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Texas Lottery has history of jackpot overestimation

Texas LotteryTexas Lottery: Texas Lottery has history of jackpot overestimation

The Texas Lotto jackpot has fallen short of the amount advertised on three occasions since November because of lower-than-anticipated ticket sales, a lottery spokesman said Monday.

Sales are running almost 26 percent behind last year's pace, said spokesman Bobby Heith, blaming the problem on increased competition for the Texas gambler's money.

Overall lottery sales, including tickets for scratch-off games, are up almost 11 percent over fiscal 2004, he added.

A longtime lottery critic filed a false-advertising complaint with the state attorney general's office after last Wednesday's actual Lotto jackpot fell about $1.3 million short of the $8 million advertised. Nobody won, and the attorney general, after consulting with lottery officials, took no action.

Had there been a winner choosing a 25-year payout, he would have collected only about $6.7 million, lottery officials said. Winners selecting the cash option get only half of the advertised jackpot.

The Lottery Commission said that was the third shortage in a Lotto jackpot since last fall. On Nov. 3, an $8 million advertised jackpot was $717,000 short, and on Feb. 12, another $8 million jackpot was short by $270,000. There was no winner either time, allowing the shortages to correct themselves with subsequent drawings.

An advertised jackpot is based on a forecast of how many tickets will be sold for a particular drawing, and "on those occasions, there was a shortfall," Heith said.

Wednesday's shortfall prompted lottery officials, for the first time, to freeze the advertised jackpot at $8 million for last Saturday's drawing, which also went unclaimed.

Normally, estimated Lotto jackpots are increased when there is no winner.

According to Lottery Commission calculations, sales plus interest for last Saturday's drawing totaled $8.2 million, enough to have covered a winner. Heith said lottery officials also are confident the $9 million jackpot advertised for this Wednesday's drawing is solid.

"Once it (the jackpot) rolls to $9 million, we begin to see the sales increase," he said.

The lottery was created by the Legislature and approved by Texas voters in 1991. Total lottery sales, including the Lotto and scratch-off games, reached a peak of $3.7 billion in fiscal 1997. After declining, they climbed back to $3.4 billion in fiscal 2004 after the Legislature approved Texas' participation in the multistate Mega Millions game.

Sales for Texas Lotto alone, however, dropped about 9 percent from fiscal 2003 to fiscal 2004 — to $477.8 million. And Lotto sales for the first 40 weeks of fiscal 2005, which began Sept. 1, are down almost 26 percent, compared to the first 40 weeks of last year, Heith said.

He blamed the decline on increased gambling opportunities in neighboring states, including casinos in Louisiana and New Mexico. The multistate Mega Millions game also may be cutting into Texas Lotto.

Most of the lottery proceeds, 58 percent, pays for prizes. The state gets about 30 percent, which is dedicated to public education. About 7 percent pays for administration, and 5 percent goes to the retailers who sell the tickets.

The false advertising complaint over last week's jackpot shortfall was filed by Dawn Nettles, publisher of The Lotto Report, an online newsletter.

"All the people of Texas want (is) a fair game of chance, and we want a guarantee that we will receive our share of sales," she said. "We demand truth in advertising."

A spokeswoman for Attorney General Greg Abbott said he believes lottery officials are properly addressing the issue.

Houston Chronicle

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24 comments. Last comment 11 years ago by LOTTOMIKE.
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konane's avatar - wallace
Atlanta, GA
United States
Member #1265
March 13, 2003
3333 Posts
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Posted: June 14, 2005, 12:13 pm - IP Logged

Now that TX has Mega Millions, it should lower the matrix in Lotto TX back to what it used to be. 

My cousin in TX who is a regular couple of dollars a draw lottery player says she knows of many players who have stopped playing entirely since TX raised the matrix making small wins far more difficult.

One of these days lotteries will realize their huge mistake making the game too difficult, alienating small players who are in fact its bread and butter.

Back to the subject at hand, Estimated Jackpot means just that, Estimated but contingent upon the number of players purchasing tickets.   

