Written comments were received. The Commission conducted a hearing to receive comment on the proposed amendments. The hearing was properly noticed for April 4, 2002 at 9:00 a.m. at the Texas Department of Housing & Community Affairs, 507 Sabine Street, 4th floor, Board Room, Austin, Texas 78701. No persons attended the hearing and no comment was received at the hearing.

One commenter supports the rule amendments because the amendments give all players more favorable odds to have winning tickets, thereby increasing participation and interest in the game. The Commission agrees with the comments.

One commenter is opposed to the rule amendments because the commenter does not want the numbers per week increased. The commenter believes the game is hard to win but the initial jackpot made it worthwhile. The commenter indicates that he will spend even less money when there are six draws per week.

The commenter also recommended a game plan that the commenter indicates the Commission might want to consider if the rule changes are not successful in the game performing as expected. The proposal is to have Pick 3, Cash 5, and a $2 jackpot game on Monday, Pick 3, Texas Two Step, and a $5 jackpot game on Tuesday, Pick 3 and Lotto Texas on Wednesday, Pick 3, Cash 5, $5 jackpot game on Thursday, Pick 3, Texas Two Step, and $2 jackpot game on Friday, and Pick 3 and Lotto Texas on Saturday. The commenter indicates that the $2 game is played in Australia and has a total of 180,000 chances sold for each game with 10,147 winners. The commenter states that there are three top prizes of $100,000, $20,000, and $5,000. Jackpots start at $500,000. After all winning tickets are determined, a second drawing is held. If the final ticket matches one of the winning tickets, that player wins the jackpot. If there is not a match, $50,000 is added to the jackpot for the next drawing. Drawings are not held until all 180,000 tickets are sold. The commenter states that the $5 jackpot has the same rules but the major prizes are $200,000, $20,000, and $2,000. There are 12,880 prizes, including free tickets. If the second drawing fails to match a winning ticket, the jackpot which starts at $750,000 is increased by $100,000. The commenter believes he would spend more money on the two proposed games but would not spend more money (on) other Commission games.

The commenter believes that the lottery operator is telling the Commission what it wants to hear and the Commission is accepting it "hook, line, and sinker".

The commenter doesn't believe that player views were seriously considered. The commenter believes "it's just a big con game" and that all the Commission really wants is to "maximize profits by instituting games that minimize the number of winners and the size of the payouts".

The commenter believes the Commission is changing the game to make extra money and that the change will occur "regardless of and in spite of what players want". The commenter believes the decision to change the game was made months ago when sales started dropping after Texas Two Step was introduced. The commenter believes that "the Commission will vote 3-0 as always and the change will be implemented as soon as possible".

With regard to the proposed changes to Cash 5, the commenter uses a system to select his Cash 5 numbers and believes the change in the number of balls will affect his drawing statistics. However, the commenter is not suggesting that the Commission change the game because it will affect the commenter's previous work. The commenter believes Cash 5 was an interesting and fun game when it was implemented, the two drawings provided decent jackpots, and the game was popular but the Commission ruined the game when the number of draws per week was increased to four.

The commenter believes Cash 5 players have switched to Texas Two Step. The commenter believes that the Commission in adopting the changes to Cash 5 thinks that Cash 5 players will spend more but the commenter believes that might not happen.

The Commission disagrees with the comments. First, the Commission proposes game changes through the rulemaking process and part of that process is to receive comment. The Commission considers the comment and then makes its decision that it believes is in the best interest of the State based on information available to it at the time of the decision. Part of the information considered by the Commission is player comment. The Commission also considers information it receives from the lottery operator. Part of the lottery operator's contract requirements are to provide input on improvements/enhancements to the lottery games.

With regard to spending habits by players, the Commission wants players to spend only that amount of money they can afford. The Commission has a responsibility to generate revenue for the State of Texas through the sale of lottery tickets. That revenue is used for public purposes and is currently dedicated to the Foundation School Fund. Changing a lottery game throughout the life of the game is one way to refresh the game and renew interest while generating additional sales and revenue and is not uncommon to what other lotteries do when a game experiences sales decline.

With regard to the game proposal suggested by the commenter, the Commission appreciates player input and does consider different game play approaches. The Commission conducts player research where it introduces new game concepts and may introduce the concepts suggested by the commenter. However, with regard to Cash 5, the Commission believes that the adopted changes will increase sales and revenue and have experienced positive feedback from players when the Commission conducted player research.

One commenter sent comments and also attached surveys regarding the proposed amendments that were completed by other persons. This commenter also attached copies of E-mail messages the commenter received from other persons regarding the proposed rule amendments.

