New Texas Lottery Regulator Increasing Budget, Staff To Handle Added Responsibilities

The Texas Lottery Commission (TLC) is no more, but lottery play in Texas continues on with the Texas Department of Licensing and Regulation (TDLR) now overseeing it.

That means a greatly expanded budget and a larger staff for the TDLR to handle its massive influx of new work.

Tuesday, at the first public meeting of the Texas Commission of Licensing and Regulation (the seven-member governing board and policy-making body for the TDLR), commission members addressed the necessary changes.

During a three-hour-plus session that mostly focused on duties unrelated to the lottery, Glenn Neal, the TDLR’s recently hired lottery transition director, outlined that the TDLR would need to increase its staff by 50% and that its expected operating budget for the two-year period beginning Sept. 1 would expand by a factor of nearly 6x in order to handle lottery oversight.

“I thought I’d start with a little sense of scale as far as the transition goes,” Neal said in his opening remarks. “If TDLR were to stand alone as an agency for the ’26-’27 biennium, it would be a $140 million agency with 615 FTEs [full-time employees]. With the transfer of … lottery commission to TDLR, we’ll be an $800 million agency with 938 FTEs.”

The lottery produces about $10 billion annually for the Texas state treasury.

Some background, one big pay bump

The oversight change in Texas stems from a pair of controversial Lotto Texas wins, one in 2023 and one in February, which ultimately led to Gov. Greg Abbott signing into law state Sen. Bob Hall’s bill to abolish the TLC.

An investigation into the more recent win remains in progress five months later, and the woman who holds that $83.5 million jackpot winning ticket, Kristen Moriarty, still has not been paid. She filed a lawsuit in May against the TLC.

The 2023 jackpot, worth $95 million and claimed by a group called Rook TX that reportedly purchased every possible number combination because it was a positive-expected-value play at that jackpot amount, is generally perceived as the greater controversy because the TLC allegedly helped facilitate the scheme.

The two investigations combined to inspire SB 3070, which disbanded the TLC but kept lottery play (and the money it produces) flowing through new TDLR oversight.

Early in Tuesday’s meeting, commissioners voted to increase TDLR Executive Director Courtney Arbour’s annual salary by 23.6%, from $190,000 to $235,000, to reflect her added workload and responsibility with the lottery now under her purview. That change will go into effect Sept. 1.

Arbour and Neal updated commissioners on the state of the transition, saying most of the changeover will be completed by the same date.

In the wake of the two jackpot investigations, lottery courier companies, which take online orders and then physically purchase tickets on customers’ behalf, are no longer permitted to operate in Texas. On Tuesday, Arbour referred to courier operations as “flawed practices” and emphasized that one of the TDLR’s new duties is to ensure third-party lottery sales are not happening in the state.