Good luck to everyone!

    atlasshrugged's avatar - candle
    Alaska
    United States
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    May 27, 2005
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    Posted: June 14, 2005, 12:25 pm - IP Logged

    I Agree! I would not like playing the Texas lottery's matrix. Why don't they have a regular pick six? I am in agreement with Todd in that any state which does not offer their players a basic pick 6 game is giving their players the shaft. -Bonnie

      konane's avatar - wallace
      Atlanta, GA
      United States
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      March 13, 2003
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      Posted: June 14, 2005, 12:43 pm - IP Logged

      Am sending them an email to the effect of my first post so will see what they have to say about it.  Big Grin 

      If people say nothing then lotteries will continue experimenting with stupid ideas which have little chance of working in the long run. 

      Good luck to everyone!


        United States
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        June 5, 2002
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        Posted: June 14, 2005, 3:32 pm - IP Logged

        I suggest going back to the 6/54 matrix.

          konane's avatar - wallace
          Atlanta, GA
          United States
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          March 13, 2003
          3333 Posts
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          Posted: June 14, 2005, 3:41 pm - IP Logged

          Believe they were originally 6/49 or 6/50 which makes more sense ... and which people were happier with.  If someone believes they have a chance of winning a small tier prize, they will play more often. 

          Good luck to everyone!


            United States
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            June 5, 2002
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            Posted: June 14, 2005, 3:59 pm - IP Logged

            konane:

            Lotto TX began as a 6/50.

              Avatar
              Amarillo/Austin
              United States
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              April 25, 2003
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              Posted: June 14, 2005, 4:04 pm - IP Logged

              I think we should go back to the original 6-50 matrix and call it Classic Lotto.  They can begin at $3 million, too.  That would be more popular.

              Orangeman                      Big Smile

                konane's avatar - wallace
                Atlanta, GA
                United States
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                March 13, 2003
                3333 Posts
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                Posted: June 14, 2005, 4:16 pm - IP Logged

                konane:

                Lotto TX began as a 6/50.

                Been so long since sending my cousin money to play it, completely forgot the details.  Thud

                Good luck to everyone!


                  United States
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                  Posted: June 14, 2005, 7:24 pm - IP Logged

                  Lotto TX should go back to the traditional pick-6 format.

                    konane's avatar - wallace
                    Atlanta, GA
                    United States
                    Member #1265
                    March 13, 2003
                    3333 Posts
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                    Posted: June 18, 2005, 10:10 am - IP Logged

                    Email came back yesterday from the Texas Lottery Commission.  They are listening to player suggestions ....

                     

                    "We want to hear from the players. I'll forward your comments to our Product Manager.

                    We realize that sales for Lotto Texas® have not been as strong lately
                    as in the past. There are a number of reasons for this. We've conducted
                    extensive player research recently on several possible changes to the
                    game.  .....

                    Thanks again for contacting us. If you have further questions, email us
                    at
                    customer.service@lottery.state.tx.usor call us toll-free at
                    1-800-37-LOTTO (1-800-375-6886), and we'll be happy to assist you."

                    Got suggestions, then email or call them.  They can't read your mind and will never know unless you voice your opinion.  Cool

                    Good luck to everyone!

                      Avatar
                      New Mexico
                      United States
                      Member #12305
                      March 10, 2005
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                      Posted: June 18, 2005, 10:31 am - IP Logged

                      Konane:

                      I've wondered a bit whether the various State lottery administration structures aren't the reason for some of this..... maybe the scratcher folks are in a separate department from the people administering the draw programs, so they ones administering the draws aren't seeing how many buyers are spending the price of a draw ticket on scratchers with a lot smaller returns because they have a better chance at smaller wins.

                      Some of those folks administering these programs probably need to go stand in line at a convenience store and watch what the people in front of them in line are doing.  I frequently see people spending several times as much money on scratchers as they spend on PB tickets, even when the jackpots reach into the stratosphere.

                      Jack

                        Todd's avatar - Cylon 2.gif
                        Chief Bottle Washer
                        New Jersey
                        United States
                        Member #1
                        May 31, 2000
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                        Posted: June 18, 2005, 11:18 am - IP Logged

                        Konane,

                        If the Texas Lottery really wanted to demonstrate that they are listening to the players, then someone from that vast organization would sign up here and interact with the players on the forums.

