A Lottery Boon Raises Concerns

I hope you are having a happy holiday season. A few days ago the New York Times ran an article (for which I was interviewed) on lotteries across the country and their increasing reliance on high-priced scratch off tickets to raise revenue. For your information, I'm including the story below.

December 27, 2007
Behind the Jackpot
The $50 Ticket: A Lottery Boon Raises Concern
By NELSON D. SCHWARTZ
With the popularity of traditional lotteries waning across the country, many states are turning to instant games priced at $20, $30 and as high as $50 to lure new players and raise revenue.
Scratch-off tickets, for example, now account for more than 75 percent of lottery sales in Texas, which this year became the first state to introduce a $50 scratch-off game.
But critics in Texas and elsewhere say games promising this kind of instant gratification are more likely to contribute to the kind of problem gambling that is usually associated with fast-paced casino betting, and they are now trying to limit them.
They say the games take particular advantage of the most vulnerable members of society, including the poor and members of minority groups.
"Scratch-off tickets are to the lottery what crack is to cocaine," said State Senator Eliot Shapleigh, a Democrat who represents El Paso.
In Massachusetts, a third of the calls to the state's 24-hour gambling addiction hot line come from lottery players, the majority of whom play instant games, according to Margot Cahoon, a spokeswoman for the state's Council on Compulsive Gambling.
Industry leaders agree that the future of the lottery business now depends on instant games with bigger prizes. The $50 Texas game, for example, offers thousands of instant prizes ranging from $50 to $50,000, with a few exceptional prizes as high as $5 million. But they say the games are not aimed at compulsive gamblers and are not intended to be addictive.
"It used to be lotteries would offer $1, $2 and $5 tickets but the growth is in $10 and $20," said Ernest L. Passailaigue, director of the South Carolina lottery and president of the North American Association of State and Provincial Lotteries.
The higher value games certainly appeal to people like Larry Hardy, who nearly every day walks from his central Houston rooming house to a nearby Chevron station to work odd jobs and buy scratch-off lottery tickets.
He has won $200 several times with a game called "Break the Bank," but Mr. Hardy, who relies on $600 a month in federal disability payments to support himself, still spends $30 to $40 a week on the elusive dream of hitting it big.
"I feel at times I shouldn't play again," Mr. Hardy said, "but the reason I play is I really need $20, $30, $40 or maybe $50."
States are now considering even more potentially addictive offerings. A Florida government report this year on how to enhance lottery revenue suggested that the introduction of video lottery terminals there could raise more than $1 billion a year. But the report acknowledged these games "are considered to be more addictive than traditional lottery games and could contribute to a problem of pathological gambling."
Just who plays the lottery — and how much — has always been a contentious issue. As lotteries have expanded their offerings, most states have emphasized statistics showing overall participation in any type of game, which typically matches the demographics of the population.
Academic experts on the lottery, however, say this kind of analysis is misleading because it does not make a distinction between those who play once or twice a year players and daily or weekly bettors.
"Surveys usually stop with the question: ‘Have you played in the last month?"' said Philip J. Cook, a professor of public policy at Duke University. "They don't plumb the questions about depth of play, which the lotteries have chosen to obfuscate because they see themselves as vulnerable on this issue politically."
The introduction of the $50 ticket in Texas — and evidence that blacks and Hispanics individually spend much more than whites on the lottery — has spurred criticism from legislators in heavily minority neighborhoods, like the one in Houston where Mr. Hardy lives.
"I didn't think I'd be this concerned but it's harming people," said Garnet Coleman, a Democrat who represents a majority black district in Houston in the state legislature. "When I go to get a pack of cigarettes or a soda I'm in line behind people playing the lottery. They're not buying one ticket or five tickets. They're buying $50 or $75 worth and this is in my district, which is limited-income."
Unlike most states, Texas is required by law to provide detailed demographic information on lottery participation — data that backs up Mr. Coleman's argument. In 2006, according to a University of North Texas survey commissioned by state lottery officials, the typical black player spent $70 a month on the lottery, compared with $47 for Hispanics and $20 for whites.
