Is it game over for the Texas Lottery?

Aug 2, 2014, 8:31 pm (54 comments)

Texas Lottery

Some Texas lawmakers say it may be time to scratch out the lottery.

More than two decades after Texas voters legalized the game of chance in the state, a group of lawmakers will soon start reviewing whether to end at multibillion-dollar industry that pumps more than $1 billion a year into schools.

Critics say they fear that the game financially hurts some of the most vulnerable Texans and doesn't do enough to help the state. Supporters disagree and question where $1 billion a year can be found to replace revenue lost if the entrenched business is shut down.

Some "believe the lottery was a trick and the state of Texas was sold a bag of goods that hasn't delivered," said Rob Kohler, a consultant with the Dallas-based Christian Life Commission of the Baptist General Convention of Texas, which opposes gambling.

"It's gobbling up folks' money that they could otherwise use to buy food, pay health insurance or send their kids to camp."

Gary Grief, executive director of the Texas Lottery Commission, said he looks forward to the legislative review.

"I'm hopeful that the work we've done here at the agency will be recognized ... and that they decide to keep us in business," he said.

At the same time, he said he realizes this that it won't be review of the agency's efficiency.

"It's more a philosophical [review] of whether it's ... good to have a state-operated gaming program," Grief said.

Critics have long sought to end the Texas lottery, and the issue came to a head last year when members of the Texas House, in an unexpected move, voted to do so.

Within hours, as questions arose about how to replace the money that flows from the lottery into the state's public schools, legislators shifted gears and continued the lottery.

But they said there must be a study about the possibility of phasing out the game someday and determining how that would affect Texas financially.

Ten lawmakers recently named by House Speaker Joe Straus and Lt. Gov. David Dewhurst will soon study the impact of eliminating the lottery as well as review charitable bingo and the distribution of money that bingo games generate.

A report on their findings is due to the Legislature by Dec. 1.

"I want to go in and look at all of this," said state Rep. Giovanni Capriglione, R-Southlake, one of the recently named committee members. "Right now, people are split on this. Some think we should do away with it. Others are saying if we do, that leaves a big hole in education funding.

"What replaces that revenue? That's the $2 billion question."

State Sen. Kelly Hancock, also named to the committee, said he's ready to get to work.

"We will take a look at this," said Hancock, R-North Richland Hills. "We are fortunate that the Texas economy is strong, which does allow us to look at this and decide if it's something we want to continue."

The early days

In 1991, the state faced a huge tax hike to counter a budget shortfall.

State lawmakers, after years of rejecting the possibility, eventually decided to ask voters whether they wanted a lottery.

More than three-fifths of Texans said yes.

In 1992, the first Texas lottery ticket was sold. The program has generated around $21 billion for the state since then, state records say.

Before 1997, lottery proceeds went into the state's general revenue fund. Since then, they have gone to the Foundation School Fund, which is administered by the Texas Education Agency, according to the Lottery Commission.

Overall, the lottery has contributed more than $16 billion to the school fund, including more than $1 billion a year for the past decade, commission records say.

"The lottery is not a panacea," then-Gov. Ann Richards said in 1992. "It is not the answer to all the fiscal challenges facing this state and I have never said that it will solve all our problems.

"But we should not lose sight of the bottom line in any discussion of the lottery," she said. "The bottom line is money for Texas."

Sixty-three percent of lottery proceeds go to prizes, 26.1 percent to the foundation school fund, 5 percent to retailer commissions, 4.4 percent to the lottery administration and 1.4 percent to other state programs, such as unclaimed prizes, according to the commission.

Some local lawmakers have different opinions about the lottery.

State Rep. Charlie Geren, R-Fort Worth, said the lottery generates about $1 billion a year for public education.

"I don't have the problem with the lottery," he said. "But there are some people who do."

Count state Rep. Lon Burnam, D-Fort Worth, among those people.

"The lottery is basically a tax on working-class people to help the Legislature avoid properly funding schools," he said. "We had to keep it around during the 2013 legislative session because we didn't have a plan to replace the education funding, but the Legislature should make a plan and end the lottery.

"There's more than enough money coming in if you don't give away the farm to cut Texas' already meager business taxes."

Bingo

The lottery isn't the only focus of the legislators' study.

Charitable bingo, and the distribution of money it raises, will be studied.

Texas lawmakers approved state-regulated bingo in 1981 to raise money for charities, and more than $1 billion has been paid to Texas charities through the game, according to reports from the charitable bingo operations division of the Lottery Commission.

In 2013, bingo sales in Texas topped $719 million, and nearly $550 million went to players. Last year, sales declined $3.9 million from 2012, the highest sales year, records say.

Recent studies have indicated problems.

At least one review "revealed troubling facts that, while there are some charitable bingo operations that do a good job of paying out to charities, many more do not meet any reasonable standard for charitable giving," state Rep. Byron Cook, R-Corsicana, wrote in a letter to the Lottery Review Committee.

"Most disturbing, the review also revealed the fact that many charitable bingo operations pay nothing to charity," he said.

