The Hodgepodge Page
Texas Lottery News ... Read all about it here ...
Brought to you by
Aug 23, 2005 - FY05 is nearing its end for the TLC and things aren't looking good for them. I've just updated FY05 sales figures - While overall sales are up - due 100% to the sale of scratch tickets - their bottom line will be way down.
As it stands right now, if you compare the last 240 draws under the old 6/54 matrix to the first 240 draws under new 5/44 matrix AND add in Mega Million and Megaplier sales since inception, these games are in the RED.
The TLC says (excuse) sales for all lotteries are down ... therefore, its to be expected that Texas sales would be down too. Well, for whatever this is worth, I disagree. The lotteries have FAILED to recognize that their own actions are the direct cause for the decline in sales -
The lotteries just love to say that it's "player fatigue" and people are "tired" of the games and that's why sales are down. Someday, someone is going to wake up and FIX our lotteries. They give players unreasonable odds and computerized draws and then they blame their losses on "player fatigue."
OK, nuff said. Go see how Texas has done this year. They have 9 more days to catch up! :)) Click here.
July 18, 2005 - Tomorrow you will be reading about the TLC employee who was indicted today by the Travis County grand jury. Seems she was scamming retailers. I only wonder why it took the DA so long to take action and I can't help but wonder why the DA hasn't gone after the TLC for cheating Lotto Texas winners. Maybe it'll come.
Several of you have asked if it is true that the TLC bought promotional products - paid $300,000 in advance (a real no-no) - but have not received the merchandise yet. Yes, it appears that story is true too. I heard about this quite some time ago - sure has taken a long time to hit the news!
Also you've been asking me if I think we will finally see changes on our games. The answer is YES, I believe we will. I don't know this for sure but I believe changes are forthcoming.
One last thing. I've received inquiries as to how many people post to my web site. I'm the only one. The Lotto Report consists of ME, there is not a "they." My husband knows how to post the Pick3 results but that's as far as he goes.
More news later.
July 8, 2005 - Revised - 6 PM - Regarding the news that Reagan Greer resigned today - my comments are ...
Now let's see if the "real" guilty parties resign too.
Reagan Greer was set up - he depended 100% on Gary Grief and Kim Kiplin to run the Texas Lottery and he did and said what they told him to do and say.
Gary Grief knew about the funding shortage on Friday night ... 27 and 1/2 hours prior to announcing a roll amount to $8 million if there was no winner on Saturday ... yet he failed - as the number 2 man in charge - to alert Greer and he failed to protect the People of Texas. What kind of "team player" was Grief? (Grief has this thing about being a "team player." Ask all of the people that he fired or had fired "at will.")
Why did Grief intentionally deceive the People of Texas when HE could have been prevented it?
Kiplin, as General Counsel, failed to advise the Commission to cease and desist deceptive advertising when she found out that Monday night [prior to Wednesday's draw]. All the TLC had to do to comply with consumer law pertaining to truth in advertising was to send out ONE press release and electronically change the billboards. Changing billboards requires one keystroke.
The problems at the lottery existed long before Greer came on board - Grief and Kiplin set him up - Greer's biggest failure was not recognizing and identifying the real problems.
They need to clean house at the TLC.
I've updated my Summary of Lottery Sales page that shows sales for each game since 1992. I will update the page frequently now until the end of FY05 - Aug 31 for you. Everybody should review this page so you can see how the Texas Lottery has really done. You will see that our boycott was successful! Click here.
Also, I've posted a news story from the LA Times about the lawsuit that's been filed in California. The people who have filed this suit have merit - I can see where CA may have to stop selling Mega Millions tickets at least until the issue is resolved. If this happens, the Mega Millions group will really be taking advantage of players since they will have to continue the game at its current odds for a while. Click here to read the story and the press release.
I'd like to answer one of your most popular questions of late - YES, I do think we'll see game changes coming for Lotto Texas in the very near future. If they give us a FAIR game, then YES, we can stop our boycott!
June 30, 2005 - The Texas Lottery staff has been spending considerable time here lately explaining how they estimate the jackpot amount to advertise for Lotto Texas. What bothers me is how they make it look so complicated when it's a 5 minute task. I want ya'll to know how to do it so I'm going to show you. If you can add, multiply, and divide, you'll have no problems.
