The Retailers Testimony
CHAIR CLOWE: We're now moving to Item Number eight on the agenda, which is the possible discussion and including public comment on proposed amendments that are relative to Lotto Texas. There is a public hearing scheduled on April the 19th. What time is that, Kim?
MS. KIPLIN: It is 10:00 a.m. located here in Austin, Texas in this very room.
CHAIR CLOWE: And the scheduled meeting on the 19th is for the purpose of having public comment come in and be received and be part of the record. We have asked that that issue be placed on this agenda today. We have come to that point because we thought that there might be individuals who would like to appear before the Commission and make commentary. We are going now to call on those folks who have filled out appearance forms. Kim, did you want to make a comment before we begin that process?
MS. KIPLIN: Yes, I would. I am looking at the audience and I see quite a few people and I guess in the interest of time if you hear a comment that you agree with and to try to avoid repetition to the extent that we would like to, if you wanted to just adopt those previous comments into the record, that would be acceptable. If you want to just, on your witness affirmation form, mark that you are either in favor or you are opposed to the proposed rule we are making, that is also acceptable and will be part of the rule-making record. If you come forward and you want to address the Commission, if you would identify yourself. And if you are representing an entity, if you would also identity the entity that you are representing. We have a court reporter who is reporting the commission meeting today. The court reporter can only take one voice at a time. So if you would bear that in mind for those of you that are in the audience, if you want to come forward -- if you want to address the Commission, you must come forward and speak into the microphone so we get a clear record.
MR. SADBERRY: Kim, may I ask you a question? There are times when we as commissioners are not permitted to interact because of the ripeness of the matter. I do know that this is down as a possible action item. And I also know that it would not be right for any official action. So in that respect, are we restrained in any way in interacting with comments and questions that might be put to us or may we do so?
MS. KIPLIN: On rule making, it is pretty much wide open. You are correct, Commissioner Sadberry, this is not ripe -- this proposed rule making is not ripe for adoption because the minimum 30-day public comment period has not expired. I think this is an opportunity, largely, to receive comment directly to the Commission. So to the extent you wish to ask clarifying questions of the commentors, you are free to do so to the extent you wish to deliberate with your fellow commissioners or ask questions of the staff, you are free to do so. You may not take action in the form of adopting the proposed amendments today.
MR. SADBERRY: Thank you.
CHAIR CLOWE: Thank you, Kim. At this point in time we have 22 witness affirmation forms. Ten individuals have indicated a desire to make an appearance, ten have indicated a desire not to make an appearance and two did not indicate any desire along those lines. We will begin in the order in which they were handed to me, calling on each individual who has indicated they like to appear. If during the process anyone would like to appear, fill out a form, well, you are invited to do that. As Kim said, if you will come forward, please, when I call your name and announce yourself to the microphone so you can be identified, we'd be happy to have your comments. First is Rick Johnson.
Here's The Testimony Regarding The Surveys
MR. JOHNSON: For the record, my name is Rick Johnson. I am the president of Texas Food Industry Association and the Texas Association of Lottery Retailers. When we first heard about the proposed changes, we sent a survey out to our members and to our nonmembers also, retailers that sell lottery products, explaining the thinking behind the changing of the matrix and trying to get their opinion on what they thought. We got back 3,973 surveys. Of those surveys, 3,505 said yes, they were in favor of the change, 468 said they were against the change. Which works out to 88 percent were in favor and 12 percent were against the change. Just as kind of a personal note, I think this is probably an opportunity to try to breathe a little new life back into the lottery. Since the sales started dropping a couple of years ago, I have noticed that a lot of retailers have lost their enthusiasm to sell lottery products and they just kind of leave it out there as something if somebody wants it, they can come and get it, but they really -- they are really not real enthused about selling it. And I think maybe this will generate some interest to get the sales back up to where they were and also will give us an opportunity to work on some other issues that we had began talking with Linda and the other staff here about. That kind of just been put on hold since the sales started dropping. That's pretty much all I have got to say. Anybody have any questions?
CHAIR CLOWE: Any questions? Thank you, sir.
MR. JOHNSON: Thank you.
CHAIR CLOWE: Carlos Rocha.
MR. ROCHA: Good morning, my name is Carlos Rocha. I am the representative of Fiesta Mart, Incorporated out of Houston, Texas. We have 47 operations in the state of Texas. We sell lottery in all of our operations. We are in full support of the changes to the Lotto Texas. We have seen a decrease in sales in Lottery sales and hopefully this will turn that around for us.
