By Todd Northrop
AUSTIN, Texas — Two recent Texas Lotto winners have hit jackpots of $21 million and $6 million, but for the Texas Lottery it has meant dipping into revenues by $3.4 million to cover the prizes.
In just the past 10 days, two lucky lottery players have matched all six Lotto Texas numbers, but the lottery did not sell enough tickets during that period to fully cover the advertised prize.
The shortfall was created by the way the Texas Lottery generates its new advertised jackpot amount each drawing. In order to generate more excitement and sales, the lottery created a fixed starting point, and a fixed amount that the jackpot will increase each drawing, regardless of actual sales.
The Lotto Texas jackpot currently starts at $4 million and grows in increments of at least $1 million per drawing until there is a winner.
Bobby Heith, a spokesman for the Texas Lottery Commission, said that it has been a good year for the Texas Lottery, with Lotto Texas proceeds up 33 percent over the same period last year.
In fiscal 2009, Lotto Texas alone generated $201 million, with total lottery ticket sales of $3.7 billion.
Dawn Nettles, a Texas Lottery critic from whom local newspapers frequently seek anti-lottery quotes, said dipping into the state fund means money is going out instead of coming in for Lotto Texas.
"That's like saying we're getting paid $1,000 a month and spending $2,000," she said.
Although Nettles tries to make a case that the Lotto Texas jackpot calculation takes money away from revenue already earned, her conclusion is seemingly unsupported by revenue figures.
With revenues up 33 percent for Lotto Texas, any temporary loss from the recent lucky lottery players is easily covered by the vastly increased revenue. Further, the good faith payouts made by the Texas Lottery seem to generate an increasingly loyal following.
"Lotto Texas has a very, very loyal following," Heith said. "We want to provide them with the game they want. We design games, all of them, to generate revenue for the state of Texas to support education."
The jackpot for the Wed., Aug. 18 drawing is $5 million — up $1 million from Saturday's $4 million jackpot, right on schedule.
I'm glad to see that the TLC is willing to "Rob the state to pay the player." Makes me feel good to know that when I go cash my lottery check I don't have to wonder if it will bounce because of non-sufficient funds. If they decide to do what Ms. Nettles suggest I'll still play the TX Lotto. Mega Million and PowerBall are nice and fun to play, but the TX Lotto--TX Two-Step--TX Cash 5 are my preferred games. Of course I gotta dabble with TX Pick 3 and TX Pick 4.
Ohio had a similar problem at one time.
Ohio use to have a state lottery game that started at $4M and grew $4M each draw. After surrounding states started their own games and Ohio lost out of state players, they changed their game by starting it at $4M and increasing it by $2M each draw and when that didn't work they got rid of it and replaced it with Lot'O Play which they said would be more fun even though its tickets were $2 ea. with higher odds and paid out less.
After a year they got rid of Lot'O play and bought back an improved version of the old game and called it Classic Lotto. It starts at $1M and can grow $100K each drawing and the tickets cost $1 again. Unlike Texas, Ohio tried to convince its players that they would be just as happy playing the old 6/49 game with a smaller jackpot and they added MegaMillions and PowerBall for those who wanted bigger jackpots.
Unlike Nettles, I love what the Texas Lottery is doing. They're putting some skin in the game too. Nice.
Nettles is a chronic bitcher. For whatever reason she has always had a bug up her rear about the Texas Lottery Commission.
I read about sales not covering winnings in the paper, and obviously, people aren't playing like they used to, probably because of PB and MM, and also the economy. But if the Commission does what Nettles wants, it will kill the Lotto game. There are people who are loyal to the Lotto game more so than the MM and PB.
Overall the lottery is making money, which is what it is supposed to do. While it would be nice, it doesn't matter if one or two other games aren't completely supported by sales as long as the overall profit is there.
Nettles must not understand business or math.
The two prizes totaled $27 million. Let's assume that the payout is 60% of sales instead of the typical 50%. To have $27 million in the prize pool the lottery would then have to sell just shy of $45 million. If they were $3.4 million short they had $23.6 million. That would mean sales were a bit over $39 million. 39 million - 27 million = 12 million. I'll assume those prizes are annuites and the actual cash value is 50%, so it becomes 19.5 - 13.5 = 6 million. Sounds to me like it's a $6 million profit on $19.5 million in sales. In reality there would have been plenty of smaller prizes that fit the expected payout, so overall sales and profit are almost certainly a good bit higher.
It is unfortunate that Nettles gets so much attention in Texas. For some reason, the local newspapers feel she has some kind of experience to draw upon, but now the lack of depth is clearly exposed. I'm not sure why they feel that Nettles has the financial background to comment on a story like this. (I took the Nettles quote from a local newspaper story.)
I've been married to a few women like that. Constantly looking for something to complain about. Lord knows there's nothing about me to complain about. No flaws, no shortcomings of any nature. Mild mannered, easy going, polite, disciplined, cultured, responsible, generous, slow to anger, forgiving, reserved, thoughtful, giving, fun-loving, adventurous, witty, caring, kind, romantic, spontaneous, soft-spoken, funny, long-lasting, educated, gregarious, trustworthy, loyal, loving, truthful, jovial, open-minded, brave, protective, fearless, staunch, noble, respectful, artful, appreciative, magnanimous, curious, driven, hard-working, helpful, trend-setting and just a little bit shy and very humble. But still, those kind will find something to complain about.
It's not their fault though. They can't help it. They can't help it if they're... They can't help it if they're... if they're... BLABBERMOUTHS!
YES, BLAAAAAAAAAAAABBERMOUTHS!
BLAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAABBERMOUTHS!!!!!
huh..