PART 9. TEXAS LOTTERY COMMISSION
CHAPTER 401. ADMINISTRATION OF STATE LOTTERY ACT
The Texas Lottery Commission (Commission) proposes amendments to 16 TAC §§401.101 (Lottery Procurement Procedures), 401.102 (Protests of the Terms of a Formal Competitive Solicitation), 401.103 (Protests of Contract Award), 401.104 (Contract Monitoring Roles and Responsibilities), 401.153 (Qualifications for License), 401.158 (Suspension or Revocation of License), 401.160 (Standard Penalty Chart), 401.301 (General Definitions), 401.302 (Scratch Ticket Game Rules), 401.304 (Draw Game Rules (General)), 401.355 (Restricted Sales), and 401.501 (Lottery Security).
The proposed rule amendments are the result of the Commission's recent rule review conducted in accordance with Texas Government Code §2001.039, as well as the agency's recent review by the Texas Sunset Advisory Commission. Among the more significant changes, this proposal addresses issues identified as rulemaking gaps in the May 2024 Texas Sunset Advisory Commission Staff Report (Staff Report). Specifically, the Staff Report noted that there was "no clarification as to whether internet sales of lottery products are prohibited" (addressed in Rules 401.153(b)(12), 401.158(b)(27), 401.160(h), and 401.355(a)), and "no explanation of what it means for a person to 'engage in a business exclusively as a (lottery) sales agent' for purposes of licensure" (addressed in Rule 401.153(b)(13)).
The proposed rule amendments also clarify procurement procedures and the time period a bidder or proposer has to respond to an appeal of certain protest decisions issued by the agency in procurements; update several definitions; update a provision in the scratch ticket game rule to make it more consistent with the draw game rule; update the scratch and draw ticket prize claim processes; and update the language regarding lottery security to state that several divisions of the Commission are responsible for developing and maintaining security plans and procedures, and confirming that these plans and procedures are protected from required public disclosure as allowed under the Texas Public Information Act.
The proposed amendments to Rule 401.101 clarify the rules governing the Invitation for Bid (IFB) procurement method by reorganizing the section and by adding language that describes the process used for IFBs. The proposed amendments also clarify certain differences between the Request for Proposals (RFP) and IFB procurement methods.
The proposed amendments to Rule 401.102 add language stating that the email address designated by the vendor for correspondence in the procurement will also serve as the email address for notice of proceedings and decisions under this section.
The proposed amendments to Rule 401.103(g) clarify the time period a successful bidder or proposer has to respond to an appeal of an agency determination of a vendor's protest to a contract award resulting from a competitive solicitation. Also, the proposal adds language stating that the email address designated by the vendor for correspondence in the procurement will also serve as the email address for notice of proceedings and decisions under this section.
The proposed amendments to Rule 401.104 clarify that the agency may assign designated personnel to monitor contract compliance and facilitate historically underutilized business participation, in addition to the existing divisions within the agency that handle these matters.
The proposed amendments to Rule 401.153(b)(12) clarify that an application for a sales agent license will be denied if the applicant intends to sell lottery tickets via the internet, and the proposed amendments to Rule 401.153(b)(13) reiterate the prohibition in the State Lottery Act that an application for a sales agent license will be denied if the applicant intends to engage in business exclusively as a Texas Lottery ticket sales agent (as defined in the proposed amendments). This change addresses gaps that were identified by the Staff Report.
The proposed amendments to Rule 401.153 also add a provision that, based upon consideration of the factors in Rule 401.160(g), the director may determine a person or organization whose license has been revoked, surrendered or denied is not eligible to apply for another license for one year.
The proposed amendments to Rule 401.158(b)(23) make it an express violation to require a purchaser to buy additional items when paying for lottery tickets with a debit card and the proposed amendments to Rule 401.158(b)(27) make it an express violation to sell lottery tickets over the internet.
The proposed amendments to Rule 401.160 update the penalty chart and correspond with the proposed amendments to Rules 401.158(b)(23) and (27) referenced above.
The proposed amendments to Rule 401.301(1), (4), (51), and (55) make minor updates to multiple definitions to increase the clarity of those definitions. The proposed amendments also add a definition of "Present at the terminal" that was deleted in a non-substantive rule amendment in August 2020. The purpose of re-inserting the definition, in combination with the related proposed amendment to Rule 401.304(b)(3), is to dispel any misconception that the deletion was substantive and make clear that all aspects of a sales transaction under Rule 401.304 must take place at the retail location.
