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 |
I'd love to see this committee squirm, when they ask where they're going to replace the Billion dollars that the lottery generates. ?
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.
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?
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?
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.
Agreed. Do these dudes in Austin think that "the numbers" won't make a resurgence if the lottery goes away? Except the $$$ will go to criminals rather than to the state.
Winning the lottery is all some people have to hope for in their lives.
Put removal on the ballot. If the voters still want it, then keep it. Govt can't regulate what people do with their own money. If that money is not spent in Texas, it spends in OK or LA
You'd think the issue should be that simple...that's too much common sense for local or state govts.
Actually, it's too much common sense for politicians. The govt actually did it's job with the Sunset Review Commission who gave the Texas Lottery a go-ahead with a few organization changes. This is strictly politicians who think they know what's best for us little people who don't have enough sense to make our own decisions.
This is the part of politics I despise more than anything. Who are these people that think they can regulate and make our personal decisions? This isn't costing the state anything. This isn't costing tax dollars. This is personal money spent for leisure that actually makes money for the state. And these busy-bodies think that there's a small part of the population THEY deem 'too poor' to spend money on the lottery, then no one should have it. It's referred to as a dollar and a dream for a reason.
Buncha
a pick 3 paying 900 not 500 would help the poor more than what these twits can come up with
Exactly.
"It's gobbling up folks' money that they could otherwise use to buy food, pay health insurance or send their kids to camp."
This is kinda lame. The same could be said for any lottery.
Pia, I agree 110%.....but alas, some of the bibe thumpers down here get their panties in a knot
Don't those idiots in Austin have more pressing issues to deal with than a voluntary revenue generator that puts more and more $$ in the kitty every year ? 
Looking at the chart above and revenue generated makes clear sense why you would want to do that?
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 !!!!
The same could be said for taxes.
That is how Louisiana got its lottery, the legislature, even those opposed, decided to put it on the ballot and let the people decide, and 61% of us said yes. If Texas decides to shut down its lottery, Louisiana is more than happy have the money, we were before Texas started a lottery, and our casinos are happy to take Texas money too.
Can we send the rest of the Katrina refugees, too? We can bring some with each charter bus headed to the casinos. We need room for our new Central American 'refugees'.
Boy, ain't that the truth.
some of the bible thumpers down here get their panties in a knot
I'm not defending religious groups wanting to abolish the lottery, CT, but it should be noted that one of the more vocal opponents of the lottery is the Texas chapter of the NAACP. They're the ones saying it's a "tax on the poor" and "discriminates against minorities".
I'm not too worried about it; if 60%+ of the voters wanted the lottery in '91 (voting for an amendment to the Texas Constitution), I don't see how that number could be less today. I think it would be political suicide for a legislator to vote to abolish the lottery.
If any Texans here wish to contact the members of the committee, here are their Texas Govt. official pages. There's a link at the top for an email contact form.
Senate:
Sen. Larry Taylor
Sen. John Whitmire
Sen. Eddie Lucio, Jr
Sen. Kelly Hanc*ck
Sen. Charles Schwertner
House:
Rep. Senfronia Thompson
Rep. Garnet F. Coleman
Rep. Rick Miller
Rep. Giovanni Capriglione
Rep. John Kuempel
NOTE: As you can see, I had to amend the name of one of the Senators.
EDIT TO ADD: LP "snipped" out the email address. Oh well, if you want to contact Sen. Kelly, you can search for him on the Senate website. Sorry 'bout that.
I can't STAND POLITICIANS!!!!!!!! The VOTERS wanted the lottery in Texas, they voted on the issue to approve it!!, but leave it to a bunch of elitist in the Texas Legislature to take it upon themselves to believe they know what's best for the hapless souls of Texas. Their so called logic is so flawed! They say that the Texas Lottery financially hurts the most vulnerable right? So how would raising taxes to try and offset the lost revenue not also financially hurt the "most vulnerable"? The Texas Lottery has been around for 20 years years, so where is the data to back up the claims by the lottery critics that the Texas Lottery is "financially hurting the most vulnerable"?
If Texans are willing to bend over for politicians, they are bound to get screwed. Seriously they should throw all those politicians out of office, the first opportunity they get. Sadly, we know that's not going to happen, because the moment those same politicians, throw out these words, ..Libs, Dems, RINO, Repubs,Tea P etc to the public, they tend to forget what they are supposedly fighting for and start fighting each other.
Even Texas isn't dumb enough to get rid of over 4 billion dollars a year in revene ! Rick Perry isn't that dumb , well maybe he is !!!
The Dumbest State in America: West Virginia
Actually, Rick Perry has nothing to do with this. It the Texas LEGISLATURE.
'Zactly and I deleted a comment that explained that to him b/c I decided it wasn't worth explaining it to him. No need to buy someone books if all they're going to do is chew the covers off 'em.
I have absolutely zero love f/ Perry, but as you've pointed out, he has nothing to do with this.
Instead of taking taxes on the games, justifying the toleration by taking more money from the players, they should eliminate all taxes and maximize the payouts. The lottery should not be a money machine for itself or anyone else, but the players. The solution is to guarantee best payouts, mainly in the smaller prices. The weakest play to win, let them win.
