AUSTIN AMERICAN-STATESMAN

Were odds stacked for new Lotto game?
Lawmakers question agency's purchase before getting OK

By By Ken Herman

AMERICAN-STATESMAN STAFF

(Comments in red are my comments - they did not appear in the newspaper story.)

Wednesday, May 7, 2003
Thursday, May 8, 2003

Lotto players and lawmakers who fear the fix was in before lottery commissioners voted on a major game change have sparked an investigation into why equipment for the new game was ordered before the change was approved.

Lottery commissioners formally approved the change, which makes it harder to hit the lotto jackpot, on March 27. On Feb. 28, the agency purchased two drawing machines, at a cost of $83,150, for the new game. (The machines were actually bought on Jan 28, 2003 - they officially "awarded" the bid on Feb 28)

That timing has many people — including Gov. Rick Perry and several lawmakers — concerned that the decision may have been made before the formal vote was taken.

On Tuesday, Deirdre Delisi, Perry's deputy chief of staff, called Lottery Commission Executive Director Reagan Greer "out of concern of the purchase of the equipment prior to the change in the game," according to Perry spokeswoman Kathy Walt.

"I think we ought to let the process work and let all the facts come out," Walt said, noting that lawmakers plan to look into the matter.

State Rep. Jack Stick, R-Austin, also has asked Attorney General Greg Abbott to review the purchases.

Greer, who was hired as director on Feb. 28, said the purchase was set in motion by then-Acting Executive Director Gary Grief. Greer called it a "business decision" based on a "risk assessment" that it would be wise to buy the equipment so the new game could begin as soon as possible if approved by commissioners.

The first drawing of the revamped Lotto Texas was held Wednesday night. In it, players select five numbers out of a 44-ball field and a bonus ball from another set of 44 balls. Under the old game, players picked six of 54 numbers. The goal is to produce fewer jackpot winners, which would mean higher jackpots and, commissioners believe, increased overall ticket sales.

"It was a business decision on his part to take a chance on the fact that it would move forward," Greer said of Grief's early purchase of the equipment.

The purchase came before the proposed change drew thousands of letters from players opposed to the change. In addition to ordering the equipment, the lottery agency on Feb. 11 placed a $5,375 order for 25 additional balls needed for the new game. The five sets of five blue balls completed five sets of balls used for an earlier version of the lottery's Cash 5 game.

The molded rubber balls, ordered from Garron Lottery Products in Maryland, are specially made for lotto drawings and manufactured to exacting tolerances to guarantee fair drawings. A spokesman for the company, who declined to be identified, said the $215-per-ball cost paid by the Texas Lottery Commission is average for the industry.

Greer said the decision to buy the equipment in advance is defensible.

"Every day it wasn't up and running after the vote was lost dollars for the state," he said.

Greer also said "part of the reasoning (for the early purchase) was the war in Iraq" and how it might interrupt shipping. The new balls were made in France.

The equipment and balls would have wound up as valuable "backups" if the new game had not been approved, according to Greer.

Asked if he would have proceeded as Grief did, Greer said, "I'm going to defer on that."

"Everything I've seen there so far was followed right by the book," he said.

Greer said Grief acted on his own and not as a result of any direction from the three-member Texas Lottery Commission as to how it planned to vote on the game change.

Twenty lawmakers have contacted the lottery agency to express concern about the game change, according to agency spokeswoman Leticia Vasquez, who said several legislators asked specific questions about the equipment purchase.

Inquiries from lawmakers also have caused House General Investigating Committee Chairman Kevin Bailey, D-Houston, to schedule a May 15 hearing to ask commission officials about it.

"We are totally open to any inquiry," Greer said.

Stick said Wednesday the equipment order indicates the Lottery Commission may have violated the open meetings law.

"If the Lottery Commission decided in a closed meeting to change the rule and then subsequently had an open meeting where they solicited what essentially was sham testimony I have both an ethical and legal concern about that," Stick said.

"I think they decided to change the rules and then I think they decided to have a hearing to develop a record supporting their rule change," he said.

Stick is among lawmakers from around the state who have been blanketed with correspondence from lottery players who don't like the change or how it was made.

"The balls were bought in the middle of the comment period," San Antonio lawmakers were told in a May 1 letter from an angry player.

On April 28, Sen. John Carona, R-Dallas, told lottery commissioners he had been "besieged" by upset players.

"The item of note that received my attention was the fact that your agency purchased all of the necessary equipment to employ the changes before they were even approved by the commission," Carona wrote. "While it is within the commission's authority to consider and adopt such changes, to say the least it was a BAD business decision to make such purchases in advance of adoption."

kherman@statesman.com; 512-445-1718