TITLE 16. ECONOMIC REGULATION

PART 4. TEXAS DEPARTMENT OF LICENSING AND REGULATION

CHAPTER 140. TEXAS LOTTERY AND CHARITABLE BINGO

The Texas Department of Licensing and Regulation (Department) proposes new rules at 16 Texas Administrative Code (TAC), Chapter 140, §140.1 and §140.2, regarding the Texas Lottery and Charitable Bingo program. These proposed changes are referred to as "proposed rules."

EXPLANATION OF AND JUSTIFICATION FOR THE RULES

The rules under 16 TAC, Chapter 140, implement Texas Government Code, Chapter 466, State Lottery; Texas Occupations Code, Chapter 51, Texas Department of Licensing and Regulation; and Chapter 2001, Bingo.

The proposed rules are necessary to implement Senate Bill (SB) 3070, 89th Legislature, Regular Session (2025), which transferred administration of the state lottery and the licensing and regulation of charitable bingo to the Department on September 1, 2025. SB 3070 requires the Texas Commission of Licensing and Regulation (Commission) to establish a lottery advisory committee and a bingo advisory committee and requires both advisory committees to meet at least quarterly. SB 3070 requires the Commission, as soon as practicable after the effective date of the act, to appoint members to both advisory committees and adopt rules to govern the operations of the committees. The proposed rules establish the member composition, appointment procedures, terms, and meeting requirements for the lottery advisory committee and bingo advisory committee.

The proposed rules are identical to the emergency rules adopted by the Commission at its August 21, 2025, meeting, except that clarifying language is added to §140.1(d)(1) and §140.2(d)(1) to provide for staggered terms of advisory committee members. Those emergency rules were filed with the Texas Register on August 22, 2025, and took effect 20 days later on September 11, 2025.

SECTION-BY-SECTION SUMMARY

The proposed rules add §140.1, Lottery Advisory Committee.

The proposed rules add §140.1(a), which ensures that words and terms used in the section are defined in the context of the relevant statutes.

The proposed rules add §140.1(b), which provides the membership composition of the advisory committee and the procedure for appointment of its members.

The proposed rules add §140.1(c), which provides eligibility requirements for advisory committee members, including requirements that any necessary licenses be issued by Texas and remain in good standing, that public members not have interests in lottery operations, that members meet criminal history standards, and that applicants for membership provide complete and accurate information.

The proposed rules add §140.1(d), which provides the term length for advisory committee members, the process for filling a vacancy, the process of appointing a presiding officer, the prohibition against compensation or reimbursement for serving as a member, and the process for removing a member.

The proposed rules add §140.1(e), which provides meeting requirements, including quarterly meetings, the number of members required for a quorum, majority voting, open meetings, and provisions relating to meetings held by videoconference.

The proposed rules add §140.1(f), which provides the duties of the advisory committee, including advising the commission and department, providing input on proposed lottery rules, reporting on committee activities, and briefing on advancements and challenges in the lottery industry.

The proposed rules add §140.1(g), which establishes the process by which public comments may be provided to the advisory committee in writing via email or orally at a public meeting of the advisory committee.

The proposed rules add §140.1(h), which clarifies that Texas Government Code, Chapter 2110, does not apply to the advisory committee.

The proposed rules add §140.2, Bingo Advisory Committee.

The proposed rules add §140.2(a), which ensures that words and terms used in the section are defined in the context of the relevant statutes.

The proposed rules add §140.2(b), which provides the membership composition of the advisory committee and the procedure for appointment of its members.

The proposed rules add §140.2(c), which provides eligibility requirements for advisory committee members, including requirements that any necessary licenses be issued by Texas and remain in good standing, that members not be delinquent in payment of prize fees, that public members not be associated with certain licensees, that members meet criminal history standards, and that applicants for membership provide complete and accurate information.

The proposed rules add §140.2(d), which provides the term length for advisory committee members, the process for filling a vacancy, the process of appointing a presiding officer, the prohibition against compensation or reimbursement for serving as a member, and the process for removing a member.

