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Texas Lottery accused of over-inflating jackpots

Texas LotteryTexas Lottery: Texas Lottery accused of over-inflating jackpots

The Attorney General's Office will examine allegations that the Texas Lottery Commission is inflating the advertised jackpots for its Lotto game because ticket sales are too sluggish to support the high payouts.

Lottery officials rejected the allegations, but acknowledged that because of lagging ticket sales, for the first time in the game's history they would be unable to boost their jackpot estimate for Saturday's drawing if no one wins Wednesday night.

Dawn Nettles, publisher of the online Lotto Report and a persistent critic of lottery commission policies, first raised the red flag that ticket sales were running far behind the estimated jackpot when she sent a letter to Attorney General Greg Abbott on Monday accusing officials of false advertising.

On billboards across Texas and on the lottery's Web site, officials had touted an $8 million jackpot for Wednesday's drawing.

"They only have enough to fund a $6.5 million jackpot at best," Nettles said.

Bobby Heith, spokesman for the lottery, did not dispute that the jackpot would have been less than advertised, but not because anyone was skewing estimates.

But a spokeswoman for Abbott said Nettles' concerns would be addressed.

"We will treat this complaint like we treat all complaints that come into the agency," said Angela Hale, Abbott's communications director. "We'll examine it and determine whether there is something (we need) to do about it."

Lotto jackpots and ticket sales have a relationship akin to that of the chicken and egg. High jackpots are needed to sell tickets, but ticket sales must be robust for jackpots to escalate.

Lottery commission rules set the minimum Lotto jackpot at $4 million. If no one matches all of the numbers needed to win, the jackpot typically rises for the next drawing. Historically, ticket sales remain relatively flat until jackpots roll toward $50 million and higher. Drawings are held each Wednesday and Saturday.

Lottery commission figures show that when the jackpot rolled back to $4 million for the May 25 drawing, ticket sales totaled just over $2 million. Of that, $1.04 million was paid to players who won lower-tier prizes for matching some, but not all, of the numbers drawn.

When the jackpot rolled to $5 million for the May 28 drawing, ticket sales totaled $2.33 million and nearly $1.2 million was paid to lower-tier prize winners. The trend for ticket sales and lower-tier prizes continued for the next two drawings when the jackpot rolled to $6 million and then to $7 million.

Under lottery commission rules, the state guarantees that a winner who takes proceeds under the 25-year annuity option will receive the full advertised amount if someone hits the Lotto jackpot during one of the first four drawings.

If the ticket sales are not strong enough to support the jackpot, officials are authorized to dip into the lottery's reserves to make the payment.

After the first four drawings in a Lotto roll, commission rules state that a jackpot winner with the 25-year option must receive 39.1 percent of all of the ticket sales during that run, regardless of the advertised jackpot.

Nettles said there is no way the lottery commission could invest the proceeds of that 39.1 percent of ticket sales dating back to the May 25 drawing to earn $8 million over 25 years.

"The lottery commission is using false advertising, plain and simple," Nettles said.

Heith said jackpot estimates are based on historical sales trends, the time of year and the health of the state's economy.

"There were some concerns starting about last Friday that we were not seeing the level of ticket sales that we would like to see," Heith said. "There might be a problem (with the $8 million jackpot for Wednesday's drawing), but it is an estimate and the players know that."

Nettles, whose Lotto Report tracks trends for the Texas lottery and those around the nation along with her criticisms of the Texas Lottery Commission's policies, said players might expect the estimate to be off by a few thousand dollars, but not by more than $1 million.

Still, she suggested that there might be little risk in offering optimistic jackpot estimates during the early rounds of Lotto drawings.

Since the current configuration of Lotto went into effect in May 2003, only 14 jackpots have been hit in 218 drawings.

"The odds against hitting the jackpot are 48 million to 1, so there's a real good chance that no one's going to win it, at least for awhile," she said.

AP

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19 comments. Last comment 11 years ago by Maverick.
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Amarillo/Austin
United States
Member #1424
April 25, 2003
696 Posts
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Posted: June 9, 2005, 12:26 pm - IP Logged

If they paid something for the bonus ball, they would have more participation and they would not have to inflate their jackpots! Duh!

Orangeman           

Crazy

    Avatar

    United States
    Member #1826
    July 11, 2003
    2645 Posts
    Offline
    Posted: June 9, 2005, 12:41 pm - IP Logged

    They really need to go back to a pick-6 format. Mega Millions has the market cornered in the big jackpot category, and it's time they realized it.

    (insert signature here)

      Avatar
      New Mexico
      United States
      Member #12305
      March 10, 2005
      2984 Posts
      Offline
      Posted: June 9, 2005, 12:57 pm - IP Logged

      Maybe the great State of Texas just needs to buy up some of their own lottery tickets to jack up the revenues to whatever point will generate the sized jackpots they want to advertise.  That ought to create some really outstanding food for discussion, both in the news media and in on this DB.  I can see it all now:

      "The poor and under educated government of Texas has bought $3 million dollars in Texas Super Lotto tickets to serve the cause of honesty in government, which has been conspicuously absent in Texas government until now."