Since the main objection seems to be that low income people spend too much on lotteries, why not change the games to target millionaires? For example, replace the traditional 50c/$1 daily Pick-3 game with "The Daily GetAway." They could play up the fact that a win in this game would easily pay for a couple weeks of gambling in exotic places like Vegas, Macao, or even Monte Carlo! The game would look much like the original, with the exception that the price of a straight ticket would be upped to $50,000, and the payoff to $25,000. Big money people probably wouldn't be interested in the "nickles & dimes" of box hits, so that could be dropped. It would be interesting to see how many tickets would be sold on opening day!
Well, it will be Dec 1 before the committee has to report their findings. Plenty of time for me to hit it big and retire. LOL.
And if not, and Texas no longer has a lottery, then Oklahoma becomes my lottery state.
I hear ya,man. You live up in N. Texas, don't you? I am about sixty miles or so from the OK state line, so I guess I would have to make the RT trek every ten drawings/ five weeks.
I still doubt they'll end it.
EDIT: Just dawned on me - if you won, you'd have to pay out an extra 5.5%, think it is. I wouldn't want to pay that, but...I wouldn't cry about it if I did.
I live just off I-35 North of Fort Worth.
Yeah, I thought about the extra taxes. I'm with ya, really can't see them shutting it down. Money talks and BS walks.
PiaI totally agree with you about the politicians trying to regulate our personal decisions.
Rob Kober need to just find him a job. The churches takes more money from the poor more than any habit they have i.e 10% of their income, The IRS already tax my income. I AM GOING TO MAKE A PREDICTION THAT ONE OF THESE IDIOTS INVOLVE IN THIS HAS PLANS TO BUILD A CASINO HERE IN TEXAS OR LEGALIZE ALL THESE MOM AND POP'S GAME ROOM RACKET THEY HAVE GOING ON.
Greg Abott is mostly likely to build a casino, I hope Wendy Davis blow that jerk off out the water come November.
I hope Wendy Davis blow that jerk off out the water come November.
Uh, seen the latest polls? The last one I looked at had Abbott w/ a 17 point lead, a lead which has been climbing steadily since the primaries. He also has a campaign fund that is three times that of Abortion Barbie's. (granted, a lot of Abbott's money comes from big business, but most of Wendy's comes from out-of-state) While Abbott isn't the candidate I wanted (or voted for in the primary), Davis' whining, lies about her past, perceived gold-digging and shady dealings * after being elected state senator should make the choice easy for Texans. (well, Texans that want an ethical governor, that is) I predict Abbott in a landslide.
*Cronyism, taxpayer abuse, conflict of interest, betrayal of public trust.
I know the progressives want to turn Texas "blue", but the only way they're going to be able to do that faster than they predict is by holding their breath. THAT'S the kind of blue Texas I'd love to see.
Exactly!
If the Democrats turn Texas blue, it is game over. Increased taxes, increased regs on the energy industry, etc etc etc. Forget the little bit the poor put into the lottery. That money will be gone paying to the state. What we've got makes a robust economy, even good during economic downturns. The last time Texas was hit hard by a recession the Democrats were running the state. The poor get poorer, the rich get richer, and the middle class sinks to poverty.
Texas Lottery isn't going anywhere. And Texas isn't turning blue in 2014.
I banged that out a little faster than I should have b/c I was annoyed. I also meant to add that Ms. Pink Tennies got fewer votes in the primary than any Democratic gubernatorial nominee since 1998. She failed to carry several of the traditionally Democrat Rio Grande Valley counties, the only one to do so in 20 yrs. and even lost counties Obama had won. Her one-trick-pony platform of killing more non-white babies isn't winning any support amongst the mostly devout Catholic Hispanic voters as she and her Yankee handlers had hoped, either. OTOH, Abbot speaks fluent Spanish and his wife is a Latina.
The bulk of her money has been coming from Hollywood, something that isn't going over very well with independents and the conservative Democrat voters. From what I've read, the DNC has quietly been pulling back its support - and money - in Texas and putting it into another state that shows much more promise of turning "purple", or at least capturing the governor's office - Georgia.
Unless Abbott makes some horrific blunder prior to the election, it's game - set - match.
I'd love to see how these folks would respond to the idea that if the Lottery was ended that to make up the money, they would need to start taxing their churches. I can't imagine how quickly they would backtrack their statements that the lottery hasn't delivered.
Soon as the elections are over, they will be done pandering to their base.
When the Texas Legislators created the law, they probably didn't think it would apply to their most successful state agency. Because of it, all the lottery opponents are coming out of the woodwork.
"It's gobbling up folks' money that they could otherwise use to buy food, pay health insurance or send their kids to camp."
There are hundreds of different choices people make every day where the same thing could be said. The Legislators will posture about a number of things, but the bottom line is the Texas Lottery is a cash cow. That will be the main thought when the committee acts in December.
I wonder how much was spent sending missionaries to Africa to catch Ebola?