The proposed amendments to Rule 401.302(a)(1) add language from Rule 401.304(b)(3) (Draw Game Rules (General)) regarding the requirement that all aspects of a ticket purchase must take place at a licensed retail location, to make Rule 401.302 more consistent with Rule 401.304. The proposed amendments to Rule 401.302(e)(6) and (f)(2) update the rule by requiring all scratch ticket prize claim processes to be made in accordance with Commission procedures and deleting requirements that are inapplicable to mobile prize claims.
The proposed amendments to Rule 401.304(b)(3) add language that was deleted in a non-substantive rule amendment in 2020 to reiterate and clarify that no part of a draw game ticket sale may take place away from the terminal. The proposed amendments to Rule 401.304(d)(3) update the rule by requiring all draw ticket prize claim processes to be made in accordance with Commission procedures and deleting requirements that are inapplicable to mobile prize claims.
The proposed amendments to Rule 401.355(a) clarify that retailers shall not sell lottery tickets via the internet, a gap that was identified by the Staff Report, and the proposed amendments to Rule 401.355(b) update a cross-reference.
The proposed amendments to Rule 401.501 update the language regarding lottery security to state that several divisions of the Commission are responsible for developing and maintaining security plans and procedures, including information security, gaming security, and facility security as required by the State Lottery Act to ensure the integrity and security of the lottery games, and confirming that these plans and procedures are protected from required public disclosure as allowed under the Texas Public Information Act.
Angela Zgabay-Zgarba, Administration Director, has determined that for each year of the first five years the proposed amendments will be in effect, the anticipated public benefit will be greater clarity regarding agency procedures governing procurement.
Robert Tirloni, Lottery Operations Director, has determined that for each year of the first five years the proposed amendments will be in effect, the anticipated public benefit includes a greater understanding of the Commission's rules and games by licensed lottery retailers and lottery players based on the removal of obsolete language and the addition of new, clarifying language; and addressing issues identified as rulemaking gaps in the Staff Report. The new rule language should lead to an increase in understanding and compliance.
Sergio Rey, Controller, has determined that for each year of the first five years the proposed amendments will be in effect, there will be no significant fiscal impact for state or local governments as a result of the proposed amendments. There will be no adverse effect on small businesses or rural communities, micro businesses, or local or state employment. There will be no additional economic cost to persons required to comply with the amendments, as proposed. Furthermore, an Economic Impact Statement and Regulatory Flexibility Analysis is not required because the proposed amendments will not have an adverse economic effect on small businesses or rural communities as defined in Texas Government Code §2006.001(1-a) and (2).
Pursuant to Texas Government Code §2001.0221, the Commission provides the following Government Growth Impact Statement for the proposed amendments. For each year of the first five years the proposed amendments will be in effect, Sergio Rey, Controller, has determined the following:
(1) The proposed amendments do not create or eliminate a government program.
(2) Implementation of the proposed amendments does not require the creation of new employee positions or the elimination of existing employee positions.
(3) Implementation of the proposed amendments does not require an increase or decrease in future legislative appropriations to the Commission.
(4) The proposed amendments do not require an increase or decrease in fees paid to the Commission.
(5) The proposed amendments do not create a new regulation.
(6) The proposed amendments do not expand or limit an existing regulation.
(7) The proposed amendments do not increase or decrease the number of individuals subject to the rule's applicability.
(8) The proposed amendments do not positively or adversely affect this state's economy.
The Commission requests comments on the proposed amendments from any interested person. Comments may be submitted to Kyle Wolfe, Assistant General Counsel, by mail at Texas Lottery Commission, P.O. Box 16630, Austin, Texas 78761-6630; by facsimile at (512) 344-5189; or by email at legal.input@lottery.state.tx.us. Comments must be received within 45 days after publication of this proposal in the Texas Register to be considered. The Commission will also hold a public hearing to receive comments on this proposal at 1:00 p.m. on January 15, 2025, at 1801 Congress Ave., George H. W. Bush Building, 4th Floor, Board Room 4.300, Austin, TX, 78701.
SUBCHAPTER A. PROCUREMENT
These amendments are proposed under Texas Government Code §466.015(c), which authorizes the Commission to adopt rules governing the operation of the lottery, and §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
This proposal is intended to implement Texas Government Code, Chapter 466.