By knowing this, you can see how easy it is and would be for lotteries to deceive players especially when lotteries "guarantee" jackpot amounts. Mega Millions is a guaranteed jackpot - Lotto Texas is not with the exception of the first four draws in a roll AND, we don't EVER want guaranteed jackpots either. You'll see why in a minute.
Estimating is a two step process - Step 1 - you need to know how much a jackpot winner has coming should he win and Step 2 - you have to know how much it would cost to fund the amount you want to advertise.
Under the current Lotto Texas rule, the jackpot winner has won 39.104% of total sales from every draw in the roll.
Let's start with step one and figure out how much a winner has "really" won. And we're going to figure the 5th draw in the roll and let's make it hard and say it's Friday. That means that if there is no winner on Saturday, we have to tell the people how much they'll be playing for on Wednesday after Saturday's nights draw.
We already know how much a winner has coming from the 1st three draws because the draws have already been held and sales figures are final. To estimate sales for the 4th & 5th draws, we're going to look at historical sales figures to see how many tickets are usually sold under the same conditions. We're also going to consider - is it a Saturday or a Wednesday, is it a holiday, have there been any disasters? We also know that Saturday sales are higher than Wednesday's sales during the beginning of the roll.
Now let's get started.
Very good. Now we know about how much a winner has coming should he win on Wednesday.
Now we move to step two. If the winner is due to receive about $4.3 million, we need to know how much we'd get if we invested that $4.3 million for 25 years. This is so very simple. We simply take the amount we want to advertise [we hope he's gonna get] and divide it by the interest factor, that we just got from the Comptroller today, to see if we have enough to fund.
$8,000,000 divided by 1.5576% = $5,136,107.
Now - do we have enough to fund $8 million? No, we don't. We only have $4.3 million but we need $5.1 milllion. So we'd better lower the jackpot amount if we want to be as accurate as humanly possible in our advertising.
$7,000,000 divided by 1.5576% = $4,494,093.
Oooops ... we still don't have enough but we are closer. However, we have cause for alarm because we have estimated total sales for 2 draws and IF our estimated sales fall below our estimates, we could be short by more than $170,000 to fund $7 million. So let's see what advertising $6.5 would do.
$6,500,000 divided by 1.5576% = $4,173,087
BINGO - we found a safe jackpot amount to advertise based on today's rate.
If we're lucky and sales come in a little bit higher, will there be enough to fund $7 million? If we're lucky again, maybe the interest factor will increase. So, just for the heck of it, let's hope that the interest factor goes up. Let's figure that out now.
$8,000,000 divided by 1.5764% = $5,074,854
Ooops, still not enough - we only have $4.3 million.
$7,000,000 divided by 1.5764% = $4,440,497
Ooops, still not enough but definitely closer.
Maybe we'd be better off if we just ignored what the Comptroller told us the factor was to justify our advertised amount. Heck, how will anyone know what the factor is? We won't release the factor so by the time anyone could obtain it through an open records request, and we take our full 10 working days to deliver, it'll be to late to have an impact.
Let's figure this scenario based on higher rates ....
$8,000,000 divided by 1.605% = $4,984,424
Ooops, still not enough and its still way to far off - we only have $4.3 million to invest.
$7,000,000 divided by 1.605% = $4,361,371
We're closer - IF rates go that high and IF we advertise $7 million. But we don't want to advertise the same amount twice. So let's increase the rate some more. We really don't feel safe increasing sales because we don't really think they'll come in much higher than we have estimated - after all, our historical sales records won't support increasing our sales estimates.
$8,000,000 divided by 1.8532% = $4,316,857
BINGO - That's what we'll do. We'll imply that our rate/factor is 1.8532% so IF there is a winner and they know how to determine our "factor," that's all we'll have to pay them if the jackpot amount is guaranteed.
For the June 8th drawing, the TLC did not lower the advertised jackpot figure, sales came in lower than what we estimated above, [officially the winners share was $4,271,144], and the quoted factor was 1.5576%. Had there been a winner, I think the TLC would have told the winner that the factor was 1.873034% to justify paying them $4.2 million. This is what my calculations indicate they have done in the past. I can only conclude that this is the reason they REFUSED to tell me the factor that they had received on Friday, June 3, 2005.
