Texas Lottery may rethink jackpots

Jim Vertuno

Tuesday, Aug. 16, 2005 | 9:54 a.m.

AUSTIN -- Texas Lottery officials are considering guaranteed jackpots to help avoid inflated estimates like the one in June that prompted a consumer complaint to the state attorney general and cost the agency director his job.

New jackpot prize guidelines proposed Monday include a guarantee the winner collect either the advertised amount or the amount calculated by sales, whichever is greater. The guarantees would apply to jackpots paid with the 25-year annuity, not to winners who choose the immediate cash-option payment.

The proposed rules would also require lottery officials to make a "fair and reasonable" estimation of potential jackpots. And if the jackpot falls short of the estimate and ticket sales, the lottery would be allowed to pull money from other lottery funds to cover the difference.

The proposed changes were spurred by the revelation that former lottery executive director Reagan Greer signed off on advertising for Lotto Texas jackpots that were higher than ticket sales could support.

Greer, who had overseen day-to-day operations at the nation's third-largest lottery since February 2003, resigned July 8 after Lottery Commission Chairman C. Thomas Clowe told legislators he believed Greer had deceived the public.

Greer told the commission he approved a staff report proposing an $8 million advertised Lotto Texas jackpot for the June 8 drawing even though that report stated estimated sales could cover only $6.5 million.

Gary Grief, the commission's deputy director, has been named acting executive director.

The inflated jackpots came to light after Dawn Nettles, a longtime lottery watchdog, filed a complaint with the state attorney general.

The commission, for the first time in state history, then held the jackpot for the June 11 game to only $8 million. The jackpot starts at $4 million and traditionally grows by at least $1 million each time no tickets match all five numbers and a bonus ball.

During the first four drawings, the commission is allowed to use its reserves to pay a grand prize winner if it hasn't sold enough tickets to cover the jackpot. But ticket sales usually are slow until the jackpot reaches $9 million in the sixth drawing.

The proposed rules are subject to a 30-day public comment period before the commission makes a final decision.

Grief said he also is also considering proposing changes to the Lotto Texas game to help spur ticket sales, including reducing the field of numbers to choose from and the elimination of the bonus ball.