The proposed rules add §140.2(e), which provides meeting requirements, including quarterly meetings, the number of members required for a quorum, majority voting, open meetings, and provisions relating to meetings held by videoconference.

The proposed rules add §140.2(f), which provides the duties of the advisory committee, including advising the commission and department, providing input on proposed bingo rules, reporting on committee activities, and briefing on advancements and challenges in the bingo industry.

The proposed rules add §140.2(g), which clarifies that Texas Government Code, Chapter 2110, does not apply to the advisory committee.

FISCAL IMPACT ON STATE AND LOCAL GOVERNMENT

Tony Couvillon, Senior Policy Research and Budget Analyst, has determined that for each year of the first five years the proposed rules are in effect, there are no estimated additional costs or reductions in costs to state or local government as a result of enforcing or administering the proposed rules.

Mr. Couvillon has determined that for each year of the first five years the proposed rules are in effect, there is no estimated increase or loss in revenue to the state or local government as a result of enforcing or administering the proposed rules.

Mr. Couvillon has determined that for each year of the first five years the proposed rules are in effect, enforcing or administering the proposed rules does not have foreseeable implications relating to costs or revenues of state governments or local governments.

LOCAL EMPLOYMENT IMPACT STATEMENT

Because Mr. Couvillon has determined that the proposed rules will not affect a local economy, the agency is not required to prepare a local employment impact statement under Texas Government Code §2001.022.

PUBLIC BENEFITS

Mr. Couvillon also has determined that for each year of the first five-year period the proposed rules are in effect, the public benefit will be the establishment of advisory committees to advise the Commission and the Department on the administration of the state lottery and the licensing and registration of charitable bingo.

PROBABLE ECONOMIC COSTS TO PERSONS REQUIRED TO COMPLY WITH PROPOSAL

Mr. Couvillon has determined that for each year of the first five-year period the proposed rules are in effect, there are no anticipated economic costs to persons who are required to comply with the proposed rules.

FISCAL IMPACT ON SMALL BUSINESSES, MICRO-BUSINESSES, AND RURAL COMMUNITIES

There will be no adverse economic effect on small businesses, micro-businesses, or rural communities as a result of the proposed rules. Because the agency has determined that the proposed rule will have no adverse economic effect on small businesses, micro-businesses, or rural communities, preparation of an Economic Impact Statement and a Regulatory Flexibility Analysis, as detailed under Texas Government Code §2006.002, is not required.

ONE-FOR-ONE REQUIREMENT FOR RULES WITH A FISCAL IMPACT

The proposed rules do not have a fiscal note that imposes a cost on regulated persons, including another state agency, a special district, or a local government. Therefore, the agency is not required to take any further action under Texas Government Code §2001.0045.

GOVERNMENT GROWTH IMPACT STATEMENT

Pursuant to Texas Government Code §2001.0221, the agency provides the following Government Growth Impact Statement for the proposed rules. For each year of the first five years the proposed rules will be in effect, the agency has determined the following:

1. The proposed rules do not create or eliminate a government program.

2. Implementation of the proposed rules does not require the creation of new employee positions or the elimination of existing employee positions.

3. Implementation of the proposed rules does not require an increase or decrease in future legislative appropriations to the agency.

4. The proposed rules do not require an increase or decrease in fees paid to the agency.

5. The proposed rules create a new regulation. The proposed rules create a new chapter in the Texas Administrative Code, which creates two advisory committees and provides the requirements for membership and the conduct of their meetings.

6. The proposed rules do not expand, limit, or repeal an existing regulation.

7. The proposed rules increase or decrease the number of individuals subject to the rules' applicability. The proposed rules increase the number of individuals subject to the rules' applicability by 18 individuals, the number of members that serve on the advisory committees.

8. The proposed rules do not positively or adversely affect this state's economy.

TAKINGS IMPACT ASSESSMENT

The Department has determined that no private real property interests are affected by the proposed rules and the proposed rules do not restrict, limit, or impose a burden on an owner's rights to his or her private real property that would otherwise exist in the absence of government action. As a result, the proposed rules do not constitute a taking or require a takings impact assessment under Texas Government Code §2007.043.