The demographic differences were especially sharp when it came to scratch-offs. Players with a high school degree or less typically buy $20 a month worth of scratch-off tickets, compared with $10 for college graduates. Similarly, players with an annual income of less than $12,000 spent 33 percent more a month than those with incomes above $100,000.
Mr. Passailaigue, the president of the state lotteries association, does not dispute that certain games appeal more to minorities and low-income people but he said these groups were not being singled out and the trend should not worry state lottery officials.
"It's more cultural in nature," he said. "Some people think it's O.K. to go and play golf and bet on each hole."
While golfers might have more disposable income than many scratch-off bettors, Mr. Passailaigue argued the reality was, "Culturally, people have experienced different ways not only to amuse themselves but to gamble. It's been that way for a long time in this country."
Whatever the reasons, state lottery officials and the companies they hire to run the games appear to be concentrating on the heaviest players.
The Scientific Games Corporation, which dominates the scratch-off market and counts states like Texas and Massachusetts as clients, advises lottery managers to increase jackpots to lure players, according to a report supplied by the company to the Texas Lottery Commission and obtained by The New York Times under an Open Records Act request.
"But like any ‘tool,' an increased payout is only useful when used in the right way," the report cautions. Describing what it calls ‘‘chatter," or midsize prizes, Scientific Games concludes, "Better to increase the number of chatter prizes in a game aimed at heavy players so that they see more of the prizes they are playing for and will communicate their excitement to others, creating a buzz for the game."
This approach seems to be working. In Massachusetts, which Mr. Passailaigue considers a forerunner in developing higher-priced tickets with bigger payouts, 70 percent of the state lottery's $4.6 billion in revenue comes from instant games.
In Texas, the $50 scratch-off was introduced after higher-value denominations of $20, $25 and $30 proved popular. The success of these and other instant games helped the state increase total lottery sales in four of the last five years.
Meanwhile, the popularity of its more traditional lotto offerings has sagged and the percentage of Texans playing any game has fallen from 70 percent a decade ago to about half today. Lottery officials in Texas credit the rapid success of the $50 game, introduced in May, with helping it avoid a sharp drop in sales during the 2007 fiscal year. For the $50 game, the odds range from 1 in 6.67 for a $50 prize to 1 in 1.2 million for the top $5 million jackpot.
As for the criticism from legislators and others that such games appeal most to compulsive gamblers or low-income players, a spokesman for the Texas Lottery Commission, Bobby Heith, said, "We value and respect those concerns very much but our job is to run the lottery, to generate as much revenue as possible, as responsibly as possible."
In Texas, urban liberal Democratic politicians like Mr. Coleman and Mr. Shapleigh of El Paso now find themselves aligned with the Christian Life Commission, the public policy division of the Baptist General Convention of Texas, as well as traditional conservatives like Robert F. Deuell, a Republican state senator from the suburbs east of Dallas. Four years ago, the Baptist group hired a former state lottery official to crunch the numbers and prepare reports intended for urban Democratic officeholders that detailed the high rate of play in their districts.
"We use the facts that are the most persuasive," said Suzii Paynter, executive director of the advocacy group. "If it's just a religious argument, people can pat you on the head."
Mr. Deuell has opposed the lottery since he took office in 2003, but research from the anti-gambling group played an important role in Mr. Coleman's change of heart, whose district has the highest rate of lottery spending in the Houston area. His constituents spend about 3 percent of their income on games, according to the anti-gambling group's research.
"Ten years ago, I wasn't opposed to the lottery," Mr. Coleman said. "This has really made me take a second look at whether the state should be in the gaming business."¶
The Baptist group has been fighting the lottery ever since it was introduced in Texas in 1991 by Ann Richards, then the Democratic governor, and Ms. Paynter concedes the lottery will not be abolished overnight. "It's a long fight, and a hungry industry," she said.
Mr. Coleman does not support shutting down the Texas Lottery. But he shares Ms. Paynter's goal of eliminating the $50 scratch-off and similarly priced instant games. "If people want to play," Mr. Coleman said, "they're better off buying a dollar ticket and calling it a day."
Ron Nixon in Washington and Thayer Evans in Houston contributed reporting.

