Texas Lottery Commission Meeting, September 11, 2024

okay good morning everyone I'd like to call this meeting to the Texas Lottery Commission to order today is September 11th the time is 9:30 a.m. we have all Commissioners here we'll start with the pledge of allegiance to the US and the Texas flags flag of the United stes okay uh to my colleagues in public thank you all for joining us and and being here for this special called meeting we have several initi to discuss on the important topic of prohibiting sales of lottery tickets to miners under the lottery uh State act that is the prohibition on a retailer selling or offering the sell of lottery tickets to any person under the age of 18 at the agency Sunset advisory commission hearing on August 14th we heard the concerns of legislators regarding the important issue of what this commission has done and is doing to prevent the sale of lottery tickets to miners as I stated at the hearing this commission has a zero tolerance for any retailer selling lottery tickets to miners at today's meeting we are affirming this policy and it is my intention for the commission to take action to reinforce it and to send a strong message to our licensed retailers our players and the public that this activity will not be tolerated at all but before move forward with that discussion or first item will be to go into executive session I move that the Texas Lottery Commission go into executive session to deliberate Personnel matters and to receive legal advice yes so is there a second we have that uh all in favor say I I okay the Lottery Commission will go into executive session at 9:32 a.m. on September 11th 2024 e e e okay the Texas Lottery Commission is out of executive session at 9:53 amm I anticipate the commission will be taking action later in this meeting uh but there is no action to take now our first discussion item I've asked our executive director Ryan uh to to report to the commission's past and current initiatives to prevent sales to miners to lay out what the agency has put into motion for the future to further ensure that retailers are clearly educated about the statutory prohibition and the commission Zero Tolerance policy that miners are not able to purchase lottery tickets ran thank you and good morning chairman and Commissioners for the record my name is Ryan Mandell I'm the executive director like to start my report on this item by reviewing with you a presentation that the lottery Operations Division has put together covering our historical initiatives regarding lottery tickets and miners as well as a Communications campaign the agency put together starting last month after the presentation I'll report on some activities by our enforcement Division and I'll close with a contractual update so again as we start the presentation I'm going to C first cover initiatives we've had in place for a number of years we've taken this issue very seriously I think you'll see that as we work through these materials if we start on slide three um this slide will cover one of our uh on the uh one of our main points of messaging and that's you must be 18 or older to purchase a lottery ticket this messaging is included on all of our tickets scratch tickets and draw tickets it's included on what we call our point of sale materials so those are items like posters that are put near the point of purchase advertising our Lottery products we also include that messaging on our digital marketing screens that we have have on most retail locations in the states we call that in the state we call that esmm so that's the technical term but it's a digital screen that Cycles through different messaging and we make sure that we include that we also that have that on materials at our short-term selling locations like fairs and festivals that we do throughout the state we include this information must be 18 or older to purchase a ticket on all of our self-service vending machines we provide retailers a remote shut off device that they're instructed to use if they see miners interacting with the machine more to come on that there's again a number of retailer Communications manuals brochures and other campaigns that include this messaging throughout the year on the next slide we're going to start covering um some information we have on our website and this is what we broadly call social responsibility section of the website but it encompasses our responsible gambling program that's RG for short and RG contains a lot of information about the prohibition on minors purchasing Lottery and I I give I do want to give some context about our RG program because I think that's important here problem gambling in the RG program is focused on more than just underage gambling but it again it's a significant focus of what we do on RG our RG program was certified in 2015 by the world Lottery Association as part of that review they had an independent review panel and that panel gave the agency's player education the highest rating of all of our RG program elements in 2016 we leveled up we received a level three World Lottery Association certification for RG program The Independent assessment panel at that time said quote the focus of our player education program has been on underage control and promoting play responsibly messages there's also in the states the National Council on problem gambling they worked with the North American Association for state and provincial lotteries nasel to introduce an G parallel verification program that works hand inhand with the world Lottery Association program we have achieved the highest level of certification from that National Council on problem gambling program the world Lottery Association recertified our RG program at level three in 2020 at that time they noted among other things that a main area a