Created by the People
The Texas Lottery was born from a voter referendum in November 1991, when Texans approved Amendment 3 to the state constitution authorizing a state-run lottery. The first scratch-off tickets went on sale in May 1992, and the response was immediate — Texas sold $23 million in tickets on its very first day, setting a national record. Draw games followed later that year with the launch of Lotto Texas, the state's original jackpot game.
Where the Money Goes
Unlike many states that earmark lottery revenue broadly, Texas directs the bulk of its proceeds to two specific causes. The Foundation School Fund, which supports public K-12 education, receives the lion's share — approximately $2 billion per year in recent years. Since inception, the Texas Lottery has contributed more than $35 billion to education, making it one of the largest lottery-to-education pipelines in the country. A portion of revenue also supports veterans' programs through dedicated scratch-off games, a distinction that few other state lotteries share.
The Second-Largest Lottery by Population
With nearly 30 million residents, Texas is the second most populous state behind California, giving it a massive player base. This translates into enormous ticket sales volume and frequent big winners. Texas consistently ranks among the top five states in total lottery revenue, and its Powerball and Mega Millions ticket sales rival those of states with twice the number of retail locations.
Games Available Today
Texas offers a strong lineup of draw games. Lotto Texas (6/54) is the flagship state jackpot game, drawing Wednesday and Saturday nights. Texas Two Step (4/35 + 1/35) is unique to Texas — no other state offers this exact format, and its odds of roughly 1 in 1.8 million make it one of the easiest jackpot games to win in the country. Cash Five (5/35) is a daily game with odds of about 1 in 325,000. Pick 3 and Daily 4 each offer four draws per day — morning, day, evening, and night — giving digit players more action than most states. Multi-state games include Powerball and Mega Millions. Our Texas games overview covers every game's rules, odds, and draw schedule.
No State Income Tax
Texas is one of the best states in the country to win the lottery, for one simple reason: there is no state income tax. Lottery winners in Texas pay only federal taxes on their prizes — roughly 24% withholding on prizes over $5,000, with the final rate depending on total annual income. Compare that to New York, where winners face federal plus 10.9% state plus potential city taxes exceeding 50% total. A $10 million Lotto Texas jackpot in Texas nets significantly more than the same prize would in most other states. Our tax-free lottery states guide breaks down the math.
Playing Smart in Texas
For odds-conscious Texas players, Texas Two Step is the standout value — its 1-in-1.8-million jackpot odds are roughly 160 times better than Powerball. Cash Five offers daily draws with solid odds and typical prizes in the $25,000-$250,000 range. For players chasing life-changing money, Lotto Texas provides a middle ground between state and national games, with jackpots regularly climbing above $20 million during extended rollovers.