State

Texas Lottery Reaches $3.7 Billion in Revenue Fiscal Year-To-Date

Though state lawmakers as a whole seem ambivalent about the prospect of expanding gambling in Texas, the state continues to employ gambling as a tool to bring in extra revenue.

Years after the Texas House came within a porcupine’s quill of abolishing the Texas Lottery, it is breaking revenue records, seemingly unfazed by the economic downturn accompanying the coronavirus pandemic.

In Fiscal Year 2020, the Texas Lottery Commission (TLC) reported more earnings than ever — $6.7 billion. The commission also reports $3.7 billion in revenue so far in Fiscal Year 2021, compared to about $3 billion at the same point in the past two fiscal years.

Scratch tickets account for $2.9 billion of that $3.7 billion year-to-date figure, while other high-dollar categories include $196 million in income for “MegaMillions,” $158 million for “Powerball,” and $128 million for “Pick 3.”

In a statement to The Texan, Texas Lottery Executive Director Gary Grief underscored that nearly all 20,000 locations where lottery tickets are sold were deemed “essential” during last year’s lockdowns and throughout the pandemic. 

Consequently, while lottery sales dropped during the original shutdown in March 2020, sales bounced back as soon as April of last year.

“The pent-up demand for the scratch ticket produced based on the slowdown in March 2020, the closing of all casinos in surrounding states, the lack of availability of other entertainment options, along with the prior and expected growth trends the agency was seeing for scratch tickets of approximately 7-10 percent prior to the arrival of the Covid-19 pandemic,” Grief said. 

“[A]ll these factors have contributed to a resurgence in scratch ticket sales since late April 2020, culminating in a weekly scratch ticket sales record for the week ending Feb. 6, 2021.”

Grief also partially ascribed recent increased scratch-off ticket and draw game sales to “large, dueling jackpots” associated with MegaMillions and Powerball.

“All these sales provide critically needed revenue for public schools and veterans’ services in Texas,” Grief added. “[T]he agency continues to do all it can to ensure its retailers are provided with the necessary support and scratch ticket inventory to continue this trend.”

Since its establishment in 1992, the Texas Lottery has cashed in $32 billion in revenue and paid out $68 billion in winnings to players, according to press statements.

The late Gov. Ann Richards, a Democrat, touted the lottery as a prudent method to raise education funds, but lottery proceeds did not directly go to education until years after Texas voters approved the lottery in a 1992 referendum.

The law requires that lottery proceeds benefit public education and services to veterans. The TLC says that $26.4 billion has flowed from them to the Foundation School Fund since 1997, and $151 million has gone to benefit veterans since 2009.

By a vote of 81 to 65, the Texas House in 2013 opted to effectively repeal the lottery, but later the same day reversed its decision.

Oftentimes, the Texas House will “stand at ease” and the cameras will cut to a view of the whole chamber. During these breaks, members are known to discuss issues among themselves and finalize agreements or deals off the record before returning to formal deliberations. 

Shortly before the chamber chose to reconsider the lottery reauthorization, it had been standing at ease for about half an hour.

The Texas House then voted to reconsider its decision and ultimately continued the Texas Lottery by a vote of 92 to 53. Many representatives were concerned about the blow to the state’s fiscal situation.

Opponents of the state lottery generally characterize it as a regressive tax of sorts.

Before the House voted to repeal the lottery, Rep. Scott Sanford (R-McKinney) asserted that the state’s lottery is immoral, calling it a “tax on poor people.”

“According to The University of Texas at Arlington, the median amount of money spent each year on the lottery by someone with less than a high school education was $600, while a person with a graduate school education spent $156,” Sanford contended in written remarks recorded in the House journal.

“In other words, someone who hasn’t graduated high school will spend four times more playing the lottery than a person with a graduate education. Other recent reports show that playing the lottery generally decreases as education and income increases.”

The TLC encourages the public to “play responsibly” and provides on its website resources for those who battle compulsive gambling.

UPDATE: The piece has been updated with historical information about Gov. Ann Richards and lottery proceeds along with a statement from a Texas Lottery representative.

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