§401.101.Lottery Procurement Procedures.
(a) - (d) (No change.)
(e) Formal competitive solicitations.
(1) A formal competitive solicitation is a process conducted in order to receive at least three sealed competitive bids or proposals pursuant to the issuance of an IFB, RFP, RFQ, or another statewide contract process, respectively.
(A) An IFB will be used when the agency is able to describe, by way of established specifications, exactly what it wishes to procure, and wants bidders to offer such at a specific price. For formal competitive solicitations where an IFB is used, the agency will award a contract to the qualified bidder submitting the lowest cost responsible bid meeting all specifications and providing the best value for the agency, as determined during the evaluation of the bids.
(B) - (C) (No change.)
(2) - (4) (No change.)
[(5) For formal competitive solicitations
where an IFB is used, the agency will award a contract to the qualified
bidder submitting the lowest cost responsible bid meeting all specifications
and providing the best value for the agency, as determined during
the evaluation of the bids. Negotiations are not authorized when utilizing
an IFB procurement method; however, if only one response is received,
negotiations are allowed, provided, negotiations may not result in
a material change to the advertised specifications.]
(f) RFPs and IFBs [RFP].
(1) Submission of RFP. When an RFP is used by the agency, the RFP will contain, at a minimum, the following:
(A) - (B) (No change.)
(C) the time and date proposals are due, and the location
and person to whom they must [are to] be submitted;
(D) - (E) (No change.)
(2) Submission of IFB. When an IFB is used by the agency, a bidder will submit a bid in response to the solicitation. The IFB solicitation will contain, at a minimum, the following:
(A) A detailed description of the goods and/or services to be provided, and specific specifications for the goods or services to be procured;
(B) A description of the format bids must follow and the elements they must contain;
(C) The time and date bids are due, and the location and person to whom they must be submitted;
(D) an identification of the process to be utilized in evaluating bids; and
(E) a listing of the factors to be utilized in evaluating bids and awarding a purchase order. At a minimum, the factors should include:
(i) the bidder's price to provide the goods or services;
(ii) the probable quality of the offered goods or services;
(iii) the quality of the bidder's past performance in contracting with the Texas Lottery, with other state entities or with private sector entities;
(iv) the bidder's experience in providing the requested goods or services;
(v) the qualifications of the bidder's personnel; and,
(vi) whether the bidder performed the good faith effort required by the HUB subcontracting plan, as applicable.
(3) [(2)] Evaluation Process.
The agency will, prior to the deadline for receipt of proposals or
bids, develop and establish comprehensive evaluation criteria
to be utilized by an evaluation committee in evaluating the proposals or bids. All proposals or bids that are responsive
to the procurement [RFP] will be reviewed by
the evaluation committee. Part of the initial evaluation process may
include an inspection trip to the proposer's facilities, and/or proposers
may be requested to make an oral presentation to the committee. The
evaluation committee may seek advice from consultants. If consultants
are employed, they may be provided all information provided by the
proposers or bidders. The evaluation committee will evaluate
and score all proposals in accordance with the evaluation criteria.
(4) [(3)] Best and Final Offers
(BAFO). With an RFP, the [The] agency may select
top proposers, which may each be given an opportunity to discuss,
clarify, and negotiate with the agency, and submit revisions to their
respective proposals to the agency through a BAFO process. During
discussions between the proposers and the agency, no information from
a competing proposal may be revealed by the agency to another competitor.
Any type of auction practice or allowing the transfer of technical
information is specifically prohibited. At the conclusion of the discussions,
BAFOs may be formally requested from the proposers and a deadline
will be set for submission. BAFOs will be submitted by supplemental
pages and not a complete resubmission of the proposal. All BAFOs will
be reviewed by the evaluation committee. The evaluation committee
will evaluate and score the BAFO response together with the original
proposal in accordance with the evaluation criteria.
(5) [(4)] Negotiation.
(A) RFP. If a BAFO process is not used, the agency will attempt to negotiate a contract with the selected proposer. If a contract cannot be negotiated with the selected proposer on terms the agency determines reasonable, negotiations with that proposer will be terminated, and negotiations will be undertaken with the next highest scored proposer. This process will be continued until a contract is executed by a proposer and the agency, or negotiations with all qualified proposers are terminated. If no contract is executed, the agency may cancel the solicitation.
