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Public Schools Losing In Texas Lottery Payout

By Jack Fink, CBS 11 News
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A woman fills out her Mega Millions lottery ticket. (credit: Getty Images/Tim Boyle)

A woman fills out her Mega Millions lottery ticket. (credit: Getty Images/Tim Boyle)

GARLAND (CBSDFW.COM) – While lottery sales and prize payouts have increased since 1998, the money given to public schools from the Texas Lottery last year decreased about $200,000 compared to what they received then.

Since 1992, the Texas Lottery Commission has given public schools $18 billion dollars, according to commission figures. A 20-year lottery watchdog, however, says schools should be making even more money.

Garland resident Dawn Nettles operates the Lotto Report, where she closely tracks each of the lottery’s seven games with drawings, their prize payouts and sales.

“I caught them cheating Lotto Texas winners a number of years ago,” she said. “So I’ve watched them ever since then.”

Last year, the Texas Lottery Commission brought in $3.74 billion in sales and issued $2.3 billion in prize payouts. The amount public schools received peaked in 1998, when they brought in $1.2 billion from the lottery. Back then, lotto sales were nearly $3.1 billion and payouts sat at $1.65 billion.

However, despite this increase, public schools received about $1 billion last year.

That’s because about 75 percent of the lottery’s sales come from instant or scratch-off games. And because of the way the rules are set up, the state funds a higher percentage of the prize money, leaving less for schools.

In a perfect world, sales would cover all of the payouts. But Nettles said sales haven’t been strong enough in recent years, meaning Texas must make up the difference, paying more than it normally would.

“The schools? They’re losing,” Nettles said. “The state of Texas is losing.”

She said she’s found jackpot winners of two games, Lotto Texas and Texas 2-Step, have made out too well at the expense of public schools. Nettles said since 2006, records show schools have lost out on about $30 million because the lottery overpaid Lotto Texas Winners.

And since January 2008, schools have lost out on nearly $2.5 million because the lottery overpaid Texas 2-Step prize winners.

Nettles said she believes schools are receiving less because the state has to pay more.

“It comes from the state lottery account,” said Bobby Heith, spokesman for the Texas Lottery Commission.

Heith acknowledged that some of the lottery’s games don’t always measure up to their jackpots.

“That’s what we’d like to see our jackpots do; grow to a point where sales can support,” he said.

As for the lottery’s unclaimed prizes, they amounted to $87 million last year. Since 2003 through this year, that total has amounted to nearly $500 million. None of that is designated to public schools.

In 2003, state law required that the money go to the state’s teaching hospitals or the state’s general revenue fund.

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