The Voluntary Reserve

Executive Summary

In November 2025, Texas became the first U.S. state to purchase bitcoin for a government-held strategic reserve, investing $5 million of a $10 million legislative appropriation through BlackRock’s iShares Bitcoin Trust. The acquisition was authorized by Senate Bill 21, the Texas Strategic Bitcoin Reserve and Investment Act, signed into law by Governor Greg Abbott in June 2025.

The move is historic — but it also exposes a problem that every state considering a similar reserve will face: the political and philosophical difficulty of using taxpayer dollars to buy a volatile asset like bitcoin. Critics, across both parties, frame the issue as “gambling public money.” Many bitcoiners, for their own reasons, are uncomfortable with coercive taxation being used to fund sovereign bitcoin acquisition.

This paper proposes a model that resolves both objections at once: fund strategic bitcoin reserves through dedicated lottery scratch-off proceeds, not compulsory tax revenue. A dedicated bitcoin scratch-off would not make bitcoin risk-free. It would make the funding mechanism voluntary, self-sustaining, transparent, capped, and politically separable from the general budget. The mechanism is also grounded in an existing Texas precedent — the veterans’ scratch-off program, which has raised approximately $300 million for the Texas Veterans Commission’s Fund for Veterans’ Assistance since 2009, with over 90 percent of that fund’s revenue now coming from dedicated lottery games.

Applied to a state bitcoin reserve, the same mechanism could plausibly generate $10–30 million per year in voluntary contributions — enough to acquire 100–300 BTC annually at current prices (est. $75K). Over a decade, this could build a meaningful state holding without a single dollar drawn from general revenue.

It transforms the narrative from “taxpayer dollars at risk” to “lottery players investing in the state’s future.”

Texas offers the clearest test case because the legal framework is already in place. But the model is replicable in any state with a lottery and an interest in building a strategic bitcoin reserve. This paper outlines how it would work, why it solves the political problem, and what states would need to do to implement it.

The Problem: Taxpayer-Funded Bitcoin Is Politically Fragile

The Texas precedent is significant, but it also illustrates why more states have not followed. Arizona and New Hampshire have passed legislation authorizing strategic bitcoin reserves, yet neither has executed a purchase. Wyoming, Florida, and others are exploring the idea but have not moved. The obstacle is not legal or technical — it is political.

Using compulsory tax revenue to buy bitcoin runs into resistance from multiple directions at once. Fiscal conservatives balk at speculative positions with public money. Progressive critics argue the funds should go to schools, healthcare, or infrastructure. Commentators across the spectrum describe state bitcoin purchases as “gambling” — a framing that appeared repeatedly in coverage of the Texas bill and its critics.

There is also a quieter objection from within the bitcoin community itself. Many bitcoiners who support state bitcoin adoption nevertheless oppose using coerced taxation to fund it. Bitcoin’s founding ethos is voluntary exchange and individual sovereignty; having the state acquire bitcoin by taking money from citizens who did not consent to the purchase sits uneasily with that ethos, even for those who celebrate the broader trend.

The result is a political trap. The argument for state bitcoin reserves — that bitcoin is a long-term store of value with strategic properties similar to gold — is increasingly accepted in policy circles. But the funding mechanism remains the sticking point. So long as taxpayer dollars are the only answer, progress will be slow, fragile, and vulnerable to reversal whenever bitcoin’s price drops.

The Proposal: A Dedicated Bitcoin Scratch-Off

The idea is simple. A state creates a bitcoin-themed lottery scratch-off game whose net proceeds — after prizes and administrative costs — are dedicated by statute to the state’s strategic bitcoin reserve. The state lottery operates the game like any other. Lottery players voluntarily buy tickets. Net proceeds periodically flow to the reserve fund. The Comptroller (or equivalent state financial officer) converts those dollars into bitcoin via a qualified custodian.

No taxpayer dollars are involved. No general-fund appropriation is required beyond whatever startup costs the state chooses to cover. The reserve grows at the speed of voluntary participation.

The concept is novel as applied to bitcoin, but the mechanism is not. Texas already does exactly this for veterans.

The Precedent: Texas’s Veterans’ Scratch-Off

In 2009, the Texas Legislature passed legislation directing the state lottery to create a scratch-off game whose proceeds would flow to the Texas Veterans Commission’s Fund for Veterans’ Assistance (FVA). The first game, “Veterans Cash,” launched on November 9, 2009, as a $2 ticket — the first Texas lottery game ever dedicated to a cause other than public education.

Fifteen years later, the results speak for themselves. The Texas Lottery has launched more than 80 veterans-themed scratch-off games. Cumulative contributions to the Fund for Veterans’ Assistance now exceed $299 million. In FY 2025 alone, $31.2 million was transferred to the fund. More than 90 percent of the FVA’s total revenue now comes from dedicated lottery proceeds.