(B) IFB. Negotiations are not authorized when utilizing an IFB procurement method; however, if only one response is received, negotiations are allowed, provided, negotiations may not result in a material change to the advertised specifications.
(6) [(5)] Multiple Award. The
agency may award a contract to two or more vendors or contractors
using a single solicitation to furnish the same or similar supplies
or services, where more than one vendor or contractor is needed to
meet the agency's requirements for quantity, delivery, or service.
(g) - (i) (No change.)
§401.102.Protests of the Terms of a Formal Competitive Solicitation.
(a) - (d) (No change.)
(e) The director of administration will review the protest, and the solicitation file, and will make a written determination of the protest, which may include canceling the solicitation. The director of administration's written determination will be served by email on the protestant. Confirmation that the notice was sent to an email address designated for the receipt of correspondence in the procurement will be conclusive proof that delivery was made. The decision of the director of administration may be appealed to the executive director. The appeal must be filed electronically with the commission's general counsel by 5 p.m. the next business day after issuance of the written determination. An appeal is considered timely filed if it is electronically filed before the filing deadline. An electronically filed appeal is deemed filed when transmitted to the protestant's electronic filing service provider.
(f) On appeal of the director of administration's determination,
the executive director will review the protest, the solicitation file,
any responses, and the director of administration's determination,
including any reasoning that supports the determination. The executive
director will then make a written determination of the appeal, which
may include canceling the solicitation. The executive director's written
determination will be served, by email on the protestant. Confirmation
that the notice was sent to an email address designated for the receipt
of correspondence in the procurement [correspondence,]
will be conclusive proof that delivery was made. An appeal to the
Texas Lottery Commission of the determination of the executive director
must be filed electronically with the commission's general counsel
by 5 p.m. the next business day after issuance of the written determination.
An appeal is considered timely if it is electronically filed before
the filing deadline. An electronically filed appeal is deemed filed
when transmitted to the protestant's electronic filing service provider.
(g) - (h) (No change.)
(i) The Texas Lottery Commission will make a written
determination of the protest. To make its determination, the commission
[Commission] will review:
(1) - (4) (No change.)
(5) The staff attorney's recommendation. The written
determination on the protest may include a determination canceling
the solicitation. The Texas Lottery Commission's written determination
will be served by email on the protestant. Confirmation that the notice
was sent to an email address designated for the receipt of correspondence
in the procurement [correspondence,] will be conclusive
proof that delivery was made. The Texas Lottery Commission's determination
shall be administratively final when issued.
§401.103.Protests of Contract Award.
(a) (No change.)
(b) A protest of any contract award must be filed electronically with the commission's general counsel, by email to legal.input@lottery.state.tx.us, within 72 hours after receipt of notice of contract award. A copy of the protest must be delivered to the successful bidder or proposer at the same time that the protest or supplement is delivered to the agency. The protestant must include its email address with the protest. A protest is considered timely filed if it is electronically filed before the filing deadline. An electronically filed protest is deemed filed when transmitted to the protestant's electronic filing service provider. Unless otherwise requested by the commission, the protestant is not required to file a paper copy of its protest. For good cause shown by the protestant, the commission may allow an alternate form of filing. The electronically filed protest must be in a text-searchable PDF format. The protestant is solely responsible for ensuring its protest is complete and filed timely with the office of the general counsel and a copy is sent to the successful bidder or proposer. A protest not filed timely will not be considered, and the protestant will be so notified in writing by the commission's general counsel by electronic notice sent to the protestant's designated email address, or the email address identified for notices in the procurement response . A protestant may supplement its timely filed protest. The deadline to supplement is 5 p.m. central time, 10 calendar days after notice of contract award.
(c) In the event of a protest of a contract award, the successful bidder(s) or proposer(s) may file a written response electronically to the protest within 72 hours after the office of the general counsel's receipt of the protest or any supplemental filing. The successful bidder(s) or proposer(s) must include its email address with the response. A response is considered timely filed if it is electronically filed before the filing deadline. An electronically filed response is deemed filed when transmitted to the successful bidder(s) or proposer(s)'s electronic filing service provider. The electronically filed response must be in a text-searchable PDF format. The successful bidder(s) or proposer(s) is solely responsible for ensuring the response is complete and filed timely with the office of the general counsel. Responses not filed timely will not be considered, and the successful bidder(s) or proposer(s) will be so notified in writing by the commission's general counsel by electronic notice sent to the successful bidder(s) or proposer(s)'s designated email address, or the email address identified for notices in the procurement response.