Chron story on search for TSU president

Today the Houston Chronicle ran a story on the search for a new president at Texas Southern University. To expand on my quote from the story, I believe the sooner a permanent president gets on the ground, the better off the school will be. The unfortunate reality is that there are some people in Austin looking for an excuse to make drastic changes at TSU that will ultimately hurt the school rather than help it. It is important that we all work to make sure TSU is operating above the standard levels of academics and administration before the start of the 81st Legislative Session in 2009.

Three on inside track to TSU presidency
UH's Rudley, 2 others thought to be on search panel's short list

By MATTHEW TRESAUGUE
Copyright 2007 Houston Chronicle

The search for Texas Southern University's next president is drawing to a close, although the selection could not come soon enough for some state lawmakers.
The university's governing board will receive a recommendation from an advisory search committee at a specially called meeting today — more than 18 months after the firing of former President Priscilla Slade.
Although the regents could act immediately upon the recommendation, it's likely that they will wait before making a decision because not all of them will attend the meeting, said Glenn Lewis, the board's chairman.
The short list of candidates, according to people familiar with the search process, includes interim University of Houston President John Rudley; the city of Houston's chief administrative officer, Anthony Hall; and Ivory Nelson, a former Texas A&M University System administrator who now leads Lincoln University in Pennsylvania.
It's unclear how many candidates the committee will recommend to the board.
Lewis declined to comment on the candidates but previously praised Rudley, who served as TSU's chief financial officer and internal auditor during the 1980s. He said the board needs to make a decision soon but cannot afford to make the wrong one.
"It needed to be done yesterday," Lewis said.
The board is under pressure to move quickly to the fill the position, which has been vacant since the firing of Slade in June 2006 amid a spending scandal. A hung jury recently spared Slade of a criminal conviction on charges related to her use of school money for personal expenses, but her former chief financial officer, Quintin Wiggins, received a 10-year jail sentence for his role in the scandal.
TSU is at risk of losing accreditation if campus leaders do not rectify a series of financial and management issues within a year. The Southern Association of Colleges and Schools placed the state's largest historically black university on probation last week because of the school's poor financial picture.
"I would hope that a decision be made and a new president on campus by the beginning of next semester," said state Rep. Garnet Coleman, a Houston Democrat whose district includes the 9,500-student campus. "If not, it's a big problem."
The spring semester begins next month.
State Sen. Steve Ogden, a Bryan Republican, recently wrote the regents, raising doubts about their ability to turn around the chronically troubled school without a permanent president.
The letter came in response to a sweeping reorganization plan that the regents submitted in October to the legislative budget board, of which Ogden is a member.
The proposal calls for top-to-bottom changes, including greater oversight from regents, tighter controls over spending and the involvement of outsiders in academic and financial matters. If the plan is approved by lawmakers, the state would provide nearly $40 million in supplemental funding over the next two years.
"Without a permanent president," Ogden wrote, "I believe it will be nearly impossible to get anything done."
The university had suspended the search this year after Gov. Rick Perry decided to replace the entire nine-member governing board. The search resumed in September after Lewis added three regents to the advisory committee, which includes alumni, faculty and community members and students.
The committee, headed by Gerald Smith, chairman and CEO of Houston investment firm Smith, Graham & Co., had narrowed the field of candidates to 18 names in November but accepted applications and nominations through last Friday.
Rudley will be the interim president at the University of Houston until Renu Khator, formerly the second in command at the University of South Florida, takes over the reins next month. Rudley is expected to return to his role of vice president for administration and finance.
Hall, a TSU-trained attorney who oversees the day-to-day operations of the city, is a former City Council member and state representative. He also recently served with Lewis on Perry's blue-ribbon committee on the future of the university.
Nelson, a noted chemist, served one year as acting president of Prairie View A&M University and six years in the top job at the Alamo Community College District in San Antonio. He has been president of the historically black Lincoln since 1999.
If the regents do name finalists today, state law requires them to wait 21 days before voting on the appointment.

