State Agencies Undergo Sunset Review Process – Texas Lottery Commission
Last week, I began outlining Texas’ sunset review process. As a reminder, in order to identify and eliminate government waste, duplication and general inefficiencies in state agencies, the Texas Legislature established the Texas Sunset Advisory Commission (Commission) in 1977. The sunset review process is designed to review each of these agencies every twelve years. This review is done by taking up a certain number of the state agencies each session when the Texas Legislature convenes.
The Texas Lottery Commission is one of the state agencies currently under the sunset review process. In 1991 the Texas Legislature passed House Bill 54 during a special session of the Legislature and was signed by the Governor on August 26. House Bill 54 created a lottery in the State of Texas under the control of the Comptroller’s office. In order for the lottery to be fully authorized Texas voters had to also approve it, which they did on November 5, 1991 by a two-to-one margin.
Less than one year later on May 29, 1992 at 6 a.m., the first scratch off lottery ticket was sold to then Governor Ann Richards. Within the following twenty-four hours, Texans throughout the state bought 23.2 million more tickets, thereby setting a world record for first-day sales. In fact, so many tickets were sold during the first three hours of sales that the start-up cost of the Lottery, plus interest, was recouped. In total during the first week of sales, the Texas Lottery sold 102.4 million tickets thereby setting another world record. In 1993 the Texas Legislature officially created the Texas Lottery Commission composed of three members with staggered six-year terms.
The mission of the Texas Lottery Commission is outlined on their site as being “committed to generating revenue for the State of Texas through the responsible management and sale of entertaining lottery products. The Texas Lottery will incorporate the highest standards of security and integrity, set and achieve challenging goals, provide quality customer service and utilize a TEAM approach.”
Since the first lottery ticket was sold in 1992, the Texas Lottery has generated well over $19 billion in revenue for the State of Texas. Before 1997, the revenue generated by the Texas Lottery was allocated to the State’s General Revenue Fund. However, since 1997 some of the Texas Lottery proceeds have been transferred to the Foundation School Fund, to help support public education in the State of Texas. Since that time the Texas Lottery has contributed more than $14 billion to the Foundation School Fund.
A lot of folks often ask where does the money all go? During the 2011 Fiscal Year, the Texas Lottery Commission had approximately $3.8 billion in total sales, of that 62.6 percent or roughly $2.4 billion was paid out in total prize winnings. Also out of the $3.8 billion in sales, the Texas Lottery Commission contributed approximately $963 million in to the Foundation School Fund for the purpose of supporting public education. In addition to the prize winning payouts and money directed to the Foundation School Fund, 5 percent or approximately $191 million was paid in commission to retailers who sold the lottery tickets and roughly $21 million was paid to retailers through an incentive program and as a percentage of winnings if the retailer sold a winning lottery ticket. The Texas Lottery Commission used $174 million for Administrative expenses. In addition, 2 percent of the money went to other state agencies. Additional information about the Texas Lottery Commission can be found on www.txlottery.org .