CHAIR CLOWE: Questions? Thank you very much.
MR. ROCHA: Thank you.
CHAIR CLOWE: Mike Thomas.
MR. THOMAS: Good morning.
CHAIR CLOWE: Good morning.
MR. THOMAS: I'm Mike Thomas. And I am hear representing Ultramar Diamond Shamrock. We're a convenient store chain in several states. And in the state of Texas, we probably got about a thousand stores. And we participate in the lottery. And, basically, I am here to concur with what has already been said. We have suffered a decline in sales over the last couple of years in lottery, as well as Lotto. And we know that our sales are driven by the lottery jackpots. And we feel like when the excitement is created over that, it ties in with our lottery sales. That is just the way it works out. So I am here to voice my opinion for the changes.
CHAIR CLOWE: Mr. Thomas, did I understand that you have a thousand outlets in the state of Texas --
MR. THOMAS: Yes, sir.
CHAIR CLOWE: -- that sell lottery products?
MR. THOMAS: Yes, sir.
CHAIR CLOWE: Thank you, sir. Mr. Doug Waldbaum. Help me on the pronunciation of your name, please, sir.
MR. WALDBAUM: I will. My name is Doug Waldbaum.
CHAIR CLOWE: Thank you.
MR. WALDBAUM: I am the division loss prevention manager for Albertson's from the San Antonio division. And my comments also reflects my peers in Dallas, Fort Worth, Houston and a few stores that we have in the El Paso area. I am not a lobbyist. And I am not used to addressing commissioners, but I want to make a few comments that reflect the business of Albertson's and some of my personal beliefs. When I got up this morning, I was trying to decide what kind of tie I was going to wear. And I said, now, I have two ties. My first tie is this serious tie and my second tie is a monopoly tie with play money. Now, I thought now I would come in with this monopoly tie and everybody would laugh about it and we would create a little bit of excitement, a little bit of fun, but this is a serious matter. So we'll talk a little bit about excitement with a serious tie. At Albertson's our belief is serving our customer. We believe in achieving our sales goals. And in order to do that we believe that we have to have a little bit of fun and excitement in order to do that. The Lottery is one of those avenues that we offer to our customers that provides a little bit of fun and excitement. But recently that gloss has been off of there because we haven't had the large jackpots that we were used to when the lottery first became a reality in our stores. And we know that when those jackpots got higher, that people got excited and things happened in the stores and we would see a little bit more people coming into our stores in this great competitive environment because they could play Lotto and play the games of lottery with Albertson's in our stores. And we haven't seen that. So we solidly stand behind the recommendation to add four numbers. We believe that higher jackpots will bring in more customers. We believe that will help us with our sales, that we'll have more foot traffic, that people will get enthused and excited and that is the name of the game. We would like to see $55 million jackpots, we would like to see some 60 and $65 million jackpots and I think all of you would like to see that too. And the state of Texas benefits. We would like to see that happen as well. So from the standpoint of Albertson's, we certainly are in concurrence to the recommendation of the staff and the Lottery Commission to add more numbers. We believe that is a great thing. Now, sitting here, I do have one more opportunity and I think it was reflected in the minor way from one of the previous commentators. When we get higher jackpots, we would also like to see a higher commission or some other incentive come the way of the retailers so that we pay for the amount of labor that we use, that 5 percent really doesn't meet. Certainly, we loved to have one of those one percent winners. I personally know about two of them. One here in Austin and one in Victoria. And we would certainly like to have the luck of the draw and have that happen again. But the day-to-day basis, we would like to see a little more income come our way in terms of a commission or an incentive or maybe a cashing bonus in Albertson's. We tend to cash a lot of winners -- tickets even though they may not have purchased them at Albertson's. And again, I would like to thank you for your time. I know it took a little bit more, but remember the word, excitement. We need excitement back in Texas Lotto. Thank you.
CHAIR CLOWE: I want to compliment you on your tie. And I want to tell you that although it may not be in your division, you have a store in Waco.
MR. WALDBAUM: Yes, sir.
CHAIR CLOWE: And I would like to ask you if you know how many stores do you have in Texas that sell lottery products?
MR. WALDBAUM: We have -- and I was just going through my head how many stores we have. We have approximately 320 stores that are in the state of Texas.
CHAIR CLOWE: Very good. Thank you for coming.