main focus of our RG program is underage gambling they also said that our RG program is quote well implemented and integrated in our organization now our current world Lottery Association and National Council problem gambling certifications are valid until 2026 we have every expectation that will be continue to be recognized for efforts in this area in fact just last year we won two awards at the nasville annual meeting relating to our RG program we won the award for responsible gambling communication and digital media and the award for responsible gambling Communications and print overall I'm very pleased with the work that's gone into our RG program over the years I'm going to continue to make this a priority for the agency I did want to take a moment to recognize Teresa Edwards who runs that program for many years in addition to her other duties put a lot of work into this presentation with that I'm going to move on to the next slide which has more information about the RG section of our website and again here we call out you must be 18 or older to purchase a ticket or redeem a prize at retail we also have a link here to the International Center for Youth gambling problems it contains additional information about the risk of Youth gambling we think this information is valuable for retailers the public parents and all other stakeholders on the next slide we'll finish up the information that we provide on our website with a with a page we have about getting help and again here we reemphasize lotteries for those 18 and older and we again have the link on youth gambling on the next slide we have materials more focused on our retailers on some of the materials I mentioned called point of sale we have the opportunity to put messaging facing the clerk as well so one side faces the player and we'll have message about the new game that's in Market but on the reverse side we have a message to the clerk for the retailer to give them reminders about different violations that we want them to be aware of rotate those messages over time but again we include reminders in that program both for the violation of retailers not selling tickets to Miners and also not paying prizes to minor I have two other examples on this slide that come from what we call the retailer round Up Magazine this is a monthly magazine that we put together that has a number of points of emphasis for our retailers might have updated sales material and other information but again we include updated regulatory reminders about appropriate retailer behavior these reminders have regularly included messaging about how retailers are not authorized to sell tickets to miners or pay Lottery prizes to miners on the next slide I wanted to cover our annual gift response posibly campaign we've worked with the National Council for problem gambling and the International Center for Youth gambling problems since 2009 on this campaign this effort is part of that recognized RG program I talked about before but it's focused specifically on lottery purchases around the holidays as part of this campaign we will deploy messages in many of the places I mentioned before like the monthly retailer Roundup magazine and that digital esmm screen that we have at retailer locations but we also o include messages sent directly to the lotteries uh the lottery terminal at retail social media messages for the public emails to players who have subscribed to our Lottery email list and emails to TLC employees and vendors the next slide provides some more examples of what that program looks like again we heavily emphasize that lottery tickets are not Child's Play That's the messaging for the holiday campaign and we put it out in a number of different locations so that covers really what we've done historically on a regular basis next I want to cover the communication campaign that the staff put together in light of the concerns raised at the August 14 hearing again we have a substantial amount of communication and Market throughout the year but we wanted to supplement that with an additional campaign to reemphasize the message Lottery is not for kids so first on the next slide we issued what's called an urgent terminal message to retailers reminding them not to sell Lottery tickets to minors this is printed out right on their retailer terminal and they have to receive that message to pursue additional sales on that terminal really it's the fastest way to get Vital Information to retailers we're going to be repeating that throughout the fall on the next slide we used our social media channels so that's Facebook Instagram LinkedIn and X to get the word out we use this across all the channels and again it's going to be repeated throughout the fall next we also utilized the mobile app the new functionality that we have um to issue what's called a push notification you might be familiar with these on your phone from various apps and but basically it's going to send a message to your phone so if you're in the app and the Texas lottery app it might look like a popup or it might go to your your home screen your notification area and again we're reminding our players that you must be 18 or older to purchase a lottery ticket we'll be repeating this message uh additional times throughout the fall on the next slide have details of the subscriber email Communications we sent emails to our subscribers about how miners should not be buying lottery tickets now I just note here those last couple the social media these app notifications these email notifications you know we'd call that the public those are players those are people that are interested in our message but we do have a number of Lottery retailers that use these methods as well to keep up with what we're doing and so I think we reached a non insubstantial amount of