Number 71: State Rep. Dan Barrett (D-Fort Worth)

Representative Jim Dunnam, the House Democratic Caucus chair, sent this e-mail out recently to Democratic members about Dan Barrett's election yesterday. I thought you might find it enlightening.

Number 71:  State Rep. Dan Barrett (D-Fort Worth)

In case you've missed the morning news, Democrat Dan Barrett of Fort Worth won Tuesday's special election runoff to take Republican Anna Mowery's place in the Texas House. There are now 71 members of the House Democratic Caucus.

To all of you who helped out in the race, thank you. Particular thanks to Rep. Barrett's Democratic colleagues in Tarrant County, Representatives Burnam, Veasey and Pierson. And to everyone in our caucus, please take time to give Dan a call, and welcome him to the Texas House of Representatives and our family.

Looking at some real numbers, House District 97 has been Republican territory for three decades. John Kerry received only 35.8 percent in the district in 2004. Even the strong performance of Moody in the 2006 Supreme Court race was only 43.1 percent. Not one pundit or "expert" predicted anything but a Republican landslide for Mark Shelton, the GOP's nominee.

So what happened?

First and foremost, Rep. Barrett was a great candidate who worked very hard. At the end of the day, a good candidate is the best ingredient for success. Dan won both the early vote and the election-day vote. He was outspent by a wide margin, but his campaign was organized and properly (albeit not lavishly) funded, and his message was right. Dan could not have won without the overwhelming vote of independent voters, and the trends in Dan's district reinforce what we have seen elsewhere in Texas for the last several cycles—Texans are sick and tired of what Republican leaders in the state are doing.

It would be putting blinders on to ignore the impact of Tom Craddick on the Barrett victory.

Craddick was in all the way in the race. Tom's original anointed candidate, Craig Goldman, widely touted his allegiance to Craddick during the race. Goldman ended up coming in fourth in the November special election.

What we know now is that at some point prior to the November vote, Craddick jettisoned Goldman because of real fears that Goldman was not performing well and anointed Mark Shelton as his new, favored candidate. Shelton kept his pledge to Craddick pretty low key, while Craddick quietly turned on the funding spigot for Shelton. Shelton ended up coming in second behind Barrett to advance to the runoff.

Because of campaign filings and the press spotlight, Shelton could not hide his Craddick pledge or his Craddick support in the runoff, and both the pledge and the support became an issue in the race. One of Dan Barrett's mail pieces made the choice very clear, stating "Since Mark Shelton already gave his vote to Craddick, why should you give your vote to Shelton?" Clearly this message resonated with the voters, with Barrett improving his 32 percent in November to over 52 percent last night.

In January 2003, we stood at 62 House Democrats and Craddick predicted there would be up to 98 Republicans within the next several election cycles.

In January 2005, after George W. Bush's last time on a Texas ballot, we improved to 63.

In January 2007, we weighed in at 69 members.

Three months ago, we welcomed Kirk England to our party and stood at 70 members.

Today, thanks to our faith in one another, our commitment to the best interests of our constituents and our working together, we are 71 strong.

Make no mistake, we did not get here by accident—it has been work (hard work)—and it will be a lot more hard work in the months to come.

Last week ended with Tom Craddick clinging on to some supposed victory in Greg Abbott's opinion/non-opinion of Craddick's "absolute power." But something interesting happened—no matter how much politicians might mess things up, the voters can be counted on to right wrongs. Just as Hugo Chavez recently learned from voters that his claim to absolute power might be a bit premature, so too have the voters sent Tom Craddick a message.

What is interesting about the Barrett race? Not only can you win a race by running against Tom Craddick, but it also might be the smartest way to win. Because then, all Texans end up winning.