MR. WALDBAUM: Thank you.
CHAIR CLOWE: We appreciate it. Denise Lawhon.
MS. LAWHON: Yes. My name is Denise Lawhon. And, actually, I am the manager of an independent store out in the middle of the country. And I have spoken with my customers who actually keep us in business and they are very excited about adding the four numbers. And like everyone has said, I agreed with everyone. I don't want to sit here and repeat myself, but we do need excitement back in the lottery and I think it would be great if we could do this. Thank you.
CHAIR CLOWE: Thank you, ma'am. And do you mind if I say the city that your store is located in?
MS. LAWHON: It is Robstown, Texas.
CHAIR CLOWE: Robstown.
MS. LAWHON: Yeah.
CHAIR CLOWE: Good. That is not way out in the country. I know where Robstown is. Thank you for being here. Lance Peterson.
MR. PETERSON: Lance Peterson. Shop & Go Grocery in Dallas. We own one store in Dallas on the edge of downtown. We get the blue collar -- the utility workers all day long. They take their 15-minute break, they come through. They really want the excitement back. Breathing new life with a change would be great, everyone gets excited. You come into our store, we know you after a week. I mean, we only have about 30 employees. We can tell the people we see all the time. The regular players. But I remember in the past we have been with the lottery, you know, selling tickets since the beginning and I remember what it seems like when the lines would start, when the jackpots really got up there. And people do, they look at four million, they look at the small pools and they really don't get excited anymore. And the big jackpots would be great. They would bring people in. And I am sure that it would also increase the other games also. And also my business, the rest of my businesses would be great too. So I firmly support it as an independent retailer.
CHAIR CLOWE: Thank you, sir. Thank you for coming. Juan Flores.
MR. FLORES: Yes. I am Juan Flores from Mission, Texas. We got United Drive In. We got two stores. One of them is the top three in the state. And I am for it. We need to wake up the people again. Thank you.
CHAIR CLOWE: Thank you, sir. Thank you for coming. Robin Crawford.
MS. CRAWFORD: Good morning, my name is Robin Crawford. And I am from the country, for sure. I am from Timpson, Texas.
CHAIR CLOWE: I have to agree with you then.
MS. CRAWFORD: I am from the country.
CHAIR CLOWE: You got me there. Is that Timpson at Jenny Hall?
MS. CRAWFORD: That's it.
CHAIR CLOWE: Okay. I have been there too.
MS. CRAWFORD: We're the larger of the two.
CHAIR CLOWE: Okay.
MS. CRAWFORD: I am here in favor of amending our game. I have been a retailer since the start-up. We have gotten a little stale, I will have to say. I want somebody to go over there and hold Larry King while I say this, GTECH does a great job. And it is him that I always call and fuss to whenever I have a problem. I have talked with him before about this subject and in other states, this has helped. So, historically, in other states it has helped. I don't think Texas would be any different. I guess I have turned in my little form that -- that Mr. Johnson had the numbers from. I have one store. I am in it every day. I can reiterate what these people are saying. A guy comes up and he has a Dr. Pepper and a bag of jerky and you ask him if he wants to buy a ticket and what is the first thing he says? What is the jackpot? And if you say $4 million he says, no, I don't play unless it is -- whatever it says. And, you know, that is the general feeling. If this will breathe new life into our games, this is what we need. I think you are in business and you know that is the name of the game. Business is changing to meet the wants of your customer. If you ask any customer, hey, do you want to make the odds harder, what are they going to say? No. But if they vote with their money. When the jackpot is high, they buy the tickets. When the jackpot is low, that's when they don't buy tickets. So no matter what they might verbally tell you, I think that, you know, in the past that you can see if they are not buying tickets, that is not the product that they want. So that is my opinion. Thanks.
CHAIR CLOWE: Thank you. Thank you for coming. David Parkey.
MR. PARKEY: Good morning, my name is David Parkey. And I am from Denison, Texas. I am an independent retailer. And they more or less covered everything there. But I am definitely for the change. I think it would enhance the games. I know it would make the jackpots bigger and when the jackpots are bigger, there is more people, more traffic coming in. That is from all the Oklahoma people too. I get them all. They all come to the store. Thank you.
CHAIR CLOWE: Thank you, sir. Doug Sturdevant.