      Jack

        bobby623's avatar - abstract
        San Angelo, Texas
        United States
        Member #1097
        January 31, 2003
        1394 Posts
        Online
        Posted: June 9, 2005, 1:17 pm - IP Logged

        The prize totals for the May 24 ($1.04 million) and May 28 ($1.2 million) are incorrect.

        A check of the Texas lottery website shows the non-jackpot winners received $248,130 on May 24, and $275,828 on May 28.

        Not sure how the AP reporter came up with the reported totals.

        Texas Lotto has been in the tank since the new 5/44 + 1/44 matrix was adopted. It's just a matter of time before the game will undergo a major change. But then, the Texas lottery officials are a greedy bunch. They may just sit back and wait until the jmultidraw players build  jackpots large enough to attract more players. They want another $145 million jackpot in the worst way, and apparently will do whatever it takes.

        Afterall, they can't be sued and there isn't a politician in the state with the balls to step in and ask some questions.

        It will be be interesting to see what the Attorney General learns. My bet is that we won't hear anymore about this.

         

          Avatar
          Amarillo/Austin
          United States
          Member #1424
          April 25, 2003
          696 Posts
          Offline
          Posted: June 9, 2005, 2:13 pm - IP Logged

          Maybe if "Governor Good Hair" got off his duff and actually did something it would help.  The entire staff of the Texas Lottery Commission needs to be fired.

          Orangeman

          Confused

            Avatar
            Fort Worth
            United States
            Member #4717
            May 20, 2004
            46 Posts
            Offline
            Posted: June 9, 2005, 11:49 pm - IP Logged

            The prize totals for the May 24 ($1.04 million) and May 28 ($1.2 million) are incorrect.

            A check of the Texas lottery website shows the non-jackpot winners received $248,130 on May 24, and $275,828 on May 28.

            Not sure how the AP reporter came up with the reported totals.

            Texas Lotto has been in the tank since the new 5/44 + 1/44 matrix was adopted. It's just a matter of time before the game will undergo a major change. But then, the Texas lottery officials are a greedy bunch. They may just sit back and wait until the jmultidraw players build  jackpots large enough to attract more players. They want another $145 million jackpot in the worst way, and apparently will do whatever it takes.

            Afterall, they can't be sued and there isn't a politician in the state with the balls to step in and ask some questions.

            It will be be interesting to see what the Attorney General learns. My bet is that we won't hear anymore about this.

             

            The AP reporter gave the total for the non-jackpot winners plus the rollover.  The jackpot is 39.1% of sales.  For May 28th that would have been about $911,000.

            This is only going to get worse when California joins Mega Millions.  The Lotto Commission is sticking with their "6 days a week" jackpot promotion to the exclusion of anything else.  It's as bad as the old "Texas Million" game.

             


              United States
              Member #379
              June 5, 2002
              11296 Posts
              Offline
              Posted: June 10, 2005, 3:42 pm - IP Logged

              "Texas Million" wasn't bad-it was lump sum, unlike OR's Lose for Life.

                starchild_45's avatar - spherewall2
                kent, washington
                United States
                Member #3509
                January 26, 2004
                465 Posts
                Offline
                Posted: June 10, 2005, 8:18 pm - IP Logged

                They really need to go back to a pick-6 format. Mega Millions has the market cornered in the big jackpot category, and it's time they realized it.

                washington state went back to the pick 6 after they realized that they couldn't afford doing what texas was trying to do.  now they are trying to advertise all the lotteries and not just the washington lotto. the washington lotto jackpot moves up so slow it is like molasses rolling up hill in the winter. Rant

                 


                  United States
                  Member #379
                  June 5, 2002
                  11296 Posts
                  Offline
                  Posted: June 14, 2005, 3:41 pm - IP Logged

                  Thank goodness the scratch version of the former WA Unlucky for Life has a cash option.

                    starchild_45's avatar - spherewall2
                    kent, washington
                    United States
                    Member #3509
                    January 26, 2004
                    465 Posts
                    Offline
                    Posted: June 14, 2005, 3:47 pm - IP Logged

                    Thank goodness the scratch version of the former WA Unlucky for Life has a cash option.

                    how do you know so much about the oregon and washington state lotteries living in new york? just curious.


                      United States
                      Member #379
                      June 5, 2002
                      11296 Posts
                      Offline
                      Posted: June 14, 2005, 3:59 pm - IP Logged

                      45:

                      Because I am very interested in how lottery games are played.

                        LOTTOMIKE's avatar - cash money.jpg
                        Tennessee
                        United States
                        Member #7853
                        October 15, 2004
                        11338 Posts
                        Offline
                        Posted: June 18, 2005, 5:36 am - IP Logged

                        same here i'm very interested in how the games are played and if they are ball drawings or computerized.


                          United States
                          Member #379
                          June 5, 2002
                          11296 Posts
                          Offline
                          Posted: June 19, 2005, 1:28 pm - IP Logged

                          I'm trying also to keep track of balls v computers.

                            LOTTOMIKE's avatar - cash money.jpg
                            Tennessee
                            United States
                            Member #7853
                            October 15, 2004
                            11338 Posts
                            Offline
                            Posted: June 25, 2005, 10:13 pm - IP Logged

                            good thing,i'm keeping track too,say no to computerized draws.