I'm showing you all this because I want you to see the significance of the interest factor. If the TLC tries to "guarantee" all advertised jackpot amounts and if you win, they will determine how much they have to pay you based on the factor the day after you win. You will never know if they have inflated or deflated the factor.
Between Sept 1996 and March 2002, the TLC was guaranteeing jackpot amounts even though it was NOT written into the rule. The rule emphatically said that all prizes were based on pari-mutuel calculations EXCEPT for the 4th prize which was a guaranteed $3 then $5.
Between Feb 1997 and Feb 2000, the TLC shortchanged 13 wins by paying them the amount needed to invest rather than the percentage due the winner based on 32% of sales - the winners share of sales at that time.
In addition to that, my calculations indicate that the interest factors were inflated and deflated as well.
For those winners who received more than their share from total sales, my calculations indicate that the factors were inflated so the TLC would not have to pay as much. However, those winners received at least the amount they were entitled to as per the written rule.
Folks, you can easily see how easy it is for the Texas Lottery to deceive us. There is only ONE fair way to pay us and that is for us to divide a set percentage of sales for all prize categories. This is our guarantee that we will receive our share of sales and it also guarantees the state that they can expect no financial losses.
The amount on the billboard is an estimated figure but that estimated figure should be fairly close. There are a few exceptions that should be excused and that is if there was a disaster that prevented people from purchasing lottery tickets. The figure should be conservative and let it be a pleasant surprise if someone wins more than advertised.
For those of you who want to know why it is called an "interest factor" and not an "interest rate" - that's because they figure the amount returned based on purchasing 24 separate securities - all at different interest rates - so they figure the average of the 24 rates to determine the "factor."
Finally, for those of you who want to know how to get the info you need to calculate. You can either call the TLC and ask them to tell you what draw sales were for all draws in question or you can obtain them on my web site. You can also see where I keep the current roll info by clicking here. As for the rate/factor, well right now that's another matter. Six months ago, the Commissioners told the TLC staff to post the factor and the cash value amount on the TLC web site but it still has not been done. I do obtain factors EASILY from other lotteries and I post the factor here. The factor I post is higher than the Texas Lottery will EVER get so it is a safe number for the most part. I also post the estimated cost to fund the amount advertised for each drawing on my results page and it can be found under Lotto Texas where I have all the payout information.
June 17, 2005 - Editorial - About the Pick3 last night. The TLC is reporting that there was a computer glitch so they had to suspend "sales." They did not suspend the drawing - just ticket sales. If the computer can not track the numbers sold, then when players go to collect, the computer may say that the ticket is not a winner when it really is. So I think they did right in suspending sales. For those of you who bought early, check your own tickets.So ya'll want to know what is going to happen regarding the latest highly publicized incident about the TLC's deceptively advertising a jackpot at $8 million. All I know at this point is that the Commissioners are going to address the issue next week (June 24th) during the commission meeting and there is a hearing scheduled at the Capitol for June 29th.
The TLC will have to "explain" how they made such a mistake. For me, this will be very interesting to say the least. I predict the TLC staff will try to convince the Commissioners that they need to "guarantee" jackpot amounts. The reason they wrote guaranteeing jackpots for the first four draws in a roll was because they knew they couldn't really fund the amount they were advertising. They never dreamed sales would decline so badly that they wouldn't have enough to fund after the 4th draw. At the time, I told them that "guaranteeing" any prize was bad business - it is not safe for the state and certainly is not fair to the people. I think my phrase was that "it takes a fool to do something like this."
The reason they didn't worry about it - they knew that no one would win at this level because they were giving us a game that was "intended to roll" - meaning - no one would win. And they were right - no one can win and no one has won. This is why I call the game a scam.
As for what will happen at the capitol - I predict that the TLC will tell the legislators that they won't do it anymore - that it was an "honest" mistake - they fired the person responsible - and that steps have already been taken to ensure integrity and fairness of the games. This is what they always do. They will get their hands slapped like they did when they bought new balls and machines before proposing and adopting rules.
