The Texas Lottery Commission defended its Lotto Texas jackpot advertising policies yesterday, after an audit said the current practice could reduce the amount of money transferred to the state to support education.
An uproar last summer over the lottery's decision to advertise four jackpots that officials knew they couldn't afford to pay cost former executive director Reagan Greer his job and shook public confidence in the games.
As a result, the lottery commission approved a measure in October that guarantees all grand prize winners will be paid either the advertised jackpot or the jackpot based on sales, whichever is greater. Previously, only the jackpots for the first four drawings were guaranteed.
The advertised jackpot has exceeded sales estimates three times since the new policy was adopted, according to a report released Tuesday by the State Auditor's Office.
Although no one won those jackpots, the auditors said the new policy could reduce the amount of money the lottery generates for the state because the agency would have to cover the difference with funds from other accounts.
But commission chairman C. Thomas Clowe said that's a chance he's willing to take because sales slumped last year when the lottery temporarily suspended its traditional practice of raising the jackpot by at least $1 million after each drawing with no grand prize winner.
"Over time I think you measure any game that's offered in the state not on any one individual roll or hit of the jackpot but in our case on an annual contribution ... to the Foundation School Fund," he said.
He did, however, direct executive director Anthony Sadberry to keep a close eye on the game and tell the commission if it should reconsider the policy.
State Auditor John Keel said the commission had the right to adopt the policy but should know that it could contribute to a lack of public confidence in the game.
"You have your vantage points, your conclusions," Keel told Clowe during Wednesday's commission meeting. "I believe others could differ with those with the same set of facts."
The commission also discussed a separate audit by Keel's office that said incomplete, inconsistent and undocumented personnel practices undermine the agency's ability to create a positive work environment.
Clowe said he has charged Sadberry with creating a culture of dignity and respect at the lottery, and said the new chief has made a big difference in the six months since he became acting executive director. He was hired permanently in June.
The agency has already addressed many of the suggestions included in the audit, such as adopting a revised personnel handbook with a formal grievance policy. It also plans to hire an employee ombudsman who will address workers' concerns as they arise.
While a former employee who sued the agency over her dismissal said Sadberry should fire the top managers who let the work environment deteriorate, the executive director said he has no such plans.
"I expect staff will carry out the sense, the spirit of the principals that I see here and I'm trying to bring here," he said. "I think time will tell."