February 02, 2003
Lottery changes proposed

As expected, the state Lottery Commission has proposed changes to Lotto Texas which result in longer odds of winning the jackpot. The hope is that this will also result in bigger jackpots and brisker sales, mostly from people who only play when the number gets to a certain size.

The Lottery Commission is banking on the theory that making it harder for players to win will increase the jackpots and boost stagnant sales. The three-member commission voted Friday to take the first step toward introducing the new game in May.

Players would have to match five of 44 numbers plus a bonus ball from another set of 44.

"These games have to be looked at and modified from time to time," said commission chairman C. Thomas Clowe of Waco. "There's a very large group of players that likes to see the jackpot at $20 million or more."

The risk, of course, is alienating the people who already play all the time and who think that odds of one-in-47.7 million represents a significant reduction from one-in-25.8 million.

One critic of the game change didn't wait. Dawn Nettles, publisher of a lottery newsletter and Web site, said the long odds make the proposed game "absolutely a scam."

"We want a lottery, but we don't want to be robbed," she said.

The new game also would pay out a smaller percentage of revenues to players. Now, 55 percent of lottery dollars goes back to players; under the new game it would be 52 percent.

The game's already a scam and always has been. All forms of gambling where there's a "house" involved is a scam. It's only a question of degree. It's legitimate to question whether you're getting your dollar's worth of fun (or "utility", as the economics types like to say), but complaining about the odds has always been pointless. The lottery is a device to raise funds for the state in a way that doesn't involve the dreaded T-word. Never forget that.

And given the state of our state's finances, this is a big deal:

Lottery officials are predicting a steep decline if the game isn't changed. Sales are projected to drop from $550 million this fiscal year to $400 million in fiscal 2005.

With the proposed game change, lottery marketers believe sales would jump to near $600 million in fiscal 2004 and would stay above $500 million for the next four years.

They better hope they're right, because every dollar counts.

Left unsaid in this article is whether the switch to a Powerball-style game means Texas is taking a step closer to joining the national Powerball game. There was some talk about this after the last humongous Powerball jackpot, as there was a flood of Texans driving to Louisiana to buy tickets for it. I fully expect that we will someday join in that national lottery, I just don't know when.

Posted by Charles Kuffner on February 02, 2003 to Jackpot! | TrackBack

Not to get too far afield from the topic, but games where there is a house but you don't bet against it - when the house take is a fixed amount not tied to the size of the wager rather than a percentage - aren't necessarly scams. Examples include pari-mutuel bets, poker clubs, and the stock market (broker's fees = "the house"). This may have been what you meant. :)

Posted by: Matt on February 4, 2003 9:36 AM