MR. STURDEVANT: Good morning, my name is Doug Sturdevant. I have a store in Baytown called Vice Stop, one store. It is kind of unique. It is a drive-through, drive-through only. Nobody comes inside. I spoke in November to the Commission in Houston. And what I did -- I spoke against this change. Well, I have done some research and I polled my customers and I am now in favor of it. I checked with something somebody mentioned earlier that some other states had done so. The Florida lottery changed back in November. I called the Florida lottery and they e-mailed their figures, their sales figures. And I put together a graph that shows how much they have increased. Since November, their sales have increased over $80 million. That's an increase of 24 percent. And I have it by drawing except for a couple of times they didn't give me the jackpots amounts. But it is quite obvious a couple times when their jackpots were high, that the change did not exceed that previous year. But you are welcome to these if you like them. It would be a good thing for us in Texas. I sold a winning jackpot ticket back in '98. It was a $4 million jackpot. And one of the first things that -- when they called me, they said I wished it was a bigger jackpot. Well, so do I. But I am very thankful for what I got. It is no doubt, as everybody said, when the jackpot is higher, sales are higher. There is an ATM right by my store and the bank president told me that he can tell by the traffic at the ATM when the jackpot is over 20 million because of the traffic at the ATM. And I am in favor of it. My players are in favor of it. And just want to make sure that everybody knows that because I spoke against it in Houston. Thank you.
MS. KIPLIN: Mr. Sturdevant, would you mind giving those documents to the court reporter and we'll add them to the record. Thank you, sir.
MR. STURDEVANT: Thank you.
CHAIR CLOWE: Thank you, sir. Thank you for coming. I am going to need some help on this name. Jacques Rieulrt.
MR. RIEULRT: Rieulrt.
CHAIR CLOWE: Yes, sir.
MR. RIEULRT: Good morning, my name is Jacques Rieulrt. I am represent Melek Corporation. We don't have a thousand stores in Texas, but we have seven in El Paso. We're number one seller there. And we strongly support the change of the matrix. Thank you.
CHAIR CLOWE: Thank you, sir. Tim, is it Potter?
MR. POTTER: Yes.
CHAIR CLOWE: Yes, sir. This is the 11th appearance that -- the last one that has been handed to me. Yes, sir. Thank you for coming.
MR. POTTER: The name is Tim Potter. The Town & Country. We've been, I believe, the top retailer since, I believe, almost day one. We strongly support this change. I guess we can take it by Florida and some of the other states that has done it. I think everybody here has full belief that everybody here wants to make more money, including you guys for the state and for us. And that is about it.
CHAIR CLOWE: Thank very much. Thank you for being here. That concludes the appearance list I have of individuals who wanted to come. Oh, I see there is another one. Thank you. Mr. Bill Parr, I believe it is.
MR. PARR: My name is Bill Parr. I am representing TMT, Incorporated. We're doing business as Whip In. Commissioners, Chairman, I appreciate the opportunity. We have 18 stores in the Metroplex. Incidentally, we started in Austin off of Riverside. I am in favor of the matrix change. I think that -- I think we have a good model. I just think that it needs to be tweaked a bit. I don't know who came up with the idea with adding the extra balls, but I think it was a brilliant idea. Thank you.
CHAIR CLOWE: Thank you. Thank you for coming. For the record -- and I mentioned there were ten individuals who filled out forms, but did not wish to appear. Kim, if I may, I would like to read out their names and their position on this issue. Jodi Moon-Hensley for the proposed changes. Jeanetta Johnson for the proposed changes. Robyn Lehman, and there is no indication on this form how this individual feels. Rudolph Blaschke for the proposed changes. Pablo Lucio for the proposed changes. Faye Cooper for the proposed changes. Blanca Victorino, no indication on this form of how this individual feels. Nancy Nunez, again, no indication. Becky Anderson for the proposed changes. David Hudson for the proposed changes. And two individuals who did not indicate whether they wanted to appear or not, but I would like to report their feelings. Faithi Yousef for the proposed changes. And Arnando Selinas for the proposed changes. Is there anyone else in the audience who would like to make an appearance that has not filled out a form at this time? I would like to thank all of you who have come to this meeting and made your appearances and attended the meeting. Many of you have come from a great distance, as far away as El Paso. I think that is further away than northeast Texas, if I remember right. But you have taken a lot of time and effort to give us your feelings and we appreciate it very much. We'll now move on to the next item on our agenda which is, Kim, the possible discussion and action on adoption or republication of amendments.....
Now, you should go read the transcript
Then go read the forensic reports that were
The Lotto Report