Honorable Bryan Hughes, Chair, Senate Committee on State Affairs
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
SB1820 by Hall (relating to the prohibited play and facilitation of play of a lottery game by telephone or through the Internet.), Committee Report 1st House, Substituted
Estimated Two-year Net Impact to General Revenue Related Funds for SB1820, Committee Report 1st House, Substituted : a negative impact of ($15,754,000) through the biennium ending August 31, 2025.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five- Year Impact:
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2024
($6,561,000)
2025
($9,193,000)
2026
($9,655,000)
2027
($10,156,000)
2028
($10,678,000)
All Funds, Five-Year Impact:
Fiscal Year
Probable Revenue Gain/(Loss) from Foundation School Fund 193
2024
($6,561,000)
2025
($9,193,000)
2026
($9,655,000)
2027
($10,156,000)
2028
($10,678,000)
Fiscal Analysis
The bill would amend the Government Code to prohibit persons, including third party courier services, from engaging in certain activities that facilitate the playing of a lottery game by telephone or through the internet that would include accepting orders for, selling, or arranging the purchase of a lottery ticket for or on behalf of another. The bill would take effect on September 1, 2023. The bill would require the Texas Lottery Commission to adopt or amend rules as necessary to implement the bill's provisions no later than January 1, 2024.
Methodology
This estimate is based on the analysis of the Comptroller of Public Accounts using data provided by the Texas Lottery Commission. In the first seven months of fiscal year 2023, lottery sales associated with courier services contributed to $101.0 million in lottery ticket sales. Extrapolating these sales figures to a full fiscal year produces an estimated lottery ticket sales by couriers total of approximately $173.1 million for fiscal year 2023.
The state share of the overall lottery after accounting for prizes paid, administration, and other costs, is approximately 24 percent of total ticket sales. Based on these figures, this estimate assumes that the share of courier sales for lottery tickets in fiscal year 2023 would be approximately $41.6 million.
This estimate assumes that while most lottery ticket sales would be expected to continue as players would purchase tickets through a brick-and-mortar retailer, an estimated 20 percent of lottery sales that are currently associated with courier activity would cease by January 1, 2024, or the date by which the bill requires the Commission to adopt or amend rules to implement the bill's provisions. This estimated revenue loss would reduce allocations to General Revenue-Dedicated Foundation School Fund No. 193 in amounts as shown in the tables above.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies:
304 Comptroller of Public Accounts, 362 Texas Lottery Commission