Could the folks running Texas be afraid that the common folks who win the lottery may become politically active and are perceived as threats by the Politicians?
Just asking.
I'm not in Texas but wonder if this is a ploy to get people to play more....... to keep it going.
"Disinformation".
Kind of a back door approach to you can't buy that kind of publicity.
I haven't thought of that, but I really don't think so. They actually voted to shut it down last year, then. ooops. Where do we make up the billion dollars???
I'm hopeful that cooler heads will prevail. Again.
I read a study done in the UK and Australia that says that winning the lottery makes you more politically conservative, i.e Republican. If that is true in America, the Dems wouldn't want any of their voters to win!
Winning the Lottery Makes you More Conservative
I don't know about that - I'm sure having to pay such a huge chunk of taxes would make just about anyone want a little more fiscal responsibility in the govt. that just sliced off a big percentage of their winnings. It's like that old saying "A liberal is someone who has been arrested and a conservative is someone who has been mugged." IOW, your personal experiences help shape your belief systems.
I do want to correct you on one thing: "...more politically conservative, i.e Republican."
Republican and conservative are not necessarily one and the same and are too often not.
You're right. I wonder how much money people spend on fast food instead of buying something like beans and rice? Or buying sodas instead of water? Owning and driving a car instead of taking public transport? If they want these people to have more money to do those things listed they would push those sources of money savers.
And not just catching Ebola, but also having missionaries that molest kids in orphanages. How about they fix their own issues before trying to force their ideals upon everyone else?
The lottery is just one of many Texas state agencies that is under review.
"The bill was initially defeated 81-65, leading state Rep. Linda Harper Brown to declare from the dais that "the lottery commission is gone." But concerns about how to replace the more than $2 billion budget hole that would create led to a new vote in which the lottery survived 92-53."
The lottery profit is after all the employees, vendors, agents, and retailers are paid so there is quite a bit more on the table than the issue of how people should spend their money.
I have a hard time believing that the Texas Lottery will discontinue. Like most other lotteries, the Texas Lottery appears to be expanding its offerings: last year, they moved from drawing Pick 3 and Pick 4 from two times per day to four times per day ... but still nothing on Sundays. Revenue increased by $180 million from 2012 to 2013; I wonder to what level the two additional numbers games drawings affected the revenue increase.
No, just tell them you won't vote for them in the next election and if they're not in your district, inform them that you will donate to their opponent's campaign.
I still maintain this is much ado about nothing - they bandied this about a few months back and after the outcry, dropped the idea like a hot potato. They have a LOT of money invested in the lottery infrastructure - all the promotions and lotto machines, to name a couple of things. As also has been noted, they'd have a significant budget hole to fill if they stopped the cash cow.
This really has me worried - I toss 'n turn every night for two or three seconds fretting over it.
One thing is for sure - the Texas Lottery needs to be better managed. It's really pretty mediocre for a state with such a large population. I checked out their website thoroughly and wasn't impressed.
What makes it "mediocre"? Their % of prize allocations are in line with most states and better than some. The website was recently redesigned and while I liked the last version, this one loads fairly quickly (about the same as the N.C. site) and is easy to navigate. Other than the latest kerfuffle w/ the Texas ledg and lottery commission, I don't recall any huge controversy with the Texas Lottery - the head guy resigned ten yrs. or so ago over some miscalculation about a JP payout and around the same time there were some accusations about improper campaign donations and conflict-of-interest (and I don't think anything came of it), but other than that, I don't recall any scandals, at least none in the last ten yrs.
Quite a few Texas scratchers have weak payouts compared to other major state lotteries, considering the cost of the cards. Just one quick example:
Millionaires Club (Texas $50) 3 Top Prizes of 7.5M; 102 2nd Prizes of 10K.
World Class Millions (Mass $30) 4 Top Prizes of 15M; 36 2nd Prizes of 1M.
$10M Cash Spectacular (Georgia $30) 5 Top Prizes of $10M, 36 2nd Prizes of 1M.
The $50 Texas card doesn't pay nearly as well as the cheaper $30 cards from the other states. The 2nd prize of only $10K is a joke compared to the $1M 2nd prizes on the other two cards. Remember that Texas has the second-largest pool of lottery players in the nation, and a population of about 10 million more people than Georgia and Massachusetts combined.
With such a high card price and enormous player pool, one has to wonder where all the money is going. It's apparent that not that much is going to the players. Other major lotteries are paying out more to the players, and still doing a good job of funding state programs.
I never play those high dollar scratch tickets, so I didn't compare against other states. OTOH, since you don't live in Texas, you don't have any true gripe about it, do you?
From a few years ago, but I doubt much has changed:
The 10 States That Pay Out the Biggest Lottery Jackpots
Texas is #4. Here's a more recent one with a more current breakdown of where the money goes:
10 states with the biggest lotto jackpots
Considering the fact that Texas easily has the 2nd largest population of all the states in the country, behind only California, they should be ranked #2 in jackpot payouts.
In scratch game payouts, they're lucky if they're in the top ten. Definitely an underperforming lottery for such a large state, which is one of the main reasons the legislature is scrutinizing them so carefully.