June 10, 2005
Creative accounting in the Lottery Commission?

Yesterday, the Star-Telegram reported on a complaint filed by Lotto watchdog Dawn Nettles that the state Lottery Commission had inflated the advertised jackpot due to slow ticket sales.

Lottery officials re-jected the allegations but acknowledged that because of lagging ticket sales, for the first time in the game's history they would be unable to boost their jackpot estimate for Saturday's drawing even though no one won Wednesday night.

Dawn Nettles, publisher of the online Lotto Report and a persistent critic of lottery commission policies, first raised the red flag that ticket sales were running far behind the estimated jackpot when she sent a letter to Attorney General Greg Abbott on Monday accusing officials of false advertising.

On billboards across Texas and on the lottery's Web site, officials had touted an $8 million jackpot for Wed-nesday's drawing.

"They only have enough to fund a $6.5 million jackpot at best," Nettles said.

Bobby Heith, spokesman for the lottery, did not dispute that the jackpot would have been less than advertised, but not because anyone was skewing estimates.

But a spokeswoman for Abbott said Nettles' concerns would be addressed.

"We will treat this complaint like we treat all complaints that come into the agency," said Angela Hale, Abbott's communications director. "We'll examine it and determine whether there is something [we need] to do about it."

Today's edition reports that the Commission has taken action, and that this has satisfied the AG's office, though not a different prominent critic.

C. Thomas Clowe, the commission chairman, said the three-member panel will discuss this month whether to guarantee the advertised jackpot or continue basing the grand prize on a percentage of ticket sales.

Clowe said Thursday that he is concerned that miscalculating the lotto jackpot could undermine confidence in the game.

"We want the public to have confidence in the lottery," Clowe said. "This is the people's business."

The commission came under fire this week when it was accused of overestimating Wednesday night's jackpot even though the pace of ticket sales would not support the advertised $8 million payout.

The complaint brought calls from state Sen. Jane Nelson, R-Lewisville, for new legislation to compel the lottery to comply with the state's truth-in-advertising laws.

Nelson, who is vice chairwoman of the legislative panel that reviews the performance of state agencies, said that Texans must have full confidence in the lottery's integrity.

"Clearly, this is an example of the pitfalls associated with government-sanctioned gambling," said Nelson, an outspoken opponent of gambling. "We have to be absolutely sure that everything that goes on there is open and aboveboard. The public needs to know what's going on. I need to know what's going on."


Lottery officials have acknowledged that the jackpot was overestimated but said it was an honest miscalculation.

Lottery spokesman Bobby Heith said the chief reason for the miscalculation was that ticket sales did not increase as expected as the deadline for Wednesday's drawing approached.

To make sure that another overestimation did not occur, lottery officials did not advertise a higher jackpot for Saturday's drawing even though there was no grand-prize winner Wednesday.

It was the first time in the Texas lottery's history that the jackpot was not increased after a drawing without a winner.

On Thursday, Abbott spokeswoman Angela Hale said the attorney general's office examined the complaint and was satisfied that lottery officials "were addressing the issue raised in the allegation."

Clowe said that weak lotto sales can be attributed at least in part to the lottery commission's decision in 2003 to join the multistate Mega Millions game, which is similar to lotto but often generates jackpots that are far higher.

Yes, well, some of us were pretty well convinced that Mega Millions would cannibalize existing Lotto sales when we first adopted it back in 2003, but that's not important right now.

There's an under-the-surface story here that's not being reported sp far. Save Texas Reps has the details.

Rumors are flying around Austin that Reagan Greer, Executive Director of the Texas Lottery, is boosting jackpot numbers despite lagging ticket sales and the advice of his staff in order to make himself look good for future political office. That kind of self promotion by Greer would come as no surprise considering his name and signature was added to the back of all scratch-off tickets.

But who is this Reagan Greer, anyway?

Prior to heading the Texas Lottery Commission, Greer was a District Clerk and Rick Perry’s Bexar County campaign coordinator in 2002. Following the election, Perry allegedly changed the official requirements for the TLC Executive Director so that he could appoint Greer - who does not have a college degree - to the position in a blatant move of cronyism.

There's more, so click over and read it. Or, if you prefer, Sarah connects the dots for you with pictures. Check it out.

Posted by Charles Kuffner on June 10, 2005 to Jackpot! | TrackBack