(d) - (e) (No change.)
(f) The director of administration will review the
protest, the contract award file, any responses, and will make a written
determination of the protest, which may include canceling the award
of the contract. The director of administration's written determination
will be served, by facsimile or by email, on the protestant and the
successful bidder(s) or proposer(s). Confirmation that the notice
was sent to an email address designated for the receipt of correspondence,
will be conclusive proof that delivery was made. The decision of the
director of administration may be appealed to the executive director
[Executive Director]. The appeal must be filed electronically
with the commission's general counsel by 5 p.m. of the next business
day after issuance of the written determination. An appeal is considered
timely filed if it is electronically filed before the filing deadline.
An electronically filed appeal is deemed filed when transmitted to
the protestant's electronic filing service provider.
(g) The successful bidder(s) or proposer(s) may file
a response electronically to the appeal of a determination made by
the director of administration or the executive director by 5
p.m. of the next business day [Executive Director within
24 hours] after notice of the commission's receipt of the appeal.
The successful bidder(s) or proposer(s) must include its email address
with the response. A response is considered timely filed if it is
electronically filed before the filing deadline. An electronically
filed response is deemed filed when transmitted to the successful
bidder(s) or proposer(s)'s electronic filing service provider. Unless
otherwise requested by the commission, the successful bidder(s) or
proposer(s) is not required to file a paper copy of its response.
The electronically filed response must be in text-searchable PDF format.
The successful bidder(s) or proposer(s) is solely responsible for
ensuring the response is complete and filed timely with the office
of the general counsel. Responses not filed timely will not be considered,
and the respondent will be so notified in writing by the commission's
general counsel by electronic notice sent to the successful bidder(s)
or proposer(s)'s designated email address.
(h) On appeal of the director of administration's determination,
the executive director will review the protest, the contract award
file and responses, and the director of administration's determination,
including any reasoning that supports the determination. The executive
director [Executive Director] will then make a written
determination of the protest, which may include abating the award
of the contract. The executive director's written determination will
be served by email on the protestant. Confirmation that the notice
was sent to an email address designated for the receipt of correspondence
[correspondence,] will be conclusive proof that
delivery was made. An appeal to the Texas Lottery Commission of the
determination of the executive director must be filed electronically
with the commission's general counsel by 5 p.m. of the next business
day after issuance of the written determination. An appeal is considered
timely filed if it is electronically filed before the filing deadline.
An electronically filed appeal is deemed filed when transmitted to
the protestant's electronic filing service provider.
(i) - (k) (No change.)
§401.104.Contract Monitoring Roles and Responsibilities.
The contract monitoring roles and responsibilities of agency internal audit staff (or contractor) and other inspection, investigative, or compliance staff are as follows:
(1) - (3) (No change.)
(4) A division or divisions, or other designated
personnel within the agency, [agency]
will monitor and report to other appropriate agency divisions or units
regarding contract compliance.
(5) A HUB coordinator and any other designated
personnel [division] within the agency will assist
the administering division or divisions and the contract management
section in monitoring agency contracts in connection with applicable
historically underutilized and minority business contract requirements.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on November 20, 2024.
TRD-202405636
Bob Biard
General Counsel
Texas Lottery Commission
Earliest possible date of adoption: January 5, 2025
For further information, please call: (512) 344-5392
16 TAC §§401.153, 40.158, 401.160
These amendments are proposed under Texas Government Code §466.015(c), which authorizes the Commission to adopt rules governing the operation of the lottery, and §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
This proposal is intended to implement Texas Government Code, Chapter 466.
§401.153.Qualifications for License.
(a) (No change.)
(b) The director may grant or deny an application for a license under this subchapter based on any one or more factors listed in subsection (a) of this section. In addition, the director shall deny an application for a license under this subchapter upon a finding that the applicant:
(1) - (9) (No change.)
(10) failed to certify to the director the applicant's
compliance with the federal Americans With Disabilities Act; [or]
(11) is the subject of a license suspension or decision
issued under Chapter 232, Family Code; [Code.]
(12) intends to sell lottery tickets via the internet; or
(13) intends to engage in business exclusively as a Texas Lottery ticket sales agent. For purposes of this section, an applicant "intends to engage in business exclusively as a Texas Lottery ticket sales agent" if the applicant does not sell any goods or services to the public other than Texas Lottery tickets.