Geren said he doesn't have a problem with bingo. But he does have a problem with groups that call themselves charities and don't do charitable work.

"Some of the charities that use bingo aren't really functional charities," he said. "A couple of them have shut down in my district."

One, he said, was a volunteer fire department that "wasn't fighting any fires."

"I don't think it ever hurts if we look at things a little closer," he said.

Bingo has drawn media attention in Texas this year, including the attention focused on a plan that some feared would let bingo halls use devices similar to slot machines, and reports questioning whether charitable bingo has enough state oversight and whether nonprofit groups get their fair share from the game.

The previous director resigned this year, and Alfonso Royal became the new director of the Charitable Bingo Operations Division in July.

Royal, who has more than 24 years' experience handling financial duties for nonprofits, is a former budget and policy adviser in the Texas governor's office.

Legislative study

Grief said he believes tbat the commission has "run a great lottery."

He said he stands ready to help lawmakers as they begin their review. But at the end of the day, he said, he realizes this is a policy issue for Texas' elected officials.

Some say the lottery has been a key to raising money for important causes, such as more than $36 million for the Fund for Veterans Assistance, through the Veterans Cash lottery ticket.

"Since the ticket's creation in 2009, nearly 170 programs, helping more than 170,000 Texas veterans and their families, have been funded with the money raised," said state Rep. Chris Turner, D-Grand Prairie.

"Without access to the grants provided by the [FVA], many organizations across our state would be unable to help veterans and their families with housing assistance, PTSD counseling and transportation to medical facilities," he said. "The Veterans Cash lottery ticket is critical for the success of these programs and a tremendous way to show our support for the 1.7 million veterans across our state."

Capriglione said he hopes the committee will focus on the Lottery Commission and issues including scratch-off and electronic tickets and allowing new games in bingo halls.

"We are definitely not looking to expand the lottery," he said. "We want to provide guidelines to the commission and what we would like to see."

Texas lottery sales

A look at sales since the lottery began in Texas:

Year Total lottery sales Amount given to state
1992 $591 million $203 million
1993 $1.8 billion $609 million
1994 $2.7 billion $869 million
1995 $3 billion $927 million
1996 $3.4 billion $1.15 billion
1997 $3.7 billion $1.89 billion
1998 $3.1 billion $1.15 billion
1999 $2.57 billion $969 million
2000 $2.65 billion $918 million
2001 $2.8 billion $864 million
2002 $2.96 billion $956 million
2003 $3.1 billion $955 million
2004 $3.48 billion $1.04 billion
2005 $3.66 billion $1.07 billion
2006 $3.77 billion $1.08 billion
2007 $3.77 billion $1.09 billion
2008 $3.67 billion $1.03 billion
2009 $3.72 billion $1.04 billion
2010 $3.73 billion $1.09 billion
2011 $3.8 billion $1.02 billion
2012 $4.19 billion $1.096 billion
2013 $4.37 billion $1.2 billion

Star-Telegram

Comments

MADDOG10's avatarMADDOG10

I'd love to see this committee squirm, when they ask where they're going to replace the Billion dollars that the lottery generates. ?

mypiemaster's avatarmypiemaster

US FlagYou can never hold Texas down US Flag

I don't see anybody holding a gun to anybody's head and demanding that they play the lottery. It's a matter of choice.

spartan1707's avatarspartan1707

With over a Billion in sales and given to the state for state run programs. Only those who are not on the take will push this issue period! Those state reps who are given hush money aka funding for reelection will oppose it this who want it will say it hurts poor people. Then say how are you gonna replace a billion dollar aid for programs?

Stack47

Some "believe the lottery was a trick and the state of Texas was sold a bag of goods that hasn't delivered," said Rob Kohler, a consultant with the Dallas-based Christian Life Commission of the Baptist General Convention of Texas, which opposes gambling.

This is just one of several groups either believing they could run the lottery much better or believe the lottery should be abolished all together. In January the lottery commission purposed a Keno type game called "Texas Triple Chance" which opponents said was not even a lottery game. Lots of state lotteries have Keno type games and are very popular. The difference in Texas apparently is the hypocrisy of pretending the lottery is really not gambling giving the lottery opponents plenty of ammunition to calling for the lottery to be abolished.

"What replaces that revenue? That's the $2 billion question."

How about going after the tax exempt organizations opposing the lottery?

Piaceri

Good grief. Leave it alone already. Texas voters voted the lottery in with a 3/5 vote. Put removal on the ballot. If the voters still want it, then keep it. Govt can't regulate what people do with their own money. If that money is not spent in Texas, it spends in OK or LA. Already billions of Texas dollars go into the casinos in OK & LA. 

The Sunset Committee review recommended continuance with some minor changes. This attack by the legislature is purely govt regulation of individual private choices. Texans usually don't look too kindly on that. If the legislature is fixing to tread on people's freedoms, then they are fixing to get a big backlash by about 3/5 of the population.

