The categories used to rank the lotteries are listed below.

The best possible score would be 100

 

CATEGORY & POINTS ASSIGNED –

 

WEBSITE (overall) (organization, etc.) -- 15

each of the 31 students in the class rated each website – Texas rated 11.94, West Virginia 6.95

WEBSITE (other factors) -- 10

Texas 7.90, Kentucky 9.00, Delaware 4.20

       Cash Value of online games – 2 

Some state have this information on their website, many don’t.  NASPL (North American Association of State and Provincial Lotteries) guidelines stipulate that this information  be disclosed. The information can be found under the heading Game Information at the following website:    http://www.naspl.org/index.cfm?fuseaction=content&PageID=39

        Bilingual? -- 2

Texas has added a Spanish language feature as a direct result of this project, but because this occurred after point determinations had been made, received no points for this item

       Odds statement on scratch-offs (if any) – 1.5

All websites have room to give the initial odds for each prize level of each scratch game – some don’t give any odds and several just give overall odds.  Texas gives all this information.

       Quality of FAQs – 0.5                         

Some states have an excellent variety of FAQs, others very few

       Winning numbers easily found – 0.5

True of almost all states, a few do not have on their home page

       Minutes and Annual reports -- 1

Can any information that should be available to the public be easily accessed?

       Detail of problem gambling information --1

Some states give detailed tell-tale signs that someone has a gambling problem, others just give links to help organizations

       Information about scratch game unclaimed prizes – 1.5

Texas was considered a best example of what and how this information should be disclosed.

SCRATCH-OFFS -- 30

The class felt that this item deserved the most points because it is where the greatest amount of lottery dollars are spent.  Texas had 15.52 points, California 23.32

       Top price point sold -- 8

This ranged from a high of $50 in Texas to a low of $5 in California, Oklahoma, Oregon, and West Virginia.  The median and modal price was $20.  The most points were awarded for the lowest price point with the rationale that there should be a limit on what a state is willing to wager with a citizen at any one time

       "Free ticket” prize -- 5

Many states use this feature to boost the number of “winners” and odds of “winning”.  In fact, a “free ticket” prize is not even a “break-even” prize.  A “break-even” prize is one of the prizes in many scratch games, but if you win the prize you have the option of getting your money back.  A “free ticket” prize does not give that option, it gives you a ticket that has an average value in most states of between $.50 and $.70 per $1 paid for the ticket

       Game closing procedure -- 8

These practices vary widely.  Many states continue to sell scratch tickets that have absolutely no chance of winning the advertised top prize.  Texas stopped this practice in the spring of 2007 and now closes games that have had all top-level prizes closed.  California has the best practice, they begin collecting tickets to close the game when there are two or three top level prizes remaining.

       Sales as a percent of sales -- 4        

A straight mathematical calculation that was then percent-ranked.  The lower the percentage, the more points that were awarded.  The rationale was that games that give instant gratification (they are, after all, called “INSTANT GAMES”) are more likely to cause problem gambling.  Texas received only a fraction of a point on this item because they have one of the highest sales of scratch-offs as a percent of total sales.

       Odds statement (if any) on back of ticket -- 5

Statements ranged from no statement at all, “overall odds”, “overall odds including breakeven prizes” to Texas excellent disclosure of overall odds including breakeven prizes as well as disclosure of the odds of winning the top prize.  The BEST PRACTICE is that followed by Illinois, Vermont, and Wisconsin; namely they have the odds for every prize level as well as overall odds on the back of their tickets.

       Bonus -- 5

Maryland was the only state we could find that allows players who win the top prize in a game that offers an annuitized prize (e.g., “Weekly Grand”) to change the way the prize is awarded to a cash payments.  Players in other states who discover they can’t or don’t want to wait for payments only have the option of selling their prize to a discounter at a greatly reduced rate.