Texas Progressive Alliance 2007 Texans of the Year

Today the Texas Progressive Alliance, a group of progressive bloggers from around the state, named Representative Jim Dunnam, Representative Pete Gallego and myself as the 2007 Texans of the Year.

As the Democratic leadership for the Texas House of Representatives, it's a true honor to be recognized with my colleagues for our work last session and the past four years. I promise we will continue working for open, democratic, and progressive governance in our state.

The Texas Progressive Alliance is proud to announce the House Leadership team of State Rep. Jim Dunnam, State Rep. Garnet Coleman, and State Rep. Pete Gallego as our 2007 recipients of the Texan of the Year award.

There may not be another three individuals who have done more for Democrats in the state of Texas over the past four years than Rep. Jim Dunnam, Rep. Pete Gallego and Rep. Garnet Coleman. Together, they have led the fight for the resurgence of the Texas Democratic Party. Every day is another story. They fought through the 2006 elections, and then they fought for the months leading up to the first day of session. They led the fight against Speaker Craddick in the final days of the session, and are now poised to add to the Democratic gains in the House as they continue their roles as Co-Chairs of the House Democratic Campaign Committee.

Their work together is imperative to the continued progress of Democrats in Texas, but it's their individual efforts that really demonstrate how this leadership team makes the best of one another for the good of all Texans. Here is a brief highlight of what each of these leaders did over the past year:

State Rep. Jim Dunnam

In 2003, we had a mere 62 members in the House in 2003. Today, there are 70, including State Rep. Kirk England who announced his intentions to switch parties and run as a Democrat next cycle. In only 5 years, there was full frontal attack on Speaker Craddick's ability to lead, launched by one question by the Waco Democrat: "Mr. Speaker, what is the process of removing the Speaker of the Texas House?" His mastery of the House rules is incredible to watch.

During the 80th Regular Session, Rep. Jim Dunnam led efforts to clean up the mess Governor Perry and the Republican leadership made at the Texas Youth Commission. He worked with Rep. Coleman and Rep. Gallego to lead the fight against expanding new tax cuts for the richest 10% of Texans at the expense of health care and education opportunities for Texas families. He passed numerous bills for his district, but he will forever be remembered for the efforts he made on the House floor, challenging the absolute power of Speaker Craddick.

State Rep. Garnet Coleman

Rep. Garnet Coleman is one of the most progressive members of the Texas House. Rep. Coleman filed over sixty piece of legislation, including (1) legislation end tuition deregulation, (2) legislation to overturn the ban on gay marriage, (3) legislation to prevent the construction of any new toll roads anywhere in the state of Texas. But beyond these strong policy positions, he successfully passed legislation to expand health care opportunities for former foster children and double the funding for cancer research. He continued his fight to fully restore CHIP — an effort he's worked for ever since Speaker Craddick and his allies cut hundreds of thousands of kids off of health care since 2003.

Beyond his legislative work, Rep. Coleman is the top fundraiser for Texas Democrats, and is well-known for his non-stop efforts in supporting House Democrats across the state. He chairs the Legislative Study Group, which received a Silver Star award from the TPA for its incredible policy work.

State Rep. Pete Gallego

Rep. Pete Gallego is the chair of of the largest bipartisan legislative caucus in the Texas House– the Mexican American Legislative Caucus. He also sits on the national board of NALEO. He was a top lieutenant for Speaker Pete Laney, and his trust from that better time in the Texas House allows him to remain as one of the most trusted members in the Texas House.

His policy issues are far-reaching, and can range from helping protect our state's natural resources to preventing those horrid voter ID bills behind the scenes. Rep. Gallego also helped temper some of the more controversial issues of the session, including immigration and security.

Rep. Gallego often makes waves quietly inside the Capitol, but his efforts help thousands of Texans from all walks of life. Together, Rep. Gallego, Rep. Dunnam, and Rep. Coleman are extremely deserving for our 2007 Texan of the Year award.