(c) - (e) (No change.)
(f) Based upon consideration of the factors in §401.160(g) of this title (relating to Standard Penalty Chart), the director may determine a person or organization whose license has been revoked or surrendered, or whose application has been denied for reasons which would justify a revocation of an existing license, will not be eligible to apply for another license earlier than one year from the date of revocation, surrender, or denial.
§401.158.Suspension or Revocation of License.
(a) (No change.)
(b) Without limiting the commission's ability to consider factors listed in §401.153(b) of this title as grounds for suspension or revocation of a license issued under this subchapter, the commission may also suspend or revoke a license for reasons including, but not limited to, any of the following:
(1) - (22) (No change.)
(23) licensee charges a fee for lottery ticket purchases using a debit card, requires an additional purchase with a debit card, and/or requires a minimum dollar amount for debit card purchases of only lottery tickets.
(24) - (26) (No change.)
(27) licensee sells tickets over the telephone or internet,
or via mail order sales; or [sales,] establishes
or promotes a group purchase or pooling arrangement under which tickets
are purchased on behalf of the group or pool and any prize is divided
among the members of the group or pool, and the licensee intentionally
or knowingly:
(A) - (B) (No change.)
(28) - (39) (No change.)
(40) licensee incurs four (4) notices of nonsufficient fund transfers or non-transfer of funds within a 12-month period (revocation only);
(41) licensee fails to pay the full amount of money owed to the commission after a nonsufficient funds transfer or non-transfer of funds to the commission's account (revocation only); or
(42) (No change.)
§401.160.Standard Penalty Chart.
(a) - (f) (No change.)
(g) Based upon consideration of the following factors, the commission may impose penalties other than the penalties recommended in §401.158 of this title (relating to Suspension or Revocation of License) and/or this section:
(1) - (8) (No change.)
(9) Penalties imposed for related offenses; [or]
(10) Current employment status of any employee(s) that committed violation(s); or
(11) [(10)] Any other mitigating
or aggravating circumstances.
(h) Standard Penalty Chart.
Figure: 16 TAC §401.160(h) (.pdf)
[Figure: 16 TAC §401.160(h)]
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on November 20, 2024.
TRD-202405637
Bob Biard
General Counsel
Texas Lottery Commission
Earliest possible date of adoption: January 5, 2025
For further information, please call: (512) 344-5392
16 TAC §§401.301, 401.302, 401.304
These amendments are proposed under Texas Government Code §466.015(c), which authorizes the Commission to adopt rules governing the operation of the lottery, and §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
This proposal is intended to implement Texas Government Code, Chapter 466.
§401.301.General Definitions.
The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Caption--The letters or other characters appearing below the play symbols in the play area of a ticket that verify the correctness of the play symbols.
(2) - (3) (No change.)
(4) Claim form--The printed or electronic form authorized and provided by the commission that a claimant shall complete and submit to the commission when claiming a prize.
(5) - (34) (No change.)
(35) Present at the terminal--A player remains physically present at the terminal from the time the player's order for the purchase of draw game tickets is paid for and accepted by the retailer until the processing of the order is completed and the tickets are delivered to the player at the retailer terminal location.
(36) [(35)] Prize amounts--The
amount of money payable to each share in a prize category, the annuitized
future value of each share in a prize category, or the net present
cash value of each share in a prize category for each draw game drawing.
Prize amounts are calculated by dividing the prize category contribution,
the annuitized future value of the prize category contribution, or
the net present cash value of the prize category contribution by the
number of shares determined for the prize category.
(37) [(36)] Prize breakage--The
money which is left over from the rounding down of the pari-mutuel
prize levels to the next lowest whole dollar amount or money which
is in excess of the amount needed to pay a prize.
(38) [(37)] Prize category--The
matching combinations of numbers and their corresponding prize levels
as described in rules for the specific game being played.
(39) [(38)] Prize category contributions--Refers
to contributions for each drawing to each prize category, including
direct and indirect prize category contributions.
(40) [(39)] Prize fund--The monies
allocated to be returned to players in winning tickets within a specific
scratch ticket game.
(41) [(40)] Prize pool--In a
draw game, the total amount of money available for prizes as a percentage
of the total sales for the current draw period.
(42) [(41)] Prize structure--The
number, value, prize payout percentage, and odds of winning prizes
for an individual game as approved by the executive director.