ONLINE GAMES -- 15                       

 

        Odds printed on front or back of ticket -- 5

Most states have no odds information on the ticket itself.  Many have overall odds.  Texas gives both overall and top prize odds on the back of the ticket.  Wisconsin actually printed the odds for each prize level of its Lotto game on the front of the ticket

        Is information printed the back of tickets legible? -- 1

The print on most is so small that it is almost impossible to read

       Annuity amount or cash value on ticket -- 2

A few states print the annuity amount of a game such as Lotto, PowerBall or Mega Millions on the front of the ticket.  To our knowledge, only Texas has the BEST PRACTICE of printing either the annuitized amount or cash value (whichever is chosen at the time of purchase) on the FRONT of the ticket.  Doing this was at no cost to the State of Texas because the lottery operator (in this case GTech) bears the cost of printing tickets as a part of its contract with the state.  State should tell players what it is they’re playing for on the ticket!

     Computer generated numbers? -- 4 

 

Several states now use a computer to generate winning numbers for their online games.  There have been two major scandals (Arizona in 1998 and Tennessee in 2007) where the computer program allowed players who chose certain numbers ZERO chance to win.  In the most recent example, the program had been “certified” by an “independent” testing company.  We doubt very much that either PowerBall or Mega Millions would ever switch to such a system because players have more faith in what can be seen than that which is unseen.

       Subscriptions offered? -- 1

1 point was awarded to those states that didn’t offer

             If offered, is credit card payment OK? -- 2  

2 points were awarded to those states that either didn’t offer subscriptions or, even though they did not accept payment by credit card

ITEMS AFFECTING BOTH ONLINE AND SCRATCH

GAMES – 20

 

       Are lottery winnings subject to state income tax? -- 4

4 points were awarded to states that, even if they had an income tax, exempted lottery winnings from taxes.  If you consider lottery as an “entertainment” method of taxation, then taxing winnings seems like a tax on a tax

       % of sales returned to players as prizes -- 3

The greater percentages were awarded the most points

      Overhead % -- 2

The lesser percentages were awarded the most points

      Disposition of unclaimed prizes -- 4  

The class felt it was fairest to return unclaimed prizes to players, regardless of the worthy cause that might receive these funds

      Procedures implemented or being implemented to safeguard players from retailer fraud -- 4

This has become a major issue after investigations in Canada showed store clerks were telling players that they had won a lesser prize and then claiming the greater amount prize themselves, including in some instances the top prizes.  Several states have either installed or are in the process of installing machines at retail locations where a player can first check for themselves to see if a ticket is a winner.  The problem is being exacerbated by new games that take more skill to tell whether or not a ticket is a winner (e.g., “If your poker hand beats our poker hand”).

        Time allowed to claim prizes (Bonus/Deduction)

180/180 the norm, some allow 1 year/1 year and got a bonus, some allow less than 180 days and got a deduction

        Use “Education” as a justification -- 3

Using education or really any other good cause as a reason why citizens should be more willing to buy a product that is not totally benign seems a contradiction.  Three states (North Carolina, South Carolina, and Tennessee) use “Education” as a part of their lotteries names.  It seems somehow more honest to just say the profits go to the general fund.

       Required age to play and/or claim a lottery prize

This was added as a Bonus/Deduction question of from -2 to 2 points.  For most states both ages are 18.  A few states require players to be either 19 or 21 to play.  Many allow a person under the legal purchase age to actually claim a prize, although most require the presence of an adult parent or guardian.  This would seem to encourage underage buying.

GENERAL -- 10

 

        Response to survey (bonus up to 3 points)

 

        Operate video lottery or “keno parlors”? -- 3

These seem to have strayed far from the original definition of lottery, and have been shown to be the most addictive of lottery products and thus earn no points.

         CEO/COO/President/Executive Director/Secretary (all titles for essentially the same position) compensations -- 1

Most ranged from slightly below $100,000 annually to the mid $100s.  Only Tennessee paid their CEO up to 5 times the national average.

         Money spent for problem gambling initiatives – 3

 

         % of sales spent on advertising – 2

 

         Self-exclusion program

1 point bonus to Iowa and Illinois

         Information contained on billboards

1 point bonus to Nebraska and Texas, 2 points to North Carolina and Nebraska.  All revealed that the jackpot was an annuitized prize.  The latter two also gave the odds of winning the top prize