retailers retailer employees with these messages as well um on the next slide I mentioned the monthly Roundup magazine we wanted to make sure that we included a message on this issue uh on on miners buying tickets in the October edition of Roundup that will go to our retailer base later this month we had talked about the digital esmm display so on on the next slide we're talking about the messaging that we added to the esmm slide now this takes a little bit more work to get into market so we were able to get a slide into the show that's going to be at the State Fair of Texas later this month and then that's going to be going out to all retailers starting in November and again the message here you must be 18 or older to purchase or redeem tickets at retail um we also include a digital Banner on the digital self-service machines we have called gt2s and that's going to start next month as well last but not least we wanted to supplement on the next Slide the information from our website so I showed you some of the information we have about our RG program the messaging we have to to say hey Lottery is not for retail it's part of the problem gambling campaign but we also have message we have areas on our website that really focused for retailers um they have a different information that they can use to get what they need for their business so we added information here on the Retailer's main information page again detailing it's a criminal offense to knowingly intentionally sell a lottery ticket to a minor um on the next slide we added a link on the RG section of the retailer page again linking back to that information about miners and lottery so I'm going to end with a slide um that has a lot of information and so I just I want to make sure this is not intended for every bit of it to be absorbed but I thought it was worthwhile to show the scope of the communication that we put together on this issue so on my last slide you can see the full schedule of communications we have planned for the rest of the year yellow highlights are retailer focused blue highlights are player public focused again this is a lot of information it's really just meant to demonstrate the full scope of the communications plan we believe that this is extremely robust and it demonstrates how important this issue is to our agency so again that concludes the part of the presentation on the communication efforts we've done I did want to provide some information on our from our enforcement division concerning the sale of lottery tickets to miners to start that part I I just want to give some context as well so the agency employs nine field investigators includ including two managers we have of course over 21,000 retailers selling Texas Lottery P products so enforcement program is always going to be complaint and referral driven we do believe that we effectively respond and investigate all the complaints we receive from the public as well as questionable claims that come in through our claim center we do not have the ability to be present for every transaction as there's well over a billion tickets sold in Texas every year with that introduction though I will share that since 2014 the Texas Lottery has received 21 complaints regarding the sale of lottery tickets to minors now during that time there were approximately 5,000 complaint investigations and over 12,000 total investigations conducted by the enforcement division of the 21 complaints that we received four were substantiated two were brought to the commission and in both cases the retailer was given a suspension one case was prepared to be brought to you but the retailer surrendered their license prior to presentation to the board and the fourth has been referred to Lottery Operations Division has been considered for administrative action right now for the other 17 cases one is currently under investigation the remaining 16 investigations did not result in sufficient evidence to support a violation now there are several challenges in these cases often a person who makes a complaint might wish to become remain anonymous or they're reluctant or unable to provide additional details needed for us to investigate but if we we have not been able to develop evidence to substantiate the allegation if the allegation involved a self-service vending machine we always try to take that opportunity to educate and remind store staff on the use of the remote that I mentioned to disable the machine if they see minor are attempting to access it and in some cases we recommended relocating the machine to a spot where it's more easily observed that brings me to my last update again we have over 3,000 of these self-service vending machines at retailers today I do believe that it is time to add additional safeguards for that equipment to proactively address any potential use by miners I've instructed our system vendor IGT who provides that equipment to us to implement age verification functionality by the end of the year that would require scanning of identification to initiate a lottery purchase at the self-service machine IGT is finalizing the technical approach to achieve that but I'm optimistic we can achieve that goal so in closing I think the agency has communicated on this issue for years but we've stepped up our efforts recently we want to make it clear to everyone involved in lottery in Texas retailers players parents vendors and staff miners should not be purchasing lottery tickets with that I'm happy to answer any questions you may have okay Brian thank you very much for your detailed analysis and and overview and just it's Testament to how seriously that you and staff and the lottery uh take this issue so thank you for your leadership uh what we have heard today and the rule change that we will be considering uh next on the agenda