As for what I think about all this and my forthcoming comments - I will have to wait to see how the Commissioners respond and what their plan is first.
I think that somebody needs to address a number of major issues that have either been kept quiet or just totally ignored. A concern the legislature needs to address is the constant reporting that "sales are up from last year" - well - sales may be up BUT profits for the state are WAY down. And the People are getting a royal screwing.
Profits for the state are NOT down because players are winning more - profits for the state are down because of managements bad business decisions and that management is still there. They need to clean house at the TLC and go back to basics.
Did you know that when Reagan Greer was hired he had absolutely no knowledge of the lottery business. Guess who taught him? Gary Grief and Kim Kiplin. Well, let's do a brief analysis of their previous roles.
Gary Grief was named the "acting" director when Linda Cloud resigned. Linda's last action as director was that she lowered the starting jackpot - a very brave thing to do and an honest act because sales did NOT support starting jackpots at $4 million.
Gary's first action - he put the starting jackpot back to $4 million. That told me that he was deceitful and I knew where we were headed right then.
As for Kim Kiplin - whoa - she's done quite a few things that shows her true character. She is responsible for writing the 1997 rule and she was the "acting" executive director when the first winner was cheated out of his rightful winnings on Feb 26, 1997. The 1997 rule that she wrote did NOT guarantee advertised jackpot amounts but she decided that the commission was going to pay the advertised amount through an internal policy.
Her plan was to use excess prize money from purposely "under-estimated" larger jackpots to off set losses at the low levels where the jackpot was purposely over-estimated.
The TLC continued this unlawful practice until March 2000 - this is when I began posting EXACTLY how much a winner would receive if they won. I calculated the prize amounts based on the written rule itself. A March 30, 2000 Memo confirms my interpretation of the rule and all winners from the day I began posting the amount a winner should collect have received "at least" the amount in the prize pool. Many, many "jackpot" winners received more than their share of sales - to the tune of $100 million while some where cheated out of their share. Click here if you want to see the spreadsheet showing the methodoligies used for each and every win.
The sad thing is that millions of low tier winners were cheated because the money used to overpay "jackpot" winners came from the "reserve fund." Monies in reserve come from the players share of sales - the money is in "reserve" because they over-estimated the amount needed to fund the $3 and $5 prizes and the TLC keeps 2% of the players share of sales. To them, it's their slush fund to use however they want..
Sadder still - there is no direction as to how to return the reserve money to the players. They used the reserve monies to cover false advertising when it wasn't even in the rule - again let me say - it was $100 million in overpayments and they cheated some winners out of $3 million.
Two audits have been done over these allegations - one for my benefit (2002) and one for the legislatures benefit (2004). The TLC told the legislature that the written rule gave no direction for calculating prize amounts - I nearly fell out of my chair when I read that and I'm quite frankly surprised that the legislature bought that explanation.
Some members of the Texas legislature have told me that the underpayment and the overpayment issue is NOT closed as they do not believe or agree with the TLC's internal audit findings. All I know is that 13 wins were cheated and the TLC will not pay those people what they rightfully won - I find this extremely distasteful for a gambling entity. We don't need this in Texas.
Kim Kiplin has made quite a few contradictory statements on the record regarding the rule. You can read the excerpts from some transcripts that I have posted. Click here if you'd like to read them (pdf).
In July of 2000, Kim Kiplin told me she didn't know how much was allocated for the school foundation fund from the new Lotto Texas rule. This is when they increased the prize pool to 55% - up from 50%. I wanted to know where the 5% came from - she knew but said she didn't - it took 3 or 4 days and a call to a state rep to get an answer from the TLC. By the way, they reduced the percentage that went to the schools from 38% to 33%.
Kim Kiplin told me she knew nothing about Criners resignation. She did.
Kim Kiplin is the one who summarizes comment received for rule changes. Her reasons for disagreeing with the commenters amuse me. I laugh and think to myself that she would do really good selling used cars.
Kim Kiplin is the one who tried to bully fellow web site owners out of their domain names.
Employees at the Commission KNOW not to cross Kim Kiplin's path and employees know not to cross Gary Grief's path. Whatever Kiplin and Grief say - employees just agree with because they fear being terminated at will. Why do you think the TLC has no grievance policy?