                        Or, if they want to just SAY that they're listening, while continuing to make changes without player interaction, then they will keep giving very generic answers like the one they gave you.  Lotteries always say they listen to player input, but I have rarely seen any evidence of that.

                        For example, the one lottery leader that I hold in very high regard for truly listening to players is Chuck Strutt from MUSL (who runs Powerball).  His web site clearly shows that they are listening to players — for example, have you ever checked out the FAQ page there?  It answers questions in a very straight-forward manner, and answers questions that most lotteries would not touch.

                        Further, Mr. Strutt does not feel that he is above the players — he is a registered Lottery Post member, and has participated in some discussions here in the forums.  He's a stand-up guy, in an industry that generally plays keep-away from its customers.

                        You'll have to forgive me, but I don't think the reply the TX lottery sent to you is all that customer-friendly, in that it does not prove anything other than lip-service.  For example, were you aware of this so-called "extensive player research"?  Why wouldn't ALL players be given the chance to be included in their "research"?  Why wouldn't everyone be notified that they are looking for input?  Without notification, they can basically pick and choose who they ask the opinion of, in order to help determine the results of their "research" in advance.

                        And I'm not trying to single out the Texas Lottery here, because that kind of thing is common to most states.

                        I really wish the lotteries would adopt a more integrated approach with the players.  I welcome them to register a membership here and make their voice heard.  I don't care whatever opinion they hold on any topic, that's not the point.  The interaction with the players is what's important, and players really respect people who demonstrate that they listen.

                         

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                          Avatar
                          Amarillo/Austin
                          United States
                          Member #1424
                          April 25, 2003
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                          Posted: June 18, 2005, 11:20 am - IP Logged

                          I forwarded some ideas to the lottery commission including:

                          A. eliminating the 44/44 matrix with no payment for the bonus ball.

                          B. establishing a 6-50 format and calling it Classic Lotto.

                          C. beginning Pick 4.

                          Orangeman                                No No

                            konane's avatar - wallace
                            Atlanta, GA
                            United States
                            Member #1265
                            March 13, 2003
                            3333 Posts
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                            Posted: June 18, 2005, 11:28 am - IP Logged

                            Konane:

                            I've wondered a bit whether the various State lottery administration structures aren't the reason for some of this..... maybe the scratcher folks are in a separate department from the people administering the draw programs, so they ones administering the draws aren't seeing how many buyers are spending the price of a draw ticket on scratchers with a lot smaller returns because they have a better chance at smaller wins.

                            Some of those folks administering these programs probably need to go stand in line at a convenience store and watch what the people in front of them in line are doing.  I frequently see people spending several times as much money on scratchers as they spend on PB tickets, even when the jackpots reach into the stratosphere.

                            Jack

                            Hear you on that.  I feel lottery number crunchers are more influenced by game originators with pie charts, flashing lights, unrealistic projections of emptying everyone's pockets than listening to what players really want.

                            Such seemed to be the case with our original now former lottery director who is now director for the TN lottery.  It felt to me as if any suggestion sent in would reach the trash can because her expertise was beyond question.  As a result of her "expertise" lottery sales decreased.  Yes, this was post 9-11 when the economy went into a tailspin, but it seemed to be a time lotteries needed to pull their head out and assess what was taking place in the real world.  Fortunately for GA, TN gave her an offer she couldn't refuse along about the time her and staff's astronomical salaries and bonuses were coming to the forefront of public attention as Hope Scholarship funds plummeted.

                            Yes their jobs are to wring out as many dollars as possible but us southerners count our money carefully as to how much is spent for the fun it returns ..... and fun to us is being able to get occasional small wins while working toward capturing the mother lode.

                            Our new director has restructured Fantasy 5 to give us a free ticket for 2 numbers, sent out coupons for free Fantasy 5 tickets with the purchase of other game tickets, also is conducting contests to give back to players.  She is "dancing with the one that brung you" and doing a find job of restructuring what IMHO was a mess.

                            Lottery marketers who think they're smarter than players by telling us what we're going to get because they say so are losing lottery participation especially in the south.  I expect it just may be contagious.

                            Good luck to everyone!