clearly reinforces this commission Zero Tolerance U to the miners but before we move on to the next item I'd like to open the floor to my fellow Commissioners for their comment yeah i' just like to thank you commissioner uh Mr chairman for providing this this venue for commission to to reiterate and as Ryan pointed out to demonstrate the the seriousness with which we take this issue and have always taken put this issue and then also to provide an opportunity to as we always want to do to do better where we can and where we see opportunities so thanks Ryan for the the thorough background on that and um I think it's good for the public to hear these things which go on behind the scenes that only retailers and folks who may be playing will generally see and to share that with with the the general public and um and also that history of of the related complaints and how how few have actually come come forward and and the way that they've been handled each time and um and I think the activity we're going to or the initiative we're going to take today we'll just further tighten that up and um again I'm I'm really proud of the work that our staff has done on this and uh and as evidenced by the the awards we received from uh from National and international um recognition so um frankly proud of our work on this and proud that we're going to keep keep moving forward on it and where we see opportunities to to fix it we will so thanks Mr chairman and thanks ran okay thank you commissioner I'd like to say I agree with everything that commissioner France said and um I agree that this is an important issue for this commission and for the agency to be focused on Texas lottery tickets should not be purchased by minors and we need to ensure that our licensed retailers and the public understand this and that the retailers understand the consequences consequences of KN knowingly selling tickets to Miners and and as as Ryan presentation showed I believe this has always been top of mind with the staff and they're working really hard in this regard um we can always find ways to improve and and strengthen the messaging though so all stakeholders clearly understand the requirements I'm I'm I'm looking forward to working with all of you guys and uh Ryan on this and his team on this issue and getting it tightened up a bit okay commissioner thank you also would like to uh Echo what my fellow Commissioners have said and hopefully after reviewing our past actions and the actions we're taking today is abundantly clear that under no circumstances should miners be purching lottery tickets so thank you again Mr chairman and staff and executive director for all the work work that's gone into this today thanks chairman thanks Ryan for the the background history on this um I I am I'm confident that we've always taken this very seriously and you guys have done a good job with it um but I also am very pleased to see us putting this up sort of front and center as a as a true priority it's obviously important for the legislature which means it's it's important for us um I'll also just to add obviously that our our efforts and Endeavors to educate retailers is is Paramount I'd also encourage us to find ways to deter kids from buying lottery tickets and if that's with proactive messaging on the self-purchased machines or or elsewhere to make it clear you're you're breaking the law if you're trying to buy a ticket um and so yeah with that again I'm just glad we're moving in this direction wonderful well just uh again grateful to all of our commissioners for the work that y'all are are putting in on this and and again to staff and uh to our retailers that it is an absolutely clear message that uh selling to minors is just not allowed and if you do uh you will not be selling Lottery period And so this initiative is something that I'm absolutely 100% along with all of our commissioners uh in support of and so uh grateful for all the work that is that is gone on so the next item is the lottery rule proposal Bob uh your item good morning Commissioners I'm Bob beard general counsel item three is a proposal to amend two Lottery licensing rules rule 41.1 158 on suspension or revocation of license and rule 40116 the standard penalty chart the purpose of the proposed amendments is to reinforce the commission's zero tolerance policy regarding a Texas Lottery 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 lense e intentionally or knowingly sells or offers to sell a lottery ticket to a person that the license he knows is younger than 18 years of age this violation comes from a criminal Statute in the loty act at Texas government code section 46635 under this rule proposal the exclusive penalty for a firsttime violation will be revocated of the retailers license staff recommends approval to publish The Proposal in the Texas register to receive comments for 30 days if you approve the official publication date will be Friday September 27th and the comment period will end Monday October 28th the amendments may be adopted any time after the comment period ends and uh it's my understanding that we we have another commission meeting set for for late October so be Timely you will be able to adopt the rules at that time I'll be happy to answer any question okay B thank you uh Commissioners any discussion okay is there a motion to publish the rule uh proposal for public comment I still move okay is there a second second okay all in favor say I I I okay motion passes uh next item is public comment I have received no requests for public comment okay Bob thank you uh Commissioners I believe this concludes business uh for this commission meeting is there a motion to adjourn so moved okay is there a second second okay all in favor say I I okay we are adjourned thank you everyone thank you sir