As for Reagan Greer - well - he's trusted these two folks to tell him how to run the TLC - he wants name recognition so he can run for office again and that's why he put his name on the back of the instant tickets. He holds the big "title" but others clearly run the show.
Maybe you'd like to make a political contribution to Reagan Greer. He has a web site and if you look closely, you'll see that it was copyrighted in 2005. If he's the director of the TLC, why does he have political web site and why does he collect money? Click here if you want to see his web site.
All Texans want are FAIR games of chance and a fair chance to win. We expect to receive 100% of our share of sales to be paid out in prizes for each and every "independent" draw. We want truth in advertising. We want consumer protection. We want protection from faulty terminals and crooked store clerks. Clerks either steal players winnings or they scan the tickets more than once resulting in a print out that says, "NOT A Winner." Then if that's not bad enough, the terminals sometimes err in reading the tickets too. This could be avoided if players would simply check their own tickets but players don't.
The TLC knows players don't check their own tickets and they take advantage of the situation. We need a law forbidding retailers from checking players tickets. The retailers would like this too - they aren't paid enough as it is. Checking players tickets is why the TLC bought the SST's and the SST's were already outdated when they were purchased for $12 million. But the TLC had to enter into an agreement BEFORE Aug 31 - the end of their fiscal year. Another bad business decision and another waste of taxpayer money.
We expect the TLC to spend taxpayer money wisely - but it's near the end of their fiscal year again so they have monies that they have to spend now or they'll lose it. I suppose this is why they've recently rented a room at the Driscol Hotel for training purposes. I'd like to know why they can't use their own auditorium for two days. I'd ask but it wouldn't do me any good. <big grin>
I suppose they'll be buying more SST's too. Last year they did this and said the SST's would pay for themselves but they missed that projection BIG TIME. The legislature really needs to look at the costs and real benefits associated with the SST's. They placed an SST is a convenience store several months ago to see what would happen. Guess what - the stores lottery sales declined! Someone needs to inquire about this.
How much time and money has been wasted "studying" computerized draws and developing animation? This is something players all over the US oppose but the TLC wants to give it to us too. We're saying, no thanks - we don't trust computers to draw "random" numbers - in fact - computers can't produce random numbers.
OK - I've said enough. I'm venting now because I'm angry at the TLC for unfair games, unfair payouts, cheating winners, bullying small private individuals, lying to me, keeping public information from me, false advertising where NO BODY had done anything about all this. It's time for serious changes and I pray we see them.
Ya'll pray too - maybe we'll get our old Lotto game back, our old Cash5 game back and protection from our legislators.
June 16, 2005 - Press Release Issued - Pick3 Sales Suspended - Early this evening, Texas Lottery Commission officials suspended sales for the Pick 3 game after GTECH Corporation, the lottery operator, notified the Commission of a computer code problem associated with the game. The Commission hopes that the problem will be corrected promptly.
Draws for the Pick 3 game will continue as scheduled.
June 12, 2005 - I know it's been a long time since I updated this page but I've been making comments on the other stories that I've been posting. And I've been posting a ton of "Sad but True" stories so I'm not really behind on my news to ya'll.
I am really having a hard time replying to all my mail now-a-days and I don't want anyone to think that I'm ignoring you - you have no idea how much I appreciate and respect your comments and love receiving your emails.
Anyway, let me answer your most recent questions for all who may be wondering or thinking the same things - Here goes...
NO, the Texas Lottery is not going bankrupt.
NO, the Texas Lottery is not going broke.
NO, the Texas Lottery is not under-funded.
YES - the Texas Lottery lied about how much you were really playing for on Wednesday, June 8. They knew on Friday, June 3rd that sales wouldn't support the amount they were going to roll to after Saturdays draw if there was no winner.
YES, IF someone wins this next Wednesday, they really would receive approx $9 million IF they take annual pay. IF they choose CVO - which is best - then they will receive the amount in the "prize pool" [39.104% of sales] which is the SAME amount they would invest for you if you took the annual pay. When you win Lotto Texas, all you've won is a set percentage of sales.
