The Texas Lottery Commission chairman laid blame for inflated lottery jackpots squarely on the agency's chief Wednesday, hinting to state lawmakers that executive director Reagan Greer could be punished.
Chairman C. Tom Clowe was asked by members of the House Licensing and Administrative Procedures Committee who specifically had deceived lottery players by advertising phony estimated jackpots four times since last fall.
Mr. Clowe answered: "The person who made the decision [to sign off on the estimates] ... Reagan Greer."
"The commissioners think this was deception and that it was wrong," Mr. Clowe testified. "If those were my employees in the private sector ... I would take the appropriate action and consider it a wrong act."
Mr. Clowe stopped short of saying that Mr. Greer should lose his job over the issue. However, the grillings Mr. Greer got at the House hearing and at a commission meeting last Friday indicate he could be next in a long line of lottery directors to leave after a scandal.
The commission is scheduled to meet on the issue July 11. It's the first opportunity to take action since the scandal broke.
Lawmakers demanded more openness, better communication, tighter oversight and more accountability to lottery players after the growing public scandal over estimates – two in June – that exceeded what the agency could have paid the winners. There were no winners in any of the four drawings, saving the lottery from having to explain itself sooner.
Lawmakers suggested switching to guaranteed jackpots – winners now get a set percentage of revenue from drawings – or better educating the public that the advertised jackpots are only estimates. Lawmakers also questioned the firing of financial director Lee Deviney, who oversaw employees who made the estimates, suggesting that he was terminated because he was trying to point out the problem.
Lotto officials have said Mr. Deviney's termination was a matter of poor job performance and had nothing to do with the false estimates, although there's no documentation of past grievances.
"If there is one agency that needs oversight, that's the one," said Rep. Corbin Van Arsdale, R-Tomball, who is not a committee member but sat in on the hearing and questioned officials. "I think the mismanagement in there is far more substantive, far more pervasive than any of the news stories have led me to believe."
Mr. Greer, who has the authority to set jackpots and the final word on what the publicized estimates will be for each drawing, has taken most of the criticism. His subordinates have said they inflated the estimates to maintain sales.
"My perspective and intent was not from a deceptive scenario," he testified Wednesday. "It was a mistake I made based on staff recommendations that I had felt confident with over a period of time. Looking back, I should have asked harder questions and looked into it, probably in a micro way."
Mr. Greer said the agency has implemented a checks-and-balances system on the estimates and might start holding pat on jackpots through multiple drawings, among other measures.
"We're going to fix this situation, and we're not going to let it happen again," he said.
The false estimates came to light after Garland resident Dawn Nettles, a self-appointed lottery watchdog, filed a false-advertising complaint with the Texas attorney general and the Travis County district attorney's office on June 6. Later that week, the commission decided for the first time in its 13-year existence not to increase the jackpot between drawings when there was no winner so sales could catch up to the advertised $8 million estimate.
Ms. Nettles, who has monitored the lottery since its inception, testified Wednesday that the people of Texas deserve fair games and that the lottery commission has routinely deceived and cheated players. Committee Chairman Kino Flores, D-Mission, invited her to meet with him and Mr. Greer and "spend an entire day" going over her ideas for ways to fix the lottery.
"I believe in what they're doing, and I don't think they're out there to cheat anybody," Mr. Flores said.
Ms. Nettles expressed frustration with the hearing later, saying commission officials were covering up their knowledge of problems.
"Great, the TLC's been slapped. But you tell me. What's actually going to come from it?" she said. "They're not going to misrepresent the numbers – until the next time?"