PUBLIC COMMENTS AND INFORMATION RELATED TO THE COST, BENEFIT, OR EFFECT OF THE PROPOSED RULES

The Department is requesting public comments on the proposed rules and information related to the cost, benefit, or effect of the proposed rules, including any applicable data, research, or analysis. Any information that is submitted in response to this request must include an explanation of how and why the submitted information is specific to the proposed rules. Please do not submit copyrighted, confidential, or proprietary information.

Comments on the proposed rules and responses to the request for information may be submitted electronically on the Department’s website at https://ga.tdlr.texas.gov:1443/form/Ch140_Rule_Making; by facsimile to (512) 475-3032; or by mail to Shamica Mason, Legal Assistant, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711. The deadline for comments is 30 days after publication in the Texas Register.

STATUTORY AUTHORITY

The proposed rules are adopted under Texas Government Code, Chapter 466, and Texas Occupations Code, Chapters 51 and 2001, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department.

The statutory provisions affected by the emergency rules are those set forth in Texas Government Code, Chapter 466, and Texas Occupations Code, Chapters 51 and 2001. No other statutes, articles, or codes are affected by the emergency rules.

The legislation that enacted the statutory authority under which the emergency rules are to be adopted is Senate Bill 3070, 89th Legislature, Regular Session (2025).

§140.1. Lottery Advisory Committee.

(a) Definitions. Unless the context clearly indicates otherwise, words and terms used in this section have the same meanings as used in Texas Government Code, Chapter 466, and Texas Occupations Code, Chapter 51.

(b) Membership.

(1) The Lottery Advisory Committee consists of nine members appointed by the presiding officer of the commission, with the commission's approval, as follows:

(A) one member who represents the public;

(B) one member who is a licensed sales agent;

(D) two members who represent entities associated with or benefiting from the lottery's contributions to this state;

(E) one member with experience in lottery law enforcement;

(F) one member with experience in lottery legal matters;

(G) one member with experience in lottery finance;

(2) In appointing advisory committee members, the presiding officer of the commission shall consider the geographical diversity of the members.

(1) If a license is required to hold any of the member positions identified in subsection (b), the license must be issued by the State of Texas and be in and remain in good standing for the balance of the term.

(2) A member representing the public may not be an individual who is:

(A) a sales agent or an applicant for a sales agent license;

(B) an employee or prospective employee of the department;

(D) a lottery operator or prospective lottery operator;

(E) an employee of a lottery operator or prospective lottery operator, if the employee is or will be directly involved in lottery operations;

(F) a person who manufactures or distributes lottery equipment or supplies, or a representative of a person who manufactures or distributes lottery equipment or supplies offered to the lottery;

(G) a person who has submitted a written bid or proposal to the department in connection with the procurement of goods or services by the department;

(H) an employee or other person who works for or will work for a sales agent or an applicant for a sales agent license; or

(I) a person who proposes to enter into or who has a contract with the department to supply goods or services to the department.

(3) A member must meet all criminal history standards established by the department.

(4) An applicant for membership must provide complete and accurate information on the department's application form.

(d) Terms, Vacancies, and Removals.

(1) Members serve staggered six-year terms, with the terms of three members expiring on September 1 of each odd-numbered year. For the first appointments, three members will serve two-year terms, three members will serve four-year terms, and three members will serve six-year terms.

(2) If a vacancy occurs during a member's term, the presiding officer of the commission, with the commission's approval, will appoint a replacement to fill the unexpired term.

(3) The presiding officer of the commission will appoint one of the advisory committee members to serve as the presiding officer of the advisory committee for a term of two years.

(4) Advisory committee members do not receive compensation or reimbursement for serving as a member.

(5) Advisory committee members serve at the pleasure of the commission. An advisory committee member may be removed from the advisory committee by the presiding officer of the commission, with the commission's approval, on any of the following grounds:

(A) the member does not have at the time of becoming a member of the advisory committee the qualifications required by the law or rule authorizing appointment of the member;

(B) the member does not maintain during service on the advisory committee the qualifications required by the law or rule authorizing appointment of the member;

(C) the member cannot, because of illness or disability, discharge the member's duties for a substantial part of the member's term;

(D) the member is absent from more than half of the regularly scheduled advisory committee meetings that the member is eligible to attend during a calendar year without an excuse approved by a majority vote of the advisory committee; or

(E) the member is unfit to continue serving on the advisory committee.

