Texas Lottery: Texas Lottery considers changing jackpot calculationAmid complaints of false advertising, Texas Lottery Commission officials will consider changing the way jackpots are paid.
C. Thomas Clowe, the commission chairman, said the three-member panel will discuss this month whether to guarantee the advertised jackpot or continue basing the grand prize on a percentage of ticket sales.
Clowe said Thursday that he is concerned that miscalculating the lotto jackpot could undermine confidence in the game.
"We want the public to have confidence in the lottery," Clowe said. "This is the people's business."
The commission came under fire this week when it was accused of overestimating Wednesday night's jackpot even though the pace of ticket sales would not support the advertised $8 million payout.
The complaint brought calls from state Sen. Jane Nelson, R-Lewisville, for new legislation to compel the lottery to comply with the state's truth-in-advertising laws.
Nelson, who is vice chairwoman of the legislative panel that reviews the performance of state agencies, said that Texans must have full confidence in the lottery's integrity.
"Clearly, this is an example of the pitfalls associated with government-sanctioned gambling," said Nelson, an outspoken opponent of gambling. "We have to be absolutely sure that everything that goes on there is open and aboveboard. The public needs to know what's going on. I need to know what's going on."
A complaint was filed Monday by lottery commission critic Dawn Nettles of Garland with Texas Attorney General Greg Abbott's office accusing the commission of overstating Wednesday's jackpot in an effort to boost sagging ticket sales.
Lottery officials have acknowledged that the jackpot was overestimated but said it was an honest miscalculation.
Lottery spokesman Bobby Heith said the chief reason for the miscalculation was that ticket sales did not increase as expected as the deadline for Wednesday's drawing approached.
To make sure that another overestimation did not occur, lottery officials did not advertise a higher jackpot for Saturday's drawing even though there was no grand-prize winner Wednesday.
It was the first time in the Texas lottery's history that the jackpot was not increased after a drawing without a winner.
On Thursday, Abbott spokeswoman Angela Hale said the attorney general's office examined the complaint and was satisfied that lottery officials "were addressing the issue raised in the allegation."
Clowe said that weak lotto sales can be attributed at least in part to the lottery commission's decision in 2003 to join the multistate Mega Millions game, which is similar to lotto but often generates jackpots that are far higher.
He said the agency has policies in place to ensure that it follows all consumer-protection laws.
"I believe we have rules in effect that do just that," Clowe said.
He said further discussions are planned for the commission during its June 24 meeting.
"We have had very open and extensive discussions on that, and we will continue to have those discussions," Clowe said.
Under current policy, anyone who wins the lotto during the first four drawings after a jackpot is won is awarded the advertised amount. After the fourth drawing, the amount a jackpot winner is awarded is based on a percentage of ticket sales.
Nettles said she would fight any effort to change that policy because when jackpots roll into the tens of millions of dollars, the percentage of sales often exceed the advertised jackpots.
"We don't want them low-balling the estimates once the jackpots start getting on up there," Nettles said.
During the legislative session that ended last month, a bill to extend the lottery's life for 12 more years contained a clause that would have required the agency to fully comply with consumer-protection laws, including those dealing with deceptive advertising. The measure died, meaning that the lottery commission will again come under review in 2007.
The provision was developed by the state's Sunset Advisory Commission, an arm of the Legislature co-headed by Nelson that reviews and evaluates all state agencies.
Ironically, Nelson helped kill the lottery-extension bill because pro-gambling lawmakers intended to use the measure as a way to legalize Las Vegas-style video slot machines in Texas. But she said she will explore ways to craft legislation that will bring greater consumer protections to the lottery without providing an opening for additional gambling opportunities in the state.