Many of the these commenters are opposed to increasing the number of draws per week from four draws to six draws; indicate they will not spend more money playing Cash 5 than they do now; do not want the number of balls to be decreased from 39 to 37; do not want a $2 prize category; are opposed to playing Pick 3 twice a day and will quit playing Pick 3 as a result of the Pick 3 rule change to allow for two drawings per day; did not want four balls added to the Lotto Texas game; are not familiar with and do not know how to obtain a copy of the Texas Register.

Some commenters support the proposed change to decrease the number of balls in the Cash Five from 39 to 37.

One commenter indicated that she wants to play the numbers she selects every draw and if she can't, she won't play at all. The commenter indicates that "normal people don't play golf every day, nor do they bowl, play cards, go to the horse races or the casinos every day either". The commenters don't want to play the game six times a week.

The Commission disagrees with the comments. While people don't engage in the activities mentioned by the commenter every day, such activities are available every day. It's up to the person to decide how frequently to engage in an activity. The Commission is offering the game more frequently during the week but the game is intended for entertainment. People should only play what they can afford. (Bowling alleys, golf courses, horse races and casino's do not count on making their profits from the same people everyday - unlike the TLC. I'd say that makes a big difference!)

The commenter is opposed to offering a $2 prize for matching two numbers. The commenter believes that people won't claim $2 prizes and the prize money will be unclaimed. The commenter also believes that the $2 prize is in exchange for reducing the prize level amounts on the 3 of 5 and 4 of 5 prize categories. The Commission disagrees with the comment because the Commission focus tested this game matrix and it was favorably received.

The change will increase the number of Cash Five winners. (Yes, it definitely will increase the number of "winners" - but your players have told you that they don't care about winning $2 which is what most of the "increase of winners" will be.)

The commenter also believes that the Commission staff didn't accurately present the proposed game changes to the Commission when the Commission considered the rule amendments for proposal for public comment. The Commission disagrees with the commenter because the staff made a comprehensive presentation. The Commissioners also received, individually, information pertaining to the focus groups that were conducted. That information was provided prior to the Commission meeting at which the Commission heard staff's presentation and considered whether to propose the amendments for public comment. (Why was the new prize structure not mentioned in the actual meeting, the preamble or the press release? Were you trying to keep the press from realizing the severity of the reduction in the 3 of 5 and 4 of 5 prizes with the new prize structure?)

The commenter is critical that the Commission doesn't make the public aware of its rulemakings other than through the Texas Register or posting on the Commission's website. The commission disagrees with the commenter. The Commission noticed its Commission meeting at which the proposed amendments were considered and also noticed a rulemaking comment hearing at which comments could be received. The notices were posted on the Commission website and also submitted to the Texas Register. No one appeared at either venue.

The commenter believes that if the amendments are adopted, sales will decline. The Commission disagrees with the comment and believes sales will increase. Sales have been decreasing on the current Cash 5 game and that is the primary reason the Commission pursued game modifications. (Yes, sales have been decreasing. And look when the decline started - when the TLC went to 4 draws per week.)

The commenter suggests having two Lotto Texas draws per week, two Cash Five draws per week, and two Texas Two Step draws per week. The commenter believes this approach will increase Cash Five jackpots and "reduce competition for the same dollar". The Commission disagrees because the sales trends for five digit cash games don't support the suggestion. (The term "sales trends for five digit games" just happens to come from other states whose attempts at the same things have failed - Texas is doing nothing more than "copying" other states failing ideas - much like the TLC decides to put data on its web site after I put the data on mine. Actually it's quite flattering.)

Other comments made on the form survey created by a commenter were to leave the games alone, go back to the original number of balls in the Lotto Texas game, air the drawings on television stations, join Powerball, and winning on the 3 of 5 prize is what keeps one commenter going.

One commenter indicated he plays Pick 3 twice per day and has won more money on Pick3 than any other game.

The Commission believes that the games should be reviewed for their performance and revised, when sales information indicates that the games need to be refreshed. The Commission has evaluated the suggestion to join Powerball and currently, doesn't believe that it has the statutory authority to do so. The Commission agrees that the drawings should be aired on television stations in Texas but it can't compel a station to do so. The Commission makes the drawings available via satellite but it is the station's choice to air the drawings. (Have you thought about buying the airtime? That advertsing would probably pay off better than all the other advertsing. The TLC expects toooo much from the news media and too much from its retailers - the very people who sell your products. The TLC has been black-balled and rightfully so.)

One group or association, Joe M. Leonard, Jr. and Associates, Inc. supports the rule amendments.
(I spoke with Mr. Leonard. A very nice man and a loyal Cash 5 player. First of all, Mr. Leonard does not represent any group - he simply submitted his comments on his letterhead and so the TLC counted him as a "group or organization." Also, he was not aware that the TLC was proposing 6 draws per week nor did he know that the other prizes were going to be reduced. He simply thinks the lottery is "stingy" and there should be more winners so he was pleased that the odds were going to be improved.)

One group or association, The Lotto Report, is opposed to the rule amendments.