Online Gambling License in Texas

More About an Online Gambling License in Texas

The Texas Lottery Commission was created in 1991 by the state to operate its state lottery. The body oversees the state-run Texas Lottery and all lottery games in Texas.

Unlike most states, which centralize gambling oversight into one agency, Texas has different bodies that control specific types of gambling. As such, the Texas Lottery Commission oversees lotteries, while parimutuel wagering on horse and dog races is under the purview of the Texas Racing Commission.

Finally, Texans can enjoy Class II casino games at one of three tribal casinos operating in Texas. The state’s legislature has frequently sued these casinos in an effort to close them down, which happened as late as 2017. However, in 2022, the United States Supreme Court decided that the state could not stop these casinos from operating. Because of that, they remain the only locations in the Lone Star State where players can enjoy casino gaming legally.

Unlike most other US states, Texas does not permit any sports betting. The state strictly prohibits all kinds of wagering on sports, including daily fantasy sports betting. It also restricts private poker games of all sizes.

Types of Gambling Regulated by Texas

Texas restricts most types of gambling. It’s one of the few US states whose regulations haven’t loosened in the past few years, making it an outlier. However, a few types of gambling did manage to become legal over the years, which you will see outlined below.

Tribal Casinos

There are three tribal territories present in Texas that offer casino gaming services as part of the Indian Gaming Regulatory Act (IGRA). These include:

• Kickapoo Lucky Eagle Casino
• Speaking Rock Entertainment Center
• Naskila Gaming

All three casinos offer Class II games. This allows them to provide non-banked card games and electronic bingo. The latter are functionally identical to slot machines, with a caveat. The outcome of those games is determined using lottery drawings.

State Lottery

The state runs its own lottery through the Texas Lottery Commission. It’s been around from 1992 onwards, making it one of the few legal ways to gamble in the Lone Star State. The majority of funds raised by the Texas Lottery go towards paid prizes: around 66.9% of them. Meanwhile, almost 25% goes towards education, assistance to veterans, and other state programs.

Since its inception in 1992, The Texas Lottery has raised $39 billion for good causes. In 2023 alone, the company raised $2 billion for its beneficiaries in a single fiscal year. It also sold the winning ticket for an $800 million Mega Millions jackpot in September 2024. That broke the record for the largest Mega Millions jackpot to be won by a Texas Lottery player.

Horse and Greyhound Racing

Horse racing in Texas has a long and storied history, dating back to the late 19th century. However, legal betting on horse and dog races only came about in 1933. The state legalized parimutuel wagering in an effort to combat the Great Depression. However, this wouldn’t last long. The state would ban betting again four years later.

Though the topic came up often, it wouldn’t be until 1987 that the state legalized parimutuel betting on horse and greyhound racing again. All oversight over the newly legal wagering was put on the newly formed Texas Racing Commission. It ensures race tracks follow Texas laws and regulations and that all wagering is done in a safe manner.

Raffles

The state permits certain religious societies, non-profits, and volunteer groups to organize raffles. Each qualified organization is allowed four raffles a year, and all proceeds must be used for charitable purposes. Organizations that wish to hold raffles do not have to obtain a permit first.

Texas raffles do not allow direct cash prizes as rewards. However, it does permit organizations to award savings bonds or stored-value credit cards.

Texas Regulatory Framework

While we would love to give you an in-depth look into how Texas handles gambling regulations, we’re afraid there’s not much to say. There is no umbrella organization that sets a regulatory framework for gambling in the state. Instead, Texas has two separate organizations for the two types of legal gambling permitted there.

On top of that, Texas does not seem to have a regulatory body overseeing tribal casinos. This makes sense to a degree, given that the state was working to shut them down entirely not too long ago. However, with the Supreme Court ruling in favour of tribal casinos, Texas can’t take this approach anymore. We hope to see it implement a new regulatory body that will work with tribal casinos in the future.  

FAQs about the Online Gambling License in Texas