Texas bets on Mega Millions
Houston Chronicle
by Thom Marshall
August 6, 2003

AUSTIN - Texas is placing its bets on the multistate lottery Mega Millions, noted for its record-setting jackpots and 1-in-135 million odds, the Lottery Commission decided Tuesday.

Commissioners gave Lottery Executive Director Reagan Greer approval to negotiate a contract for Texas to join the 10 other states that form the Mega Millions game, meaning the well-known Powerball lottery appears out of the running.

The Legislature, seeking a way to climb out of a $10 billion budget hole, authorized Texas last spring to join a multijurisdictional lottery.

In June, Gov. Rick Perry, a longtime gambling foe, reluctantly signed into law a bill lawmakers hoped would generate state revenues of more than $100 million over two years.

"I'm not a big fan of gambling," he said after the lottery commission vote. "It's happening. That doesn't mean I am overwhelmingly supportive of gambling."

With Perry's signature, Texas lottery officials immediately began talks with Mega Millions and Powerball, and began analyzing and comparing the two games.

"We've been on full tilt since this thing started in June, and I don't see that changing," Greer said, predicting Texans will be playing the game by late October or early November.

"We took this very seriously, as it is serious," he added. "It's a huge thing that we're going to live with for a long time."

The game is expected to ring up $372 million in ticket sales in Texas during its first 10 months of operation, the commission's study shows.

It is also expected to generate $91.5 million in state revenues in the budget year that starts Sept. 1, far better performance than the legislative prediction of $101 million over two years, said Greer.

Tickets for the game, which is drawn on Tuesday and Friday nights, cost $1 each. Players choose five numbers from 1 to 52 and then select a "mega ball" number from 1 to 52.
The odds for winning any Mega Millions prize are 1 in 43, worse than the 1 in 36 odds for Powerball.

Lottery spokeswoman Karen Kalergis said larger Mega Millions jackpots serve to entice players nonetheless. The largest Mega Million jackpot hit $363 million, she said, compared to $315 million for Powerball. Tuesday night's estimated Mega Millions jackpot was $42 million.
Greer said the major key for tilting toward Mega Millions was the group's willingness to add a feature that would let players make a side bet on their tickets.

For an additional dollar, players could double or triple the amount of a winning ticket at below the jackpot level, Greer said. The smaller prizes range from $2 to $175,000.
By adding the option for the so-called "multiplier," Mega Millions will become more lucrative for Texas taxpayers, Greer said.

Also weighing in the decision, he said, was the fact that Powerball draws winners on Wednesdays and Saturdays, the same days as Lotto Texas.

"One of the things that came out of the public input is there is a loyalty to Lotto Texas," he said. "The Wednesday-Saturday draw has become a big deal to a lot of people in their weekly activities. I didn't really feel comfortable about changing that."

Either multistate lottery, officials noted, would drain a percentage of sales from Lotto Texas. Greer said officials feared sales drops would be much sharper if a multistate lottery was drawn on the same day.

Dawn Nettles of Garland, who publishes the Lotto Report and is a self-described Texas Lottery Commission watchdog, said she's concerned that public accountability is lacking with Mega Millions and joining it would be "a tragic mistake."

After e-mailing the Mega Millions Web site to request sales figures, she was informed that "Mega Millions is not a public body and is therefore not subject to the requirements of freedom of information statutes."

Rebecca Paul, president and chief executive officer of the Georgia Lottery Corporation and a leader in the Mega Millions organization, said the only way to obtain Mega Millions ticket sales records, if someone wished to check the accuracy of the payoffs, would be to contact each state for its individual report.
(Some of the Mega Millions states have laws that say that the Freedom of Information Act is applicable ONLY to residents of their own state. In otherwords, if you live in Texas and ask Virginia for their Mega Million draw sales, they can refuse to give it to you and get away with it by law. Now folks, you tell me - how can we, as citizens, "check the accuracy of the payoffs" if we can't obtain the sales information from all member states?)

Texas Lottery Commission spokesman Bobby Heith said that if the commission has documents about the total sales figures for Mega Million, it will release them if required under the Texas Public Information Act. He noted sales figures for other lottery games are public record.
(Please note the use of the word "IF" in the statement made by the Texas Lottery. This is very important because the Texas Attorney General may rule that Mega Millions is not being run by a "state agency," therefore, the TLC would not have to adhere to the Freedom of Information Act either. And I can assure you, Texas will put this to the test just so that you cannot obtain sales information.

The TLC releases sales figures on the other games because the TLC IS a state agency, therefore, the information is public information by law.)

Chuck Strutt, executive director of Powerball (a nonprofit association), said that Nettles also asked for detailed ticket sales information from Powerball, and it was provided to her.

Frank Ferguson, general counsel for the Virginia Lottery, said Tuesday that he wrote the response to Nettles' request for information. He said Mega Millions is "the product of an agreement which is essentially a contractual agreement among the participating states."

Since Mega Millions lacks the organizational structure of Power Ball, he said it does not have to spend money on staffing and can therefore return more dollars to participating states.
(Excuse me Mr. Ferguson - both Powerball and Mega Millions are SUPPOSE to return 50% of sales to the players and each state keeps 50% of its own sales. So how can each state "receive more dollars?"

By chance would the answer be because Mega Millions states may not or do not return all dollars earned to the winners [from the winners investment] allowing a state to keep some of the "winners winnings," thus increasing revenues for the state in an underhanded way?

Also, by participating in Mega Millions, Texas will be paying $10,000 to $20,000 per year for expenses when there were NO yearly expenses for joining Powerball.

Additionally, by not having an "organized accountable structure" - this sounds like a risky deal for the People and a gold mine for the "private entity" running the game - I say "private" because of the claims that they are not bound by FOIA laws which is precisely why the states have a monopoly on lotteries - to prevent corruption supposedly.)

For details regarding the states that refused to release public information to me, click here.
. . .

MEGA MILLIONS
Start: Late October or early November