(6) The validity of an action of the advisory committee is not affected by the fact that it is taken when a ground for removal of a member exists.

(e) Meetings.

(1) The advisory committee must meet quarterly or at the commission's or department's request.

(2) A quorum of the advisory committee is necessary to conduct official business. A quorum is five members.

(3) Advisory committee actions require a majority vote of those members present and voting.

(4) The presiding officer of the advisory committee may vote on any matter before the advisory committee.

(5) Each meeting of the advisory committee must be open to the public.

(6) The advisory committee may meet by telephone conference call, videoconference, or similar telecommunication method, provided that each portion of the meeting that is required to be open to the public shall be audible to the public and, in the case of a meeting held by videoconference, visible to the public. If a problem occurs that causes a meeting to no longer be visible or audible to the public as required under this subsection, the meeting must be recessed until the problem is resolved. If the problem is not resolved in six hours or less, the meeting must be adjourned. The face of each participant in a meeting held by videoconference, while that participant is speaking, must be clearly visible, and the participant's voice must be audible, to each other participant and, during the open portion of the meeting, to the members of the public. A meeting held by telephone conference call, videoconference, or other similar telecommunication method is not subject to the requirements of Texas Government Code §551.127(a-3), (b), (c), (e), (f), (h), (i), and (j).

(f) Duties. The advisory committee must:

(1) advise the commission and department on the needs and problems of this state's lottery industry;

(2) provide input on proposed lottery rules during development and before final adoption unless an emergency requires immediate action by the commission;

(3) report regularly to the commission and department on the advisory committee's activities;

(4) regularly brief the commission and department on advancements and challenges in this state's lottery industry; and

(5) perform other duties as determined by the commission or department.

(g) Public comments on issues the advisory committee considers may be provided by the following methods.

(1) Written comments may be submitted via email to board.comments@tdlr.texas.gov by noon on the first business day before the date of a meeting of the advisory committee. Comments timely received will be provided to the advisory committee members for their review before the meeting but will not be read publicly during the meeting.

(2) Oral comments may be provided to the advisory committee at a public meeting by submitting a request via email to board.comments@tdlr.texas.gov by noon on the first business day before the date of a meeting of the advisory committee. The request must include the commenter's name and telephone number, the name of any person the commenter represents, and the agenda item or specific topic the commenter will address. The department will respond to the request with an email providing a website link that will enable the commenter to join the meeting virtually. The commenter will be given up to three minutes during the meeting to provide oral comments to the advisory committee. The presiding officer of the advisory committee may reduce the time provided for public comments based on the number of requests received. Oral comments must be made live during the meeting. Showing or sharing an audio or video recording is not allowed.

(h) Texas Government Code, Chapter 2110, does not apply to the Lottery Advisory Committee.

§140.2. Bingo Advisory Committee.

(a) Definitions. Unless the context clearly indicates otherwise, words and terms used in this section have the same meanings as used in Texas Occupations Code, Chapters 51 and 2001.

(b) Membership.

(1) The Bingo Advisory Committee consists of nine members appointed by the presiding officer of the commission, with the commission's approval, representing a balance of interests including representatives of:

(A) the public;

(B) charities that operate bingo games; and

(2) The advisory committee must not be involved in committee member selection.

(2) A member must not represent a licensee that is delinquent in payment of any prize fees for which a final jeopardy determination has been made by the department.

(3) A member representing the public may not be an individual who is required by statute to be listed on a conductor, commercial lessor, manufacturer, or distributor license application.

(4) A member must meet the criminal history standards in Texas Occupations Code §§2001.105(b), 2001.154(a)(1), 2001.202(1), and 2001.207(2) and any additional criminal history standards established by the department.

(5) An applicant for membership must provide complete and accurate information on the department's application form.