(43) [(42)] Promotion--One or
more events coordinated or conducted by the commission at retail sites,
fairs, festivals and other appropriate venues, or in conjunction with
one or more particular Texas Lottery games, to educate players about
Texas Lottery products and/or sell Texas Lottery games through a retailer
in specific markets to maximize Texas Lottery sales and statewide awareness.
(44) [(43)] Promotional drawing--A
drawing in which qualified contestants are awarded prizes in a random
manner in accordance with the procedures set forth for a specific promotion.
(45) [(44)] Quick Pick--A play
option that generates random numbers in a manner approved by the commission.
(46) [(45)] Roll-over--The amount
in a specific draw game prize pool category resulting from no matching
combinations and/or prize breakage from the previous drawing.
(47) [(46)] Sales agent--A person
licensed under the State Lottery Act to sell Texas Lottery tickets.
(48) [(47)] Scratch ticket--A
scratch ticket lottery game, developed and offered for sale to the
public in accordance with commission rules, that is played by revealing
the ticket play symbols.
(49) [(48)] Shares--In a draw
game, the total number of matching combinations within each prize
category as determined for each drawing.
(50) [(49)] Terminal--A device
authorized by the commission for the purpose of issuing draw game
tickets and/or validating claims, including the commission or commission's
vendor's computer hardware as well as commission-authorized third-party
point-of-sale systems.
(51) [(50)] Third-party point-of-sale
systems--Self-contained computerized equipment (not owned or operated
by the commission or lottery operator) that performs sales-related
tasks at a licensed lottery ticket retailer's checkout counter and
that has the sole Texas Lottery-related purpose of selling lottery
tickets. Third-party point-of-sale systems will only perform the same
lottery-related tasks as terminals owned or operated by the commission
or lottery operator and may not issue electronic tickets or display
outcomes for draw and scratch games using casino-style
graphics of any kind. Third-party point-of-sale systems do not include
any gambling device.
(52) [(51)] Ticket--Any tangible
evidence issued to provide participation in a lottery game or activity
authorized by the State Lottery Act.
(53) [(52)] Ticket bearer--The
person who has signed the ticket or who has possession of an unsigned ticket.
(54) [(53)] Ticket number--The
number on the back of the scratch ticket that refers to the ticket
sequence within a specific pack of a scratch ticket game.
(55) [(54)] Validation number--The
unique alphanumeric number sequence or barcode printed
on a ticket that provides for the verification of the ticket as a
valid winner.
(56) [(55)] Valid ticket--A ticket
which meets all specifications and validation requirements and entitles
the holder to a specific prize amount.
(57) [(56)] Void ticket--Any
ticket that is stolen, unissued, illegible, mutilated, altered, counterfeit
in whole or part, misregistered, defective, incomplete, printed or
produced in error, multiply printed, fails any of the commission's
confidential validation tests, or is a ticket produced by or for the
commission for education and training purposes.
(58) [(57)] Winning combination--One
or more digits, numbers, or symbols randomly selected by the commission
in a drawing which has been certified.
§401.302.Scratch Ticket Game Rules.
(a) Sale of scratch tickets.
(1) Only retailers who have been licensed by the commission
are authorized to sell scratch tickets, and scratch tickets shall [may] be sold only at the [a
licensed] location listed on each retailer's license from
the commission. For purposes of this section, the sale of a scratch
ticket at the licensed location means a lottery transaction in which
all elements of the sale between the retailer and the purchaser must
take place at the retailer location, including the exchange of consideration
and the exchange of the scratch ticket.
(2) - (3) (No change.)
(b) - (d) (No change.)
(e) Payment of low-tier and mid-tier prizes.
(1) - (5) (No change.)
(6) If a low- or mid-tier claim is presented to the
commission, the claimant shall follow all procedures of the commission
related to claiming a prize [prize, including but
not limited to filling out a claim form, presenting appropriate identification
if required, completing the back of the ticket, and submitting these
items including the apparent winning ticket to the commission by mail
or in person]. Upon validation of the ticket as a winning
ticket, the commission shall pay the claimant the amount due in accordance
with commission procedures. If the ticket is determined to be
a non-winning ticket, the claim shall be denied and the claimant shall
be promptly notified. [Tickets will not be returned to the claimant.]
(f) Payment of high-tier prizes.
(1) (No change.)
