Las Vegas Sun

March 28, 2024

Texas officials weighing multistate lottery offers

AUSTIN, Texas -- With hundreds of millions of dollars in jackpots and state revenue at stake, multistate lotteries Mega Millions and Powerball have set out to woo Texas officials to join their games.

Representatives of both groups spent four hours last week pitching their product to the Texas Lottery Commission, which was recently given the authority by the Legislature to enter into a multistate game.

While the meeting started under the assumption that Texas would look to join one of them, chairman C. Thomas Clowe suggested it may try to join both. "It's something I think we need to look at," he said.

The presentations included two 30-minute slide and video presentations. Being a true game of chance, Mega Millions and Powerball officials drew cards to see who would go first.

Powerball tried hard to sell its name brand, including video clips of late night talk show hosts David Letterman and Jay Leno mentioning the game during their broadcasts.

The Powerball name is part of the gaming culture and would need little effort to educate players about the change, said Chuck Strutt, executive director of the Multi-State Lottery Association which runs the Des Moines-Iowa based Powerball.

"The brand is very powerful," said Anthony Cooper, chief operations officer of the South Carolina lottery, which participates in Powerball. "Brand, brand, brand."

Mega Millions officials said Texans would buy their tickets, too.

"When people are buying their tickets, they don't care what the name is," said Margaret DeFrancisco, director of the New York lottery. "All they really care about is the size of the jackpots."

Powerball is a consortium of 25 individual lotteries. Mega Millions is made up of 10 states.

Each has produced some of the biggest jackpots in lottery history. Mega Millions had the largest, a prize of $363 million in 2000 when the jackpot was called The Big Game. Powerball's biggest prize was last year at $315 million.

Multistate lottery games are designed to generate jackpots into the hundreds of millions of dollars, creating a frenzy of ticket purchases across the country. Participating states get a cut of the tickets sold within their borders.

The push to join a multistate lottery comes as Lotto Texas, the state's signature game, continues to suffer from depressed ticket sales. This spring, lottery officials overhauled the game by adding a so-called bonus ball into the mix, which drove the odds against winning a jackpot from one in 25 million to nearly one in 48 million.

Powerball players choose five numbers from a pool of 53, plus an additional number from another set of 42 with the odds of winning calculated at 1 in 120 million. Mega Millions players pick five numbers from a pool of 52 and an additional number from another set of 52. The odds of winning are about one in 135 million.

Powerball also offers players a chance to increase prizes other than the jackpot by spending more on their ticket. The "Power Play" has been a good draw for more revenue, Strutt said.

One of the biggest differences between the games is the timing of the drawings. Like Lotto Texas, Powerball jackpots are drawn Wednesday and Saturday nights.

Similar drawing schedules keeps the players from getting confused, Powerball officials said.

Mega Millions is drawn on Tuesday and Friday night. Rebecca Paul, director of the Georgia lottery, says the different drawing nights keeps money circulating. Tuesday and Friday night winners of smaller prizes are more likely to cash in and spend their winnings on the big jackpot games.

A key factor for commissioners to consider is the "cannibalization" of revenue as some players will inevitably spend their money on the big jackpot games instead of the Texas games.

"We need to study what's the fiscal impact on Lotto Texas," Clowe said.

His remarks over joining both seemed to catch the two groups by surprise.

Penelope Kyle, director of the Virginia Lottery and current president of Mega Millions, said joining both -- creating as many as six jackpot drawings during the week -- would "basically kill your Texas lotto game."

Texas also could decide not join neither group, although the Legislature wrote the 2004-05 budget counting on the estimated $101 million that joining a multi-state game would bring.

Texas Lottery Executive Director Reagan Greer will study the proposals and could make a recommendation to the commission at its July 24 meeting. Any proposal will be subject to more public comment before a final vote.

Weston Ware of Texans Against Gambling asked commissioners to consider all the consequences of whatever choice they make.

He called expanding the lottery to cover a segment of the budget "a tax on people who are addicted" to gambling.

"I think part of your job is to consider the impact on the compulsive gambler," Ware said. "These types of games should not be promoted by government."

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