The mechanism is straightforward. By default, Texas lottery profits go to the Foundation School Fund to support public education. But the Legislature can carve out specific games whose net proceeds flow elsewhere. When it does, the lottery operator runs the game normally and transfers proceeds periodically to the designated beneficiary. There is no diversion from education funding writ large; the dedicated game is designed to be incremental, attracting players motivated by the cause.

This is a proven, fifteen-year-old framework with broad public support. The same legal and operational scaffolding can carry a bitcoin-dedicated game.

How It Would Work

Implementation requires four coordinated pieces. None of them is novel in isolation; the novelty is the combination.

Legislative authorization. The legislature passes a statute designating the state’s strategic bitcoin reserve as the beneficiary of a specific scratch-off game, mirroring the 2009 veterans’ framework. In Texas, SB 21 already contemplates this — it explicitly allows the reserve to receive “revenue that the legislature by general law dedicates for deposit to the credit of the reserve.” A simple amendment names the bitcoin reserve as such a beneficiary.

Game operation. The state lottery designs and runs the scratch-off like any other — ticket price, prize structure, branding, retail distribution. Prizes are paid in dollars. The “bitcoin” element is the theme and the beneficiary, not the prize. All standard lottery regulations apply.

Revenue flow. Players buy tickets. The lottery pays out prizes and retailer commissions. Net proceeds are earmarked by statute and transferred periodically — monthly or quarterly — to the strategic bitcoin reserve fund.

Bitcoin acquisition. Once in the reserve, proceeds are deployed into bitcoin by the Comptroller through a qualified custodian, following the reserve’s investment policy. Purchases can be executed in batches to average out price volatility or on a fixed schedule, at the Comptroller’s discretion.

Nothing in this mechanism requires new technology, new regulatory institutions, or new operational capacity beyond what states with lotteries and strategic reserves already possess.

Why It Solves the Political Problem

The funding mechanism is the whole point. By shifting from compulsory taxpayer dollars to voluntary lottery proceeds, the proposal neutralizes the core political objections to state bitcoin reserves simultaneously.

No taxpayer risk. If bitcoin’s price drops, no public dollar is lost. The capital at risk came from lottery players who chose to participate. Critics who frame state bitcoin purchases as “gambling with public money” lose their central argument.

No displacement of priorities. The reserve grows without competing with schools, healthcare, or infrastructure in the annual budget. Every dollar that would otherwise go to general revenue still goes to general revenue.

Alignment with the bitcoin ethos. Because participation is voluntary, the state acquires bitcoin without coercive taxation. Bitcoiners who oppose taxpayer-funded reserves on principle can support a voluntary-funding version of the same end goal.

Defensible political framing. Lawmakers can tell constituents, with full accuracy, that no taxpayer dollars are being diverted to bitcoin — the reserve is funded by a new lottery game that anyone can choose to play. That framing is politically durable in a way that appropriated funding is not.

Public engagement. The scratch-off becomes a point of contact between the state’s bitcoin strategy and ordinary citizens. Players who buy in become stakeholders in the reserve’s success. State pride, bitcoin interest, and entertainment value combine in a way that traditional appropriated funding cannot match.

Objections and Guardrails

The most direct attack on this proposal will combine its two most attackable features: that it funds a volatile asset with gambling proceeds. Each half of that critique deserves a serious response.

On volatility: bitcoin’s price fluctuates, sometimes sharply. But the entire premise of a strategic reserve is long-term holding, not short-term trading. Voluntary lottery proceeds are uniquely well-suited to this approach because there is no taxpayer expectation of immediate return, no budgetary reliance on near-term liquidity, and no political pressure to liquidate during drawdowns. The state can simply hold, and let time work.

On gambling proceeds: state lotteries are an established and accepted funding mechanism for designated public purposes in nearly every state, including Texas’s longstanding use of dedicated scratch-off games to fund veterans’ assistance. The proposal does not introduce a new vice; it directs a portion of existing voluntary lottery spending toward a new public purpose. To the extent there are legitimate concerns about lottery participation more broadly — regressivity, problem gambling, marketing practices — those concerns apply to the state lottery as a whole, not to this proposal specifically, and are addressed through the responsible-gaming frameworks that govern all state lottery games.

Beyond those direct responses, the proposal should be structured with explicit guardrails that anticipate concerns and demonstrate intentional caution:

Dollar-denominated prizes only. Tickets pay out in dollars, like any other scratch-off. Bitcoin is the beneficiary of the game, not the prize.

No marketing as an investment vehicle. Game marketing emphasizes voluntary contribution and entertainment, not financial return. Tickets are not securities and are not promoted as such.

Responsible-gaming disclosures and protections. The game operates under the same responsible-gaming framework that governs all state lottery games, including problem-gambling resources and age verification.

Per-person purchase limits. The game operates within the existing per-person ticket purchase caps that apply to all state lottery games.

Scheduled bitcoin acquisition. Proceeds are converted to bitcoin on a regular, transparent schedule (monthly or quarterly) rather than in lump sums, reducing exposure to short-term price timing.

Qualified custody. All bitcoin acquired through the program is held by a qualified custodian under the same standards that apply to the broader strategic reserve.