(2) If a high-tier claim is presented to the commission,
the claimant shall follow all procedures of the commission related
to claiming a prize [prize, including but not limited
to filling out a claim form, presenting appropriate identification
as required, completing the back of the ticket, and submitting these
items including the apparent winning ticket to the commission by mail
or in person]. Upon validation of the ticket as a winning ticket,
the commission shall pay the claimant the amount due in accordance
with commission procedures. If the ticket is determined to be a non-winning
ticket, the claim shall be denied and the claimant shall be promptly
notified. [Tickets will not be returned to the claimant.]
(3) - (9) (No change.)
(g) - (k) (No change.)
§401.304.Draw Game Rules (General).
(a) (No change.)
(b) Sale of tickets.
(1) - (2) (No change.)
(3) Draw game tickets shall be sold only at the location listed on each retailer's license from the commission. For purposes of this section, the sale of a draw game lottery ticket at the licensed location means a lottery transaction in which all elements of the sale between the retailer and the purchaser must take place at the retailer location using their terminal, including the exchange of consideration, the exchange of the playslip if one is used, and the exchange of the draw game ticket. No part of the sale may take place away from the terminal.
(4) - (6) (No change.)
(c) (No change.)
(d) Procedures for claiming draw game prizes.
(1) - (2) (No change.)
(3) To claim a draw game prize of $600 or more, the
claimant shall present the winning draw game ticket to the commission.
[For purposes of this provision, the term "commission" includes
claim centers located throughout Texas.] In connection with
certain draw games, the top-level prizes must be claimed at commission
headquarters. For any claim presented to the commission, the claimant
shall follow all procedures of the commission related to claiming
a prize [prize, including but not limited to filling
out a claim form, presenting appropriate identification as required,
completing the back of the ticket, and submitting these items including
the apparent winning ticket to the commission by mail or in person].
Upon validation of the ticket as a winning ticket, the commission
shall pay the claimant the amount due in accordance with commission
procedures. If the ticket is determined to be a non-winning ticket,
the claim shall be denied and the claimant shall be promptly notified.
[Tickets will not be returned to the claimant.]
(4) - (10) (No change.)
(e) - (h) (No change.)
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on November 20, 2024.
TRD-202405639
Bob Biard
General Counsel
Texas Lottery Commission
Earliest possible date of adoption: January 5, 2025
For further information, please call: (512) 344-5392
These amendments are proposed under Texas Government Code §466.015(c), which authorizes the Commission to adopt rules governing the operation of the lottery, and §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
This proposal is intended to implement Texas Government Code, Chapter 466.
§401.355.Restricted Sales.
(a) Retailers shall not sell lottery tickets via the internet or by mail, phone, fax, or other similar method of communications. Retailers shall not sell a lottery ticket or any other document evidencing a right, privilege, or share in a lottery ticket from another jurisdiction by any means.
(b) Retailers shall not sell tickets to persons under
the age of 18. Any ticket purchased by or sold to an individual under
the age of 18 years shall be void and the prize otherwise payable
on the ticket is treated as an unclaimed prize under Texas Government
Code §466.408 [§401.302(j)(3) of this title (relating
to Scratch Ticket Game Rules)].
(c) - (d) (No change.)
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on November 20, 2024.
TRD-202405640
Bob Biard
General Counsel
Texas Lottery Commission
Earliest possible date of adoption: January 5, 2025
For further information, please call: (512) 344-5392
These amendments are proposed under Texas Government Code §466.015(c), which authorizes the Commission to adopt rules governing the operation of the lottery, and §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
This proposal is intended to implement Texas Government Code, Chapter 466.
§401.501.Lottery Security.
The Texas Lottery Commission considers security and integrity
to be every commission [agency] employee's responsibility.
[The security of the Texas Lottery Commission shall be developed
and administered by agency's Security Division.] The Texas
Lottery Commission [Security Division] shall develop
and maintain [an internal] security plans and procedures
through its designated divisions as required by the State Lottery
Act, Texas Government Code, Chapter 466 [plan]. The commission's [agency's] security plans [plan] and [other security] procedures shall be designed
to ensure the integrity and security of the operation of the Lottery
and, to the extent that they are not inconsistent with Texas
Public Information Act [Texas Open Records law],
Texas Government Code, Chapter 552, are exempt from disclosure to
the public.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on November 20, 2024.
TRD-202405644
Bob Biard
General Counsel
Texas Lottery Commission
Earliest possible date of adoption: January 5, 2025
For further information, please call: (512) 344-5392