The continuing lottery shortfall

In our last episode, we talked about the Texas Lottery's funding shortfalls, and how it had exaggerated a jackpot total because it didn't have the sales receipts to cover it. Today, the Chron writes that the shortfalls are ongoing.

The Texas Lotto jackpot has fallen short of the amount advertised on three occasions since November because of lower-than-anticipated ticket sales, a lottery spokesman said Monday.

Sales are running almost 26 percent behind last year's pace, said spokesman Bobby Heith, blaming the problem on increased competition for the Texas gambler's money.

Overall lottery sales, including tickets for scratch-off games, are up almost 11 percent over fiscal 2004, he added.

[...]

Wednesday's shortfall prompted lottery officials, for the first time, to freeze the advertised jackpot at $8 million for last Saturday's drawing, which also went unclaimed.

Normally, estimated Lotto jackpots are increased when there is no winner.

According to Lottery Commission calculations, sales plus interest for last Saturday's drawing totaled $8.2 million, enough to have covered a winner. Heith said lottery officials also are confident the $9 million jackpot advertised for this Wednesday's drawing is solid.

"Once it (the jackpot) rolls to $9 million, we begin to see the sales increase," he said.

The lottery was created by the Legislature and approved by Texas voters in 1991. Total lottery sales, including the Lotto and scratch-off games, reached a peak of $3.7 billion in fiscal 1997. After declining, they climbed back to $3.4 billion in fiscal 2004 after the Legislature approved Texas' participation in the multistate Mega Millions game.

Sales for Texas Lotto alone, however, dropped about 9 percent from fiscal 2003 to fiscal 2004 — to $477.8 million. And Lotto sales for the first 40 weeks of fiscal 2005, which began Sept. 1, are down almost 26 percent, compared to the first 40 weeks of last year, Heith said.

He blamed the decline on increased gambling opportunities in neighboring states, including casinos in Louisiana and New Mexico. The multistate Mega Millions game also may be cutting into Texas Lotto.

My first reaction to all this is "boy, it sure is a good thing we don't actually rely on this for education funding". Beyond that, what did we all expect? The number of people who gamble is limited, and yes, they have many options to squander their money. Among other reasons, this is why we should all laugh at those who claim that slot machines at horse tracks will generate billions for the state. We're just resizing the pie slices, not growing the pie.

The Texas Lottery Commission has a long history of miniscandals and other questionable activities. Ken Rodriguez gives a taste, as does a recent Dallas Observer piece, reproduced here on Lotto watchdog Dawn Nettles' site. Even if I didn't think the Texas Lottery was a bad idea from the get-go, I'd be pretty skeptical of anything these guys say or do.

Posted by Charles Kuffner on June 14, 2005 to Jackpot! | TrackBack