LottoMetro's avatarLottoMetro

Quote: Originally posted by Piaceri on Aug 3, 2014

Good grief. Leave it alone already. Texas voters voted the lottery in with a 3/5 vote. Put removal on the ballot. If the voters still want it, then keep it. Govt can't regulate what people do with their own money. If that money is not spent in Texas, it spends in OK or LA. Already billions of Texas dollars go into the casinos in OK & LA. 

The Sunset Committee review recommended continuance with some minor changes. This attack by the legislature is purely govt regulation of individual private choices. Texans usually don't look too kindly on that. If the legislature is fixing to tread on people's freedoms, then they are fixing to get a big backlash by about 3/5 of the population.

I was thinking the same thing. Getting rid of a lottery doesn't get rid of the players and their interest. They will just take their money elsewhere.

Tialuvslotto's avatarTialuvslotto

Quote: Originally posted by LottoMetro on Aug 3, 2014

I was thinking the same thing. Getting rid of a lottery doesn't get rid of the players and their interest. They will just take their money elsewhere.

Agreed.  Do these dudes in Austin think that "the numbers" won't make a resurgence if the lottery goes away?  Except the $$$ will go to criminals rather than to the state.

Winning the lottery is all some people have to hope for in their lives.

JonnyBgood07's avatarJonnyBgood07

Quote: Originally posted by Piaceri on Aug 3, 2014

Good grief. Leave it alone already. Texas voters voted the lottery in with a 3/5 vote. Put removal on the ballot. If the voters still want it, then keep it. Govt can't regulate what people do with their own money. If that money is not spent in Texas, it spends in OK or LA. Already billions of Texas dollars go into the casinos in OK & LA. 

The Sunset Committee review recommended continuance with some minor changes. This attack by the legislature is purely govt regulation of individual private choices. Texans usually don't look too kindly on that. If the legislature is fixing to tread on people's freedoms, then they are fixing to get a big backlash by about 3/5 of the population.

Put removal on the ballot. If the voters still want it, then keep it. Govt can't regulate what people do with their own money. If that money is not spent in Texas, it spends in OK or LA

 

 

You'd think the issue should be that simple...that's too much common sense for local or state govts.

Piaceri

Quote: Originally posted by JonnyBgood07 on Aug 3, 2014

Put removal on the ballot. If the voters still want it, then keep it. Govt can't regulate what people do with their own money. If that money is not spent in Texas, it spends in OK or LA

 

 

You'd think the issue should be that simple...that's too much common sense for local or state govts.

Actually, it's too much common sense for politicians. The govt actually did it's job with the Sunset Review Commission who gave the Texas Lottery a go-ahead with a few organization changes. This is strictly politicians who think they know what's best for us little people who don't have enough sense to make our own decisions.

This is the part of politics I despise more than anything. Who are these people that think they can regulate and make our personal decisions? This isn't costing the state anything. This isn't costing tax dollars. This is personal money spent for leisure that actually makes money for the state. And these busy-bodies think that there's a small part of the population THEY deem 'too poor' to spend money on the lottery, then no one should have it. It's referred to as a dollar and a dream for a reason.

Buncha BS

savagegoose's avatarsavagegoose

a pick 3 paying 900 not 500 would help the poor more than what these  twits can come up with

sully16's avatarsully16

Quote: Originally posted by MADDOG10 on Aug 2, 2014

I'd love to see this committee squirm, when they ask where they're going to replace the Billion dollars that the lottery generates. ?

Exactly.

lottolaughs's avatarlottolaughs

"It's gobbling up folks' money that they could otherwise use to buy food, pay health insurance or send their kids to camp."

This is kinda lame. The same could be said for any lottery.

CDanaT's avatarCDanaT

Quote: Originally posted by Piaceri on Aug 3, 2014

Good grief. Leave it alone already. Texas voters voted the lottery in with a 3/5 vote. Put removal on the ballot. If the voters still want it, then keep it. Govt can't regulate what people do with their own money. If that money is not spent in Texas, it spends in OK or LA. Already billions of Texas dollars go into the casinos in OK & LA. 

The Sunset Committee review recommended continuance with some minor changes. This attack by the legislature is purely govt regulation of individual private choices. Texans usually don't look too kindly on that. If the legislature is fixing to tread on people's freedoms, then they are fixing to get a big backlash by about 3/5 of the population.

Pia, I agree 110%.....but alas, some of the bibe thumpers down here get their panties in a knot Dunk

Looking at the chart above and revenue generated makes clear sense why you would want to do that?Hit With Stick  Don't those idiots in Austin have more pressing issues to deal with than a voluntary revenue generator that puts more and more $$ in the kitty every year ?  Puke

Guess a few would rather force more taxes down everyones throat, then have the lottery that gives them a chance to get something back... I have an idea, let's start by cutting their salaries by 50% or maybe putting them down south on the King George Ranch to do armed guard duties for 2 weeks a year and deal with those issues.

You can not fix gormless !!!!

rcbbuckeye's avatarrcbbuckeye

Quote: Originally posted by lottolaughs on Aug 3, 2014

"It's gobbling up folks' money that they could otherwise use to buy food, pay health insurance or send their kids to camp."

This is kinda lame. The same could be said for any lottery.

The same could be said for taxes.

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