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Texas Lottery considers changing jackpot calculation

Texas LotteryTexas Lottery: Texas Lottery considers changing jackpot calculation

Amid 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.

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11 comments. Last comment 11 years ago by CASH Only.
Page 1 of 1
Avatar
New Mexico
United States
Member #12305
March 10, 2005
2984 Posts
Offline
Posted: June 10, 2005, 1:37 pm - IP Logged

Clowe said Thursday that he is concerned that miscalculating the lotto jackpot could undermine confidence in the game.

 

Hohoho.

"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."

Yup.  All those years when a man could get busted for the Tuesday night poker game (still can) in the home of a friend, when the cops could make a lot of political hay busting the numbers racketeers, when nobody much admitted they liked to go to Sin City Las Vegas because they'd be admitting to prima faci evidence of moral turpitude, those years the government could lay claims to the moral highground.  Protecting us all from ourselves.

But that was when the mob was running Las Vegas and the casino trade.  Not the tribes.  Not the government running the numbers racket.

The pitfalls of government sanctioned gambling are the pitfalls of any monopoly.  They know they can 'ooch' and get by with it, and if they do, they will.

Jack


    United States
    Member #3676
    February 10, 2004
    425 Posts
    Offline
    Posted: June 10, 2005, 2:02 pm - IP Logged

    How can anyone take this seriously. The fact lotteries announce these annuity jackpots is a crock to begin with.

      Avatar

      United States
      Member #1826
      July 11, 2003
      2645 Posts
      Offline
      Posted: June 10, 2005, 2:37 pm - IP Logged

      How can anyone take this seriously. The fact lotteries announce these annuity jackpots is a crock to begin with.

      I know. It's deceptive advertising. They don't even tell you it is annuity when they advertise it. I think this is the only country where this is in practice. Most every country has all-cash lotteries.

      (insert signature here)

        RJOh's avatar - chipmunk
        mid-Ohio
        United States
        Member #9
        March 24, 2001
        19831 Posts
        Offline
        Posted: June 10, 2005, 3:04 pm - IP Logged

        Ohio Lottery Website 06/10/05:
        the MegaMillions' jackpot $12M and its cash value $7,514,088 are posted
        the SuperLottoPlus' jackpot $13M is posted and the cash value posted as 50% of jackpot

        conclusion:
        MM $7.5M will pay $12M in 26 annual installments
        SLP $6.5M will pay $13M in 30 annual installments

        Truth, Confusion or both?
        RJOh

         * you don't need to buy more tickets, just buy a winning ticket * 
           
                     Evil Looking       

          Avatar
          Redmond WA
          United States
          Member #5966
          July 29, 2004
          71 Posts
          Offline
          Posted: June 10, 2005, 3:08 pm - IP Logged

           

          Canada does it best ......LUMP SUM  TAX FREE


            United States
            Member #379
            June 5, 2002
            11296 Posts
            Offline
            Posted: June 10, 2005, 3:38 pm - IP Logged

            RJ:

            Ohio still "cheats" cash option winners (of SLP) of the full amount in the jackpot pool.

              Avatar
              New Mexico
              United States
              Member #12305
              March 10, 2005
              2984 Posts
              Offline
              Posted: June 10, 2005, 3:47 pm - IP Logged

               

              Canada does it best ......LUMP SUM  TAX FREE

              That would be nice.

              But when you sit down at the table you gotta play the house rules.  If they say the dealer doesn't have to hit a soft seventeen, you either cash in and find another house, or you smile perlitely and plunk down another chip.

              Every table has a guy sitting there scowling about the house rules, the dealers, the cards and howling about the way the other players play their hands, every loss is someone elses fault, every win is skill.  But those guys aren't enjoying themselves, and mostly, they aren't winners.

              Seems to me every one of us is going to have to accept whatever the various lottery commissions do in the places we play.  In this instance they happened to go too far and lied about the stakes.  They got caught and now players will know what the stakes are going to be, maybe in other places besides Texas, because they all own computers and telephones.

              But the reality is that the chances of winning whatever the amount they claim they're giving away don't improve one iota by knowing how much it is.  And people who are going to buy a ticket for a 6 million pot would probably buy one for 3 million if that's what was offered.  That's the only way those smaller state lotteries manage to stay in business.

              At the end of the day the lotteries are just a game with lousy stakes run by people with minds that aren't appreciably different from those running the numbers racket when the mob had it all.  We played because we're gamblers.  We'd keep playing if the odds were worse because we'd still be gamblers.

              No harm in any of it, but we ought to keep it in perspective.  We ought to be the guys down the table who aren't afraid to split a pair of tens against a dealer six showing, no matter what that grumbler with a $50 bet thinks of it.  And we ought to be smiling at the dealers when they turn their card and show us a 5 underneath, just before they top it with a king.  It's got to be fun or we need to be doing something else.

              Jack

               

               

                RJOh's avatar - chipmunk
                mid-Ohio
                United States
                Member #9
                March 24, 2001
                19831 Posts
                Offline
                Posted: June 10, 2005, 6:20 pm - IP Logged

                RJ:

                Ohio still "cheats" cash option winners (of SLP) of the full amount in the jackpot pool.

                Cash,

                How do you figure Ohio cheats players who take the cash option?  They tell you the jackpot amount and how to figure the cash lump sum before you play and if you beat the 1:14M odds and win you make a choice between the two. 

                RJOh 

                 * you don't need to buy more tickets, just buy a winning ticket * 
                   
                             Evil Looking       


                  United States
                  Member #379
                  June 5, 2002
                  11296 Posts
                  Offline
                  Posted: June 11, 2005, 1:27 pm - IP Logged

                  rj:

                  Because OH pays out exactly half in cash, unlike Powerball, which pays according to interest rates, and has the same 30-payment annuity.

                    RJOh's avatar - chipmunk
                    mid-Ohio
                    United States
                    Member #9
                    March 24, 2001
                    19831 Posts
                    Offline
                    Posted: June 13, 2005, 5:12 pm - IP Logged

                    CASH only,

                    PowerBall and OhioSuperLottoPlus have different rules for calculating their jackpots cash amounts.  It may be confusing but when you play their games(slp) their rules apply.

                    RJOh 

                     * you don't need to buy more tickets, just buy a winning ticket * 
                       
                                 Evil Looking       


                      United States
                      Member #379
                      June 5, 2002
                      11296 Posts
                      Offline
                      Posted: June 13, 2005, 6:12 pm - IP Logged

                      rj:

                      I'm not confused. I know that if I hit Powerball, I will choose lump sum, and I will receive the full amount of the jackpot pool in cash, which currently is more than half of the annuity amount.