Education-fund hold-harmless provision. If the program demonstrably reduces public education funding below its established baseline, proceeds revert to the education fund until that baseline is restored.

Annual reporting and review. Annual reports on game performance, proceeds, bitcoin acquired, and reserve value, publicly available alongside the broader strategic reserve reports.

Sunset provision. The dedicated-proceeds mechanism includes a defined review period at which the Legislature must affirmatively act to continue it, preventing one-way ratcheting.

These guardrails are not afterthoughts. They are core to the proposal’s political viability and its long-term integrity.

What It Could Generate

The veterans’ precedent provides the clearest benchmark. The first $2 veterans’ scratch-off was projected to generate about $9 million annually; expanded offerings now produce $25–30 million per year for the FVA. A bitcoin-themed game priced at $5 or higher could plausibly reach similar levels, particularly if it attracts crypto-curious players who don’t otherwise participate in the lottery.

These are rough estimates, not projections. Actual results will depend on ticket pricing, player uptake, marketing, and bitcoin’s price at the time of purchase. But the order of magnitude is useful: a dedicated scratch-off could, within a few years, build a state bitcoin holding larger than Texas’s initial $10 million appropriation, funded entirely by voluntary participation.

If we assume a range of $10–30 million in annual net proceeds, the table below shows the resulting annual bitcoin accumulation under three bitcoin price scenarios:

Over a five-year period, a successful program could accumulate anywhere from a few hundred to several thousand bitcoin, depending on proceeds and bitcoin’s price at the time of acquisition. At the midpoint — $20 million in annual proceeds and $100,000 per BTC — the program would acquire roughly 1,000 bitcoin over five years.

Why It’s Legally Feasible

For Texas, the legal pieces are already in place. SB 21 explicitly contemplates dedicated revenues flowing to the reserve. The 2009 veterans’ statute establishes the precedent for cause-dedicated lottery games. Texas’s Comptroller has statutory authority to acquire and hold bitcoin through a qualified custodian. What remains is a legislative amendment linking the two frameworks — designating the strategic bitcoin reserve as a beneficiary of a specific scratch-off game.

For other states, the path depends on local law but follows the same logic. Any state with (a) an operating lottery, (b) a statutory strategic bitcoin reserve or the legal authority to create one, and (c) precedent for dedicated-cause lottery games can adopt this model with relatively modest legislative action.

One current-state note worth acknowledging: the Texas Lottery underwent significant structural change in 2025. In response to scandals involving lottery couriers and contested multimillion-dollar jackpots, the Legislature abolished the standalone Texas Lottery Commission and transferred lottery operations to the Texas Department of Licensing and Regulation under SB 3070, effective September 1, 2025. The same legislation imposed new restrictions (a ban on lottery couriers, a per-person ticket purchase cap, and mandatory annual audits) and requires the Sunset Advisory Commission to review the program before 2029, when the Legislature must affirmatively act to continue it. A bitcoin scratch-off proposal would need to work within this restructured and more closely scrutinized framework — but the dedicated-proceeds mechanism remains legally intact, and the veterans’ program continues operating without interruption.

A Model Worth Testing

Texas has opened the door to state-level bitcoin adoption. Other states are watching. The question is not whether the idea spreads but how — and on what terms. So long as the only answer to “how is this funded?” is “taxpayer dollars,” progress will remain slow, contested, and easily reversed.

A dedicated lottery scratch-off offers a different answer. It funds the reserve voluntarily. It sidesteps the political trap. It aligns the funding mechanism with bitcoin’s underlying ethos. And it has a fifteen-year track record, in Texas, of doing exactly this for another cause.

This paper is offered as a starting point. The model deserves serious attention from policymakers, from bitcoin policy organizations, and from the broader bitcoin community — because it may be the cleanest path to expanding state bitcoin reserves that we have.

Key Sources

• Texas Government Code §403.701–709 (Texas Strategic Bitcoin Reserve and Investment Act, SB 21, signed June 20, 2025).
• Texas Senate Bill 3070 (2025), restructuring the Texas Lottery and moving operations to the Department of Licensing and Regulation.
• Texas Lottery, “Supporting Education and Veterans” (official FVA revenue data, FY 2024 and FY 2025).
• Texas Veterans Commission, Fund for Veterans’ Assistance.
• Dallas Morning News / Governing, “Texas Becomes First State to Buy Bitcoin” (December 2025).
• Texas Tribune coverage of SB 21 and SB 3070 (2025).
• Statements by Senator Charles Schwertner (SB 21 sponsor) and Representative Giovanni Capriglione (House co-author).

About the Georgia Bitcoin Council

The Georgia Bitcoin Council is a 501(c)(6) trade association dedicated to educating policymakers and the public, advocating for sound bitcoin policy, and advancing responsible bitcoin adoption across Georgia.

Jeffrey Carson, Executive Director; Dr. Richard Lassiter, Board Chair; Stephen DeLorme, Board Member

Correspondence: jeff@georgiabitcoincouncil.org