The Texas Lottery Commission on Thursday entered into a contract with the Mega Millions multistate lottery, which over the past year had average jackpots of more than $40 million.
The commission next will begin purchasing equipment such as a random number generator to prepare for the launch later this year. The date hasn't been set, but executive director Reagan Greer said it probably will be after Thanksgiving.
The long-term agreement has a six-month "out clause," Greer said.
The commission also is preparing a barrage of advertising promotions, including billboards and TV ads, to encourage Texans to buy Mega Millions tickets when they become available.
"There's a whole lot of things that go with kicking off a new game, and it's going to be a lot of fun," Greer said.
During its last regular session, the Legislature authorized the commission to join a multistate lottery to create a source of state revenue.
Mega Millions drawings are Tuesday and Friday, and tickets will cost $1. The jackpot, which starts at $10 million, has averaged $42.3 million over the past year. Second prize is $175,000, and there are seven additional prize categories.
Texans will be able to multiply their prizes, not including the jackpot, by purchasing a "megaplier" number for a dollar. The megaplier, which will only be available in Texas, could double, triple or quadruple lower-level winnings. Each drawings will be set by a random number generator overseen by the lottery commission.
"It will give people at lower prize levels the opportunity to win some big bucks, and that's a good thing," Greer said.
Texas became the 11th Mega Millions state, joining Georgia, Illinois, Maryland, Massachusetts, Michigan, New Jersey, New York, Ohio, Virginia and Washington. Multi-state lottery games are designed to generate jackpots into the hundreds of millions of dollars, creating a frenzy of ticket purchases. Participating states get a cut of the tickets sold within their borders.
Texas statisticians estimated that the Mega Millions jackpot would reach $100 million four times a year. The jackpot could reach $400 million every two to three years.
The odds of winning in Mega Millions are 1 in 43, with jackpot odds of 1 in about 135 million.
The new game is expected to increase the share of lottery revenue that is transferred to Texas' Foundation School Fund. Last year, $888 million was transferred to the fund.
"The money going into the Foundation School Fund is significant," Greer said.
A report from the comptroller's office had estimated $100 million would be generated by Mega Millions over a two-year period.
"I feel very comfortable with being able to deliver that and much higher," Greer said.
The commission, after completing extensive research, estimates a five-year average of $121.6 million in net revenue.
The name of the new multi-state lottery Texas is joining isn't important to Haroon Shamsie, Manager of Mi Tienda.
"It's not Powerball. It's the... what is it called? Mega Millions. See I still don't know the name of it," Shamsie said.
But he knows if the jackpots are as high as promised, Mega Millions will bring business into his North Austin store. Mi Tienda sells about 30,000 Texas Lotto tickets a month.
"Good jackpot means good sales," Shamsie said.
There are some potential downsides to joining Mega Millions. First, lottery officials expect it will cut into Lotto Texas sales by about 20 percent.
Commissioners admit they have some concerns about the way Mega Millions is run, specifically audit procedures and security of the game, so once Texas has been in the game six months, they're ordering a formal review of how it's going.
The next Mega Millions jackpot, to be drawn tonight, is worth an estimated $16 million.