans ticket resellers, also known as couriers, who can purchase lottery tickets on behalf of customers through apps.
Sales produced by retailers affiliated with ticket reseller services amounted to around 10 percent of the lottery’s revenue in 2023, generating more than $223 million.
The Texas Lottery is already working to comply with SB 3070, even though it has not yet been signed into law by Gov. Greg Abbott. The measure’s effective date is September 1, 2025.
After the law is implemented and the Department of Licensing and Regulation assumes control of the Texas Lottery, the agency must conduct an independent review of existing lottery contracts to determine whether to renew, amend, or terminate them.
However, IGT is exempt from that review, and its contract was extended an additional two years, until August 31, 2028.
To read more of Texas Scorecard‘s ongoing coverage of the lottery, click here.