PART 9. TEXAS LOTTERY COMMISSION
CHAPTER 401. ADMINISTRATION OF STATE LOTTERY ACT
SUBCHAPTER B. LICENSING AND SALES AGENTS
The Texas Lottery Commission (Commission) adopts amendments to 16 TAC §401.158 (Suspension or Revocation of License) and §401.160 (Standard Penalty Chart) without changes to the proposed text as published in the September 27, 2024, issue of the Texas Register (49 TexReg 7703). The purpose of the amendments is to reinforce the Commission's zero tolerance policy regarding a Texas Lottery sales agent (retailer) selling lottery tickets to a minor by requiring revocation of the retailer's license in all cases involving a violation of a law or Commission rule where the licensee intentionally or knowingly sells or offers to sell a lottery ticket to a person that the licensee knows is younger than 18 years of age. See Texas Government Code §466.3051(a) (Sale of Ticket to or Purchase of Ticket by Person Younger Than 18 Years of Age).
The Commission received one comment opposing the proposed amendments from the Texas Food & Fuel Association (TFFA), which represents the wholesale and retail levels of the food and petroleum industries in Texas and whose members own, operate, or supply more than 16,500 retail convenience stores in Texas.
COMMENT: While TFFA does not condone sales to minors, it asserts the proposed amendments are excessively punitive by mandating the automatic revocation of a retailer's license for a first violation. TFFA notes the proposed amendments eliminate the Commission's discretion to issue an alternative penalty or consider mitigating circumstances, including the history of the retailer. TFFA also asserts that, because the Sunset Advisory Commission's review of the Commission is still in progress, this rulemaking is premature and should be placed on hold until legislation is passed to continue the Commission's operations.
RESPONSE: The prohibition of lottery ticket sales to minors is vitally important to maintaining the public's trust and ensuring the integrity of the Texas Lottery. While the Commission appreciates TFFA's comments, it is important to send a strong message to lottery retailers that preventing sales to minors must be a top priority for them, and the Commission believes that its zero tolerance policy and license revocation for a first violation is an appropriate measure to accomplish that.
These amendments are adopted under Texas Government Code §466.015(b)(3), which requires the Commission to adopt rules governing the enforcement of prohibitions on the sale of tickets to or by an individual younger than 18 years of age, and §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on October 29, 2024.
TRD-202405159
Bob Biard
General Counsel
Texas Lottery Commission
Effective date: November 18, 2024
Proposal publication date: September 27, 2024
For further information, please call: (512) 344-5392
The Texas Lottery Commission (Commission) adopts the repeal of existing 16 TAC §401.315 ("Mega Millions"Draw Game Rule) and the new 16 TAC §401.315 ("Mega Millions"Draw Game Rule) without changes to the proposed text as published in the August 23, 2024, issue of the Texas Register (49 TexReg 6391). The rules will not be republished.
The purpose of the repeal and new rule is to conform the play of the Mega Millions game in Texas to game changes recently adopted by the Mega Millions Lotteries and the Multi-State Lottery Association (MUSL). These changes include (1) increasing the purchase price of a ticket from $2 to $5; (2) changing the game matrix from 5/70 plus 1/25 (selection of five numbers from a field of 70 numbers and then one number from a field of 25 numbers) to 5/70 plus 1/24 (selection of five numbers from a field of 70 numbers and then selection of one number from a field of 24 numbers); (3) removing Megaplier® and Just the Jackpot® features; (4) changing the play of the game to include a Multiplier automatically generated by the Lottery Gaming System (as defined in the new rule) as part of the cost of a Play, which will multiply the non-jackpot prizes by 2, 3, 4, 5 or 10 times; (5) revising certain game definitions and references; (6) updating grammar and/or sentence structure changes to provide clarity, including renaming the top prize as the Jackpot Prize instead of Grand Prize; and (7) adding that the Mega Millions Lotteries are removing the graduated percentage escalator for the thirty annual payment schedule. Mega Millions Lotteries will take responsibility for the schedule of prize payments for a thirty annual graduated payment schedule. The new Mega Millions game changes are expected to be implemented on April 5, 2025, with the first drawing under the new rule expected to be on April 8, 2025. Accordingly, the current Mega Millions rule will remain in effect until the date the new rule is implemented, which currently is expected to be April 5, 2025.
The Commission is a member of MUSL and is authorized to conduct the Mega Millions game in Texas under the conditions of the Cross-Sell Agreement between MUSL and the Mega Millions Lotteries, MUSL rules, the laws of the State of Texas, this rule (16 TAC §401.315), and under such further instructions, directives, and procedures as the Commission executive director may issue in furtherance thereof. To be clear, the authority to participate in the Mega Millions game is provided to the Commission by MUSL through the Cross-Sell Agreement and the conduct and play of the Mega Millions game in Texas must conform to the MUSL Product Group's Mega Millions game rules.
The Commission received forty-two (42) written comments on the proposed repeal and new rule during the public comment period.
COMMENTS: All commenters were against the proposed price increase from $2 to $5 to play Mega Millions. Many commenters expressed that they would no longer play the Mega Millions game at the higher price. Several commented that raising the price causes the game to be out of reach for some players and causes others to spend more than they can afford, is not proportionate with the slight improvement of the odds and is greedy. Several also commented that they did not like losing the choice to "Megaply"or not, nor did they like losing the "Just the Jackpot"option. A few commenters also expressed that less people will play the game, resulting in less money for Texas public education.
RESPONSE: The Commission is authorized by the Cross-Sell Agreement between MUSL and the Mega Millions Lotteries to sell the Mega Millions game in Texas. In order to sell this lottery game, the Commission must adhere to the conditions of the Cross-Sell Agreement, as well as the MUSL rules regarding the Mega Millions game. The Mega Millions Lotteries control the management of the game, game changes and new game features. The Commission has no vote, choice, or input, on the cost of the Mega Millions game, the play of the game, or the odds of the game. The Commission only has a choice to sell Mega Millions lottery tickets in accordance with the Cross-Sell Agreement and MUSL rules, or to not participate in the game. In FY 2024, the sale of Mega Millions resulted in the Commission transferring $144,025,131.52 in revenue to the state. Whether the Jackpot prize is won in Texas or in another state, the proceeds from each ticket sold in Texas stay in Texas. Because of the significant revenue brought to the State with the Mega Millions game, the Commission intends to continue selling the Mega Millions game pursuant to the Cross-Sell Agreement and MUSL rules.
SUBCHAPTER D. LOTTERY GAME RULES
The repeal is adopted under Texas Government Code §466.015(c), which authorizes the Commission to adopt rules governing the operation of the lottery; §466.451, which authorizes the Commission to adopt rules relating to multijurisdiction lottery games; and §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on October 30, 2024.
TRD-202405167
Bob Biard
General Counsel
Texas Lottery Commission
Effective date: April 5, 2025
Proposal publication date: August 23, 2024
For further information, please call: (512) 344-5324
The new rule is adopted under Texas Government Code §466.015(c), which authorizes the Commission to adopt rules governing the operation of the lottery; §466.451, which authorizes the Commission to adopt rules relating to multijurisdiction lottery games; and §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on October 30, 2024.
TRD-202405168
Bob Biard
General Counsel
Texas Lottery Commission
Effective date: April 5, 2025
Proposal publication date: August 23, 2024
For further information, please call: (512) 344-5324