Request for Proposals for Lottery Operations and Services

The Texas Department of Licensing and Regulation (TDLR) issued a Request for Proposals on April 28, 2026, seeking a single vendor to serve as the comprehensive Lottery Operator for the Texas Lottery Program through August 31, 2038. The procurement encompasses a broad scope of lottery operations and services including the Lottery Gaming System, sales and marketing services, warehouse and distribution operations, draw games and scratch ticket game management, in-lane sales solutions, claims and validation services, mobile applications, retailer management systems, reporting systems, sales terminals, call center support, interactive voice response systems, communications networks, and conversion/implementation services. The Successful Proposer must demonstrate strong past performance, qualified personnel, financial stability, and competitive pricing while committing to approximately twenty months of conversion and implementation to achieve full system operability by September 1, 2028. TDLR will evaluate proposals based on price, quality, past performance, personnel qualifications, experience, financial status, and good faith HUB subcontracting effort. Key deadlines include a mandatory pre-proposal conference on May 11, 2026; Letters of Intent and Non-Disclosure Agreements due May 18, 2026; written questions accepted in two rounds with responses by June 15 and July 10, 2026; proposal submission deadline of July 27, 2026; oral presentations and site visits scheduled for October 7-23, 2026; and announcement of the Apparent Successful Proposer on or before November 2, 2026.

Historically Underutilized Business (HUB) participation is mandatory with required subcontracting plans, and mandatory HUB Subcontracting Plan workshops are scheduled for May 18-29 and July 1, 2026. The Successful Proposer must submit a proposal surety bond of $150,000 and a protest/litigation bond of $750,000 with technical proposal submission, and subsequently provide a performance bond of $20,000,000 within fifteen days of contract execution along with extensive insurance coverage including commercial general liability ($2,000,000 per occurrence), professional liability ($10,000,000 per occurrence), crime insurance ($10,000,000), cyber liability ($10,000,000 per occurrence), and umbrella/excess liability ($10,000,000). Based on fiscal year 2025 performance, the Texas Lottery generated $7.9 billion in sales with approximately 81% from scratch tickets and 19% from draw games, providing a substantial revenue base for the contract. The Successful Proposer will receive no compensation during the approximately twenty-month conversion period and must withhold six weekly payments during the final contract year as hold-back, with additional eight-week withholding possible if transition to a replacement vendor fails. A comprehensive sanctions and remedies schedule applies to performance failures with liquidated damages ranging from $200 per minute for system degradation to $100,000 per incident for unauthorized media releases and daily sanctions up to $100,000 for system unavailability affecting draw game ticket sales. TDLR reserves the right to renew the contract for one additional three-year period at mutually agreed upon rates, and pricing must be submitted on the required Cost Proposal form with costs remaining firm throughout the contract term.