YES - the billboard advertising is deceptive too - it wouldn't be if it said: "$9 Million IF paid out over 25 years"
How did I know they falsely advertising the $8 million jackpot? It's real easy. You divide 8,000,000 by the "rate" and that tells you how much they need to fund the amount advertised.
Now you have to see if they have that much. You add draw sales for all draws leading up to the draw in question - include an estimated sales figure for the actual draw - then simply take 39.104% of that figure to see if they have enough to fund the amount advertised. [The 8,000,000 divided by the rate - it should be close]
How do you get the rate? Well, that's another story in itself. The TLC refuses to tell me what the rate is even though they have it at their fingertips. So I obtain the rate from other HONEST lotteries who don't hide the facts before their draws -
Then I make an open records request to obtain the rate from Texas each Sunday. They keep me 3 weeks behind though.
Why won't they tell us the rate? My guess is that they sometimes alter the real rate for financial gain and they don't want to make it easy for people to determine when they are falsely advertising the jackpot amount.
Why no Pick3 plays recently? Because Don and Jeff haven't had a play and I only post plays when they have one. Pick3 plays are far and few in between. To figure your own play, use my strategy page - seeing the last time a "sum" has come in is the best way to play Pick3 - in my opinion. All you have to do is pick the right sum then the right combination to win. It's as easy as 1-2-3. <big grin>
NO, Pick3 plays are not included in the Lotto Report. They can only be found on my web site.
Can a lottery cheat using balls and machines? Yes, they could but I don't think Texas does.
Is the Quick Pick selection random? No, I don't think it is. It is my educated opinion that's it's pseudo-random. I recently asked Bobby Heith (communications) if G-Tech's software was RNG or pRNG and if the software was "certified." His first response was that he was forwarding my question to open records. He called about 2 weeks later and said that open records told him to tell me to call G-Tech with that question. I asked him to reply in writing but he has apparently refused. Open records did not respond either.
Also, I recently suggested to the Commissioners that Dr. Eubanks review the Quick Pick combinations sold for past drawings to see if he thinks their random. I tried to obtain the combinations sold for some draws but the TLC "claimed" they didn't have it. The reason I say "claimed" is because I know that we have 6 months to claim a ticket therefore, the combinations are still in the computer. They could have copied the combinations sold onto a disc if they wanted to and provided it to me.
Ex-staff members have provided me with much information about what the TLC "really" has and what they don't have. Also, players have been complaining for years about the numbers they get when they buy Quick Picks.
Why do we not want "guaranteed" prizes? Because then we wouldn't see 100% of our share of sales. As it stands right now, just since May 2003, players have been cheated out of $8.5 million because of those $3 and $5 "guaranteed" prizes. There is no way the lottery can determine exactly how many winners there will be for each draw - it is best to allocate a percentage of sales for each prize category then divide that amount by all winners and they need to pay us the "cents" too. Just like they do at the horse races.
What is the reserve fund? They keep 2% from the players share of sales in reserve just in case the money is needed to fund the guaranteed prizes. Needless to say, they don't have to dip into reverse very often because they over allocate the percentage of sales needed for each prize category. Also, they can now use the reserve money to guarantee the jackpot amount for first 4 draws in a roll where sales do not support the amount advertised. Needless to say, because of the high odds of the game, no one can win at that level anyway so the money just sits there drawing interest!
What do they do with the money in reserve? Good question. The last time I heard there was no policy or directive for what to do with the reserve money. Once, they had so much money in reserve that the Texas Legislature made them transfer it into the General Revenue Fund. Folks, this money was the players prize money.
Remember when they changed to 6/54 - one of Linda Cloud's selling points was that they were increasing the prize money returned to players to 55% - up from 50%. Then when they switched to 5/44 - they lowered that return to 52%. It was included in ONE press release only.
I hate to tell you this - but they have NEVER returned 50% or 52% or 55% of total sales to the players. But they've told us that they do. They have lied and cheated us out of our share of sales since day one.
The only way we will see our share of sales is to demand pari-mutuel calculations - NO guaranteed prizes.
We want truth in advertising - we want what sales will support - not guaranteed prizes so they can keep more than their share of sales.
That's all for now -
Continued....click here to read more
The Lotto Report
P. O. Box 495033
Garland, Texas 75049-5033
(972) 681-1048 Fax