Lawmakers scramble for unclaimed lottery prizes

Lawmakers scramble for unclaimed lottery prizes

USA Today

February 27, 2013

AUSTIN, Texas (AP) — So a guy walks into a gas station, buys a scratch-off, wins a few bucks, gets distracted with some fool thing and eventually puts the lucky ticket through the wash in his Wranglers. It happens. No big deal.  But for state lawmakers in a tough budget year nationwide, the unclaimed prizes are adding up to a tempting pot of cash.

"It's something we've seen an increased interest in this year," said Jon Griffin, a policy associate at the National Conference of State Legislatures in Washington.

Around the world, some staggeringly huge jackpots have gone unclaimed in recent years, drawing lots of headlines and more than a few schemes. In 2011, a $77 million Powerball winner let the 180-day deadline expire in Georgia. In California last year, a woman claimed her $23 million prize only after state officials put on a five-month publicity campaign to find the missing winner. In Illinois, officials are still searching for the holder of a $1 million ticket set to expire on March 17. And in Britain, seven prizes worth $1.3 million each are set to expire between March and July.

After the prize deadlines lapse —usually within a year, sometimes in as few as 90 days— lottery commissions generally put the money toward future prizes or general state revenues.

For the most part, those policies have remained unchanged since the 1960s, when the modern state lottery movement spread from New Hampshire.

"It was all divided up in terms of who gets the profit," said I. Nelson Rose, a gambling industry expert at Whittier Law School in California. "They didn't think about what's left over unclaimed."

Now, they are officially thinking about it.

In Albany, for example, a New York Senate committee is considering a proposal to transfer unclaimed prizes to a summer reading program known as the Love Your Library Fund.

In Wyoming, where lawmakers are trying to start a new state lottery agency, the unclaimed prize money has become the subject of an intricate power squabble. Members have been shading the prize legislation to change which agencies controlled the money and whose pet causes would benefit, from gambling addiction programs to assorted social needs or maladies.

Here in Texas, where even a big oil boom has not quite rescued the budget from troubles including a $4.7 billion debt to Medicaid, the unclaimed prize money seems to fit that name less and less every year.  Over the past decade, the amount has been going up, peaking at $86 million in 2010.  As the pool of cash expanded, the state developed a complex formula allowing appropriations for teaching hospitals, veterans' services and health care in border counties.  Other proposals met resistance. In 2005, one unsuccessful bill would have paid $50,000 to the families of Texas soldiers killed in Iraq and Afghanistan.

Last year, the lottery commission reported unclaimed prizes of $52 million, including $35.6 million from instant games and $16.7 million from draw games. Though the total amounts to less than a rounding error in the state's proposed two-year budget of $88.9 billion, some strikingly diverse parties have emerged to compete for the money.

"Something like $50 million will get the legislators nuts, because they can all sense, 'That's what a school costs in my district or a bridge or a road," said William Thompson, an expert on gambling industry regulation at the University of Nevada-Las Vegas.

To Democratic Rep. Trey Martinez Fischer of San Antonio, $50 million means a chance to send some resources back to the original stated beneficiary of the state lottery, the public schools. His bill would send more to supplement school districts with low property tax revenues.

"We're still dealing with $5.4 billion in cuts that was imposed by the Republican leadership," Martinez Fischer said. "I think every dollar we can find should be going to educate our schoolchildren."

Democratic Sen. Wendy Davis of Fort Worth also kept her request on the modest side. Her bill would stake out $5 million for military veterans' health and education services. Under the current formula, those programs get a maximum of $5 million.

So far, the boldest proposal would carve out $10 million a year to restore the Battleship Texas, which is anchored at the San Jacinto Battleground in the Houston Ship Channel and draws 100,000 visitors annually.

Bruce Bramlett, executive director of a nonprofit foundation devoted to preservation of the ship, said leaks in the ship, which was commissioned in 1914, have caused damage requiring $75 million in repairs.  He said the idea of tapping unclaimed lottery money occurred to him, though he has done little to promote the proposal publicly.

"Loose lips sink ships," he said in an interview.

Republican Rep. Wayne Smith of Baytown, who filed the measure, expressed little surprise at the emergence of competition for the unclaimed prize money.

Referring to other lawmakers with rival bills, he added, "maybe they did their research too."